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Home , Beveridge Report, Liberal Assembly, Ramsay Muir

‘Reluctant’ or Liberal Collectivists? The Social of Keynes and Beveridge, 1922 – 1945

At the 1945 British General Election, held in the wake of the Allied victory in Europe, the Liberal Party addressed the electorate in an assertive, heir social liberal creed but because, in their view, it would prescribed an extended role entail productive forms of state even confident, spirit. Tfor the State in both eco- activity that were compatible with Its election campaign, nomic and social policy, involv- liberal values – with the defence of ing commitments to a managed individual and the pursuit chaired by Sir William , to the goal of of rational progress in promoting full employment, and to a welfare the common welfare. Beveridge, promoted society. But this expansion of the Reflecting, then, those State’s role was justified by Keynes ideological influences, as well as a clear and radical and Beveridge not for its own sake, the prevailing climate of popular programme which involved, in several important respects, a broadly collectivist approach towards the nation’s acute economic and social problems. That approach was itself consistent with the kind of which both Beveridge and Maynard Keynes, by 1945 the Liberal Party’s most influential policy intellectuals, had, in their different ways, advocated during the interwar and wartime years. Tudor Jones examines their approach.

32 Journal of Liberal History 78 Spring 2013 ‘Reluctant’ or Liberal Collectivists? The Social Liberalism of Keynes and Beveridge, 1922 – 1945

opinion, the Liberal manifesto Security and Full Employment, been destroyed or damaged beyond stressed the need for post-war the Liberal Party leads a frontal repair during World War II. Land social reform and reconstruction, attack on this Fear.1 development outside built- declaring that: up areas were to be ‘acquired for In addition, the Party advocated the public’ and ‘a periodic levy on mankind is a prey to Fear – fear a Ministry of Housing to oversee all increases in site values’ was pro- of poverty and want through a post-war housebuilding drive, posed in order to secure for the unemployment, sickness, acci- including an expansion of afford- community any appreciation in the dent and old age. With the able housing, in a country in which value of land that was due to com- Beveridge schemes for Social more than 500,000 dwellings had munal action.2 The Liberal manifesto also called for the public ownership of the coal-mining industry, depicted as ‘the key to the health of our basic industries and our export trade’, and therefore accorded the status of ‘a public service’. The rail- ways and electric power similarly should be organised as public utili- ties, and in general it was argued that where there was ‘no further expansion or useful competition in an industry’, or where an industry had become a private monopoly, it should become a public utility.3 In British industry Liberals believed in ‘the need for both private enter- prise and large-scale organisation under government control’, and, in deciding which form was nec- essary, identified as the tests to be applied in each particular case ‘the service of the public, the efficiency of production and the well-being of those concerned in the industry in question’.4 All in all, the Liberal election manifesto of 1945 was thus, as Alan Watkins later noted, ‘surprisingly leftist both in content and in tone’.5 Certainly, by 1945 a more collec- tivist strand of thought was widely evident within the Party. It under- lay both its economic and its social policy proposals, reflecting the

Journal of Liberal History 78 Spring 2013 33 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945 highly influential contemporary played a leading part.8 These con- movement – including Keynes, ideas of Maynard Keynes and Wil- sisted of, first, the Liberal Sum- Henderson, Layton, Muir and liam Beveridge. mer School movement, established Ernest Simon. To some extent, too, the shift to in 1921 and running from 1922 Rejecting the traditional antith- state collectivism in Liberal policy onwards; second, the Liberal peri- esis between and col- and thought by 1945 was due to odical, The Nation, founded in lectivism, Britain’s Industrial Future the influence of a pressure group 1907 and managed by Keynes as offered radical proposals for state within the Party originally estab- active chairman from 1923 until intervention in the British econ- lished in 1941 under the name, the its absorption into The New States- omy without recourse to the ortho- Liberal Action Group, and renamed man in 1931; and third, the Liberal dox socialist remedies of large-scale in 1943. It sought Industrial Inquiry, financed by state or collective ownership of to campaign for imaginative and , and culmi- industry or central state economic radical policies for post-war social nating in Britain’s Industrial Future, planning. In addition to advocat- and economic reconstruction and, published in 1928, the key propos- ing joint consultation in industry more immediately, to question or als of which later appeared in We between workers and managers, challenge the Party leadership’s Can Conquer Unemployment and Can the Yellow Book put forward as its support for the wartime electoral Lloyd George Do It?, the pamphlets key proposal a Board of National truce between the three main par- that launched the Liberals’ 1929 Investment, which would oversee a ties. Founded by Donald Johnson, general election campaign. wide-ranging programme of state a doctor and publisher, Honor Bal- Like their Edwardian New Lib- investment in public works. This four, a journalist, and Ivor Davies, eral predecessors, these intellectual anticipated Keynes’s case in The another publisher, the group later movements and influences may be General Theory of Employment, Inter- included among its most prominent described as social liberal, rather est and Money, published eight years members the Liberal MPs, Clem- than classical liberal, in character To some later, for large-scale public invest- ent Davies, Dingle Foot and Tom since, while supporting a market ment as a crucial means of stimulat- Horabin. In 1942 Lancelot Spicer economy, they advocated a signifi- extent, too, ing economic activity and reducing replaced Donald Johnson as the cant measure of state intervention mass unemployment. group’s chairman. By the time of in modifying or supplementing the shift to The authors of Britain’s Indus- the dissolution of Parliament in market outcomes in order to reduce trial Future, published a few months 1945, six of the 19-strong Parlia- mass unemployment and to pro- state col- before the Wall Street Crash, suc- mentary Liberal Party were mem- mote social welfare.9 During the ceeded, as Ed Randall has observed, bers of Radical Action.6 1920s the Liberal Summer School lectivism in in ‘fashioning a Liberal programme Aiming to radicalise the party movement thus sought to build on for national recovery calibrated to in respect of its policy, strategy the foundations of Edwardian New Liberal policy needs of their own times’.14 Their and organisation, Radical Action Liberalism by recommending selec- most significant proposals were strongly supported the Beveridge tive state intervention in the cause and thought popularised a year later in the two Report and its far-reaching pro- of social reform whilst turning by 1945 was 1929 election pamphlets, Can Lloyd posals for social security after its away from the path of doctrinaire George Do It?, co-written by Keynes publication in December 1942. It state socialism.10 due to the and Hubert Henderson, and We also claimed credit for encouraging The Liberal Summer School Can Conquer Unemployment, pub- the party leader, Sir Archibald Sin- movement was, as Michael Freeden influence of lished in Lloyd George’s name.15 clair, and other senior party figures has observed, ‘the linchpin of lib- The latter document’s centrepiece eventually to support Beveridge’s eral and progressive thought during a pressure was its proposal for massive public proposals. It succeeded, too, in the 1920s’.11 Its leading lights were investment in road-building, hous- pressurising the Liberal leadership drawn partly from Manchester - group within ing, electrification and other pub- into fighting the forthcoming 1945 including Ramsay Muir, Ernest lic works. The Yellow Book, and General Election as an independ- Simon and Edward Scott - and the Party the documents that it generated, ent political organisation, and into partly from Cambridge – includ- thus reflected the major influence keeping free of any subsequent coa- ing Keynes, Hubert Henderson originally that Keynes had exerted during his lition arrangements once the war and Walter Layton. The movement period of closest involvement in the had ended.7 became particularly influential established politics of the Liberal Party, that But more significantly, the after Lloyd George assumed the is, between 1924 and 1929 – years ascendancy of Liberal collectiv- Party leadership in 1926. During in 1941 under in which he had set out, in Rob- ist ideas in 1945 could be traced that year he personally initiated ert Skidelsky’s words, ‘to supply it back to the currents of social lib- and financed the Liberal Industry the name, with nothing short of a new philos- eral thought that flowed during Inquiry which resulted in the pub- ophy of government’.16 the interwar years. In that period lication of Britain’s Industrial Future, the Liberal In ideological terms, Keynes of electoral decline and internal ‘the Yellow Book’ as it was popu- Action Group, saw the central task of this govern- strife, the Party had nonetheless larly known, in February 1928.12 ing philosophy, his version of social continued to display its intellectual That ‘formidable and … exceed- and renamed liberalism for the 1920s, as one of vitality. The years from 1922 to ingly interesting document’, as managing and reforming a market 1929, in particular, had witnessed the socialist thinker G.D.H. Cole Radical economy that was producing insta- the development and dissemina- described it in his review in The bility and high levels of unemploy- tion of Liberal ideas through three New Statesman,13 was to a large Action in ment in Britain and throughout overlapping institutional networks, extent the product of active mem- the rest of the industrialised world. in each of which Maynard Keynes bers of the Liberal Summer School 1943. Part of the theoretical basis for this

