In 1991 Pope John Paul II wrote the encylical Centissimus Annus, in which he dealt with economic and workers’ rights themes following the collapse of Soviet Communism and the seeming triumph of capitalism as an economic system. While noting that capitalism unrestrained by moral values was a Bad Thing, he nevertheless notes its practical success. He went on to say this regarding the kind of welfare states that exist in much of the developed world, and particularly in Europe:
In recent years the range of such intervention has vastly expanded, to the point of creating a new type of State, the so-called “Welfare State”. This has happened in some countries in order to respond better to many needs and demands, by remedying forms of poverty and deprivation unworthy of the human person. However, excesses and abuses, especially in recent years, have provoked very harsh criticisms of the Welfare State, dubbed the “Social Assistance State”. Malfunctions and defects in the Social Assistance State are the result of an inadequate understanding of the tasks proper to the State. Here again the principle of subsidiarity must be respected: a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view to the common good.
By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need [Centissimus Annus 48].
Unfortuantely, with the exception of Britain, Europe has been slow to wean itself away from welfare state ideology. Fortunately, there are now signs that Europeans are beginning to realize that the kin of welfare state utopia they hoped to build is unsustainable and must be abandoned.
This blog entry contains some fascinating analysis.