Skip to main content

What is "welfare capitalism"?

People have all kinds of misconceptions about what is and isn't "socialism". Many people even have these misconceptions about their own country. I have seen, for example in the comment section of YouTube videos dealing with socialism vs. capitalism, countless people from all around the world, such as Europe, Canada, South Korea, etc. saying that their country is "partially socialist".

The reason for this is something I already commented in a previous blog post: People confuse "social services" (in all of their forms) with "socialism".

Just because the word "social" is used in both concepts doesn't make them related.

Socialism is a form of government where the state owns all means of production of the country. All the industry, all the corporations, all commerce. There are no private corporations, and there is no private ownership of the means of production. The economy is owned and run by the state. (In socialism people may still own private personal property, which is one of the things that makes it different from communism.)

This has nothing to do with tax-paid government services, such as universal healthcare, public schools, and so on and so forth.

When the means of production is, by far and large, owned by private corporations and private citizens, in other words, it's their private property, and the majority of the commerce and economic transactions are run by these private entities, this is capitalism. If the government imposes only very minimal regulation on how these corporations run their businesses and engage in commerce, it's free-market capitalism.

But what is it called when, in addition to the above, the government taxes these corporations and private citizens, and offers social services, a strong social safety net, to the citizens of the country? This is the model used in many countries, especially European ones, and also countries like Canada, South Korea, Japan, and many others. Does this form of government have a name?

Yes. It's called welfare capitalism. Yes, it's a real term.

Personally I became aware of this term just recently. Actually I had been looking for the precise term for quite some time, when I stumbled across it.

The next time someone claims that eg. European countries are "socialist", or "partially socialist", or whatever, you can correct them.

Comments