A humanitarian dream becomes an economic nightmare
They are called welfare states, after the sense of collective compassion that inspired them in the wake of the Great Depression and World War II. Like Gothic cathedrals, they rose gradually across Western Europe, in dedication to a lofty goal: to create more humane societies, in which a solicitous state not only shielded the old and the sick but guaranteed a living wage and a cushion against the hardships of unemployment. The result—cradle-to-grave economic protection far beyond anything available in the U.S.—became European social democracy's proudest achievement. That accomplishment is now undergoing a painful reassessment. No one is proposing to dismantle the welfare state. But throughout Western Europe there is a growing realization that what once seemed a virtually limitless bounty has reached very real limits. Pressure is mounting to prune and reform the whole apparatus of welfare and redefine its purpose. The public mood behind it all is not unlike the surge of conservatism in the U.S. that helped sweep Ronald Reagan to the presidency.
At its present levels, the welfare apparatus has simply become too expensive for most governments—and their taxpayers. Across the Continent, social security systems are grappling with fiscal crisis, in part because ponderous, costly bureaucracies have mushroomed to administer a vast array of programs that sometimes neglect the essential to serve up what is merely desirable. In Britain and France, rent subsidies have done little to alleviate chronic housing shortages and overcrowding. In The Netherlands, disability plans have been abused by unemployed workers making false claims to receive higher benefits. Generous sick-leave payments in Sweden are blamed for a debilitating rise in worker absenteeism. One official West German pamphlet giving citizens a "simplified" version of their social rights, for example, runs to 300 pages.
Bloated beyond its architects' intent, welfarism is threatening bankruptcy in some countries. Attempts to curb its excesses are beginning to cause political disruption and even social unrest. In France and Britain, labor unions and other groups have demonstrated against cutbacks in medical and education benefits. In Belgium and The Netherlands, attempts to slash welfare spending have helped trigger Cabinet crises, along with protests involving workers, students, doctors and even pharmacists. In Sweden, long a model of social consensus, unions and employers paralyzed the country last spring with nine days of work stoppages over wage claims that eventually forced the government to grant tax relief and companies to hike wages 6.5%.