From Welfare Toward A Socialist Future

David Matthews

WITH FRESH ATTACKS on welfare programs in both the United States and Britain, passionate arguments have been made from various quarters of the left defending the state’s provision. Unquestionably welfare programs partly reflect historical hard-won struggles by working people and have constituted a valuable advance for the working class over the last century.

But these programs have often been shaped by the needs of capitalism as much as they have been used by working people. Existing state welfare programs have never threatened capitalism. However, I contend that they do offer the basis for a socialist system of welfare to develop, as spaces largely free from capitalist values.

The question is how to defend what’s been won, in ways that point to a transformed future. State welfare programs are vital, but we must build power beyond the state.

I’ll argue here that political control needs to be firmly located in the community, characterized by a robust system of democratic communal infrastructure such as neighborhood assemblies and cooperatives coexisting with a decentralized democratic state. The universal provision and funding of welfare can be guaranteed by the state, but we must take control.

Dark Clouds

In the United States, Trump’s presidency looms like a dark cloud over welfare. In early February, a subcommittee hearing regurgitated commonplace right-wing criticisms of the U.S. welfare system, characterizing it as bloated, encouraging dependency, and discouraging marriage.(1)

The need to reduce the welfare budget was forcefully reiterated. Recent months suggest this is exactly the desire of Trump’s administration. Republican lawmakers have signalled intentions to cut the deficit over the next decade by up to $1.5 trillion.

Welfare programs being targeted include cuts to the Social Security Administration that are feared to be a way of reducing the numbers of applicants.

The Supplemental Nutrition Assistance Program has also received specific attention with proposals to evaluate what is considered a satisfactory basis for a healthy diet so as to reduce costs and force states to match levels of Federal funding which would disproportionately impact upon poorer states with a limited tax base; and tighten eligibility criteria.(2)

The consequence would increase the numbers of people living in food poverty. Medicaid has also been identified as a lucrative source of savings of up to $880 billion over the next 10 years.(3) Extensions to the program under the Affordable Care Act are under scrutiny with a desire to reverse these changes.

As Kim Moody recently illustrated in these pages, this is likely to hit Democrat districts hardest.(4) But some Republicans also oppose targeting Medicare where their constituents are largely rural, with Medicare facilities often the primary healthcare facilities in these areas.

Furthermore, as Steve Early and Suzanne Gordon make clear in a recent edition of this journal, fears continue to grow over an increasing drive to privatize and dismantle veterans’ healthcare services.(5)

In Britain, standing up in the House of Commons on March 26, with Keir Starmer — a Labour Prime Minister no less — sitting by her side, Chancellor of the Exchequer Rachel Reeves announced cuts to disability and sickness benefits, including what caregivers of the long-term sick and disabled receive, amounting to £8.1 billion (approximately $10.5 billion) by the end of the decade.

Initial proposals were for reductions to be primarily achieved by tightening the eligibility criteria for certain disability benefits. An estimated 800,000 individuals would lose their entitlement to disability support by 2030, with a further 150,000 caregivers having their benefits withdrawn.

Furthermore, thousands of long-term sick, who are unable to work, would see their weekly benefits frozen for the next five years, with new claimants, from April 2026, receiving a weekly amount 48% less than existing claimants. The consequence of this initiative, predicted by the government itself, is that it would force over 250,000 people into poverty, including 50,000 children.(6)

This recent round of welfare cuts come after a decade of austerity has already ravaged the British welfare state. The reason for this? To stimulate the economy. Government expenditure and debt are too high, we are told, and economic growth too low.

Additionally, to appease the erratic behavior of Donald Trump’s explosion onto the world stage, reacting to his threat to scale back America’s military support for Europe, in February the Prime Minister announced an ambition to increase military expenditure to three percent of GDP by 2030.

Rather than contemplating that the wealthy should pay more in taxes, the weakest in society, those with the most to lose and the least to offer — including some of the world’s poorest with Britain cutting its overseas aid budget — will suffer.

Existing welfare states are compromises,(7) always at risk — as events in both countries demonstrate — of being dismantled by governments under pressure from capital.

Politicians on both sides of the Atlantic have been very clear that a reversal of economic fortunes and a need to adhere to the prevailing capitalist orthodoxy of balanced budgets are central reasons for cutting welfare.

Existing welfare systems that are at the mercy of capitalism can never truly meet the needs of the working class. Through electoral activity and building grassroots movements the desire for a strong progressive welfare state must be fundamental to our struggle.

But what should this system look like? I will sketch out some of the core principles of a socialist welfare state. I argue we must embrace and build upon state services that already exist but integrate them within the community. Our aim should not be to reform the welfare state but revolutionize it.

