The notion and the extent of the modern welfare state have been criticised on both economic and social grounds from both the left and the right of the political spectrum.
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In his book, The Servile State, English political writer Hilaire Belloc makes his case for the natural instability of pure capitalism and discusses how, as he believes, attempts to reform capitalism will lead almost inexorably to an economy where state regulation has removed the freedom of capitalism and thereby replaced capitalism with what he calls the Servile State. He believes that this servile state shares with ancient slavery the fact that positive law (as opposed to custom or economic necessity by themselves) dictates that certain people will work for others, who likewise must take care of them, and so he welfare state may lead to a kind of serfdom, in which one group works to support another group that does not work.
Some conservatives in the UK claim that the welfare state has produced a generation of dependents who, instead of working, rely solely upon the state for income and support; even though assistance is only legally available to those unable to work. The welfare state in the UK was created to provide certain people with a basic level of benefits in order to alleviate poverty, but they these conservatives believe that it has been expanded to provide more people with more money from the state than it can ideally afford.[1][2]
Some feel that this argument is demonstrably false: the benefits system in the UK provides individuals with considerably less money than the national minimum wage, but people on welfare often find that they qualify for a variety of benefits, including benefits in-kind, such as Housing Benefit, which usually make the overall benefits much higher than basic figures imply.[3][4]
Some British conservatives, such as Conservative Party co-chairman Sayeeda Warsi, also criticise the "'something for nothing' culture" of the welfare state, claiming that the high extent of the welfare state "discourages the unemployed from finding jobs". [5] 55% of people in England and 43% of people in Scotland believe that "benefits for unemployed people are too high and discourage them from finding jobs". [6]
Marxists argue that welfare states and modern social democratic policies limit the incentive system of the market by providing things such as minimum wages, unemployment insurance, taxing profits and reducing the reserve army of labor, resulting in capitalists having little incentive to invest; in essence, social welfare policies cripple the capitalist system and its incentive system, and the only real solution to the issues of capitalism is its replacement with a socialist economic system.[7]
The most extreme criticisms of states and governments are made by anarchists, who believe that all states and governments are undesirable and/or unnecessary. Some socialist anarchists believe that while social welfare gives a certain level of independency from the market and individual capitalists, it creates dependence to the state, which is the institution that, according to this view, supports and protects capitalism in the first place. Nonetheless, according to Noam Chomsky, "social democrats and anarchists always agreed, fairly generally, on so-called 'welfare state measures'" and "Anarchists propose other measures to deal with these problems, without recourse to state authority."[8] Some socialist anarchists believe in stopping welfare programs only if it means abolishing government and capitalism as well.[9]
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