Criticisms of Welfare State

Critics of the welfare state argue that such a system will make citizens dependent on the system and less inclined to work. However, certain studies indicate there is no association between economic performance and welfare expenditure in developed countries,[25] and that there is no evidence for the contention that welfare states impede progressive social development. R. E. Goodin et al., in The Real Worlds of Welfare Capitalism,[26] compares the United States, which spends relatively little on social welfare (less than 17 percent of GDP), with other countries which spend considerably more. This study claims that on some economic and social indicators the United States performs worse than the Netherlands, which has a high commitment to welfare provision.

However, the United States, until the financial crisis of 2007–2010 which brought a significant fall in GDP, led most welfare states on certain economic indicators, such as GDP per capita, with the notable exception of Scandinavian countries, where Norway for example has significantly higher GDP per capita.[27] Until the recession of 2008 brought about a significant rise in unemployment in the USA, the United States also had a low unemployment rate and a high GDP growth rate, at least in comparison to other developed countries (its growth rate, however, is lower than many welfare states which grow from a lower base and may benefit from recent economic liberalizations, further U.S. GDP per capita is sometimes 20-30% higher than that of welfare states).[27] The United States also had led some welfare states in the ownership of consumer goods. For example, compared to some welfare states, it has more TVs per capita,[28] more personal computers per capita,[29] and more radios per capita.[30]

Socialists criticize welfare state programs as concessions made by the capitalist class in order to divert the working class and middle class away from wanting to pursue a completely new socialist organization of the economy