34 Journal of Liberal History 78 Spring 2013 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945

ambitious project had already been Keynes’s policy. However, he himself did to spaces left vacant by private laid in his 1926 essay, The End of not accept the philosophical basis enterprise’.25 Laissez-Faire (partly based on a 1924 contribu- of Edwardian New Liberalism, dis- Moreover, in The General Theory Oxford lecture), which provided daining it ‘as a typical example of Keynes firmly emphasised ‘the tra- both an incisive critique of unregu- tion to Brit- Oxford Idealist muddle’.20 His own ditional advantages of individual- lated and an attempt to empiricist philosophical leanings ism’, pointing out that: set out, in Bentham’s phrase, ‘the ish Liberal meant that his distinctive efforts to Agenda of the State’. In Keynes’s revise and update British Liberal- They are partly advantages of view, the latter ought to relate ‘to thought thus ism therefore ‘stemmed from a dif- efficiency – the advantages of those functions which fall outside provided a ferent background, and a different decentralisation and of the play the sphere of the individual, to intellectual style’.21 of self-interest … But, above those decisions which are made by movement Deeply influenced as a student all, individualism, if it can be no one if the State does not make at Cambridge by the philosophi- purged of its defects and its them’.17 away from cal ideas of G.E. Moore and Ber- abuses, is the best safeguard of In his major treatise of 1936, trand Russell, Keynes shared, as personal in the sense that, The General Theory of Employ- classical lib- Skidelsky has noted, their distaste compared with any other system, ment, Interest and Money, Keynes for the idealist basis of the ethical it greatly widens the field for the later proceeded to specify the kind eral tenets belief, associated at Oxford with exercise of personal choice. It of economic ‘agenda of the State’ T.H. Green and his followers, ‘that is also the best safeguard of the which he considered appropriate towards the the good of the individual and the variety of life, which emerges for unstable times. Developing new good of the whole are intercon- precisely from this extended methods and ideas for effecting advocacy nected’. Keynes instead maintained, field of personal choice, and the the transition from ‘the economic with Moore, ‘that good states of loss of which is the greatest of all anarchy’ of the prevailing system of forms of mind could be enjoyed by indi- the losses of the homogeneous or of ‘individualistic capitalism’, he viduals in isolation from social totalitarian state.26 rejected the traditional socialist state inter- states of affairs’. More generally, policy instrument of state owner- too, Keynes and his Cambridge In The End of Laissez-Faire, too, ship of industry on the grounds vention contemporaries found ‘repel- Keynes had concluded his trench- that it would prove to be inefficient lent’ the ‘mixture of Hegelian and ant critique of the workings of and authoritarian.18 In its place, he compatible biological language’ in which the unregulated capitalism by mak- advocated more indirect yet, in his New Liberal thought of Green and ing clear his qualified support for judgement, more effective methods both with his followers was philosophically a market economy as a form of of controlling a market economy. liberal val- expressed.22 technical organisation, maintain- These would involve the use of fis- Developed, then, without the ing that ‘capitalism, wisely man- cal and monetary policy, and, in ues and with intellectual foundations of the aged, can probably be made more particular, government manage- Oxford-based New Liberalism, efficient for attaining economic ment of demand – by stimulating the achieve- Keynes’ own liberal ‘via media’ ends than any alternative system both investment and consumption nonetheless clearly involved the yet in sight’, even though ‘in itself – to levels at which full employment ment of what acceptance and advocacy of state it is in many ways extremely objec- could be attained. collectivist ideas and policies dur- tionable’. ‘The important thing for Ideologically, then, the eco- he consid- ing the 1920s and 1930s, and the government’, he maintained, ‘is not nomic approach of British social legacy of that intellectual process to do things which individuals are liberalism as developed by Keynes ered a more was later evident in Liberal think- doing already … but to do those during the 1920s, and as endorsed ing and policy-making. However, things which at present are not and advanced politically by Lloyd humane and both he and Beveridge have been done at all.’27 ‘The Agenda of the George, amounted, as Paul Addi- described, with some justification, State’ in the economic field should son has observed, to a ‘‘‘middle- more effi- by Vic George and Paul Wild- thus be concerned with remedying way” of imaginative reform within ing as ‘reluctant collectivists’.23 the technical faults of an unregu- capitalism’, offered as an alternative cient system Keynes’s ideological approach has lated market economy – the most both to the perceived economic ste- thus been portrayed as ‘a collectiv- serious of which, in his view, was rility of free-market Conservatism of managed ism not of principle, but of neces- its inability to ensure a sufficient and to the ‘socialist way of abolish- sity’, for while it involved widening level of demand to avoid depression ing capitalism’.19 capitalism. the field of economic activity in and unemployment. In the con- Keynes’s contribution to Brit- which state collectivist remedies text of the economic and political ish Liberal thought thus provided could be applied, it confined their instability of the 1920s and 1930s, a movement away from classical use ‘to issues where the normal Keynes, as J.K. Galbralth later liberal tenets towards the advo- solutions of private enterprise and observed, therefore ‘sought for cacy of forms of state intervention the ’ had been unsuc- nothing so earnestly as to save lib- compatible both with liberal values cessful.24 Skidelsky has made a eral capitalism’,28 a point reinforced and with the achievement of what similar observation with a different by his biographer’s choice of the he considered a more humane and emphasis, characterising Keynes’s title of his second volume.29 more efficient system of managed ‘reconstructed liberalism’ as a creed After the fragmentation of the capitalism. In this respect his ideas concerned with ‘grafting techno- Liberal Party in 1931, and with it can be regarded as extending the cratic solutions to specific problems Lloyd George’s departure from the social liberalism of the Edward- on to an individualist stem’, and Party leadership, Keynes retreated ian era into the field of economic with ‘confining state intervention to Cambridge, convinced ‘that

