A market economy is efficient, but it is not just. Because wages are determined by the law of scarcity, some people cannot earn enough money to live a decent life.
In Western Europe, the welfare state helps these people. It guarantees a socio-cultural subsistence minimum by paying replacement incomes in the form of social aid, unemployment benefits, or early retirement benefits. If the market does not provide you with a sufficient income from your labor, the state will provide an income without requiring you to work.
Hans-Werner Sinn
A market economy is efficient, but it is not just. Because wages are determined by the law of scarcity, some people cannot earn enough money to live a decent life.
In Western Europe, the welfare state helps these people. It guarantees a socio-cultural subsistence minimum by paying replacement incomes in the form of social aid, unemployment benefits, or early retirement benefits. If the market does not provide you with a sufficient income from your labor, the state will provide an income without requiring you to work.