chapter  1
4 Pages


In the 1950s and 1960s, enormous hopes were pinned on the welfare state. In Britain, William Beveridge predicted that want, idleness, ignorance, disease and squalor could be defeated forever. In Germany, the economic secretary Ludwig Erhard announced the permanent end of unemployment and related hardships. At the root of this optimism lay the Keynesian belief that governments can actively control economic cycles and thereby prevent the ills of mass unemployment. The welfare state represented an attempt to wed social well-being with economic success; to avoid the social costs of laisser-faire capitalism whilst simultaneously reaping its benefits (Mishra, 1984: 6). When the oil crisis of the 1970s developed into a serious recession, the faith into Keynesianism began to wither and the social and the economic started to drift apart. In the 1980s, the New Right movement established itself firmly on the political stage, especially in Britain and the United States, arguing that welfare provision has adverse effects on the economy. The Keynesian bond between economic and social welfare was separated. At the same time, in the late 1980s, another attempt to reconcile social and economic goals failed: soviet-style communism.