ABSTRACT
Many economists are uncomfortable when asked to address serious welfarestate issues. While they recognize that income support serves as a countercyclical buffer and helps to reduce inequalities in the distribution of income, their focus seldom goes deeper. This in turn is reflected in the media and in popular understanding. When I studied social welfare programs in Scandinavia in the 1980s, an informant concluded her explanation of the expansive scope and generous level of social welfare provision with a caveat: "Remember that these are the fruits of economic growth." Her implication was clear: When growth slows, the welfare state must curtail its generosity. Many economists would find it difficult to integrate in their analysis Justice Holmes's response to a clerk who wondered ifhe objected to paying high taxes: "On the contrary; with my taxes I buy civilization." Holmes would have appreciated the achievements of modem social democratic societies.
