Welfare Capitalism

       In the Great Depression of the 1930s, millions of people found themselves homeless and unemployed. From this rose the idea of the government taking a role in the responsibility for the welfare of its citizens. Since then the degree of government involvement in the economy has been much debated. John Stuart Mill (1806-1873) believed in a more active role for the government in the economy to correct the abuses of capitalism. Mill understood the socialist desire for economic equality but also admired the productivity of the capitalist system. People who share these views of welfare capitalism value the promotion of human welfare. They believe only government can deal effectively with such problems as poverty and unemployment and would favour a more equitable distribution of wealth and a government that could ensure a minimum standard of living for all its citizens. Adam Smith did not believe in the government messing with the economy. In The Wealth of Nations he said when people are motivated by self-interest, or profit, constrained only by competition would in the long run provide for the needs of society. People who favour capitalism agree with Smith's ideas and value the freedom to pursue wealth with little government intervention. The Great Depression wreaked such havoc on society in America and other countries that traditional remedies, such as private charity, support from family and traditional government, were no longer adequate. The government should care for the well-being of its citizens alongside free enterprise ideas, as of welfare capitalism.
        During the Great Depression in the US, President Roosevelt's New Deal expanded the social role of the government. The New Deal established a support system to help the poor, jobless, elderly, and disabled. Governments have seen, such as in the US, that the country is strengthened if it takes some responsibility for supporting the poor, improving public health and educating its citizens. Since the 1930s, the US government has become involved in many social programs. Government involvement in human welfare without getting rid of the essential features of free enterprise has been successful for the US. The US has the most economically prosperous country in the world--highest GNP--and has the second highest standard of living in the world. This is why governments should, with the US as an example, practice welfare capitalism.
        In this decade the province of Shenzhen in China has been experimenting with capitalism. Many people across the country are immigrating to this area to try to make their money. Waitresses earn more money in Shenzhen than doctors working in other areas of China under communist rule. And there is a lot of money being made but this wealth is concentrated among the hands of a few. The overall standard of living has not been improved. Although people are making more money in this province, they would be considered living below the poverty line if it were earned here in Canada. Also workers are crowded in their living quarters. This resembles the abuses of early industrialization, capitalism, exactly what John Stuart Mill wanted corrected, and looking after these abuses is desirable. It is believed that the wide differences in wealth damages the general welfare and adds to social disorder. Welfare capitalism would lessen or eliminate these abuses and differences.
        The best example of welfare capitalism comes from New Zealand. Because the welfare programs come at a cost to citizens through taxes, those who can pay for services such as health care do pay. This lessens tax burdens. Welfare is provided for those who really need it and the non-productive cannot take advantage of the system. If you turn down two jobs on unemployment welfare you are cut off. At the same time the government protects the citizen from going broke at say, the hospital. The most you pay is $50 a day and $500 in a year.
        Welfare capitalism helps to equalize income. Some people believe the differences in earnings are not just of talent and hard work but also of larger social forces that government should control so everyone can have equal opportunity. This opportunity is important, and governments should promote the system of welfare capitalism.
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