Perspectives on the British Welfare State: From Hobson to Thatcher

Alan Booth

University of Exeter, UK

1 It is a great honour to be in Tokyo again and especially to be giving a paper to a conference that features Professors

Nishizawa, Komine and Eriguchi. They have been friends for many years and it is a privilege to be on the same speaking platform as them. It is also extremely pleasant to be once more in the grounds of Hitotsubashi University, where I spent a very happy year in 1998-99. The title of my paper is ambitious to the point of being foolhardy. We would be here for an eternity if I interpreted my title very broadly and tried to give a full overview of the range of opinions on Britain’s welfare state in the twentieth century. Rather than spread my survey very thinly, I hope to select authors who will complement those surveyed by my Japanese colleagues.

I have drawn on those who, like Beveridge and the Webbs, were engaged in political and economic discourse and who were concerned with broad questions about the role of the state in modern society. I have chosen three prominent contributors to the debates that raged during the twentieth century, in part, because they have been highly prominent figures, in part because they illustrate the main problems confronted in the period. For the period in which the foundations of the welfare state were laid the obvious choice is J.A. Hobson, one of the foremost critics of modern capitalism. The second personality, Anthony Crosland, ‘was one of the small group of men whose thought has shaped the whole outlook of British socialism’.1 He was tutor in economics at Trinity

College Oxford from 1947 until he began a political career in the 1950 British general election. His place in British history hinges upon the publication in 1956 of The Future of Socialism, a major re-evaluation of the social democratic tradition in British politics. He made the case for social democratic egalitarianism and redistribution in a period of economic growth, full employment, relative affluence and expanding consumer choice. The third figure upon whom I wish to focus, Sir Keith Joseph, was from the centre-right of British politics and a pivotal figure in the re-appraisal of British conservatism of the 1970s, which has become popularly known as Thatcherism. From the later 1950s, Joseph served in successive Conservative cabinets that operated under the so-called ‘postwar settlement’. However, his commitment to ‘consensus politics’ was that of a rational political calculator rather than of a committed theorist.2 His growing disenchantment with the messy compromises of interventionist policies led him to the New Right and a new role for the state (and therein for welfare policy) in an advanced capitalist economy. Thus, we have three personalities at the interface between politics and economics and engaged at key moments in the re-appraisal of centre-left and new right approaches to economic policy.

1 Obituary, The Times, 21 February 1977. 2 As is evident from his essay ‘The Quest for Common Ground’ in Sir Keith Joseph, Stranded on the Middle Ground, London, Centre for Policy Studies, 1976, pp. 19-36.

2 John Anderson Hobson, 1858-1940 J.A. Hobson is probably the best-known to a Japanese audience of the three commentators on British capitalism covered in this essay. He was born to a comfortable upper middle class family in Derby, a provincial industrial centre in the British midlands.3 His views on imperialism have been much studied by generations of students of

British economic and political history and more recently he has been the focus of much scholarly endeavour from a range of academic disciplines.4 Much of this work was inspired by Keynes’s (apparent) acknowledgement of

Hobson as one of the economists who had an intuitive grasp of the principle of aggregate demand.5 Indeed, the early work on Hobson made significant claims for his contribution to economic theory.6 However, the major reassessment of Hobson’s work in recent years has tended to emphasise the inconsistencies and limitations in

Hobson’s treatment of theory while acknowledging the breadth of his interests and the fertility of his intellect. In truth, Hobson was better suited temperamentally to the role of propagandist, and the most recent of the major studies of Hobson has described him as one of the chief intellectual inspirations behind the mixed economy and the welfare state created in Britain during and after the Second World War.7 The foundation of Hobson’s advocacy of the welfare state lay in his analysis of the condition of British (and world) capitalism in the late 19th century.

Hobson’s career began relatively quietly, with spells of school-teaching at Faversham (Kent) and Exeter

(Devon). In Exeter he met A. F. Mummery, mountaineer, businessman and controversialist. Mummery believed that the problems of the British economy since the end of the mid-Victorian boom (falling prices and squeezed profits) resulted from excessive saving. Hobson attempted by the orthodox economics he had studied to counter these arguments, but Mummery gradually brought him round and they worked together on The Physiology of

Industry, published in 1889.8 Their argument identified two forces in the British economy of the 1880s leading to excess saving. The first was uncertainty, which induced some to hoard money rather than spend it. The second was the strong drive to accumulate, which forced individual capitalists into excessive investment and overproduction, producing under-consumption and recurrent crises. The former bears some relation to Keynes’s liquidity preference and the latter has Marxian overtones. However, it is unwise to read too much consistency into Hobson’s thinking. Roger Backhouse, for example, has demonstrated very clearly that Hobson’s monetary theory is not

3 Jules Townshend, J.A. Hobson, Manchester, Manchester University Press, 1990, p. 3. 4 For an excellent review of this work, see P. J. Cain, Hobson and Imperialism: Radicalism, new Liberalism and Finance, 1887-1938, Oxford, Oxford University Press, 2002, pp. 1-6. 5 J. M. Keynes, The General Theory of Employment, interest and Money, London, Macmillan, 1936, pp. 364-70. 6 See D. J. Coppock, ‘A Reconsideration of Hobson’s Theory of Unemployment’, Manchester School, 21, 1953, pp. 1-21. 7 Cain, Hobson and Imperialism, p. 14. 8 Confessions of an Economic Heretic: The Autobiography of J. A. Hobson, edited by Michael Freeden, Hassocks, Harvester Press, p. 30. J. A. Hobson and A. F. Mummery, The Physiology of Industry: Being an Exposure of the Fallacies in Existing Theories of Economics, London, John Murray, 1889.

