A World Economy Based on the Welfare State Principle
The welfare state is one of the organizing principles at the basis of developing and developed countries, and will play an important role in maintaining a capitalist world system. Its extension to the world economy is not only desirable for social reasons, but is necessary for maintaining an open, ‘liberal’ and worldwide free-market economy. The welfare state, together with the rule of law and democratic participation, constitutes one of the foundations of a liberal democratic order. Yet the welfare state has come increasingly under fire, threatened by certain developments in the world economy. This is not because the world economy has become increasingly capitalist, but because the world economy is characterized by the integration of non-capitalist economies in the international division of labour and by the capitalist part of the world economy being too weak to transform the rest of the world economy into capitalist systems.
KeywordsWelfare State World Economy Real Wage Marginal Product Full Employment
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