Do you think the welfare states in Europe are sustainable in the changing global economy?

Question

I'm aware that to answer this question really requires a strong understanding of a great variety of things: economics, politics, history, etc.... My professor and I were talking about the welfare states in Europe today and he expressed doubt about their sustainability in an increasingly global economy. I've been thinking about it. What is your take?

Answer 1

European welfare states have the same problem as any welfare states plus one more:

1. They disincent high producers and reward low producers. Over a long enough period the growth gap relative to countries without this burden becomes unsustainably large.

2. Demography works against them as the average age of the population increases. The number of people collecting welfare in retirement keeps increasing relative to the number of people still actively producing wealth.