Welfare state is a state that considers development and growth of a society as a whole. Such states are inclined towards reformation of institutions in order to create an equal society in terms of socio-economic aspects of life. The concept of welfare state was developed in the years after World War 2. Many of the economists wrote about the increasing poverty and unemployment at that time that gave birth to a concept where state provides the basic necessities to the nation.
A welfare state is usually used in opposition of a capitalist state where state has much less to say about the economic activities going on in the society. Unlike capitalist economy, in a welfare state the government is responsible for the poor people in the society. State is responsible to provide them food, health and shelter. Economy in a welfare state does not strive to increase the production of goods and services but they focus upon how to avoid uneven development in the society. Equal opportunity is provided to all.
A welfare state economy seems like a Utopian concept because its implementation does not give fair results. Inequality can’t be eliminated completely in this modern era. Not equality but economic growth in terms of efficiency and production has become the priority of almost all the states now.