The welfare state is in many ways the opposite of the market state.
The market state assumes that the state is a "nightwatchman" whose job is ensuring security of person and property and the sanctity of contracts. It has no further intrinsic function than to allow individuals to maximize utility as they see fit as long as they "do no harm" in doing so.
The welfare state is based on the purpose a modern liberal state constituted by the people with whom sovereignty resides that is, the common good. The modern liberal state is brought into being for the common good.
This is encapsulated in the preamble to the US Constitution:
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.The US Constitution and the constitutions of other modern liberal states empower the state to meet these goals.
The welfare state is a social, political and economic system based on institutional arrangements determined freely by the governed, in whom sovereignty ultimately resides. Popular sovereignty which is exercised by voting in free elections for candidates of the citizens' choosing. In this way, the citizenry gets the government it deserves.
In a modern liberal state, the citizens have generally exercised their political sovereignty in ways that support the common good through means that include state welfare (transfers). This is a prerogative of citizen sovereignty acting through the institutional arrangements of the social, political and economic system. It is part and parcel of the liberal order, which is oriented toward the common good.
There is nothing illiberal about a welfare state. But there are many things that are potentially illiberal about a market state, which is not organized based on the common good or public prose. In addition, markets may lead to privilege and power accruing from wealth and the accrual of wealth through economic rent, that, without actual merit or with respect to just deserts. Furthermore, a market state is also vulnerable to becoming a corporate state owing to economies of scale and the concentration of capital it produces.
Bleeding Heart Libertarians
What is “the welfare state?” Thoughts on Matt Zwolinski’s recent post