Economy & Business, Volume 9, 2015

Abstract: The conflict between capital and labor is often described as the most important feature of capitalism. Accordingly, the welfare state is viewed as a compromise between capital and labor. However, a major, more important feature of capitalism is the conflict between financial, or speculative financial, capital and industrial, or productive, capital. While the first is interested in slowing the economy, or shrinking production, periodically as a way of eternalizing the dependence of the producers on the financial sector, the latter is interested in permanent growth based on materially developed society. The welfare state is basically an alliance between industrial capital and wage laborers against financial capital. The struggle against this formation, mainly by imposing austerity programs, is aimed at securing financial capital’s dominance. The welfare state has been the basis of democracy and peace around the world, so the struggle against it is a struggle against these human achievements.