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Over the last decade or so it has become commonplace that the welfare state and the corporate economy which is part of its fundamental structure are in crisis. Also commonplace is the notion that conventional economics is in crisis. In this chapter I will address primarily the crisis of the corporate-welfare state, but the problems that have led to crisis in conventional economics will also arise in several places. My procedure will be, first, to sketch the nature of social economics in contrast to formal or mainstream economic theory. Second, I will use one example of social economics, that of Karl Polanyi, to discuss the nature of the welfare state in terms of its origination from nineteenth century market capitalism. I shall then discuss the unresolved problems which account for the current crisis of the welfare state, and Polanyfs ideas are suggestive and useful in this regard as well. I conclude by noting the importance of the social economics perspective in coming to grips with the underlying problems of the corporate-welfare state and by suggesting that social economic itself needs to sharpen its focus on the psychocultural aspects of the current socioeconomic crisis.

DOI: 10.1007/978-94-009-2498-7_9

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