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Welfare Capitalism

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Laura Salter

on 14 March 2013

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Transcript of Welfare Capitalism

The Welfare State The growth of welfare capitalism in industrialized nations, along with the Great Depression, has led to welfare states. The People President Theodore Roosevelt has demonstrated the principles of welfare capitalism by curbing the excesses of laissez-faire capitalism. He invented the term "square deal" because of his belief that labour and capital must be treated fairly. The Place Welfare capitalism is considered differently in the United States and the rest of the industrialized world. Why Welfare Capitalism? Corporations and industries have become major employers since the Industrial Revolution. However, classical liberal principles must be modified because laissez-faire capitalists do not consider the rights of the workers. Erika Millar & Laura Salter Welfare Capitalism Without the principles of welfare capitalism, there will only be disagreements between workers and management. The workers' complaints will never be recognized, and unhappy workers are not productive. In the United States, welfare capitalism refers to the entrepreneurs and industrialists who began to give workers non-monetary rewards to earn loyalty and reduce the need for labour unions. In other parts of the industrialized world, welfare capitalism is a combination between a classical liberal economic system and a government with legislation to provide worker protection. http://eleanorrooseveltbiography.com/theodore-roosevelt-biography.php In 1902, when United Mine Workers went on strike to demand a raise, a recognized union, an 8-hour workday, and fringe benefits, Theodore Roosevelt forced the mine owners to reach a compromise with the workers. http://tihcrime812.blogspot.ca/2011/01/united-mine-workers-killings.html http://kids.britannica.com/comptons/art-169275/George-Pullman George Pullman (who invented sleeping cars on trains) built a village for his workers in order to prevent labour unrest and respond to his workers' complaints. This kind of industrialist initiative exemplifies American welfare capitalism. Various countries have implemented legislation to protect workers' rights. Britain has passed a series of Factory Acts (1810) to improve working conditions in factories. http://www.enchantedlearning.com/europe/britain/flag.shtml -decreased working hours -regulated age at which children can be employed -regulation on the number of hours women and children can be required to work The German government has made a law to provide illness and maternity leave, provided insurance for job-related injuries, and passed an old-age assistance law. (1880s) http://www.saultcareercentre.ca/polish-and-german-culture/ These principles are improving the lives of workers in liberal democratic countries around the world! Clearly, laissez-faire capitalism has failed. http://www.thecanadianencyclopedia.com/articles/great-depression http://frontview.wordpress.com/second-great-depression/ http://www.intelligentanswers.co.uk/index.php?topic=5327.0 The 1920s brought an economic boom with low unemployment and high wages. America was the "breadbasket" for Europe due to the ruin of the French grain fields after the World War. There were technological and industrial advancements and people became very involved in the stock market. Then France began producing grain again and the price of grain crashed- so people began selling their stocks. Mass panic led to the market crash on October 29, 1929. This led to disrupted international trade, unemployment, and poverty. John Maynard Keynes believes that a balance between supply and demand does not necessarily lead to full employment. During inflation, prices rise, companies shut down and workers lose purchasing power. Eventually recessions become depressions. http://www.npg.org.uk/collections/search/portraitLarge/mw08583/John-Maynard-Keynes-Baron-Keynes His solution? Someone, or something, must regulate consumer demand. By using central banks to raise or lower interest rates, taxes, and government spending according to the inflationary cycle, the economy would be forced to grow. This theory: demand-side economics "Government should safeguard all citizens from economic uncertainty." Welfare Capitalism falls roughly in the middle of the economic spectrum. The extent of government involvement can vary. Theodore Roosevelt also started a new American political party: the National Progressive Party (based on a new type of liberalism: progressivism). (1912) The NPP supports women's suffrage, improved working conditions, the prohibition of child labor, and minimum wage standards for working women. Keynesian Economics "The supreme duty of the Nation is the conservation of human resources through an enlightened measure of social and industrial justice." President Franklin D. Roosevelt was the first to take up Keyne's ideas by implementing the "New Deal"- public works programs to provide employment and emergency relief, a reformed banking system, and invigorated agriculture and economy. (1933-1945) http://franklinroosevelt.com/ What is Welfare Capitalism? Welfare capitalism is the economic combination of free market principles with principles of a welfare state- which uses legislation to regulate minimum wage and other employment rights and benefits. Welfare capitalism provides a safety net for individuals in society. http://johnziraldo.wordpress.com/2010/02/08/just-what-is-the-social-safety-net/ http://talonssephr.edublogs.org/2011/04/06/the-industrial-revolution-and-its-effect-on-upper-and-lower-canadians/ http://thesocietypages.org/socimages/2009/12/03/child-labor-in-america-1908-1912/ http://commons.wikimedia.org/wiki/File:US_flag_33_stars.svg http://www.lib.utexas.edu/maps/historical/shepherd/euro_language_dist_1914.jpg Conclusion The Great Depression increased the prominence of welfare capitalism in the United States. Classical Liberalism must be challenged because it does not meet the needs of individuals in society. The principles of economic freedom, self-interest, and competition must be challenged in order for the government to provide a safety net for workers. http://thecommune.co.uk/2010/10/12/welfare-capitalism-and-the-cuts-sheffield-wednesday-3rd-november/ Supporters of classical liberalism, such as the American Democrats and Republicans, are often resistant to change. Individualists must realize that taxation and some government regulation must be added to the capitalist system in order to avoid depressions and unemployment crises. Life is better under welfare capitalism. Workers have ensured protection and benefits, while still enjoying the freedom of capitalism. Workplace conditions are improved for men, women, and children. Classical Liberalism with a safety net! Sources:
"Perspectives on Ideology" textbook; Oxford Canada; 2009 Pg 142-150
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