In general, the net effect of tax and welfare systems in all countries is to reduce inequality at least to some degree. However, welfare can also serve a conservative function. Indeed, the historic purpose of the welfare state as it emerged in Bismarckian Germany in the 1880s was precisely that—to preserve the social status hierarchy across the vicissitudes of sickness, old age, and, eventually, unemployment.34 That was the principal logic of spending in 2020. The crisis affected the entire economy. No one was to blame. Everyone should be made whole. So the range of potential claimants on
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