Income Distribution in the Welfare State

Abstract

A major problem for the industrialized nations in this half of the twentieth century is how to manage the welfare state. In greater or lesser degree, some sooner and some later, with myriad national variations, the western democracies evolved welfare states during the first half of the century. Inflation, balance of payments difficulties, and demands for higher wages are not new phenomena, but they are certainly characteristic of these last thirty years during which welfare states have reached maturity. Few indeed of their most loyal proponents would deny that welfare state policies directed toward full employment, income maintenance, income redistribution, and increased education and medical care have contributed to inflation and balance of payments deficits and insistent demands for higher wages. What the opponents of the welfare state have charged — that inflation must be the inevitable result of welfare state policies — became a nagging worry of its supporters and now, finally, a fear.