A welfare state is a positive state. Unlike the 'laissez faire' approach of classical liberal political theory, the welfare state does not seek to do only the minimum necessary to maintain law and order. It takes a more active role in ensuring the welfare of its citizens.

A.R. Desai identifies certain unique features of the welfare state and suggests that its performance should be measured against specific criteria.

A.R. Desai, approaching the issue from a Marxist perspective, provides a detailed critique in his essay "The myth of the welfare state". He suggests test criteria to measure the performance of welfare states, such as whether they ensure freedom from poverty and social discrimination, remove inequalities of income, transform the economy to serve community needs, ensure stable development, and provide employment for all.

Desai examines states like Britain, the USA and much of Europe and finds their claims to be greatly exaggerated. Most modern capitalist states fail to provide minimum levels of economic and social security to all citizens. They are unable to reduce economic inequality and often seem to encourage it.

The so-called welfare states have been unsuccessful at enabling stable development free from market fluctuations. The presence of excess economic capacity and high levels of unemployment are yet another failure. Based on these arguments, Desai concludes that the notion of the welfare state is something of a myth.