CHAPTER 7

SPHERE OF STATE ACTION

A Good deal of controversy exists as to the functions of the state or what is called the sphere of
state action. The theories that have prevailed regarding the necessity and functions of the state
range all the way from those which deny the necessity or utility of the state altogether (anarchism)
and which limit the state's functions to the bare minimum (laissez Faire individualism), to those
which invest it with enormous range of functions and laud it as the indispensable agency by which
all social, economic, artistic, literary and scientific progress has been achieved (socialism and
welfare state). Individualism and Socialism are the two broad theories relating to the sphere of
state action while the concept of welfare state has been reflected in the ideology and practice of
most of the modern states in the twentieth century. Scholars with a Marxist persuasion classify all
theories of state into two broad categories, namely, liberal and Marxian. Under the liberal theory
of the sphere of state action they include both classical liberalism (laissez faire individualism) and
positive liberalism. The Marxian theory of the functions of state has certain unique features which
cannot be subsumed under the general theory of socialism. It is proposed to examine sphere of
state action from four different points of view which are by no means exhaustive the
individualistic, the socialistic, the welfare state and the Marxian theories.
The Individualistic Theory
The individualistic theory comes under the liberal view relating to the sphere of state action. In the
historical evolution of this doctrine two distinct phases could be discerned, namely traditional
individualism and modern individualism. Again as a part of liberal political theory it has undergone
changes from the phase of classical or negative liberalism (laissez faire individualism) to positive
or modern liberalism.
Statement of the Theory
In the early nineteenth century, the prevalent view relating to the functions of the state was
individualism or laissez faire: the sole function of the government is to protect the individual from
violence or fraud. That government is best which governs least. It began essentially as an
economic doctrine to assist in the growth of capitalism. The physiocratic school of economists in
eighteenth century France are considered as the pioneers of economic individualism. They raised
the slogan of laissez faire, laissez passer against the mercantilists measures of state control of
industry and commerce. During the period of the industrial revolution (1760-1830) State control
over trade and commerce was regarded as unnecessary and retarding. The capitalist class
demanded reduction of state activity in the economic sphere. Laissez faire (let alone) was the
economic theory of classical or negative liberalism. This doctrine received a comprehensive
treatment in Adam Smith's "Wealth of Nations"(1776) which was largely a plea for a policy of noninterference by the state in economic matters. He was the champion of "free market-liberalism,
which called for the liberation of businessmen from the restrictive regulations which government
imposed on economic activity": His views were supported by other English economists notably
Cairnes, Ricardo and Malthus.
It was only in the nineteenth century that individualism developed into a socio-political theory
chiefly by the writings of J.S. Mill and Herbert Spencer. As a social and political theory it is based
on the ultimate value of human personality. Liberty is the highest human value which is adversely
affected by state regulation and control. Individualists look upon the state as a necessary evil. It is
necessary because of the selfishness and aggressiveness of man; it is an evil because it is an
enemy of individual liberty. The individual should be left alone to develop his personality in his
own way. The state's primary function is to maintain social Peace and order. The promotion of
social welfare falls outside its scope. As Garner writes, "The state exists, merely because crime
exists, and its principal function, therefore, is to protect and restrain, not to foster and promote".
The guiding principle of individualism "is maximum possible individual freedom and minimum
possible state action"

Exponents of Traditional Individualism

Bentham, Mill, Spencer are some of the advocates of traditional individualism. Some twentieth
century writers like Hayek, Nock, Oakeshott, Nozik and Friedman are supporters of negative
liberalism. Like Adam Smith and Ricardo, Bentham believed in the dogma of self-regulating and
uncontrolled economy. C.C. Maxey writes: "At the outset utilitarianism was emphatically laissez
faire. It demanded free trade, freedom of occupation, unrestricted competition, inviolable private
property and other individualistic reforms". J.S. Mill is a transitional philosopher who began as an
individualist but ended as a positive liberal. He advocates complete freedom of the individual in
the sphere of self-regarding actions the sphere which does not concern the community. He
makes an eloquent vindication of freedom of thought and opinion. Mill wrote: "ln the part which
merely concerns himself, his (Individual's) independence is, of right, absolute. Over himself, over
his own body and mind, the individual is sovereign". Herbert Spencer, an extreme individualist,
following the principle of social Darwinism, maintained that the sphere of state action must be
limited to (a) protection of the individual against external enemies; (b) the protection of the
individual against internal enemies; and (c) the enforcement of contracts lawfully made.
Since the later half of the 19th century, negative liberalism (laissez faire individualism) has
changed into positive liberalism. Despite this change which is well accepted, some twentieth
century writers support the negative state and oppose the increasing intervention of the state in
the socio-economic and other spheres. Hayek has made out a strong case for free enterprise and
non-intervention by political authority. He argues that state-sponsored economic planning is
neither desirable nor practicable. Total planning may lead to serfdom and will reduce democracy
to a shadow without substance. Oakeshott maintains that there is essential unity and harmony in
society and the function of the state should be limited to the establishment and maintenance of
effective competition by means of an appropriate legal system. Increase in the functions of the
state will lead to collectivism which would prove prejudicial to individual freedom. Like Hayek and
Oakeshott, Friedman and Nozik have supported the negative liberal view of the state and have
opposed social welfare-oriented planning. These new champions of classical liberalism have
strongly assailed the welfare or regulatory functions of the modern state.
Gilchrist has summarised the functions of the state according to traditional individualists who take
a moderate stand on this question: (1) Protection of the state and individuals from foreign
aggression; (2) Protection of individuals against each other, that is, from physical injury, slander
and personal restraint; (3) Protection of property from robbery or damage; (4) Protection of
individuals against false contract or breach of contract; (5) Protection of the unfit and (6)
Protection of individuals against preventable evils such as plague or malaria.
Arguments in support of Individualistic Theory
The individualists support their position from four different stand points: the ethical, the economic,
the scientific and the practical: Considerations of justice require that the individual should be let
alone by the state so that he may realize fully the ends of his existence. Freedom of action is
essential to the development of personality. One should enjoy the liberty to mould one's own life
according to his ideals. This particular line of argument had the support of such thinkers as Kant,
Humboldt and J. S. Mill. Non-interference by the state is necessary to the harmonious
development of all the powers of the individual. Qualities like self-reliance, initiative, enterprise
and originality develop to the fullest extent if the individual is left alone. Over-government not only
diminishes freedom but also kills initiative, cramps personality and creates a pauper mentality.
The uniqueness of individual personality and variety of character are most likely to be destroyed
by uniform state laws which create standardised values and reduce society to a dead uniformity.
The consequence is that both the individual and society are losers.
Laissez faire theorists argue that the policy of non-interference rests upon sound economic
principles. From the economic stand point they assume that every man is self-seeking and knows
his interests best. Free competition increases production, ensures efficiency and maximizes
economic well-being. "The self-interest of the consumer will lead to the demand for the things that
are most useful to society, while the self-interest of the producer will lead to their production at the

