Modern Welfare State and Social Democracy: Interdependence and Policy Importance

Abstract

Social democratic parties during the early stages of their development have accepted capitalism and have considered the welfare state as a tool in order to indirectly achieve the goals of social justice and cohesion. In the first half of the 20th century, the welfare state was the basic tool for the implementation of the social democratic ideas, but after the oil crises of the 1970s and more intensively during the last three decades, the deregulation policies led social democracy to seek its identity as an effort which balances between the implementation of embryonic social measures and deregulation policies. At the same time, it is true that the welfare state needs to be transformed in order to meet current challenges (globalization, technological development, population aging), but this targeting does not necessarily mean its complete dismantling as it is the main balancing mechanism of the risks created by the free market economy. This study aims to categorize social democratic parties based on the social policy framework they embrace and to highlight the political deficit that has led to the dismantling of social policy, to the crisis of the state and consequently to European social democracy crisis.