I don't know Balderston, could you point out the specific book you were quoting from?
Anyway, as he's mentioning "welfare capitalism" he is using not very precisely terms. I am sure he is referring to the welfare state which in an early state of development in most Western European countries by that time. Great Britain and Germany both were pioneers in that regard already before WWI.
During the so called Weimar Republic, Germany did see a considerable expansion of welfare programs like the introduction of unemployment support which was vehemently opposed by business interests -- but on the whole it was a continuation of pre-war trends. I don't know how he gets the idea that these measures alienated workers and/or the left.
In 1919, the left was represented by two splinter parties emanating from the Sozialdemokratische Partei Deutschlands (SPD) which had split about the question of supporting war bonds during the war. The radical left-wing of the SPD had formed the USPD (unabhängige SPD, lit. "independent" SPD), while the majority that remained part of the platform was commonly called MSPD (Mehrheits-SPD, lit. "majority" SPD) although its members still called themselves just SPD. So, in 1919, you have the USPD on the radical left and the MSPD on the moderate left. While both played cooperatively a huge role in the revolution and its immediate aftermath in 1918 (with both being represented in the transitional Council of People's Deputies), the USPD lost a lot of popular support in 1919 and 1920, increasingly becoming a minor party, torn even in itself between its own even more radical left-wing (the Spartakists and communists that were seeking out violent revolution and a Soviet-style (council) republic) and the moderates that were willing to participate in the current order. In 1922, the USPD dissolved almost completely as her moderate wing re-joined the SPD (i.e. the MSPD) and its radical left-wing merged with new leftist groups, especially the new Kommunistische Partei Deutschlands (KPD) which went on to become one of the major players of the Weimar political landscape.
Regarding the political landscape of Weimar in general, I think you have to know seven parties which (while far from being the only ones) were prominent in shaping Germany in the decade of the 1920s and which were represented in the Reichstag nearly the entire time. I'll give you a quick overview (from far left to far right):
- The Kommunistische Partei Deutschlands (Communist Party of Germany), the KPD, in the far left corner of the political spectrum. I have already mentioned this party. While there were numerous other fringe groups to be found on the left, the KPD was by far the most influential. The party formed in 1919 out of disappointed SPD and USPD members, revolutionary Spartakists, people sympathizing with the cause of the Russian bolshevists etc. Being frightingly close to a Soviet cadre party and increasingly becoming the mouthpiece of Moscow in Germany during the late 1920s, the KPD was the bogey of the propertied class, of the establishment, and the nationalist right. The KPD opposed the parliamentary democratic system of Weimar and called for violent revolution. After WWII, she was banned by West-German authorities in 1956.
- The Sozialdemokratische Partei Deutschlands (Social Democratic Party of Germany), the SPD, was mentioned before too. Stretching back to the 19th century, the SPD is the oldest German party still in existence and can look back on a long history of accomplishments. Already before WWI she had become Germany's largest party in members and during the Weimar period she constantly maintained her status as the platform with the highest voter support, yet still not able to form a government on her own. While honoring socialist ideals, the statesmanlike SPD was dedicated to non-violence and gradual reform of capitalism to a better socialist future through democratic change. The SPD founded and supported the political system of Weimar and was counted as part of the so called Weimarer Koalition (Weimar coalition), a trio of parties dedicated to the defense of parliamentary democracy. The SPD was commonly seen as representing the vast moderate left-wing.
- The Deutsche Demokratische Partei (German Democratic Party), the DDP, was a (social-)liberal party which was counted as a Weimar coalition member too. The DDP was not a very large party concerning voter turnout but she proved to be influential in building coalitions and governments. The party was rooted in the centrist-liberalist traditions of the educated and progressively-minded part of the German middle-class and could trace her past to the overarching group of National Liberals in the German Empire before WWI.
- The Deutsche Volkspartei (German People's Party), the DVP, was based upon similar traditions as the DDP, tracing back to the old National Liberals before the war. However, other than the centre-left DDP, the DVP leaned towards centre-right (and continued to shift further to the right over the course of the 1920s). The DVP was commonly known as the party of business interests, capitalists, and industrialists.
- The Zentrum (Centre/Centrum) was kind of a special German case due to the traditional religious split of the country. Zentrum was a party dedicated to the interests of German catholics, which were marginalized and discriminated against in the early years of the German Empire. While the anti-catholic Kulturkampf politics were long over by now, many catholics still felt uneasy regarding the protestant majority of unified Germany and tended to stick together politically. Regarding domestic politics Zentrum was firmly conservative in sociopolitical matters (i.e. on the line of the Catholic Church), but generally progressive in socioeconomic terms (i.e. endorsing social welfare, workers interests etc.) because of its catholic values. Zentrum was regarded as part of the Weimar coalition and was generally perceived as supportive of parliamentary democracy. While being conservative Zentrum was not associated as much with the rest of the right-wing because of the protestant traditions of German nationalism, rather it was viewed more as a centrist party (granted: the name gives it away kind of).
- The Deutschnationale Volkspartei (German National People's Party), the DNVP, was a far-right party dedicated to authoritarianism and ultra-nationalism. Despite her radical stance towards the Weimar state (violent opposition to democracy, equality, liberalism) and its virulent anti-semitism, the DNVP was a rather successful party and had some impressive election results (especially in the Reichstag elections of 1924, where they got over 19%) before being gobbled up Hitler's NSDAP after 1930. The DNVP's paramilitary/thug wing was the Stahlhelm group (steel helmet). The party was a mixture of right-wingers, however in general more traditionalist and conservative than the NSDAP for example. The DNVP had a large monarchist faction that glorified the imperial past, but also openly fascist tendencies sympathizing with the contemporary movement of Mussolini. As you may have guessed, the DNVP was openly revanchist, demanded the annulment of the Treaty of Versailles, the end of reparations, and the return of lost German territory.
- And finally there is the Nationalsozialistische Arbeiterpartei Deutschlands (National Socialist Worker's Party of Germany), the NSDAP, Hitler's party. I don't want to go into detail here as you are probably alread kind of familiar with these guys. The NSDAP started out as a fringe group on the German right with marginal results in the early years but landslide success towards the end of Weimar. The National Socialists, called Nazis by some, had much in common with the traditional German right: Radical anti-Marxism, ultra-nationalism, virulent anti-semitism, authoritarian/fascist tendencies, and rejection of democracy. However their platform proved to be a lot more capable of forming a populist mass movement through a certain arbitrariness. Other than the traditional right, the NSDAP at times embraced (somewhat ambivalently) social revolutionary ideals and did not reject a certain "proletarian" vibe -- especially her paramilitary wing, the infamous Sturmabteilung (SA). Regarding foreign policy it was pretty much in line with the DNVP described above.
I hope I could help you a bit. It became a little bit longer than I expected, I think. Please feel free to ask questions!