preview

Comparison Of Neoliberalism And The Welfare State

Decent Essays

Economics is based on several theories, whether it is neoliberalism or the welfare state. Neoliberalism and the welfare state are opposite beliefs that have been introduced to help the United States economy. Neoliberalism has a key goal of improving the well-being of society while encouraging a ‘free market’ economy. Similar to neoliberalism, the welfare state is a concept in which the state is supposed to protect and promote the well-being of society, socially and economically. A welfare state can occur in a neoliberal state. When the welfare state is used, then neoliberals believe an abuse of power is occurring. While the welfare state can occur in a neoliberal state, the role of the government should be limited to allow for a free market. …show more content…

The welfare state makes capitalism and democracy possible by allowing a partial free market since regulations are put into place. By doing this, it aims to mobilize the working class. For instance, labor market policies protect the working class through “passive measures such as unemployment insurance that help soften the blows to individuals caused by market dislocations, [and] active measures such as worker training”(Schulze-Cleven, pg.80). Through these measures the working class is still being helped, but at the expense of others, through taxation. For example, unemployment insurance “is administered by states according to federal and state guidelines, and it is financed through a complex mix of federal and state payroll taxes”(Schulze-Cleven, pg.82). Through taxation the state gains power, but the population benefits from it. Although, neoliberalism and the welfare state are different beliefs they are quite similar. Both beliefs help the well-being of society, but in different measures. One helps society by having no government limitations and one helps by putting government limitations in place. Neoliberalism allows the rich people to dictate how money is produced and distributed, whereas the welfare state allows the government to decide how money is

Get Access