Journal of Liberal History 78 Spring 2013 35 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945 politics having failed, the world By 1945, a School between 1922 and 1924,34 .41 Indeed, could be saved only by thought’.30 but he was not involved with shortly after the Report’s publica- While remaining ‘a semi-detached year before Keynes, Henderson and others in tion in December 1942, a Liberal Liberal’,31 he believed that his ‘mid- the preparation of either Britain’s Party spokesman had stated that its dle way’ of a reformed capitalism Keynes’ Industrial Future or the documents underlying principles and objectives could best be advanced by aca- that launched the Liberals’ 1929 were entirely consistent with resolu- demic scholarship and through offi- death, the election campaign, being at that tions passed by the Liberal Assembly cial governmental channels rather time unsympathetic to the unor- in September of that year.42 than directly through the Liberal kind of social thodox ideas of expansionist pub- Furthermore, Beveridge’s Party. The fruits of his academic lic finance which they promoted.35 newly-found Liberal commit- endeavours emerged in 1936 in The liberal- Beveridge was later, in 1936, criti- ment was in tune with more deep- General Theory, the most influential ism that he cal of Keynes’ General Theory. He rooted ideological convictions economic treatise of the twentieth disliked, in general, what he con- since, as his biographer has noted, century. His contribution to public espoused, sidered to be Keynes’ reduction of he had always seen the Liberals as life, meanwhile, culminated in his the economic concepts of ‘unem- the ‘Party of ideas’ and of ‘national achievements as both leading eco- and which ployment’ and ‘demand’ to the interests’ – as opposed to the sec- nomic adviser to the British Treas- level of abstractions. In particular, tionalism of both Conservatives ury between 1940 and 1946 and as his economic too, he was unimpressed by Keynes’ and Labour’. In addition, the broad Britain’s most important interna- concept of ‘the multiplier’.36 and flexible character of Liberalism tional representative on economic theories epit- Beveridge’s unfavourable reac- as a political creed, and hence ‘the affairs, who shaped the institu- tion to Keynes’ General Theory, tensions’ within it ‘between indi- tional foundations of the post-1945 omised, had as well as to Sidney and Beatrice vidualism and collectivism, radical- international financial and trading Webb’s Soviet Communism, pub- ism and traditionalism … appealed system – including the World Bank, become one lished in the same year, intensi- to Beveridge’s own personal slant the International Monetary Fund fied, as José Harris has observed, upon the world’. He tended, too, and the General Agreement on Tar- of the most Beveridge’s ‘sense of estrangement ‘to idealize the Liberal past, and iffs and Trade. from current economic and politi- he looked back in particular upon In 1942 Keynes renewed his important cal thought.’ This in turn led to an Edwardian Liberalism as a golden formal connection with the Lib- ‘almost total withdrawal into politi- age of radical innovation’.43 eral Party when he became a Lib- intellectual cal agnosticism...which dovetailed All these factors, then, had eral peer, writing to Lord Samuel, with Beveridge’s growing convic- helped to reinforce his sense of party leader in the Lords: ‘in truth influences tion that academic social scientists affinity with the Liberal Party by I am still a Liberal, and if you will on Liberal should refrain from dabbling in 1944, when, in his own words, he agree, I should like to indicate that current politics’.37 had become ‘committed in mind to by sitting on your benches’.32 By thought and Such an attitude was already the adventure of putting Liberal- 1945, a year before his death, the firmly rooted since, during most ism on the map again as an effective kind of social liberalism that he policy. of the interwar years, Beveridge political force, for international as espoused, and which his economic had tended to adopt what Harris well as for domestic issues’.44 That theories epitomised, had become has described as ‘a self-consciously commitment had been confirmed one of the most important intellec- neutral stance on questions of in July of that year following the tual influences on Liberal thought party politics’, which he believed death in military action of George and policy. appropriate in view of both his Grey, the young Liberal MP for During the 1940s Sir William professional responsibilities and his Berwick-upon-Tweed. In Septem- Beveridge, social reformer, social respect for the role of the expert. ber 1944 Beveridge was adopted scientist, senior civil servant and That approach, albeit with under- as candidate to be Grey’s succes- university administrator, fostered lying Liberal sympathies, was sor, and was elected the following the spirit of Keynes’s social liber- reflected in his statement, when month as Liberal MP, unopposed alism in the field of social policy. successfully standing for the Vice by the Conservatives or Labour At the 1945 General Election his Chancellorship of the University of under the terms of the wartime ideas provided a further and, in the London in 1926, that ‘I am as nearly party truce.45 immediate post-war climate the non-political as anybody can be, In the subsequent General Elec- most powerful, influence on the but when I have any politics I am a tion, announced on 24 May 1945 radical and collectivist tone of the Liberal’.38 and to be held on 5 July, Bev- Liberals’ manifesto and campaign. By 1944, however, those vague eridge, whilst defending his own Beveridge had only become a Liberal sympathies had been seat of Berwick, also assumed the member of the Liberal Party in July strengthened. His own political responsibilities of chairman of the 1944. He had not done so before principles, as well as his cordial per- Liberal Party’s Campaign Com- because he considered member- sonal relations with , mittee.46 Morever, he had already ship of a political party inconsistent Herbert Samuel, David Lloyd provided, too, the intellectual basis with his professional roles of civil George and Dingle Foot, had drawn of the Liberals’ radical election servant and university teacher and him closer to the Liberal Party.39 platform in the form of, first, his administrator.33 Moreover, he had In addition, as Beveridge later pioneering report on social pol- had little formal connection with acknowledged, the Liberals were icy, Social and Allied Ser- the Liberal Party in the past. He ‘the first political party to accept the vices (1942) and, second, its sequel had, it is true, been briefly asso- Beveridge Report without reser- of 1944, Full Employment in a Free ciated with the Liberal Summer vations’, 40 including his plans for a Society. These documents provided

