Joseph Schumpeter once claimed to be able to detect the thunder of world history in accounts of public finance. Fiscal topics — issues of the budget, taxation, the growth of state spending — best revealed the spirit of a people, its cultural level, its social structure. The development of the welfare state is a topic which similarly conceals questions of utmost importance under matters that may at first seem merely technical and abstruse. Social insurance, old-age pensions, workers' compensation, actuarial risk, waiting time, point-indexing and cost-of-living differentials rarely seem the stuff of dramatic narrative. In fact, approached from the right angle, the nuts and bolts of social policy testify to the heated struggles of classes and interests. The battles behind the welfare state lay bare the structure and conflicts of modern society. Ongoing disputes among groups for redistributive advantage, contests over solidarity, force a constant renegotiation of the social contract.

Applying the instruments of social insurance on behalf of increasing numbers of citizens to ever greater varieties of risk and ill fortune, the modern welfare state decisively advanced society's ability to treat each of its members equally. It did so, however, less by redistributing wealth than by reapportioning the costs of risk and mischance.