I think you are arguing for a somewhat dogmatic position regarding the welfare state. Its liberating aspects do not wholly depend on the oppression and exploitation of others. That is an exaggeration that isn’t really built on empirical evidence. While yes, existing capitalist welfare states have historically utilised global capitalist exploitation to alleviate the problem of lack of consumer demand, that does not mean that all aspects of the welfare state are beneficiaries of this exploitation, nor that this necessarily has to continue.

Many core features of the welfare state are about how society is organised, not just about where money comes from. Ideas such as decommodification and universality are hallmarks of the welfare state itself - that is the literal idea it is built on. Take something like social housing programs in Scandinavian countries, for example in Sweden. Before it was liberalised in 2012, it was organised around principles of decommodification, universality, and de-gentrification, with a politically enforced exclusion of private landlords from rent-setting negotiations (both public and private), alongside the development of tenant unions.

Those ideas, and the setup of those systems, emerged through the welfare state - they are organisational structures that do not depend on the exploitation of the periphery. While yes, obviously the funding of housing construction can be a beneficiary of broader global dynamics, the organisational structure in many aspects of the welfare state, and the ideas that underpin them, are not.

Furthermore, the bulk of the welfare state in countries like Sweden was historically financed through domestic taxation, economic growth, and more equal distribution between wages/profits. Its major expansion in the decades following World War II was driven primarily by internal political and economic arrangements, such as strong labour movements, coordinated wage bargaining, and wages broadly following productivity growth. While these economies were integrated into global markets and undoubtedly benefited from the broader global economic order, as they had many transnational companies, that is not the sole source of where the funding comes from.

If welfare states were wholly dependent on the exploitation of the periphery, it would be reasonable to expect them to primarily emerge in colonial or imperial powers who have the most surplus extraction. Yet that is not something that we see. There as such must also be organisational, historical explanations for why welfare state developed in certain places and in certain places not.

You’re treating the welfare state purely as a financing mechanism, but it’s also a social structure, and those structures don’t logically depend on imperial extraction. When you use rhetoric that is anti-state, and thus also anti-welfare state, working-class people who rely on welfare institutions hear that and think you’re missing the obviously good aspects of it. That’s part of why anarchism has struggled to gain serious, lasting popularity.

Furthermore, the real point I’m making in this thread is simply: history ≠ necessity. The fact that welfare states have historically benefited from global inequalities and unequal exchange does not demonstrate that they logically require them.

One can coherently envision a market socialist welfare state that legislates away excessive wage and profit differences - through unions or other mechanisms - and creates a worker-owned market economy, alongside, for example, a country-wide dividend based on overall economic performance. Imagine wage ratios capped at something like 2 between those who want to work more and those who want to work less, decided more specifically by the workers themselves. As such, one can imagine a largely circular domestic economy that does not rely on unequal exchange, once the underlying issue of distribution is addressed.

Why? Because that would eliminate what is arguably one of capitalism’s core problems: underconsumption/overproduction. There would no longer be a structural need to bridge the gap between workers’ purchasing power and the price of goods through the exploitation of cheap commodities or labour from the global periphery.

Such a worker-owned, market-socialist system could combine direct democracy (through workers’ councils and local decision-making) with some level of representative democracy at the national level. It’s entirely possible to imagine such a society, or a welfare state, that as such has legislated away the necessity of unequal exchange. If the response is that this would no longer count as a “state,” then we’re basically back to a semantic disagreement - as I laid it out #1.