The welfare state has always been under attack—by socialists, as something that falls short of socialism; by free marketeers, as socialistic. For twenty years, knowledgeable observers have been predicting its demise. What is its condition today? Is it moribund, or capable of showing new vitality?
The main threat to the welfare state is unemployment. The founders of the welfare state saw full employment as one of its two main pillars: full employment would provide the revenue for social insurance, which in turn would enable workers to carry on after illness or accident, assuring them that in difficult circumstances their family’s needs would be met.Yet France has now gone without full employment for almost as long as it had it. French unemployment reached 4 percent in 1975, 7 percent before Francois Mitterrand’s election in 1981, and 10 percent in 1984. Today France has a higher unemployment rate—12.2 percent—than any other welfare state....
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