least cost". Unrestricted operation of the law of supply and demand will result in fair prices.
Industry, trade and commerce flourish under conditions of free competition. Likewise foreign trade
should be left free. Beyond ensuring that the market is kept free and open and that fraud and
breach of contract are not practised on one another by the members of society, the state has
nothing to do in the economic sphere.
Individualism, say its advocates, rests also upon sound scientific considerations. It is in harmony
with the principle of evolution - the biological law of the struggle for existence and survival of the
fittest. Herbert Spencer is the chief exponent of this argument. He holds that each individual
should be allowed to stand alone or fall according to his worth unaided by the supports and
guidance of government. Free competition among individuals would ensure the survival of the
strong, the efficient, the intelligent and the virile and elimination of the poor, the weak, the unfit
and the inefficient. State intervention would hamper the process of natural selection.
Practical experience shows that government attempts to do many things but does them badly.
Governmental action results in red-tapism, waste and corruption. Every additional function,
observed Mill, means a new burden imposed on a body already overcharged with duties; the
result is that most things are ill done, and much is not done at all because the government is not
able to do it without delays. As compared to government undertakings, private enterprises are
more efficient and make greater profits. Again any large-scale state control results in bureaucratic
rule. With extension of governmental functions greater power passes into the hands of the
officials. Hence the state should restrict its activity and allow maximum freedom to the individual
to mobilise his own resources and achieve best results for himself and for the society at large.
Arguments against Individualistic Theory
The theory has been subjected to searching criticisms upon various grounds.
1. The assumption that the state is a necessary evil, that all restraint as such is wrong, has hot
been borne out by experience. History bears testimony to the progress of civilization largely
promoted by wisely directed state action. The state is a positive good. Its functions have not been
simply negatively regulative" but protective, encouraging and fostering the common welfare. So
long as men live an associated life they will have collective wants which can be satisfied only
through state organization. Through 'removal of hindrances', the state can promote good life for
individuals.
2. The increasing complexity of modern civilization calls for greater and more extensive state
action. The vast majority of people cannot develop their faculties, mental, moral and physical, to
the fullest extent without positive state action. They depend upon the state for guidance and
assistance. Modern welfare states regulate the most vital aspects of our social life including
health, education, public utilities and public assistance in times of need. State is a positive good
which renders unlimited welfare services to the individual.
3. The basis of individualism that man is fundamentally selfish is unsound. Man is a mixture of
both egoistic and altruistic (doing good to others) impulses. Individualism is based on only one
aspect of human nature and grossly exaggerates it. To build an entire theory of state action on
one aspect of human nature is lop-sided and improper.
4. Individualism wrongly assumes that each individual knows his interests best, that he is equally
farsighted, that he possesses an equal power of obtaining what he wants and has an equal
freedom of choice under free competition. Experience shows that most men do not know their
best interests, nor the means to attain such interests. Garner aptly remarks: "the very point of the
matter is that ignorant people cannot take precautions against dangers of which they are
ignorant". The truth is that society is a better judge of a man's intellectual, moral or physical
needs than he himself is.
5. "The weakest point in the argument of the laissez faire advocates, writes Garner, is the

assumption that the state is necessarily hostile to freedom, that government and liberty represent
antithetical ideas, that in proportion as the functions of government are multiplied the domain of
individual liberty is restricted in short, that a maximum of government necessarily means a
minimum of freedom". In reality wisely organized and directed state action has not only enlarged
the capacities of individuals but, increased their liberty of action by restraining the strong and the
self-seeking and by moderating conflicts in society. It is wrong to assume that all restraint is an
evil. In fact the "whole problem of creating and guaranteeing liberty is largely a problem of
organizing restrictions". Law is a condition of liberty for all. All laws do not infringe individual
freedom.
6. One major weakness of individualism lies, as Burns observes, in its "neglect of the social
causes and the social results of action" Individualists' picture of an 'atomic individual' and attempt
to create a dichotomy between the individual and society are figments of the imagination.
Individual good and social welfare are not antithetical but complementary. Society is an organic
unity of which each individual is an integral part.
7. Individualists like Mill, Humboldt, and Spencer have confused individuality with eccentricity,
variety of living and oddity of character, qualities which in themselves having nothing of value.
Character is developed not through unbounded freedom but by restraint and discipline.
8. The defence of a policy of laissez faire in economy breaks down on close analysis. Free
competition has led to monopolies, trusts and combinations which have spelt a grave peril to
justice and harmony in society. Uncontrolled and unplanned production has led to frequent
fluctuations in employment and income, wastage and exploitation of the workers. Free
competition can lead to the best social advantage only where there is approximate equality of
bargaining power. The evils of free competition have necessitated planning on a large scale.
Government has come out in a big way to regulate economic action in the interest of social
welfare.
9. The biological argument is untenable. Survival of the fittest does not necessarily mean survival
of the best. Moreover, the law of struggle for existence and survival of the fittest applicable to
lower animals cannot govern Human society. Man, the noblest of creatures, actively adapts
nature to his needs. Cooperation, harmony, compassion govern the life of social aggregates.
10. It is wrong to decry all governmental measures and regulations because some governments
have made mistakes in the past or because their agents have sometimes abused the powers
entrusted to them. Private agencies too commit errors. Most governmental actions have proved
beneficial rather than harmful to society.
Modern Individualism
Towards the close of the nineteenth century traditional individualism was being abandoned in
favour of increasing state control and intervention. It declined primarily because of what Prof.
Laski calls its "moral inadequacy". It failed to meet the challenge of problems created by
unregulated industrial capitalism. Despite the acceptance of the increasing role and functions of
the modern states the spirit of protest against excessive state regulation and control has given
birth to what is known as 'modern individualism'. It focuses attention on the group rather than the
individual. The individual is integrated with his group on a functional basis more than his political
integration through the state.
Two factors have led to the growth of modern individualism: (1) the recognition of the
heterogeneous character of modern society; and (2) the revolt against the tremendous increase
in the power of the state. Modern individualists advocate the autonomy of the groups and contest
the claim of the modern state to a monopoly of supreme power. They are critical of the rigid party
discipline and anonymous authority of public opinion as sure conditions of loss of individual
freedom. Again war and economic planning have made the modern state a grand Leviathan and
reduced liberty to a marginal experience.

