The Welfare State: Origins, Keynesian Model, and the 1970s Crisis

The New Deal of the 1930s

Following the Crash of '29, greater state interventionism became necessary.

1. The American New Deal created a social security system in 1935.
2. Initially, this system was only available for white people.

Defining the Welfare State

The Welfare State is a core concept in political and economic sciences. It designates a political proposal and general model of social organization where the State provides services in compliance with social rights to all inhabitants of a country.

It encompasses two aspects simultaneously:

• A political technology
• A social ontology

It was created primarily to solve the problem of social conflicts arising from the limitations of private insurance and mutual systems working. It primarily benefits the middle classes, specifically those who have jobs.

The Postwar Welfare State (1939–1945)

The war economy and its promises were crucial for its development:

• Securing the loyalty of combatants.
• Establishing interclassist public health laboratories (treating all citizens).
• Providing the necessary justification for the construction of the Welfare State.

Consolidation and Growth After WWII

The growth of the Welfare State after the Second World War was driven by several factors:

• It was partly a product of the fears of communism.
• It was made possible by a propitious economic conjuncture.
• Between the 1950s and 1970s, the world product multiplied by four.
• The Welfare State was designed in the 1940s, implemented in the 1950s, consolidated in the 1960s, and entered crisis in the 1970s.

The Keynesian Model (1950–1973)

This era was characterized by a new social contract, viewed as a pact where the State committed to creating a framework of stability:

• State Commitments:
  • Ensuring that credit reached consumers.
  • Assuming a policy of full employment.
  • Linking economic growth to increasing benefits and wages.
• Massive public investment.
• A mixed economy (including the nationalization of strategic companies).
• The emergence of students and women as a political power.

Causes of the Welfare State Crisis in the 1970s

The collapse of the Keynesian consensus was triggered by multiple factors:

• Geopolitical: The oil crisis (petroleum shock).
• Economic: Overproduction and market saturation.
• Socio-political: The reaction of the labor movement and Keynesians to inflation.
• Cultural: The rise of a new generation, the critique of Fordism, and the refusal to work.