36 Journal of Liberal History 78 Spring 2013 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945

the focus for the Liberal campaign delivered in the form of cash ben- in capturing that spirit where oth- and embodied popular issues and efits, financed by equal contribu- ers had failed, or were on the point causes – freedom from both want tions from employees, employers of giving up’.51 and unemployment – to put before and the State, together with a pub- A number of key themes in the the voters in the most radical Lib- lic assistance safety net. In addition, British liberal tradition can be eral election programme since 1929. it proposed both the unification of identified within the Beveridge At the same time, the ideals under- the administrative systems of dif- Report.52 Among the most sig- lying those causes – social reform ferent aspects of social security, and nificant of these was the assertion and progress and personal freedom the standardisation of benefits and Beveridge’s that social security involved a co- – were enduring liberal ideals that contributions at flat rates for differ- operative partnership between could unify all sections of the Party. ent types of social need. … Report on the State and the individual.53 This The Beveridge Report itself had Three key assumptions underlay was a point that Beveridge was to its origins in a rather obscure inter- the proposed system of social insur- social insur- develop further in his work of 1948, departmental enquiry, set up in ance, each of which, in Beveridge’s ance was … Voluntary Action, the third and least June 1941 and chaired by Beveridge view, was inseparable from the known of his reports on social and himself, for co-ordinating social goal of the abolition of want. First, as Freeden economic reconstruction, in which insurance. The enquiry was gradu- accompanying the new system, he stated at the outset that: ally broadened in scope to become there should be a national health has com- a full-scale and, so it was to prove, service available to all. Second, The theme of this report is that ground-breaking examination of there should be state provision of mented, ‘a the State cannot see to the ren- British social policy. The resulting tax-financed children’s allowances. dering of all the services that are report, Social Insurance and Allied Third, there should be a com- highly liberal needed to make a good society.54 Services was published in December mitment to state action to reduce 1942, three weeks after the Allied unemployment. This third assump- document He went on to contend that: victory at El-Alamein.47 tion was developed further in Beve- Maynard Keynes, at that time ridge’s later report, Full Employment in terms of the State is or can be the master a high-ranking Treasury adviser, in a Free Society, based on his own of money, but in a free society had during the previous months independent enquiry. its ideologi- it is master of very little else. responded enthusiastically to Bev- The keystone of Beveridge’s The making of a good society eridge’s early draft proposals for his system of social insurance was the cal orienta- depends not on the State but on Report. The two met in London notion of universal entitlement, the citizens, acting individu- over several convivial lunches and which thereby conferred equal- tion, as if ally or in association with one dinners at various West End clubs, ity of status upon citizens. In the another.55 and these meetings were important case of social security, the basis Beveridge to Beveridge, as Harris has noted, of entitlement was the principle had emerged With an emphasis consistent, as ‘both in enhancing the financial via- of contributory insurance, which Harris has noted, with the liberal bility of his report and in smooth- Beveridge believed would protect from outside idealist philosophy of T.H. Green, ing the way for its reception in and foster individualist values of Beveridge believed that this inter- official circles.’48 Keynes described personal responsibility and inde- the march dependent relationship between the the final draft of Beveridge’s pendence, thrift and self-respect. individual, the State and the vol- Report as ‘a grand document’, and In the case of healthcare, the basis of time to untary sector would not only fos- conveyed to him his hope ‘that the of entitlement was the principle ter social solidarity but also enable major and more essential parts of it of citizenship, which entailed the become individual citizens ‘to exercise both might be adopted substantially as possession of both social rights and their feelings of altruism and their you have conceived them’.49 collective responsibilities for com- suddenly democratic rights.’56 In addition, The Beveridge Report pre- mon needs. and more in tune with the liberal sented a vision of society’s battle In spite of Beveridge’s lack of and totally utilitarian tradition, the Report against the ‘five giants’ of want, formal commitment to Liberal- underlined Beveridge’s high regard disease, ignorance, idleness and ism in the interwar period, and his immersed in for the role and character of the squalor. Its particular focus was on former, deliberate party-political professional administrator as a the struggle against want and, to neutrality, his Report on social some radical disinterested specialist or expert, a lesser extent, against disease and insurance was nonetheless, as reflecting his own underlying unemployment, and hence on the Freeden has commented, ‘a highly implications belief in the efficiency of a benevo- development of social security and liberal document in terms of its lent central State, serviced and health-care policy, but as the docu- ideological orientation, as if Beve- of progres- guided by a technocratic elite and ment stated: ridge had emerged from outside the sive liberal- promoting the common good. march of time to become suddenly A second, overtly social liberal Want is one only of the five and totally immersed in some radi- ism, which theme that pervaded the Report giants on the road of recon- cal implications of progressive lib- was the reformist belief that the struction and in some ways the eralism, which liberals themselves liberals abolition of want entailed some easiest to attack. The others are could not voice’. In spite of his degree of redistribution of income. Disease, Ignorance, Squalor and loose connection with British Lib- themselves Indeed, his plan as a whole was Idleness.50 eral thought in the interwar years, described by Beveridge as ‘first and his Report was ‘in a circuitous way could not foremost a method of redistribut- The Report provided a compre- … the very spirit of progressive lib- ing income so as to put the first and hensive system of social insurance eralism, and Beveridge succeeded voice’. most urgent needs first, so as to