Graham Wallas, Norman Angell, Miss Follet, the guild socialists and political pluralists are the
exponents of modern individualism. Graham Wallas offers a new institutional pattern to
counteract the operation of irrational forces in politics. He suggests the composition of the lower
chamber on territorial representation and of the upper on the basis of group representation.
Again, he suggests the creation of special bodies having a majority of the elected members,
disciplined by a minority appointed by the professional groups, for the regulation and
management of educational and economic undertakings. Norman Angell looks upon the state as
an artificial arrangement and wants to create a society consisting of a net work of functional
groups. The guild socialists plead for the reorganisation of the contemporary society on functional
basis. Modern individualists endow the group with a real personality and limit the role of the state
as a coordinating agency capable of adjusting the conflicting interests and claims of different
groups in society.
Functions of the State according to Positive Liberalism
In the long run, negative liberalism represented by the doctrine of laissez-faire proved disastrous
to the community. By the middle of the last century, classical liberalism had lost its appeal. After
the Industrial Revolution, liberal thinking with regard to the functions of the state underwent a
change. Negative liberalism was replaced by positive liberalism. Extreme exploitation of the
working class by the capitalists invited many reactions in socio-political thinking -idealistic,
humanist, utopian socialist, Marxian and positive liberal. Of these the Marxian challenge was the
most formidable and came in the form of a challenge to the total order of capitalism. Positive
liberalism emerged as a reaction to these views and liberals were not afraid of the increasing
power of the state because by then state power was in the hands of the capitalist class. They
regarded the state as a positive good-an agency for the general welfare and as a guardian of the
common interests of society. Thinkers like Mill, Green, Hobhouse, Lindsay, Tawney, Cole, Barker,
Laski and Mac Iver contributed to the philosophy of positive liberalism by clarifying the positive
functions of the state. The theory of positive liberalism is variously called as the 'theory of welfare
state','theory of industrial state', revisionist or reformist liberalism. It pleads for increased state
functions for promoting social welfare, for bringing about harmony and equilibrium in society and
for satisfying the socio-economic demands of the general masses. The views of some notable
positive liberals are as follows.
1. J.S. Mill: Mill was a transitional thinker 'who began as an individualist but switched over to
positive liberalism. He made a departure from Benthamite utilitarianism by emphasizing the
promotion of the sense of dignity in man rather than happiness as the end of the state. In his
"Representative Government" he assigned socio-economic and cultural functions to the state. In
his writings the negative character of the state largely disappears. State has to perform necessary
functions which were supported by negative liberalism and optional functions which included
welfare functions. The measures suggested by him include compulsory education, limiting the
right of inheritance, factory legislation in case of children, control of monopolies, limiting working
hours and attaching less sanctity to landed property. His great contribution to positive liberalism
was that he regarded the state as a means of personal and social development of the individual.
2. T.H. Green: He was a notable English idealist whose main theme was the harmony in the
individual's self-interest and social interest. He looks upon the state as an agency for the social
upliftment of man. The primary function of the state is to remove the hindrances in the way of
development of human personality. He writes: "The function of government is to maintain
conditions of life in which morality shall be possible, and morality consists in disinterested
performance of self-imposed duty". Again, "the state is an institution for the promotion of common
good". Poor education, poverty, ignorance and bad working conditions are obstacles to the moral
and intellectual development of human personality. The state must remove these hindrances by
positive welfare activities.
3. H.J. Laski: Laski is a critical positive liberal of the 20th century .His writings mark a major shift
from pluralistic view of the state to the state as "keystone of social arch", and "the coordinating

factor in the community". The state, Laski writes, "is an organisation for enabling the mass of men
to realise social good on the largest possible scale and its function in society is "to satisfy
common needs, to protect the interests of men as citizens". The state coordinates the interests of
various associations and institutions in society. It must reduce the gap between the rich and the
poor through its economic functions. It must perform social welfare functions like education,
health and housing. It must safeguard the interest of the working class and maintain conditions
for the enjoyment of liberty and equality by all men.
4. MacIver: A liberal pluralist sociologist, viewed the state as one among various associations
which "commands only because it serves, owns only because it owes... "State has both
negative and positive functions. State should not seek to control opinion, morality and religion,
customs, fashion and culture. State's positive functions include three broad categories order,
protection, conservation and development. The state cannot perform all the functions efficiently
and only general functions should be performed by it leaving the rest to various other
associations.
Many other modern writers supported the positive liberal views about the functions of the state.
They include J .M. Keynes, Roosevelt, Galbraith and Macpherson who expressed their views
after 1926. The Great Depression dealt a severe blow to capitalist economies and an era of
State-monopoly capitalism emerged in Europe and the U.S.A. Keynesian theory was the
propelling force behind Roosevelt's 'New Deal' programmes - mainly laws concerning
nationalisation. The State entered into trade, commerce and industry in a big way. Statemonopoly capitalism is developing fast in all liberal democratic states and bureaucratisation is on
the increase. John Galbraith has justified planned economy and a mixed economy in View of the
changed circumstances of the 20th century. Macpherson, a critical liberal, advocates positive
welfare functions of the state to fulfil the developmental goals of society. Thus the liberal theory of
state functions has undergone changes from time to time to save capitalism from decay and
disintegration.
The Socialistic Theory
Directly opposed to the individualistic theory of state functions is the socialistic theory which
contends for a maximum rather than a minimum of government. The advocates of the theory,
instead of looking upon the state as a necessary evil, regard it as a supreme and positive good.
The state's mission should include the promotion of the common economic, moral and intellectual
interests of the people. Socialists believe that direct and positive state action can make available
social justice for the bulk of mankind. It must not be understood that they attach any less
importance to individual freedom than do the individualist theorists. On the contrary, they regard it
as all important and hold that it can be better secured through positive state action than through
free competition.
Socialism, as an economic and political doctrine, originated as a protest against the evils of
unbridled capitalists. Gross social injustice, economic inequality, rampant exploitation, colossal
poverty, mass misery and antipathy between the 'haves' and the 'have-nots' were some of the
disastrous consequences of unregulated capitalism. Socialism is fundamentally an ethical revolt
against the terrible dehumanisation and pervasive alienation which characterized all institutions of
capitalism.
All varieties of socialistic conceptions can be grouped under two schools of thought, the
revolutionary and the evolutionary. The former (communists and syndicalists) hold that revolution
or direct action is the only effective method of bringing into existence the ideal society; the latter
(collectivists, guild socialists, fabian socialists and democratic socialists) believe that evolutionary,
constitutional methods are desirable and have more lasting effects. Again it is customary to
contrast Utopian socialism with the scientific socialism of Karl Marx. Utopian socialists like
Charles Fourier, Robert Owen, Saint Simon and Proudhon were not interested in political action
for ushering in socialist society but wanted to prepare people for a new social order through

persuasion and example. Karl Marx is rightly regarded as the harbinger of scientific socialism. He
not only criticized the evils of the capitalist system but delineated the means (Programmes of
action) through which the ultimate goal of a classless society (communism) could be achieved.
On account of the variety of socialistic conceptions, there is considerable difference of opinion
among the socialists as to the proper sphere of state action. However, we may attempt a general
statement on which most socialists agree.
Socialism may be defined as a theory and a movement aiming at the collective organization of
the community in the interests of the mass of people through the common ownership and
collective control of the means of production and exchange. Socialists aim at a "cooperative
commonwealth controlling all the means of production and regulating distribution according to
some method of joint control". The state should undertake all kinds of functions which are
necessary for the material and moral welfare of the individuals. Socialists suggest that all defects
of social organization inequality of wealth, insecurity, mass poverty, exploitation of the workers,
dehumanization etc. arise from one root cause namely, the private ownership of the means of
production and the desire for private profit. Therefore they advocate the abolition of all forms of
private capital- private property in land, natural resources, industries -and with it the incentive to
private profit. In place of private capital they would substitute collective ownership and control.
Through comprehensive planning, socialists seek to harness productive activities of society into
the most useful channels, and to increase social good and social justice to the utmost. Some
socialists advocate equal distribution, others equitable distribution. But as Laveleye remarks:
"Every socialist doctrine aims at introducing greater equality into social conditions. Socialism is an
equaliser and leveller".
Socialism aims at spontaneous integration of man with society. It seeks to unite man with his
work through community's control over the economy. Society is viewed as an organic whole and
the individual is integrated with the social whole by removing the fundamental causes of
alienation and dehumanisation which characterise capitalist economies. Erich Fromm says: "The
aim of socialism is man's emancipation, his restoration to the unalienated, uncrippled individual
who enters into a new, rich spontaneous relationship with his fellowmen and with nature.
Socialism for Karl Marx is a society in which "the full and free development of every individual
forms the ruling principle".
Arguments for Socialism
(1) Socialism puts emphasis on society and social good. Individual is looked upon as an integral
part of the social whole and social welfare takes into account the welfare of every individual The
good of all is given paramount to that of a few.
(2) Socialistic theory is founded on the principles of justice and right. It seeks to eliminate the evils
of unregulated competition like lower wages, over production, wastage, duplication of services
and unemployment through a planned economy. Socialists advocate an equitable distribution of
wealth and minimize the vast gap existing between the haves and the have-nots. They aim at
guaranteeing social justice and economic security to the bulk of mankind.
(3) Collective ownership of the means of production and collective management of economic
enterprises are thoroughly democratic. Socialistic policies make democracy real. They fulfil the
economic aspect of democracy by guaranteeing to each individual the basic needs of life and
securing for them freedom from want and from fear. Socialism is the "economic complement of
democracy".
(4) Socialists advocate the restructuring of society through radical programmes of social and
economic reforms. The welfare functions undertaken by the state relating to health, sanitation,
education, housing, social security etc. accord an equal opportunity to all individuals to develop
themselves fully.

(5) The socialistic ideal places emphasis on altruism and on the cultivation of a desire for social
usefulness. Under the socialistic regime, it is asserted, a higher type of individual character, better
standard of values and a larger degree of real freedom is created. It is an antidote to the gross
materialism, dishonesty and a general lowering of the standard of individual character which
characterize free competition under industrial capitalism.
Arguments against Socialism
1. The socialistic theory starts from a false premise in maintaining that private property is not only
wrong morally but also economically. Collective ownership would tend to destroy the most
powerful incentive to individual effort and industry. The activities of the average individual are
determined for the most part by the desire for gain and not by any altruistic motive. Socialist
economy will kill individual incentive and initiative.
2. Socialism, it is said, is not conducive to progress. Everybody's business is nobody's business.
Public enterprises suffer from this malady. State-managed economic enterprises do not function
as efficiently as business organizations because the "profit motive" is missing in a socialist
economy. The idle and the incompetent thrive in the name of social welfare and men of enterprise
and originality are not adequately rewarded. Production in state managed enterprises suffers both
in quality and quantity.
3. It is alleged that socialism involves a restriction of individual freedom and a deterioration of
individual character. State assumes greater control over the lives of individuals in the name of
providing greater material prosperity. Expansion of state functions results in bureaucratic control.
Officials become very powerful and opportunities for corruption, intrigue and personal spite
increase.
4. Socialists err in overestimating the state's capacity and efficiency. Garner writes: " Government
in most cases is better fitted to restrain the evils of monopoly and regulate the conduct of a
business which affects the public interest than it is to manage the business itself'. Critics of
socialism argue that to overburden the government with the management of the whole complex
volume of economic activity in a modern society will lead to inefficiency, if not to a complete
breakdown.
Both individualism and socialism contain an important truth; but they exaggerate it. As pure ties
both are untenable in theory and impossible in practice. What we need is a system which would
preserve our individualities and freedom and yet keep society intact as an organic whole. Burns
rightly declares: "The individualist is right in aiming at the variety of individuals, and so is the
socialist in impressing on all their common interest; for the fullest development of each is to be
found in the performance of his function in the life of the whole". Free competition under modern
conditions is hot always a beneficent socio-economic principle and profound social, economic
and political changes have combined to discredit the laissez faire theory. Notwithstanding the
obvious defects of socialism, most of the states adopt a policy of judicious and gradual extension
of state activities in the direction of the socialistic ideal in order to provide social justice and
economic security to the masses.
The Concept of Welfare State
The concept of 'Welfare State' is a product of the ~th century. Modern liberalism looks upon the
state as a welfare or social service agency. Individualistic and socialist theories present rather
extreme views regarding the proper sphere of state action. Most modern states avoid both the
extremes and strike a middle course between individualism and socialism by adhering to the
doctrine of welfare state.

Origin and Development of the Welfare State Ideal

The welfare state like the socialist state is the product of industrial capitalism. The evils of
industrialisation were of two kinds. The evils inside the factories included long hours of work,
unhealthy surroundings, accidents, low wages, exploitation of women and children workers.
Urbanization spread along with industrialization and created evils outside the factories such as
overcrowding, slums, inadequate supply of pure water, absence of drainage, accumulation of
garbage on the streets and environmental pollution. The state undertook legislative measures to
remove such evils. These efforts of the state marked the evolution of the idea of welfare state in
the West.
The Welfare state ideal took strong root in England. In England, trade Unions, ably supported by
the socialists played an important part in developing the ideal. The Beveridge Report on Social
Insurance issued in 1942 in England is one of the great social documents of our time. It
prescribed the provision of "national minimum" to every individual. It demonstrated that human
welfare could be realised within a democratic framework. It envisaged a scheme of social security
as a part of the general programme of social policy. It is one part only of an attack upon five giant
evils such as want, disease, ignorance, squalor and idleness. The National Health Service
received its final stage during Attlee's Prime Ministership. Under his stewardship a series of
measures were passed resulting in the nationalisation of railways, coalmines and steel, of the
Bank of England and of transport. A vast social insurance scheme is in operation in Britain. The
administration of President F. D. Roosevelt in the U.S.A. which introduced the "New Deal"
Programmes to combat the great 'depression' in the early thirties accepted the responsibility of
the federal government to promote welfare of the American people. His progressive, humanitarian
measures contributed greatly to the evolution of the concept of welfare state. The USA launched
for the first time under the Social Security Act of 1936 an ambitious plan for providing old age
pension, health disability and unemployment insurance with the cooperation of federal and state
governments, and of the employers and employees.
Among the continental countries, Sweden, Norway and Denmark have extensive welfare
schemes supported by high taxation. The socialist states like USSR, China, East Germany,
Yugoslavia are also welfare states; but there welfare is planned and executed from above. USSR
has been the first modern country to have a planned economy. It has prided itself on vigorous
interest in public welfare enterprises of one kind or another. India is committed to the realization
of the welfare state. The Directive Principles of State Policy under the Indian constitution enjoin
upon the union and state governments to direct their efforts to achieve this objective.
Meaning and Nature of the Welfare State
Notwithstanding the performance of multifarious functions by modern governments, there is no
agreed definition of the concept of welfare state. According to T .H. Marshall a "welfare state" is a
"tougher proposition", "because it would be difficult to find any definition acceptable both to its
friends and to its enemies-or even to all its friends". However some standard definitions maybe
cited. Adopting a rather purely economic point of view Abraham defines it as " ac2!!!~u~ity where
state power is deliberately used to modify the normal play of economic forces so as to obtain a
more equal distribution of income for every citizen, a basic minimum irrespective of the market
value of his work and his property". T. W. Kent attempts a more inclusive definition when he writes
that a welfare state is " a state that provides for its citizens a wide range of social services".
According to J.D.H. Cole "the welfare state is a society in which an assured minimum standard of
living and opportunity becomes the possession of every citizen". Arthur Schlesinger writes:
"Welfare state is a system wherein government agrees to underwrite certain levels of
employment, income, education, medical aid, social security and housing for all its citizens".
Hobman describes the welfare state as a compromise between communism on the one side and
unbridled individualism on the other. He believes that the welfare state sets a pattern for any
progressive and humane society. It guarantees a minimum standard of subsistence without
removing incentives to private enterprise, and it brings about a limited redistribution of income by

means of graduated high taxation. Yet it does not pretend to establish economic equality. All are
assured of adequate help and support by the state in case of need.
Asa Briggs gives a rather long definition" A welfare state is a state in which organised power is
deliberately used (through politics and administration) in an effort to modify the play of market
forces in at least three directions-first, by guaranteeing individuals and families a minimum
income irrespective of the market value of their work or their property; second, by narrowing the
extent of insecurity by enabling individuals and families to meet certain 'social contingencies' (for
example, sickness, old age and unemployment) which lead otherwise to individual and family
crises; and third by ensuring that all citizens without distinction of status or class are offered the
best standards available in relation to a certain agreed range of social services".
Almost every state in our times, whether developed or developing, whether socialist or capitalist,
wishes to pursue the welfare state ideal. Arnold J. Toynbee, the most renowned historian of our
time argues that three centuries form now the twentieth century will be remembered not for its
wars, horrors and crimes, but for the fact that it is the first era in history in which people dared to
think it practicable to make benefits of civilization available for the whole human race.
Welfare State Exhibits Certain Distinguishing Features
(1) The primary objective of the welfare state is promotion of peoples welfare. It goes far beyond
the performance of the protective or police functions attributed to the laissez faire state. The state
undertakes developmental activities pertaining to social welfare and security, guarantee of
minimum standard of living and reduction of economic disparity and raising the general standard
of living Bernstein writes:" The main principles of the welfare state are relatively simple: first, the
recognition that every member of the community is entitled solely because he is a human being,
to a minimum standard of living; second, the welfare state is committed to putting full employment
at the top of social goals to be supported by public policy". Another objective of the welfare state
is to provide social security measures against old age, sickness, accidents, unemployment etc.
(2) The welfare state is a positive state. It regards itself more as an agency of social service than
as an instrument of power. It undertakes the responsibility of bringing about the material and
moral welfare of the people within the framework of democratic political institutions. The state
provides comprehensive social services to promote the fullest possible development of individual
human potential. It is said that in a welfare state "the individual has only to get himself born, the
sate will do the rest. The state looks after the individual from the cradle, to the grave.
(3) The welfare state is a compromise between the extremes of individualism and socialism. It
puts equal emphasis on the individual and society; on individual liberty and common good of the
community. It respects the dignity of human personality while securing social justice to all.
(4) The welfare state regulates the national economy through planning. It does not allow the
operation of a free economy in which the dominant class exploits the rest. It adopts a "mixed
economy" allowing both the public and the private sectors to play their part in the development of
national economy. It strikes a middle path avoiding the pitfalls of totalitarian control on the one
hand and of unbridled free enterprise on the other.
(5) The welfare state upholds the rights of all and metes out equal treatment to all individuals and
classes without any discrimination.
(6) So far as the nature of the welfare state is concerned, Asirvatham observes, the first important
thing to remember is that welfare is not a matter of charity, but of right. Secondly, if welfare is to
be genuine welfare, the ground for it should have been prepared earlier by the various agencies
at work in the state. In the third place, if the welfare state is to be a blessing and not a curse, one
should not produce a pauper mentality on the part of its recipients

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Criticism of the Welfare State

It is alleged that the welfare state is an expensive state. Expenses on social security and welfare
measures, take away a large chunk from the public exchequer. This criticism however is not valid
because\in advanced industrialised countries only 10 to 15 per cent of the national income is
spent on welfare schemes. Moreover, expenses on welfare schemes should not be viewed as
unproductive as it is an investment in the human materialistic increasing national income it is not
difficult to earmark a sizeable portion for improving the material and moral development of the
needy and weaker sections of the society.
It has been argued that the expanding network of welfare schemes may kill individual initiative
and spontaneity and may create a pauper mentality. State care from the cradle to the grave may
stifle individuality, originality, creativity and the willingness to work. However, supporters of the
welfare state say that this argument does not contain much truth as duty is a matter of Character.
D. L. Hobman aptly observes: "A sense of duty is a matter of character and fortunately most
people do take the responsibility for themselves and their families. Those who shirk would do so
in any case whether they live in a welfare state or not. Irresponsible people are to be found in
every social class, among those who rely on an unearned income as much as among those who
are too ready to draw upon national assistance".
Another angle of criticism against the welfare state comes from the pluralists who apprehend that
the activities of voluntary associations may sharply decline with the vast expansion of welfare
functions. In this regard it is pertinent to remember that where voluntary organizations failed to
remove the disastrous socio-economic consequences of industrialisation and urbanisation the
state had to enter the field and shoulder these responsibilities. The complex and enormous
problems of modern society could be tackled only by an agency like the state which commanded
enormous power and resources. Moreover, despite the welfare activities undertaken by the state,
voluntary organizations continue to operate and render service to society in one form or another.
They have supplemented the efforts of the state to ameliorate the conditions of the teeming
millions.
It has been said that the welfare state leads to bureaucratic despotism. The business of
government has increased in scope and complexity and more and more people have been
employed by the state. The Administrative Reforms Commission in India observes: "The growth
of the administrative apparatus, both in size and complexity has been the most notable feature of
the contemporary administrative scene. Old units have expanded and numerous new units have
been added in all tiers of government, at the centre, in the states, at the local government levels
and in quasi-government bodies alleged that a huge amount of money is spent on a top-heavy
administration while very little is left for developmental activities. Moreover, bureaucracy is lacking
a sense of commitment-to the welfare state ideal and a sense of involvement in the execution of
welfare programmes. On the contrary the meddlesomeness of officials in all spheres of life holds
out a threat to individual freedom.
However, some of the disadvantages and defects of the welfare state outlined above are far
outweighed by its beneficent and humane functions.
India as a Welfare State
One of the salient features of the Indian constitution is the effort to establish a welfare state. The
Preamble and the Directive Principles of State Policy make it amply clear that our goal is a
welfare and socialist state. The Preamble promises to secure to the Indian people Justice
social, economic and political. The Directive principles are non-justiciable; nonetheless they are
regarded as fundamental in the governance of the country. Article 38 of the constitution reads:
"The State shall strive to promote the welfare of the people by securing and protecting as
effectively as it may, a social order in which justice, social, economic and political shall pervade all
institutions of the national life". It provides a broad framework for the establishment of the welfare

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state ideal. Removal of poverty and provision of a minimum standard of living is one of the
objectives of the welfare state.
While Article 39 (a) spells that citizen, men and women equally, have the right to an adequate
means of livelihood, Article 43 enjoins that the state shall endeavour to secure to all workers
work, a living wage and conditions of work ensuring a decent standard of living.
Provision of employment opportunities which is yet another objective of the welfare state is
emphasized by Article 41 which directs the state for securing the right to work. Provision against
insecurity is also incorporated in this Article which directs the state to make effective provision for
securing right to education, and to public assistance in cases of unemployment, old age, sickness
and disablement.
Protection and special care of the weaker sections of the community is provided in Article 46
which directs the state to promote with special care the educational and economic interests of the
weaker sections of the people, and in particular, of the scheduled castes and the scheduled
tribes, and to protect them from social injustice and all forms of exploitation. These directives
spell out the philosophy of the welfare state. India is making a determined attempt to fulfil this
ideal by economic planning. Successive Five Year plans and progressive legislation have
undertaken numerous social security and welfare measures which have benefitted the common
man. However, a number of hindrances like low level of motivation for work, lack of self discipline,
tax evasion, lop-sided land reforms, increase of population, low degree of personal integrity have
stood in the way for the realization of a full-fledged welfare state.
Marxian Theory of the Functions of the State
The Marxian theory of the functions of the state has certain unique features which sets it apart
from the broad framework provided by the socialistic theory. Miliband writes: "Marx himself never
attempted to set out a comprehensive and systematic theory of the state". But discussion on the
state is scattered in his numerous writings. State is the product of the class struggle, an
instrument of class rule. It is an organ of the economically dominant class through which the
propertied class exercises political dominance over the majority of dispossessed class.
Marx and his followers did not have any uniform view regarding the functions of all states. They
had different views regarding the functions of the pre-socialist states including the capitalist states
on the one hand and the socialist (Proletarian) states on the other.
Functions of the State in Capitalist Societies
In a capitalist society the capitalists (a minority class) own and control the means of production
and the motive of production is profit and workers sell their labour power to capitalists for wages.
The Western liberal democracies like the U.S.A., the U.K., France, West Germany, Italy,
Sweden, Denmark are examples of such societies.
According to the Marxian theory, all these are bourgeois democracies since the state maintains
the capitalist socio-economic and political order and serves the interests of the capitalist class.
The law of the state is "subtle and poisoned instrument which defends the interest of the
exploiters" and the political institutions of the state constitute a "machine to crush and repress the
toilers".
The nature of the capitalist (bourgeois) state being what it is, its purpose is the protection of
private property and its function is the oppression of the non-possessing by the possessing
classes. The State can seldom reconcile the interests of opposing classes; it can mediate only
when the two classes are in a state of equilibrium.
The modern capitalist state has become an agency of general social welfare and resolves the

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conflicts in society and aims at consensus. But Marxists maintain as per Chang's analysis, that
"no matter how many different functions are performed by the modern state, their effect is but the
oppression of one class by another. From this point of view, there is only one function of the state,
namely, political or repressive". The capitalist state is pressured by the working class to make
some concessions as a matter of expediency. By rendering welfare functions the capitalist order
is ultimately protected as the chances of a working class revolution are minimized. The modern
capitalist state intervenes in the economic affairs through nationalisation of key sectors, licensing
and price control etc. in order to regulate the capitalist mode of production. These measures of
the state are the historical requirements of the crisis-ridden capitalist economy in the
20th century. Selective nationalisation by capitalist state does not lead to socialisation but leads
to bureaucratisation and state monopoly capitalism.
Miliband writes, "State intervention in economic life in fact largely means intervention for the
purposes of helping capitalist enterprise".
The modern capitalist state mediates in the conflicts of capitalists and workers in the overall
interests of the capitalist economy. Working class movements are crushed and strike declared
illegal by the coercive state apparatus. All the elites in a capitalist society -political, bureaucratic,
business, military and intellectual- join hands to serve the system. The dominant economic class
influences the political and social system in various ways through money power. It purchases the
politicians, corrupts the bureaucrats, controls the media and influences the decision-making
process. Engels writes:" The modern State, no matter, what is its form, is essentially a capitalist
machine, the State of the capitalists, the ideal personification of the total national capital. The
more it proceeds to the taking over of productive forces, the more does it actually become
national capitalist, the more citizens does it exploit. The workers remain wage workers
-proletarians. The capitalist relation is not done away with".
Functions of the State in Socialist Societies
A socialist society is one where the organised working class has captured power through a
proletarian revolution and the working class state- the dictatorship of the proletariat -has been set
up. The abolition of the state involves three steps: (a) the overthrow of the bourgeois state by
revolution; (b) the establishment of the dictatorship of the proletariat; and(c) the withering away of
he socialist (proletarian) state. Among the important socialist states are the USSR, China, Cuba,
Vietnam, Cambodia, Yugoslavia, Poland, East Germany and Rumania.
Chang finds two important differences between the bourgeois state and the proletarian state.
1. The bourgeois state is an instrument for the suppression of the majority by the minority, while
the proletarian state is an instrument for the suppression of the minority by the majority.
2. While the bourgeois state must be destroyed by revolution, the proletarian state would "wither
away". According to Marx, the dictatorship of the proletariat is a transitional stage between the
bourgeois state and the classless, stateless communist society. The functions of the state in
socialist societies can be classified as under: (1) Political (2) Positive (3) International and (4)
Preparing the conditions for its own withering away.
1. Political Functions: The first task of the working class revolution is to establish a socialist state
in the form of the dictatorship of the proletariat. It is necessary for crushing the resistance of the
exploiters i.e., suppression of the bourgeoisie, and for guiding the people in the work of socialist
reconstruction i.e., establishment of socialism. According to Chang, "one is destructive, and the
other is constructive. One is political and the other is economic". Regarding the destructive
function Marx wrote: "Socialism is the declaration of the permanence of the revolution, the class
dictatorship of the proletariat, as the necessary transition stage to the abolition of all class
distinctions, the abolition of all conditions of production on which they are based, the abolition of
all relations of production which correspond to those conditions of production". Establishment of a

