ABSTRACT
This chapter presents the type of democratic state, which will serve as the starting point for the invisible-hand explanations. The institutional characteristics of this type of state will constitute and provide important elements of the quite complex social-interaction situation. The chapter also presents two invisible-hand processes, the logic of conceit and the logic of opportunism, to explain the emergence of the modern “welfare” state. These should be seen as distinct explanatory models - partly alternative and partly complementary - which show, without degenerating into historicism, that there are certain regularities, patterns or logics in the developments of a democratic society. Not only are they based on different behavioral assumptions, but they also emphasize different aspects of politics and its unintended consequences. The chapter analyzes characteristics of the “state of state” itself.