Journal of Liberal History 78 Spring 2013 37 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945

make the best possible use of what- comprising ‘a blend of left-liber- and ‘brave new world’ connota- ever resources are available’.57 The alism and centrist-liberalism’.61 It tions. He preferred instead to refer contributions of those in regular thus combined the two main ten- to either a ‘social service state’67 employment and in good health dencies of British Liberal ideology or ‘welfare society’. The latter would thus help the unemployed in the interwar period: the former was ‘a phrase he was proud to have and the chronically sick. stressing community, social justice coined’,68 implying, as we have seen, Third, however, and reflecting and social welfare, together with a wider partnership between indi- more the classical liberal tradition, greater state intervention in pursuit viduals, voluntary organisations the Report also emphasised its belief of those ideals; the latter stressing and the State in the promotion of that the pursuit of social security personal freedom, individuality welfare, with the State by no means was linked to liberal-individualist and .62 always the best provider. notions of individual freedom, ini- In assessing the Beveridge The Beveridge Report of 1942 tiative, enterprise, personal respon- Report’s practical political The Report was one of the two pillars of the sibility and voluntary effort. As impact, Addison has described reflected lib- Liberals’ radical programme of 1945 Beveridge stressed at the outset: it as ‘the blueprint of the post- for post-war social and economic war in Britain’, eral think- reconstruction. The second pillar The State in organising secu- providing the foundations and was his independent report of 1944, rity should not stifle incentive, underlying principles of the Attlee ing, and Full Employment in a Free Society. Its opportunity, responsibility; in Government’s social legislation central concern was how to abolish establishing a national mini- of 1945-48. As for Beveridge’s themes in unemployment without infringing mum, it should leave room and personal contribution to that essential civil and political liber- encouragement for voluntary achievement, his Report was ‘a Beveridge’s ties, which, in his view, were ‘more action by each individual to pro- brilliant coup by one man, which precious than full employment vide more than that minimum at once synthesized the pressures political itself ’.69 The protection of those for himself and his family.58 for a more progressive capitalism, essential – of and jolted all three parties into outlook speech, expression and religious A few months before the pub- accepting the resulting formula worship, freedoms of assembly lication of the Report, he had as the basis of a new post-war that were and association, freedom of choice expressed the same view when consensus’.63 For acting, as Harris, of occupation, and so on – would writing to the chairman of the too, has noted, in the role ‘of a recurrent therefore preclude ‘the totalitar- Board of Education on the subject synthesizer and publicist rather ian solution of full employment of child allowances. ‘Social insur- than that of an innovator’,64 through- in a society completely planned ance in a free society’, Beveridge Beveridge had proved a skilful and and regimented by an irremovable wrote, ‘must, I think, to a large persuasive advocate of social policy out his life, dictator’.70 extent consist of putting peo- ideas, launched in favourable both in its Beveridge had earlier insisted, ple into a position to meet their circumstances, who succeeded as we have seen, that his system responsibilities rather than remov- in winning over the country’s rejection of of social insurance needed to be ing their responsibilities entirely.’59 political and administrative elites supplemented by state action to Finally, the Report reflected lib- into acceptance of those ideas, sectional achieve and maintain full employ- eral thinking, and themes in Bev- including those who were initially ment – by which he meant not eridge’s political outlook that were opposed or sceptical – notably, interests as total abolition of unemployment, recurrent throughout his life, both the establishments of both the but a margin of unemployment of in its rejection of sectional interests Conservative Party and the senior a basis for not more than three per cent. His as a basis for public policy-making civil service, and sections of the own private enquiry was there- and in its suspicion of producers’ Labour Party.65 public pol- fore designed to achieve the goal organisations and preference for The circumstances in which of full employment, defined in voluntary associations of various Beveridge had applied those per- icy-making that manner, thereby slaying the kinds, such as friendly societies, suasive skills as an advocate and giant of idleness, just as the report consumers’ organisations or philan- publicist were uniquely favour- and in its of 1942 had aimed to slay the giants thropic and mutual aid movements. able since, as his biographer has of want and disease. The outcome This preference was further under- observed, ‘his mingled tone of suspicion of of his endeavour, Full Employment lined in his third report, Voluntary optimism, patriotism, high prin- in a Free Society was published in Action, in 1948. As Harris has there- ciple and pragmatism exactly fit- producers’ November 1944, five months after fore emphasised: ted the prevailing popular mood’.66 the appearance of the Churchill That reality was subsequently organisa- Government’s Full Employment Beveridge’s commitment to reflected in the public response to tions and White Paper of June 1944. It is clear planning must be set against his Report, with national sales of from Cabinet papers that the gov- his spirited defence of personal 100,000 copies within a month of its preference ernment’s official commitment to freedom and against his publication. the goal of full employment, and emphasis on voluntarism and on Beveridge’s reputation as princi- for voluntary hence to publication of its White the crucial role of a wide variety pal architect of the British welfare Paper, was intensified by aware- of intermediate organizations.60 state needs, however, to be quali- associations ness in Whitehall of the develop- fied in one important respect. He ment of Beveridge’s own resolute In its overall ideological approach, himself disliked the term ‘welfare of various undertaking.71 the Beveridge Report has been state’ because of its paternalistic Beveridge had not become characterised by Freeden as implications and its ‘Santa Claus’ kinds. converted to Keynes’s economic

