Abstract
This paper argues that the Welfare State has failed in its public aims; its function as a system of social control and conflict reduction has also failed, however, because the dilemmas inherent in Western Capitalism are starkly exposed by its failure, and by its unintended opportunities. An historical parallel with Weimar Republic Germany is drawn and it is argued that only recognition of the dilemmas and tolerance of opposition can reduce the real possibility of domination by Left or Right.