The State and Welfare

Capitalism, as Michael Lebowitz makes clear, is a system of contrasting beliefs. While capitalist principles dominate it also contains organizations and practices whose values reflect alternative ways of organizing society.(8)

Supporting this position, Erik Olin Wright argues the state exemplifies both capitalist and anti-capitalist values. Reflecting upon the influence of social democracy during the post-war era, welfare programs of this time — which continue to dominate the welfare states of many countries today — while strengthening capitalism also simultaneously expanded the spaces for socialist principles to take root.(9)

These principles, as Richard Titmuss argued, include not just spaces free from the profit motive, but the state as the instrument reflecting, and allowing for, the community to collectively support the welfare needs of everyone, providing universal services financed by each other’s tax contributions.(10)

Analyzing a transition to socialism, Wright draws our attention to existing services that form an element of “the state-socialist component of capitalist economic systems.”(11)

The importance of these, he contends, is to make us aware that we already have spaces broadly reflecting socialist values that we can utilize and develop.

Although the extent to which they exhibit rudimentary socialist principles varies from country to country, we already have examples of universal welfare programs that reflect the state’s socialist components, largely free from market intrusion and collectively funded.

For instance, in Sweden public expenditure accounts for 85% of total health expenditure.(12) With a comparable healthcare system and levels of public expenditure to Sweden, in Iceland all hospitals are under public ownership.

Similarly, in Denmark approximately 97% of hospitals are state-owned.(13) The national health systems of Wales, Scotland, and Northern Ireland offer universal free medication. Over 70% of children in Finland attend pre-school childcare funded by central and municipal governments.(14)

In all the Nordic nations college-level education is entirely funded by the state along with the provision of student grants. Public housing in Norway is overwhelmingly provided by municipal government.(15)

These examples contrast with welfare in the United States. Healthcare programs such as Medicaid, for instance, although vital for those who qualify, is nevertheless exclusionary and divisive.

In our fight for a progressive welfare system, we must have a clear understanding of the programs to expect from the state. At a minimum this must include universal tax-funded healthcare, childcare, education up to the college level, public housing, income maintenance to guarantee economic security, and support for the elderly and vulnerable.

Although the golden age of Nordic social democracy is over, and neoliberalism and austerity have, to varying degrees, battered the welfare state of these nations, the examples above indicate how the state welfare systems of the Nordic nations still come closest to realizing the ideal of socialist welfare in practice.

Existing welfare programs that already broadly reflect a socialist ethic need to be defended. But they are not perfect. We must look to how these services can further their socialist potential.

An increase in funding through a true system of progressive taxation would be a start. Another is their organization. One program ripe for development that could challenge capitalism to its core is social security. [“Social security” as used here is the European term for welfare assistance. —ed.]

Providing a valuable, albeit limited, source of income, current social security systems are nonetheless regulatory. Seeking work is frequently a precondition for receiving support. Yet, social security offers the foundations for a system of socialist income support. It presents an elementary vision of how we might obtain an income that does not rely upon labor.

Delivered through the state, it depicts the basis of a collective method of income provision that is universal.(16) On this basis, a logical step for social security is to become a universal basic income (UBI) system. This would offer a guaranteed income for all not related to work and break the link between exploitation and survival.

A UBI scheme would allow individuals to resist working for a wage and engage in more meaningful activities such as voluntary and community work.

Necessity of Community Control

Originating in Porto Alegre, Brazil, over three decades ago, participatory budgets (PB) have become innovative spaces for local democratic influence over municipal finances. To stand any chance of being truly effective a PB needs to be accompanied by institutions of communal authority, particularly neighborhood assemblies.

At the peak of its influence, Porto Alegre’s PB reflected a structure of community decision-making and representation. Local assemblies would offer residents an opportunity to debate and decide upon the themes, issues, and priorities most important to them. Representatives of assemblies then coordinated budgetary plans across the city and cooperated with the municipal authority to implement them.

The democratic authority of participatory budgeting in Porto Alegre has diminished in recent years, as public funds were shifted from social policies to large-scale infrastructure projects and political commitment waned. But we can still draw inspiration from what it achieved and from many other current examples.

A socialist welfare system must have at its core the mechanisms to ensure communities control welfare expenditure through local spaces of participatory democracy, such as community assemblies, that work with state representatives, rather than being determined by distant and bureaucratic state elites.

All welfare programmes should be organized with democratic participation in mind. Taking healthcare as an example, communities as diverse as in Bolivia, the Zapatistas of southern Mexico, as well as Rojava, are attempting to democratize health planning.

Often consisting of locals, health professionals, and state officials, communities are deciding what health issues are of most concern to them using local assemblies for community debate. Representatives of each assembly work with regional and municipal authorities to support the implementation of policy.

For instance, in Rojava — the autonomous Kurdish area in Syria — efforts have been made in recent years to establish health assemblies as the center of Rojava’s approach to healthcare.(17)

During the peak of the Bolivarian revolution in Venezuela, in the early 2000s, neighborhood health committees formed to support medical professionals in delivering appropriate healthcare for each community. Committees collected social and economic data on their neighborhood, including that relating to dominant health issues.(18)

Each committee would discuss and debate their community’s health needs, endorsing initiatives informed by members’ lived experiences and collected data which would then inform the actions of health professionals.

Community control of budgets and policy is essential, but we must also fight to secure the community’s influence over welfare provision once decisions have been made.

Inspired by Citizen Guardians, an initiative by the municipal authority of Chihuahua, Mexico, which empowers residents to actively monitor the government’s implementation of public policies, a socialist welfare system must also ensure communities are involved in every stage of welfare programs — from initial budgeting to daily delivery.

