T.H. Marshall, distinguished among sociologists, described the modern welfare state as a necessary and desirable combination of welfare, democracy, and capitalism. The welfare state covers a variety of forms of economic and social organization, helping to reduce the income gap between the rich and poor. During the Great Depression, the welfare state was placed between the extremes of communism and unregulated laissez-faire capitalism.
In a welfare state government plays a key role in the protection and promotion of the economic and social health of its citizens. The welfare state is based on the principles of equality of opportunity, public responsibility and equitable distribution of wealth, for all those unable to avail themselves of the minimal provisions to lead a good life. Modern welfare states includes Sweden, Norway, Denmark, Iceland, and Finland which employ a system known as the Nordic model.
According to Esping-Andersen the most developed welfare state systems can be classified into three categories; Social Democratic, Conservative, and Liberal. Funded through redistributionist taxation referred to as a type of mixed economy. Such taxation applies a larger income tax for people with higher incomes called progressive taxation.
The welfare state involves transfer of funds from the
state, to the services like healthcare and education, and also directly to individuals