3.3.7 The Welfare State

The political cartoon below is about Tommy Douglas, former premier of Saskatchewan and founder of Canada's universal health care plan. Recently released information shows that the RCMP spied on him for years because of his links to socialism.

Your readings about the New Deal and Keynesian economic theory showed that as liberalism evolved, a greater role for the government in the lives of citizens developed. Today this is known as a mixed economy.

As more citizens obtained voting rights, voters chose representatives who saw that government could do more than enforce the rule of law and provide national defense. The government could also provide programs and services that would benefit all people.

A country that is capitalist but uses policies that intervene in the market to ensure stability and a basic standard of living for citizens is called a welfare state. There are many kinds of welfare states in the world: some "cradle-to-the-grave" welfare societies have governments that take responsibility for the well-being of all citizens, and others provide social safety nets, or a limited number of programs and services, sometimes temporarily, to help those who are unable to help themselves.

The programs provided in a welfare state are usually funded through tax dollars. Although all taxpayers receive benefits of social programs, higher income earners tend to pay more in taxes while lower income earners benefit more. This transfer of money reduces overall poverty in a country.

Take notes on the following: