socialsystem
The social system of an economy summarizes the security for the population financed through taxes and social contributions . The social security system, for example, includes the social security system .
Most parts of today's social systems in Europe were introduced towards the end of the 19th century.
While Ludwig Erhard still suspected that a social system would become more and more superfluous with increasing prosperity of a society, it became apparent - for example in Germany with the economic miracle - that the need for a comprehensive social system even increases with decreasing need; Security turned out to be a so-called superior good .
Neoclassical view of the social system
Because to maintain a social system charges are necessary, according to neoclassical theory to net welfare losses result in a social system competes with the prosperity of the community. With a well-developed social system, full employment can not be achieved. Nevertheless, a social system seems necessary in order to enable the sick, the elderly or the disabled to make a living.
In the meantime one tries to achieve a return to the original idea by restricting the social system and thus to counteract a “recipient mentality”. This was already evident in the 1980s through a restructuring of the social system in Great Britain , later in Sweden and, to a limited extent, also in Germany ( Hartz IV ).
Keynesian view of the social system
Apart from questions of distributive justice, from a Keynesian point of view the welfare state plays an important role in three respects. Firstly as a permanent pillar of private consumer demand, secondly as a stabilizer in times of crisis and thirdly to contain uncertainty. From the Keynesian point of view, no statistically significant negative correlation between the expansion of the welfare state and growth or employment can be derived empirically.
While the government ratio (share of government expenditure in GDP) in Germany was 48% in 2003, Sweden had a government ratio of 59% and France 54%. It is interesting that economic growth in Sweden between 1999 and 2004 averaged 1.6 percentage points above the German growth. The French growth was one percentage point above the German. In addition, there is a clearly positive correlation between the level of GDP and the expansion of the welfare state in the OECD countries.