38 Journal of Liberal History 78 Spring 2013 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945

theories, including his ideas of The descrip- citizens either singly or in asso- Party won only 12 seats, in scat- expansionist public finance, until ciation, and to leave to those tered rural constituencies through- after publication of the Beveridge tion of other agencies that which, if out Britain, polling 2.2 million Report of 1942, as Harold Wilson, they will, they can do as well or votes with only a 9 per cent share of who had been Beveridge’s research Keynes and better than the State.75 the total national vote. Beveridge assistant at Oxford in the late 1930s, himself, an MP for barely seven later confirmed when Labour Beveridge In this respect, then, it may be said, months, had been, together with Prime Minister.72 By 1944, there- as with Keynes, that Beveridge was Sir Archibald Sinclair and Sir Percy fore, adopting a broadly Keynesian as ‘reluctant to some extent a ‘reluctant collec- Harris, among the Liberals’ most approach to the problem of unem- tivist’. As George and Wilding have high-profile electoral casualties. ployment, Beveridge was propos- collectiv- observed: Beveridge’s own declared com- ing a new kind of annual budget ists’ appears, mitment to ‘the adventure of put- that used taxation, public borrow- His liberal principles led him ting Liberalism on the map again ing and deficit-financing to con- as we have to seek to stress the limitations as an effective political force’,80 had trol levels of public expenditure, which he believed should be ended in profound disappointment business investment and consumer seen, to applied to government action, as his party became the victim of demand. Advocating a high degree while on the other hand, his its various shortcomings, as well of central direction of the econ- be largely passionate concern about social as of new developments. Among omy without recourse to large- ills led him at times to the view those factors could be cited the scale nationalisation, Beveridge’s justified. that many less essential liberties Liberals’ financial and organisa- programme for maintaining full could rightly and reasonably be tional weaknesses, together with employment involved state invest- sacrificed to their abolition.76 their lack of connection with any ment in nationalised industries major social class or sectional inter- such as transport and power; public In a collection of his articles and est group. But highly significant, spending on a wide range of ‘non- speeches entitled, Why I am a Lib- too, were the advent of a new vot- marketable’ goods and services, eral, published shortly before the ing generation without any inher- such as roads, hospitals, schools and 1945 General Election, Beveridge ited Liberal tradition, and, boosted defence; state subsidies for food and gave further ideological shape to by the support of that new section fuel; and state regulation of pri- his social and economic policy pro- of the electorate, the surging rise vate investment and consumption posals, depicting them as corner- to political maturity of the Labour by means of monetary and fiscal stones of a radical, interventionist Party. In stark contrast, the Liberal policy.73 programme that would liberate Party’s eventual, tentative recov- Beveridge readily acknowl- Britain from the ‘giant evils of ery was not to be even faintly dis- edged the state-collectivist and cen- Want, Disease, Squalor, Ignorance cernible until the winter of 1955-56. tralist nature of this programme of and Idleness enforced by mass Subsequently it was more clearly measures, declaring that: unemployment, which have dis- apparent following ’s figured Britain in the past’.77 Like accession to the Liberal leadership Full employment cannot be won Keynes, Beveridge presented his in November 1956, which heralded and held without a great exten- version of social liberalism – which both a revival of his Party’s for- sion of the responsibilities and he referred to as ‘Liberal radical- tunes and a reinvigoration of Brit- powers of the State exercised ism’ – as an enlightened middle way ish Liberalism. through organs of the central that avoided the errors both of free- Government. No power less market individualists and of col- than that of the State can ensure lectivists ‘who desire extension of Conclusion adequate total outlay at all times, state activity for its own sake’.78 His The description of Keynes and or can control, in the general approach would certainly involve Beveridge as ‘reluctant collectiv- interest, the location of industry an extension of the responsibilities ists’ appears, as we have seen, to be and the use of land. To ask for and powers of the state into social largely justified. The social liber- full employment while object- and economic policy areas, using alism which they both espoused ing to these extensions of State ‘the organised power of the com- involved a major extension of the activity is to will the end and munity’ to purge the country of its power and responsibilities of the refuse the means.74 social ills and thereby to ‘increase State into the fields of economic enjoyment of liberty’.79 But state and social policy. But for Keynes Yet in spite of the range of state- intervention of that kind was thus the ‘Agenda of the State’ would interventionist proposals in the justified not for its own sake but relate to ‘those functions which report, Beveridge also continued to rather by the enhancement of per- fall outside the sphere of the indi- adhere to liberal-individualist and sonal liberty, in its positive sense as vidual,’81 and which needed to be voluntarist beliefs. This was evi- the widening of opportunity, and exercised by the State in order to dent in his statement that: by the promotion of the common rectify market failures. For Bev- welfare that it would make possible. eridge, too, statist measures were The underlying principle of Beveridge’s dominant influence proposed only, he stressed, for the Report is to propose for on the Liberal Party and its election ‘those things which the State alone the State only those things campaign in 1945 was not, however, can do or which it can do better which the State alone can do or to be rewarded by the fruits of elec- than any local authority or than which it can do better that any toral and political success. At the private citizens either singly or in local authority or than private 1945 General Election the Liberal association.’82

Journal of Liberal History 78 Spring 2013 39 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945

