The Welfare State’s Spiritual Crisis

“The Welfare State's Spiritual Crisis,” Wall Street Journal, February 3, 1997.


By now it is obvious to all who wish to see that we are experiencing a profound crisis of the welfare state. Several crises, in fact. There is the financial crisis now evident in all the Western democracies, where all governments–whether left or right of center–are trying desperately to limit government spending and government commitments. Though it is this crisis that grabs most of the headlines, it is probably over the long term the least serious. That is because of the two basic laws of economics: what can’t happen won’t happen, and what must happen will happen. Governments will succeed in edging the welfare state back from the brink of bankruptcy–though at a considerable political cost. That cost will be seen in political convulsions that can be quite scary. Still, after the dust has settled, the welfare state will have been sufficiently trimmed to avoid national bankruptcy, which would be the worst convulsion of all, and one that no government can contemplate as an option.