Why Welfare States Are Important

This is an excerpt from a chapter 21 of the book "23 Things They Don't Tell You About Capitalism". It's discussing how a strong welfare state is beneficial to overall economic health as it makes workers more secure and leads to less need for trade protections for industries.

This book is very worth buying and reading. It's written so clearly and covers some of the most important economic issues affecting everyone now.

Let's look at the first bit:


What they tell you:
Big government is bad for the economy. The welfare state has emerged because of the desire by the poor to have an easier life by making the rich pay for the costs of adjustments that are constantly demanded by market forces. When the rich are taxed to pay for unemployment insurance, healthcare and other welfare measures for the poor, this not only makes the poor lazy and deprives the rich of an incentive to create wealth, it also makes the economy less dynamic. With the protection of the welfare state, people do not feel the need to adjust new market realities, thereby delaying the changes in their professions and working patterns that are needed for dynamic economic adjustments. We don’t even have to invoke the failures of the communist economies. Just look at the lack of dynamism in Europe with its bloated welfare state, compared to the vitality of the US.

This is the standard narrative on government pushed in the US. Nearly everybody who talks about the economy or government feels the need to acknowledge or reinforce this narrative.
How is this different or the same as the narrative about government in Taiwan?