The state-collectivist meas- The exten- the Labour Party: From Gaitskell Money (London: Macmillan,1936), ures that lay at the heart of their to Blair, Modern Political Thinkers pp. 377–383 policy prescriptions stemmed, it sion of state and Ideas: An Historical Introduc- 19 , The Road to 1945: Brit- is true, from their shared belief in tion, and, most recently, The Revival ish Politics and the Second World War the efficacy of a benevolent state activity of British Liberalism: From Gri- (London: Quartet Books, 1975), p. 35 guided by policy intellectuals mond to Clegg. 20 Skidelsky, op.cit., p. 134 such as themselves. But theirs was which they 21 ibid. nonetheless, as George and Wild- 1 Liberal Party General Election Mani- 22 Skidelsky, op.cit., p. 224. On Keynes’ ing have suggested, ‘a collectivism advocated festo, 1945, in Iain Dale (ed.), Liberal early philosophical influences, see not of principle, but of necessity.’83 was for both Party General Election Manifestos 1900- Robert Skidelsky, John Maynard For the extension of state activity 1997 (London: Routledge/Politico’s, Keynes. Vol. 1: Hopes Betrayed, 1883– which they advocated was for both Keynes and 2000), pp. 62–3 1920 (London: Macmillan, 1983), Keynes and Beveridge an essential, 2 ibid., p. 63 Ch.6 (pp. 133–160) pragmatic response to the debilitat- Beveridge 3 ibid., pp. 66, 65 23 Vic George and Paul Wilding, Ideol- ing economic and social ills of their 4 ibid., p. 654 ogy and Social Welfare (London: Rout- time. It was not, however, intrin- an essential, 5 Alan Watkins, The Liberal Dilemma ledge and Kegan Paul, 1976), Ch.3 sically desirable, as in the social- (London: MacGibbon and Kee, 1966), 24 ibid., p. 54 ist view, but rather was considered pragmatic p. 38 25 Skidelsky, . by them to be a necessary means 6 See R.M. Sommer, ‘The Organisa- Vol.2: The Economist as Saviour, p. of enlarging effective freedom, of response to tion of the Liberal Party, 1936–60’, 222 For this interpretation, see, too, promoting the common good, and PhD thesis, University of London, Freeden, op.cit., pp. 166–171 of developing a more humane and the debilitat- 1962, p. 77 26 Keynes, The General Theory, p. 380 stable form of managed capitalism. 7 See Robert Ingham, ‘Radical Action’, 27 Keynes, The End of Laissez-Faire, pp. Keynes and Beveridge were thus ing economic in Duncan Brack and Ed Randall 52, 46–7 advancing the case for a liberal as (eds.). Dictionary of Liberal Thought 28 J.K. Galbraith, American Capitalism well as largely pragmatic version of and social ills (London: Politico’s, 2007), pp. 327–9; [1952] (London: Penguin, 1962), p. collectivism that could draw upon Sommer, op.cit., pp. 56–77 194 a British social liberal tradition of their time. 8 See Robert Skidelsky, John Maynard 29 Skidelsky, John Maynard Keynes: The stretching back to the late-Victo- Keynes: The Economist as Saviour, 1920– Economist as Saviour (1992) rian and Edwardian eras and which It was not, 1937 (Basingstoke: Macmillan, 1992), 30 ibid., p. xxviii had been developed more recently however, p. 222 31 ibid., p. 21 in the Yellow Book of 1928. 9 For a concise, introductory discus- 32 Quoted in Robert Skidelsky, John In broader ideological terms, intrinsically sion of social liberalism as an ideo- Maynard Keynes. Vol.3: Fighting for the social liberalism of Keynes logical tendency, see Duncan Brack, Britain, 1937–1946 (London: Macmil- and Beveridge reflected, too, their desirable, as ‘Social Liberalism’, in Brack and Ran- lan, 2000), p. 265 belief that there was not a rigid dall (eds.), op.cit., pp. 386–9 33 See , Why I am antithesis in British Liberal thought in the social- 10 See David Dutton, A History of the a Liberal (London: Herbert Jenkins, between individualism and col- Liberal Party in the Twentieth Century 1945), pp. 1–5 lectivism, a belief that the Yellow ist view, but (London: Palgrave Macmillan, 2001), 34 See José Harris, William Beveridge: A Book had also affirmed. Moreover, p. 84. For a detailed study of the Biography (Oxford: O.U.P., 1997) (sec- for Beveridge the tension within rather was Liberal Summer School movement ond edition), pp. 303–4 Liberalism between individual- in the 1920s, see Michael Freeden, 35 ibid., p. 304 ist and collectivist positions was considered Liberalism Divided: A Study in British 36 ibid., p. 321 itself a manifestation of its nature Political Thought 1914–1939 (Oxford: 37 ibid., pp. 321, 322 as a flexible and dynamic political by them to O.U.P, 1986), Ch.4 38 ibid., p. 304 creed. In his view, that was indeed 11 Freeden, op.cit., p. 78 39 See Alun Wyburn-Powell, Clement one of Liberalism’s attractive and be a neces- 12 For a detailed analysis of Britain’s Davies: Liberal Leader (London: Politi- appealing features, not an indica- Industrial Future, see Freeden, op.cit., co’s, 2003), p. 129 tion of some basic incompatibility sary means pp. 105–118 40 William Beveridge, Power and Influ- of attitude within its philosophical 13 G.D.H. Cole, ‘Liberalism and the ence (London: Hodder & Stoughton, framework. In the light of twenty- of enlarg- Industrial Future’, The New States- 1953), p. 337. On reservations within first century disputes, and at times ing effective man, 11 February 1928; quoted in both the Conservative and Labour exaggerated divisions, between Freeden op.cit., p. 115 Parties about the implementation of ‘social liberals’ and ‘economic liber- freedom … 14 Ed Randall, ‘Yellow versus Orange: the Beveridge Report’s proposals, als’ among today’s Liberal Demo- Never a Fair Fight: An Assessment of see Harris, op.cit., pp. 421–3 crats, that seems an important Two Contributions of Liberal Poli- 41 See George Watson, ‘Remembering historical point to consider whilst tics Separated by Three-Quarters Beveridge’, Liberal Democrat History reflecting on the far-reaching intel- of a Century’, The Political Quarterly, Group Newsletter 14, March 1997, p. 4 lectual contribution of Keynes and Vol.78. No.1 (Jan–March 2007), p. 43 42 See The Manchester Guardian, 9 Beveridge to a British Liberal tradi- 15 See Freeden, op.cit., p. 119 December 1942; quoted in Freeden, tion which Liberal Democrats of all 16 Skidelsky, op.cit., p. 222 op.cit., p. 367 kinds have inherited. 17 John Maynard Keynes, The End of 43 Harris, op.cit., p. 447 Laissez-Faire (London: Hogarth Press, 44 Beveridge, Power and Influence, p. 340 Dr Tudor Jones is Senior Lecturer in 1926), pp. 46–7 45 On Beveridge’s brief period as a Lib- Political Studies at Coventry University. 18 See John Maynard Keynes, The Gen- eral MP, see Beveridge, op.cit., pp. His publications include Remaking eral Theory of Employment, Interest and 340–3

