ABSTRACT
This chapter describes the development of the “modern” side of the American welfare state. The phrase “modern welfare state” has become an integral part of the contemporary sociological lexicon. In conventional accounts, the philosophical foundations of the postwar welfare state are typically associated with the publication in the United Kingdom of the Beveridge Report in 1942. The real weakness of corporate America during this period can be gauged within its own domain as well as in the public sphere. Until 1965, both American labor and American capital had generally adhered to the postwar “social contract” to link wage gains to productivity increases. The fact that modern welfare states continue to reproduce market-based inequalities is often construed as evidence for the fundamentally “capitalist” character of such provisions. The institutionalization and expansion of the retirement wage in the capitalist democracies mean that the allocation of wealth to be produced in the future is increasingly fixed in advance.
