3.1.11 Response: Welfare Capitalism

3.1.11 Response: Welfare Capitalism

Marxism, communism, socialism, and classical conservatism were ideologies based on the belief that classical liberalism did not work and new ideologies should be adopted. However, many believed that classical liberalism could be changed to meet the needs of the majority and, thus, lead to the "common good".

Welfare Capitalism

Welfare Capitalism was encapsulates the efforts made by industrialists during the late 19th Century and early 20th Century to ensure better working conditions for their employees. This was done partly out of self-interest; by taking better care of their workers, business owners were hoping to avoid labour unrest and collective action such as unions. Others had more humanitarian goals in mind, and believed that employees had legitimate complaints about their working conditions.

As a result, American industrialists and business owners began to offer workers certain benefits and rewards. In other parts of the industrialized west, welfare capitalism began to be recognized as classical liberal economy regulated with some government legislation that provided greater protections for workers.

The path to greater worker protections was a long one in most European nations. It took most of the 19th Century, with a series of laws called the Factory Acts. This included legislation to reduce the number of hours worked per day, regulated child labour and other factory conditions.

While some progress was made in limiting capitalist self-interest in the pursuit of profit at the expense of workers, many industrialists refused to enact any such reforms. As a result, President Theodore Roosevelt (1901-1909) took up the fight for better treatment of workers at the hands of their employer.  His efforts to place restrictions on worker exploitation are also covered under the movement known as progressivism.  See page 3.1.12 for more information.



By the beginning of the 20th Century, modifications to liberalism took various forms in the United States and Europe.

In the U.S., some industrialists began to help their workers by providing them with other benefits such as free housing or health care. One example is Henry Ford's efforts to retain workers on his assembly line. Although this worked for awhile, eventually the government began to step in to protect workers.

In Britain and the remainder of Europe, political parties began to take a different approach by enacting laws to protect workers. Although these laws took many years to pass, they implemented protection for workers and resulted in policies and programs to support the middle and working classes.