In general terms, the welfare state is a system of politics, in which the State’s responsibility extends to the responsibility of society for the welfare of the citizens, and its purpose is to provide legal, political and social rights through equitable distribution of income to all members of the community.
Thus, it is recognized in all new developments of the Western science that as a result of the expansion of individual capabilities in the late XX century exactly an individual is primary and main source of social change, and individual well-being is put forward as the fundamental problem of socio-economic development. Since the individual actively affects the life, revealing the direction of social progress, the main duty of the society becomes an Economic development should be a function of individual welfare, as welfare is reflected in the assessment of individuals, depending on their lifestyle and values.
In such a way, the state is intended to facilitate the efforts of individuals to create wealth: a) establishing control over the business, b) developing an effective system of taxation, c) adopting laws on guaranteed income, and d) developing the artistic creativity. Individual well-being depends on the successful execution of his life plan, implementation of the principle of social justice and a minimum of material support in the community. In general, individual welfare can be defined as a function of factors that create the environment of the individual.
Thus, the economic system that produces products with a low total cost and the highest total utility is able to solve the problem of well-being in the most efficient way.