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classless society or communist society is the primary political task of the socialist state and this
involves ruthless suppression of the bourgeois, the exploiters in a capitalist society.
2. Positive Functions: For the establishment of socialism positive, constructive measures are to
be undertaken by proletarian dictatorship. Chang writes:" Proletarian dictatorship refers to the
forcible suppression of the bourgeoisie which is necessary because of the bourgeoisie's
resistance. Yet it does not consist in this destructive phase alone; it has its constructive phase-the
establishment of socialism". The positive functions of a socialist state have been elaborated by
Lenin, Stalin, Mao and other Marxists.
Some of the economic functions of the Socialist state include: (a) abolition of private property and
social ownership of the means of production, distribution and exchange; (b )establishment of
socialist mode of production whose objective is social welfare; (c) land reforms and the practice of
cooperative and state farming; (.d) establishment of planned economy and (e) rendering welfare
services to the working class.
The socialist state performs cultural, social and moral functions by making provision for scientific
education to all, establishment of social and cultural, equality and the establishment of socialistic
culture and ethics governed by altruism and cooperative social sentiment. All economic, social
and cultural functions are performed with due participation of the masses at all levels.
3. International Functions: The socialist states believe in the proletarian internationalism -the unity
and solidarity of working men of all countries. Keeping in view this objective, socialist states
provide assistance- material and moral- to the movements of the masses and the working classes
throughout the globe. They provide asylum to the revolutionaries of the world. In the international
sphere they work for the maintenance of peace, progress and justice.
4. Preparing the conditions of its own withering away: The socialist state is merely a transitional
state which must wither away after a classless society is achieved under communism. The state
will gradually pass away as the people become accustomed to observing the codes of socialist
ethics. The functioning of the socialist states have exposed some of their weaknesses and
deficiencies which are contrary to the Marxian theory. Although fantastic economic developments
have been made, economic disparities persist among people. It is alleged that dictatorships of
communist party have come up instead of dictatorship of the proletariat. Party leader- ship has
become a class in itself -distinct from the working class. Again a powerful and expanding
bureaucracy and technocracy have assumed control over administration and the economy. An
important criticism is that the socialist states have become very powerful and strongly entrenched
and there is no chance of their withering away in the foreseeable future.
Functions of a modem state
After examining the various theories relating to the sphere of state action, it is necessary from
pragmatic considerations, to discuss the functions actually performed by most of the modern
states. Most of the modern states strike a middle course between the extremes of individualism
and socialism. They are social service states or welfare states as compared with the police or
negative state of the laissez-faire conception. They aim to secure common welfare and social
justice without sacrificing individual freedom. More generally, it is agreed that the duty of the state
is to promote the greatest happiness of the greatest number. The state is an organization to
promote social good on the largest possible scale. And in attempting to achieve this purpose,
modern states regulate and intervene in most areas of human life -social, economic, cultural,
political, moral and intellectual. The function performed by modern states may be classified under
two broad groups, namely
(1) Compulsory, Obligatory or Essential functions and
(2) Optional or Non-essential functions.

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(A) Compulsory or Essential Functions

These include functions which are necessary for the continued existence of the state, for the
guaranteeing of the civil and political freedom of the individual and for the protection of his life,
liberty and property. They are determined by the threefold relations of state to state, of state to
citizen and of citizen to citizen. Woodrow Wilson gives a list of these functions.
1. The keeping of order and providing for the protection of persons and property from violence
and robbery.
2. The fixing of the legal relations between man and wife and between parents and children.
3. The regulation of the holding, transmission and interchange of property, and the
determination of its liabilities for debt or for crime.
4. The determination of contract rights between individuals.
5. The definition and punishment of crime.
6. The administration of justice in civil cases.
7. The determination of the political duties, privileges and relations of citizens.
8. Dealings of the state with foreign powers; the preservation of the state from external danger
or encroachment and the advancement of its international interests.
Gettel adds two more essential functions-financial and military which call for special attention.
The financial functions include the imposition of taxation, the regulation of tariffs, coinage and
currency, and administration of public property and the management of public debt Military
functions include the maintenance of an army, a navy and an airforce.
(B) Optional or Non-essential Functions
These functions mayor may not be performed by the state. But these are necessary for the
material and moral welfare of the people. Modern states are positive states which perform many
optional functions of social service and welfare. These optional functions can be discussed under
four heads.
1. Economic Functions
1. Control of industries and nationalisation of key and sick industries. Socialist states nationalize
the industries, factories and other means of production while liberal democratic states like the
USA, and India follow 'mixed economy'. Under the mixed economy both the public and the
private sector operate simultaneously.
2. Regulation and control of price, measurements, production, import and export.
3. Modernization of agriculture, land reforms, irrigation facilities, cooperative and state farming,
remunerative price for farm products and increase in food production.
4. Supply of essential commodities at fair prices.
5. Checking hoarding, black marketing and profiteering.
6. Control of banking, currency and inflation.
7. Management of public utility services like means of transport and communication, energy,
postal services and water works.
8. Protecting the workers by regulating minimum wages, hours of work, bonus and other
working conditions.
9. Economic planning for rational utilization and distribution of resources -both material and
-human.
10. Provision for unemployment allowances, old age pension and insurance against accidents.
2.Social Functions
Modern welfare states make numerous provisions for the security and well-being of their citizens.
1. Family planning and welfare, measures against dowry, casteism and communalism.
2. Safeguard against social exploitation and establishment of social harmony.
3. Provision of economic and social benefits to the weaker sections of the community.
4. Provision of social security to widows, orphans, handicapped, destitute through relief and

15

rehabilitation measures.
5. The State provides medical facilities, sanitation and conservancy system. They run free
hospitals, maintain public health and hygiene and control epidemics like cholera, smallpox
and plague.
6. Maintain the quality of food items and preventing adulteration.
3. Cultural Functions
1. Education of the masses is one of the important functions undertaken by the modern state.
There is a tendency to enforce compulsory elementary education and to supervise and aid
secondary and higher education.
2. Patronage and encouragement of art, literature, music, dance etc. and censorship of antisocial cheap literature and art.
3. Encouragement of scientific and technological research.
4. Cultural exchanges to promote the spirit of unity among the people.
4. Political Functions
1. Safeguarding the rights and freedoms of the people.
2. Maintaining free, fair and periodic elections.
3. Provision for participation of the masses in public affairs and decision-making through
democratisation and decentralisation.
4. Regulation and coordination of the interests and activities of various groups, associations and
parties.
5. Steps against corruption, dishonesty, nepotism etc.
The above list relating to the optional functions of the modern states is representative but not
exhaustive. Again the line between essential and optional functions is not easy to draw. The
classification is bound to vary from time to time and from place to place. What were regarded as
optional functions a few years ago have now assumed the importance of essential functions.
Education, healthcare, economic planning and social security measures have increasingly
become essential functions in most modern states, According to Hobson, "The state assumed the
duties of a doctor, a nurse, a school master, trader and manufacturer, insurance agent, house
builder, town planner, railway controller and a hundred other functions". The performance of these
vast and complex functions has led to considerable increase in civil servants and the states have
virtually become bureaucratic with all their concomitant dangers. But the modern positive state
has proved itself a blessing for the bulk of mankind.

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