A welfare state engages the responsibility of a state to secure the basic modicum of welfare to its citizens. It seeks to know whether social policies are liberatory and help in legitimization or help in the market process (Castles & Pierson, 2007). In a welfare state, the government plays a big role in protecting and promoting the economic and social well-beings of the citizens. It believes in the social equity and justice in that there is equality of opportunity, wealth allocation is equivalent, and the people are philanthropic in that they help the less fortunate. In a welfare state, there is democracy, welfare and they practice capitalism. The Western Europe and the United States have been examples of welfare state models. The welfare state created by conservatives and opposed by socialist and labour unions has been of continuous debates on whether it is beneficial. There was the German welfare state, the British welfare state, the French welfare state and the modern Europe (Kennett, 2004). The United States followed suit and joined the western countries in instituting social welfare policies. The models dealt with mainly poverty relief but the modern models are universal in that they tend to concentrate on all citizens. Firstly, this paper is going to introduce the best welfare state model which seems as Social democratic model. Lastly, the reader should be able to know and explain the best regime by the end of the study.
According to Esping -Anderson (1990), welfare regimes refer to bunches welfare states in terms of their level and quality of social rights and bases of stratification on which the welfare state is built. As Esping-Anderson acknowledged, the importance of the three welfare state models in Europe and America which were social democratic, corporatist and liberal (Castles & Pierson, 2007). The social democratic welfare state believes in universalism in which all citizens are entitled to access the benefits. They believe in politics against the market. Examples of such states are Norway, Sweden and Finland. The corporatist welfare states believe in subsidiaries in which they offer insurance schemes. Examples of the states are Germany and Austria. The liberal states believe in market dominance and private investment in which the government helps only the poor and can provide for basic needs. The forces of supply and demand set the price of goods and services. They are the UK and the United States. All welfare states use either one of the models but to varying, extend. In the social democratic state, the criteria of citizenship are pervasive. The liberal welfare state is characterized by a stronger emphasis on means tested programs.
In a social democratic state, individuals should be free and equal in the determination of the conditions of their own lives in that they should enjoy equal rights and equal obligations (Mookherjee, 2010). Rights to political participation should be distributed equally among citizens to provide them with an equal share of opportunities to act in public life. The democracy peace theory argues that citizens in a liberal democratic state are peaceful and liberal democracies have never engaged in war. Social democratic model puts more emphases on universalism, comprehensive risk coverage, generous benefit levels and egalitarianism. The state controls the economic and social policies. The state provides social services to its citizens and cares for the elderly and children. There is a high level of employment for women and people with disabilities. It heavily relies on the government provision to meet social needs and believes ion full employment as part of the welfare state. It is active and in the generation and maintenance. The social democratic model varies with others in terms of how it accords to the state, the market and family.
While the corporatist model relies on social insurance and generous transfers to keep people well fed, social democratic welfare states provide a variety of social services and utilized the labour force to the best (Huber & Stephens, 2001). Both of them are concerned with getting people out of poverty and are highly redistributive. The essential characteristic of the social democratic welfare is that they are comprehensive and inclusive, Universalist, redistributive, gender egalitarian and labour mobilizing. People can be able to apply their talents in generating more revenue or wealth for their nation. Profit margins are much more less than the other types, which leads social justice among the community (Glyn, 2001). The social democratic commitment to solidarity and equality gave rise to the universalistic and redistributive aspects of the welfare state. It advocates for citizenship criterion, which offer a basic, equal benefit to all irrespective of earnings, contributions or performance. This makes it better than the liberal model were one contribution to the insurance scheme determines his health care.
In this model, citizenship is the membership in society and the rights. The gender is equal as far as obligations are concerned. The models views capitalist entrepreneurs as people much after achievement of self-interest. This tends to slow down the pace unto which capitalism is to be spread. Capitalism does not use the labor of undisciplined and neither can it make use of unscrupulous businessperson. However, there are those who can do anything to get wealthy as it the case of a Dutch sea captain. It therefore depicts that since capitalism is as old as human history there are those who are ruthless, may get involved into war and piracy to achieve wealth (Kennett, 2004).
The redistributive model in the social democratic welfare believes that the market economy is successful in producing wealth. Unlike in capitalistic liberals where the wealth is unequally distributed, in this model there is equity for all irrespective of their social status. It does not advocate for health insurance as the liberal markets do. This is because it believes state health insurance schemes are able to achieve better results. The limitation is that opponents protest that the state should not engage in economic interventions.
Gini coefficient measures the degree of income inequality. The coefficient varies between zero indicating equality and one hundred indicating inequality (Arnold, 2008). This means that in many capitalistic countries one person has all the income while others have none.. Inequality exists because people do not receive the same labour income, asset income and do not pay the same taxes. As CIA (2005) reported the coefficient was 45 in the US which is liberal state and 27 in corporatist country, Germany. The least coefficient was in Sweden, 23 which is social democratic country. In the social welfare state which advocates for equality most of the assets are owned by the state and it somehow controls wealth.
Capitalism has a tendency of causing instability especially in cases of financial crisis. The claims for capitalism differ from the classical case for a competitive market. Some theorists such as Adam Smith had argued that presence of many buyers and sellers competing with one another in the marketplace would cause wasteful resource allocations. Capitalism has been associated with innovations and many economists argue that capitalism has to generate endogenous innovations. Joseph Schumpeter argues that innovations are normally a creation of business people and they are rules embodied in the new firms. The agents of change are the entrepreneurs who come up with new ideas and invest to generate profits.
Limitations of social welfare states
The social welfare states have some limitations. In a state where there is equality, the tax burden will be high to meet the expectations of the citizens. But it does not seem as a problem for the people of social democratic counties as labour market and taxation are balanced (Arts and Gelissen, 2002). Most welfare states are bureaucratic in that the citizens do not have much freedom since everything is being controlled by the state but the state to offer the best quality of services (ibid). It is expensive to run a social welfare state since the government can be forced to borrow to meet the demands of the people. However, the governments use that money in order to cover the socio-economic gap between poor and rich (Castles et al, 2010). Government interventions kill businesses since they don’t allow for the prices to be set by demand and supply forces but the government controls the prices. But it gives stronger role in managing welfare (Ferragina & Seeleib, 2011)
Although many capitalists will not agree with the conclusion is good hen a country is a social democrat than a capital democrat. The benefits of the social democratic welfares which believes in universalism is best compared to capitalist in which wealth lies in the hands of the few at the expense of others. The equal distribution of wealth and state ownership of assets as adjudicated by the Soviet Union in my opinion was the best. Though this will have been a topic of debate, forces of demand and supply should determine the prices of goods and services. This might lead to a monopolistic culture, which victimizes consumers. The social democratic welfare state believes in universalism in which all citizens are entitled to access the benefits. They believe in politics against the market. The paper concludes that it borrow some characteristics from Christian democratic state welfare, which will make this model a superb one. Countries using the two models have been economically equal unlike countries like the United States where the gap between the rich and the poor is very wide.