The state of the welfare system

Welfare has become an essential constituent part of the state. This is demonstrated first and foremost by the term ‘Welfare State’, the state that looks after the well-being of its citizens: this term was coined by the Archbishop of Canterbury during the Second World War to highlight the contrast between the British state, which was focused on welfare, and the German state, which was focused on war (‘Warfare State’). But it is demonstrated primarily by the proportion of public sector employees working in the welfare sector: In Italy, 2,155,259 people—approximately 64 per cent of the total 3,889,794 civil servants—are employed in education, healthcare, labour and social protection, whilst—by way of comparison—341,000 are employed in defence, accounting for around 10 per cent. It can therefore be said that the welfare state has shaped the state in which we live. A great American historian and political scientist, Charles Tilly, wrote years ago that ‘The State made War; War made the State’. A similar statement can be made about the welfare state: the state ensured the welfare state, and the welfare state shaped the state. These are two significant statements because the welfare state was defined precisely to contrast it with warfare.

One might say that it has two parents, one communist and one liberal. The father is the Marxist critique (The Communist Manifesto of 1848, Capital of 1867 and Critique of the Gotha Programme of 1875) of the bourgeois conception of equality, understood as mere formal equality, consisting of equal legal measures, but applied to individuals who are in fact different in terms of ability, family circumstances and economic conditions; and hence the proposal that follows from this: the need to ensure equality of starting points.

The concept stems from the framework set out by an English Liberal, William Henry Beveridge, who was elected to Parliament for the Liberal Party but had close ties to the Fabian Society: he worked on the 1909 ‘Poor Law’ report and then, from 1919 to 1937, headed the London School of Economics, an institution founded by the Fabians Sidney and Beatrice Webb. Beveridge was concerned with freeing people from want ‘from the cradle to the grave’; he sought to combat disease, ignorance, poverty, unemployment and ‘misery’ by ensuring free and universal public provision for healthcare, education, employment and social protection. The so-called report bearing his name dates from 1942 and, despite the war, caused quite a stir in Italy that very same year. Both events prompted a shadow member of the Constituent Assembly, Massimo Severo Giannini – who had served as chief of staff to Nenni, the Minister for the Constituent Assembly – to draft what is now the second paragraph of Article 3 of the Constitution, an example of transformative constitutionalism. Giannini took the text to his party colleague Lelio Basso, who sat in the Constituent Assembly; in the days that followed, Basso discussed it with the most enlightened figures within the Christian Democrats, and the article was incorporated into the Constitution almost unchanged from its original wording.

The idea is that

a) equality is redefined in terms of a level playing field;

b) in four areas (health, education, employment and social protection), the State should assume an obligation to provide services, to which citizens’ rights correspond (and thus not merely charitable handouts);

c) that the obligation applies to all citizens (and later also to residents), and is therefore universal in nature;

d) that there are mechanisms in place to ensure this obligation is fulfilled. Hence the 2,155,259 people currently working for the welfare state in Italy.

The ‘tree’ of the welfare state is shaped by five constitutional provisions. The trunk consists of the second paragraph of Article 3, which states that ‘it is the duty of the Republic to remove those economic and social obstacles which, by limiting the freedom and equality of citizens, prevent the full development of the human person and the effective participation of all workers in the political, economic and social organisation of the country’. It has four branches: healthcare, education, employment and social protection. With regard to the first public interest addressed by the welfare system – health – the first paragraph of Article 32 stipulates that “the Republic protects health as a fundamental right of the individual and in the interest of the community, and guarantees free medical care to the indigent”.

Secondly: Article 34 stipulates, with regard to education, that “schools are open to all. Primary education, lasting at least eight years, is compulsory and free of charge. Those who are capable and deserving, even if they lack financial means, have the right to attain the highest levels of education. The Republic gives effect to this right through scholarships, family allowances and other provisions, which must be awarded on the basis of competitive selection”. With regard to work, the first paragraph of Article 4 establishes that “the Republic recognises the right to work for all citizens and promotes the conditions that give effect to this right”.

Finally, with regard to social protection, Article 38 stipulates that “every citizen who is unable to work and lacks the necessary means to support themselves is entitled to maintenance and social assistance. Workers are entitled to have adequate means provided and guaranteed to meet their living needs in the event of accident, illness, disability, old age or involuntary unemployment. Those who are incapacitated or disabled have the right to education and vocational training. The tasks set out in this article are carried out by bodies and institutions established or supported by the State”. As can be seen, therefore, having affirmed the principle of substantive equality, the Constitution guarantees its implementation in the four fundamental areas in which the welfare state operates: health, education, employment and social protection.

Today, the welfare state faces numerous problems, two of which are fundamental: its heavy financial burden and its weak administrative capacity.

