erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

The Rise and The Fall of the U.S. Welfare State

Ahmet E. Tonak (Simon's Rock College, USA)
Anwar Shaikh (New School University, USA)

Abstract  

The framework presented in this paper begins from the vantage point of the links between production, reproduction and distribution. At the most abstract level, the net product may be thought of as being divided into a portion which goes to labor, and a remainder, the surplus product, which is appropriated by capital. But once we move to a more concrete level of analysis, then it becomes essential to examine the role of the state in modifying this division of the net product. The well-being of the accumulation process in capitalist societies depends on the level of profits. On the other hand, the standard of living of workers depends on their access to consumption, health, education, etc. The modern welfare state intervenes by extracting taxes from both sides while simultaneously re-directing expenditures back towards them.

Our primary question is: to what extent does the state's involvement in taxation and expenditures serve to redistribute a portion of the nation's surplus product to, or from, the working class? In the case of the U.S., we find that the net social wage fluctuates within fairly narrow boundaries, largely between ±4% of employee compensation and over the whole period from 1952-1997 its average is essentially zero.

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