40 Journal of Liberal History 78 Spring 2013 ‘reluctant’ or liberal collectivists? the social liberalism of keynes and beveridge, 1922–1945

46 See Beveridge, op.cit., pp. 54 William Beveridge, Voluntary the phrase ‘social service state’ Statisticians, 1966, p. 3; cited in 344–351 Action: A Report on Methods of throughout his 1948 report, Vol- Harris, op.cit., p. 427, n.60 47 For a detailed analysis of the Social Advance (London: Allen & untary Action. 73 See Harris, op.cit., p. 434 preparation and development of Unwin, 1948), p. 304 68 Watson, ‘Remembering Bev- 74 Beveridge, Full Employment in a the Beveridge Report, see Har- 55 ibid., p. 320 eridge’, p. 5. The phrase ‘welfare Free Society, para 44, p. 36 ris, op.cit., Ch.16 (pp. 365–412) 56 Harris, op.cit., 1st edn., p. 472 society’ first found print in 1957 75 ibid. 48 See Harris, op.cit., pp. 399, 400 57 Social Insurance and Allied Services, in The Unservile State (London: 76 George and Wilding, op.cit., pp. 49 Letter from Keynes to Bev- para 457, p. 1704 Allen & Unwin), the collection 53–4 eridge, 14 October 1942; quoted 58 ibid., para 9, pp. 6–7 of essays on Liberal thought 77 Beveridge, Why I am a Liberal, p. in Harris, op.cit, p. 404 59 Beveridge, letter to Maurice and policy which George Wat- 22 50 Social Insurance and Allied Services: Holmes, 27 August 1942; quoted son edited as chairman of The 78 ibid., p. 33 Report by Sir William Beveridge, in Beveridge, Power and Influence, Unservile State Group. 79 ibid., p. 36 Cmd 6404 (London: HMSO, p. 305 69 William Beveridge, Full Employ- 80 Beveridge, Power and Influence, p. 1942), para 8, p. 6 60 Harris, op.cit., 1st edn., p. 475 ment in a Free Society: A Report by 340 51 Freeden, op.cit., p. 366 61 Freeden, op.cit., p. 371 William H. Beveridge (London: 81 Keynes, The End of Laissez-Faire, 52 See Jose Harris, William Bev- 62 ibid., pp12–13 Allen & Unwin, 1944), p. 36 pp. 46–47 eridge; A Biography (Oxford: 63 Addison, op.cit., p. 211 70 ibid., p. 21 82 Beveridge, Full Employment in a O.U.P., 1977) (first edition), 64 Harris, op.cit., 1st edn., p. 449 71 See Harris, op.cit., 2nd edn., p. Free Society, para 44, p. 36 pp. 472–3; Freeden, op.cit., pp. 65 Harris, op.cit., 2nd edn., pp. 438 83 George and Wilding, op.cit., p. 368–371 421–3 72 See Harold Wilson, Beveridge 54 53 See Social Insurance and Allied Ser- 66 ibid., p. 416 Memorial Lecture, Institute of vices, para 9, p. 6 67 ibid., p. 452. Beveridge used Liberal history quiz 2012 The 2012 Liberal history quiz – with a link to the latest History Group booklet, Mothers of Liberty – was a feature of the History Group’s exhibition stand at the Liberal Democrat conference in Brighton last September. The winner was David Maddox, with an impressive 19½ marks out of 20. Below we reprint the questions – the answers will be included in the summer issue. 1. Who was the Deputy Leader of the Liberal Party from 1949 to 1951? 2. Who said of the possible formation of a breakaway from Labour in 1981 that such a party would have ‘no roots, no principles, no philosophy and no values’? 3. Who is the current Parliamentary Under-Secretary of State for Employment Relations, Consumer and Postal Affairs? 4. What is the name of the organisation within the Liberal Democrats which seeks to ensure that women are more fairly represented in the Commons? 5. Margaret Wintringham became the first-ever woman Liberal MP by winning the seat of Louth in Lincolnshire in a by-election. In what year? 6. Which Parliamentary seat was contested for the Liberal Democrats by Nicola Davies at a by-election in July 2004, when she lost by just 460 votes? 7. In what year was the Women’s Liberal Federation formed? 8. Which seat did Ray Michie (later Baroness Michie of Gallanach) represent in the House of Commons from 1987 to 2001? 9. W. E. Gladstone’s daughter acted as one of his private secretaries at Downing Street after the Grand Old Man resumed the premiership in 1880. What was her Christian name? 10. Lady was a great friend of . What was the title of the biography of him that she published in 1965? 11. Which Liberal activist became Director of the Electoral Reform Society in 1960? 12. Who did Geoff Pope succeed as Member of the Greater London Assembly when she stood down in June 2005? 13. With what animal is the former SDP MP Rosie Barnes for ever associated, thanks to her appearing with one in a 1987 party election broadcast? 14. On which Caribbean island was Baroness Floella Benjamin born? 15. Christiana Hartley was a Liberal social and welfare rights activist, businesswoman and philanthropist. In 1921 she was elected the first female Mayor of which Lancashire borough? 16. What distinction do Margery Corbett Ashby, Alison Vickers Garland, Mrs J. McEwan and Violet Markham collectively share? 17. In the Liberal interest she contested Hornchurch in 1950 and 1951, Truro in 1955 and 1959, Epping in 1964, Rochdale in 1966 and Wakefield in 1970. Who was she? 18. Honor Balfour was a member of Radical Action, which opposed the wartime electoral truce; which seat did she contest in 1943 as an Independent Liberal, coming within 70 votes (and two recounts) of victory? 19. What is the burial place of Margot Asquith, a location she shares with her husband – and also with George Orwell and David Astor, amongst others? 20. Why are Nora Radcliffe and Margaret Smith notable Lib Dem names?

Journal of Liberal History 78 Spring 2013 41