As for the first issue, that of the financial burden,

a) there is an imbalance in the internal breakdown of expenditure because 60 per cent of total welfare expenditure goes towards old-age and survivors’ benefits, compared with a European average of 47 per cent;

b) It is projected that by 2050 there will be one pensioner for every person in work. This raises the question: can we afford it?

The second problem is not financial, but administrative. Welfare institutions provide services to citizens and are therefore organised not as a hierarchy, but as networks; these require an administrative capacity that is currently lacking in many countries, but particularly in Italy.

The solutions are:

a) the redefinition of universalism through its differentiation, in the sense that free services are not guaranteed to everyone, but only to those in need;

b) economic growth that makes it possible to bear the financial burden. Beveridge believed that well-functioning markets were necessary to achieve the four objectives and said that profit is ‘a bad master, but the best servant we have’. For this reason, it is important to remember that Article 47 of the Constitution – drafted by Tommaso Zerbi, a member of the Constituent Assembly who was also a professor of Accountancy at Bocconi University in Milan – stipulates that the Republic shall promote public access to direct and indirect share investment in the country’s major industrial complexes;

c) the duty to work: Article 4, second paragraph, of the Constitution provides that “every citizen has a duty to carry out, according to their abilities and their own choice, an activity or function that contributes to the material or spiritual progress of society”;

d) then there is what is known as ‘secondary welfare’, which consists of voluntary organisations active in the social sector, as well as corporate welfare;

e) although the welfare state originated within the nation state, there is a role that the European Union could play; however, it is a regulatory giant and a financial dwarf, whilst the welfare state requires a considerable amount of financial resources;

f) Finally, we must not forget that we are faced with a question: what balance should be struck between warfare and welfare?

Maurizio Ferrera, Welfare. Ideas for our common home. Interview by Daniele Manca, Laterza, 2026, pp. 18–19 and 198–199

“The idea that the social risks generated by the market should be countered and mitigated by the state gradually emerged as early as the first half of the twentieth century and became fully established during the so-called ‘Glorious Thirty Years’ between 1945 and 1975. It was Ralf Dahrendorf who coined the term ‘social democratic consensus’ to describe this vision. In reality, this consensus was the result of the convergence of various traditions. Liberal reformism, first and foremost, that of Keynes and Beveridge. Christian Democratic solidarism, that of Dossetti and Maritain. And then, of course, social democracy: the Anglo-Saxon variety (in particular Fabianism) and the Scandinavian variety. In the late 1920s, the Swedish Social Democratic leader Per Albin Hansson coined the famous metaphor of the welfare state as ‘a common home for all the people’, where ‘no one is privileged, no one is the child of a lesser god. A home where the values of equality, cooperation and solidarity prevail’. A highly evocative image, which still retains its appeal today. We must not, however, forget that the house was built on democratic foundations, thanks to the resources generated by the market. And this has always remained the case in Sweden too. Accepting the alliance between the welfare state, the market and liberal democracy was a painful step for orthodox Marxist socialism: private property, for example, had to be accepted. A step taken in Sweden in the late nineteenth century, but one that had to wait until the 1970s in Italy and which has not yet been fully taken by the radical left in France.

“At the heart of the original vision were images of democratic national political communities, centred on the happy marriage between well-functioning markets and robust social protections.”

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“The welfare system plays a fundamental role, provided it meets three conditions: it must guarantee benefits and services throughout the entire life cycle; it must weaken, or even sever, the traditional link between entitlements and formal employment status; it must provide robust and flexible ‘walkways’ (footbridges, handrails). These three conditions create a more favourable environment for a diversity of opportunities: people can rely on collective support whatever life paths they choose. It is clear that a pension-based welfare system (where protection is concentrated at the end of working life), which is predominantly insurance-based (protection linked to the duration and regularity of contributions), family-centred and offering few services, restricts rather than broadens the range of opportunities”.

Giovanni Farese, William Henry Beveridge. A freedom based on solidarity that leads to peace, in “L’Osservatore Romano”, Friday 16 October, p. 8.

“What, then, does the Beveridge Report consist of? It proposes the establishment of a national social insurance system for all citizens, to provide for disability, unemployment and retirement, funded equally by employers, workers and the State. This would have guaranteed, in Beveridge’s words, ‘a standard of living below which no one would be permitted to fall’. On the contrary, the intention was that this would lead to a general improvement in the living standards of the population, alongside the achievement of the goal of full employment. ‘The organisation of social insurance,’ the report states, ‘must be treated as a comprehensive policy of social progress. Social insurance, when fully developed, can provide income security; it is an attack on poverty. But poverty is only one of the five giants standing in the way of reconstruction, and perhaps the easiest to tackle. The others are sickness, ignorance, squalor and idleness’”.