Front Page Titles (by Subject) The Welfare State: Business & Labor - Literature of Liberty, Spring 1981, vol. 4, No. 1
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The Welfare State: Business & Labor - Leonard P. Liggio, Literature of Liberty, Spring 1981, vol. 4, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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The Welfare State: Business & Labor
“Prelude to Welfare Capitalism: The Role of Business in the Enactment of Workmen's Compensation in Illinois, 1905–12.” In Compassion And Responsibility: Readings in the History of Social Welfare Policy in the United States (Chicago: University of Chicago Press, 1980):265–289.
It was during the Progressive era at the turn of the 20th century that modern, comprehensive welfare programs began to appear at the state level. Professionals and labor leaders were joined by businessmen who began to see such state compensation as a solution to certain of their problems of liability.
A first step to welfare policies was the reform of the common law where questions of liability, in the face of a rising number of on-the-job accidents, resulted in forty states creating commissions to examine the work-related injury. The law reflected a pre-industrial society which made suits difficult, but verdicts favoring employees were increasing.
Business groups, including insurance companies, began to favor the stability offered by state compensation. They were joined by a large number of Progressive reformers ranging from scholars to ministers. A major figure was Ernst Freund, a law professor at the University of Chicago. Born in Germany, he disapproved of the common law concept and favored compensation plans derived from European models.
Business groups seem to have played the major role in passing the Illinois law of 1911 which closely resembled a plan advocated by the National Association of Manufacturers. Originally opposed to state compensation, labor leaders began to change as the legal injunction was more frequently used against them.
Instead of trying to rework the common law tradition, business, labor, and the reformers turned to state-sponsored compensation. The support of business was crucial in this case. Other more radical Progressive proposals failed because they were opposed by the business community as radical, whereas compensation was not so viewed.