The fullest expression of this principle is the community having the opportunity to directly deliver programs, being at times best placed to deliver welfare rather than the state. We can already see this happening with regards to housing.

Housing is a human right, as Max Rameau of Cooperation Jackson — a network of worker and consumer-owned cooperatives in Jackson, Mississippi — clearly states. But its status as a commodity means home ownership and security of tenure are a distant aspiration for many.

For this reason, central to Cooperation Jackson‘s housing agenda has been to actively purchase properties and establish communal homeownership. To ensure direct, democratic, and collective control of housing while significantly expanding access, cooperative housing schemes must be a key part of any socialist welfare system, complementing state-managed housing.

Uruguay provides a successful example of cooperative housing. For more than five decades it has illustrated that cooperative housing, democratically controlled by residents, can provide secure housing for those who are excluded from obtaining housing privately.

Although they are mutual aid cooperatives supported financially by resident’s contributions, cooperative housing in Uruguay is primarily underpinned by state finance and illustrates how communities can successfully manage state funds to suit their needs.

Democratic organization of housing has also played a role in Venezuela, particularly through housing assemblies established under the “Great Housing Mission” launched in 2011. Embedded within communities, these assemblies are tasked with delivering affordable housing. Supported by state funding, each assembly handles about 70% of the planning and execution for every housing project, with members themselves designing, surveying, and constructing the homes.(19)

Envisioning the Future

Capitalism’s limitations on the size of the state and taxation rates for the wealthy often mean welfare programs underperform and are underfunded. But they have proven themselves, nevertheless, vital to protecting us against the worst of capitalism’s exploitation.

Millions have access to free healthcare, education from infant to adult, and basic income support. Though imperfect, welfare programs must be fiercely defended, especially when under attack during periods of economic stagnation. Although varying between countries, many existing state programs embody a socialist ethic of universalism, solidarity, and redistribution.

Once we recognize this, we see that some of the building blocks of a socialist system of welfare are already with us. We cannot, though, leave it at that. To redistribute power and ensure we exercise authority over our own lives, a socialist welfare system must be one that gives control over welfare to our communities.

It must be a partnership between the state and the community with the latter having authority over the former. Rather than welfare being something done to us by a distant state machine, it must be something we collectively do for each other.

Notes

1. United States House Committee on Oversight and Accountability, Hearing Wrap Up: America’s Welfare State Needs Immediate Reform. Press Release Feb 12 2025. https://oversight.house.gov/release/hearing-wrap-up-americas-welfare-state-needs-immediate-reform/
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2. https://prospect.org/health/2025-04-11-republican-budget-plan-snatch-food-hungry-children-snap-food-stamps/
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3. https://truthout.org/articles/gop-votes-to-advance-budget-that-slashes-food-benefits-medicaid-for-millions/
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4. Kim Moody, “Diktats, DODGEs, Dissent & Democrats in Disarray in the Era of Trump” Against the Current No. 236 May/June 2025.
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5. Steve Early and Suzanne Gordon, “Vets Mobilize Vs. DODGE” Against the Current No. 236 May/June 2025.
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6. Resolution Foundation Briefing, Unsung Britain Bears the Brunt: Putting the 2025 Spring Statement into Context. https://www.resolutionfoundation.org/app/uploads/2025/03/Unsung-Britain-bears-the-brunt.pdf
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7. David Matthews, The Class Struggle and Welfare: Social Policy under Capitalism (New York: Monthly Review Press, 2025).
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8. Michael Lebowitz, Between Capitalism and Community (New York: Monthly Review Press, 2020), 122-125.
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9. Erik Olin Wright, How to Be an Anticapitalist in the Twenty-First Century (London: Verso, 2021), 103-104.
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10. Richard Titmuss, Commitment to Welfare (London: Allen and Unwin, 1979), 119-129.
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11. Erik Olin Wright, op. cit., 86.
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12. https://ourworldindata.org/grapher/share-of-public-expenditure-on-healthcare-by-country
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13. https://www.commonwealthfund.org/international-health-policy-center/countries/denmark
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14. https://tribunemag.co.uk/2021/10/how-finlands-public-childcare-system-puts-britain-to-shame#
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15. https://www.oecd.org/content/dam/oecd/en/data/datasets/affordable-housing-database/ph4-2-social-rental-housing-stock.pdf
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16. David Matthews, op. cit., 114-115.
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17. Michael Knapp, Anja Flach, Ercan Ayboga, Revolution in Rojava: Democratic Autonomy and Women’s Liberation in Syrian Kurdistan (London: Pluto Press, 2016).
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18. Steve Brouwer, Revolutionary Doctors: How Venezuela and Cuba are Changing the World’s Conception of Health Care (New York: Monthly Review Press, 2011), 84.
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19. Andreina Chavez Alava, “An Army of Women is Building Venezuela’s Housing Revolution,” Venezuelanalysis, March 8th 2023, https://venezuelanalysis.com/analysis/15722/
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September-October 2025, ATC 238