Capitalism is the world's engine of growth. But its very dynamism--its "creative destruction"--tends to produce great uncertainties. Unsuccessful firms are tossed aside to make way for new and better firms, and individuals who become economically less productive (often through no fault of their own) can also be "discarded" by the market, their careers interrupted and their investments cut to a fraction of their previous value.
This uncertainty has been at the root of demands for the state to intervene and protect the individual against the market's mercilessness. Beginning with Bismarck's social security system in 19 th century Germany, through the American New Deal of the 1930's, to the social-democratic policies of postwar Europe, many countries created a "mixed" welfare state in which governments control and temper market forces, providing an extensive "safety net" for individuals.