3 entirely consistent with the Mummery and Hobson discussions of saving and investment.9 In The Physiology of

Industry there are passages that imply a distinction between savings and investment and incentives to hoard rather than invest, but they seem to be from Mummery rather than from Hobson. His publications after The Physiology of

Industry deny the possibility of both hoarding and related Keynesian concepts like the multiplier. Hobson repudiated many of the more interesting heretical elements of The Physiology of Industry in the publications under his own name in the years immediately after 1889, and instead developed the analysis of over-accumulation resulting from the changing nature of mature capitalism.10 Nevertheless, Hobson suggested that over-accumulation, or under-consumption as it is more commonly known, was an economic heresy, which put him beyond the pale of a university post in economics.11

In reassembling his analytical perspectives after the Physiology of Industry, Hobson drew widely from both progressive liberalism, notably in the Ethical Movement and the Rainbow Circle, and Fabian ideas. With most new liberals he saw the growth of state intervention as the key to solving the problems of contemporary capitalism.12 From the Fabians, he drew the analysis of rent that underpinned his analysis of the maldistribution of income.13 The evolution of Hobson’s ideas in the 1890s has been much discussed, and it is clear that from the early

1890s he clearly distinguished between elements of income that were necessary to provide for future growth (rents that were necessary to bring scarce factors of production into use) and those which were unearned and unnecessary and could be redistributed to other social strata without disturbing enterprise and economic growth.14 This in turn was influenced by his appropriation of the notion of ‘parasitic behaviour’ or ‘parasitism’ from studies in evolutionary biology published in the 1890s.

The essence of Hobson’s position was that profits made in the manufacturing sector by means of what amounted to workshop methods using skilled labour and relatively traditional techniques were conducive to

9 Roger E. Backhouse, ‘J. A. Hobson as a Macroeconomic Theorist’, in Re-appraising Hobson, ed. Freeden, pp. 116-36. 10 Cain, Hobson and Imperialism, pp. 30-46. It is also worth noting that Keynes believed that Mummery’s contribution to The Physiology of Industry was more powerful than that of Hobson, whom Keynes believed to have been side-tracked into the idea of under-consumption leading to over-investment. See Peter Clarke, ‘Hobson and Keynes as Economic Heretics’, in Re-appraising Hobson, ed. Freeden, pp. 112-13. 11 Confessions, pp. 30-1. However, Cain and Kadish have recently questioned Hobson’s interpretation and suggested that the breach with orthodoxy was exaggerated: Cain, Hobson and Imperialism, p. 29; Alon Kadish, ‘Rewriting the Confessions; Hobson and the Extension Movement’, in Reappraising J. A. Hobson: Humanism and Welfare, edited by Michael Freeden, London, Unwin Hyman, pp. 143-9; Alon Kadish, ‘The Non-canonical context of the Physiology of Industry’, in J. A. Hobson After Fifty Years, edited by J. Pheby, Basingstoke, Macmillan, 1994. 12 Townshend, J. A. Hobson, pp. 88-9. 13 Sidney Webb, ‘The Rate of Interest and the Laws of Distribution’ Quarterly Journal of Economics, 2, 1888; J. A. Hobson, ‘The Law of the Three Rents’, Quarterly Journal of Economics, 5, 1890-1, pp. 263-81. 14 Cain, Hobson and Imperialism, pp. 31, 165, 174-5.

4 economic growth.15 In certain industries, however, there were strong tendencies towards much more capital- intensive methods of production, bringing wider markets, more intensive competition and more complex patterns of demand.16 Greater capital intensity had raised the general efficiency of workers who remained in employment, but this trajectory for capitalism was labour-displacing and added to the pressure on wages of those in the lowest grades of labour. It was scarcely surprising that Hobson should look for an analysis of continuing high unemployment and sharply unequal income distribution in the early 1890s. The term ‘unemployment’ was first coined in the 1880s and the country, but especially London, had witnessed the intense struggles of the low-paid to improve and defend living standards in the strikes of the unskilled in the late 1880s and early 1890s.17 The problem for the capitalist system was that those who held the lion’s share of purchasing power did not demand consumption goods in proportion to their wealth.18 Thus, the economy could be stuck with an increasing problem of poverty, unemployment and the spiralling social problems of the cities.

This simply raises the question of why rich capitalists acted in this way and how their unwillingness to consume might be remedied. In The Physiology of Industry, Hobson and Mummery had argued that the forces of competition in modern industrial capitalism drove capitalists to invest more heavily than was good for the wider economic system. In part, this was because what was rational for the individual capitalist was not necessarily optimal for society as a whole.19 This was the individualist fallacy, or the fallacy of composition that Peter Clarke has argued was at the centre of the Keynesian macroeconomic revolution.20 From the mid-1890s, Hobson was inclined to blame the maldistribution of income. He showed that the bulk of savings accrued to a small proportion of the population. These rich capitalists invested, and so created additional employment in the immediate period.

But the creation of additional productive power required an increase in consumption power in the longer term to absorb the additional output created by the new investment.21 However, the growing concentration of productive power, which he noted in the cartels of Germany, the trust movement in the USA and the tendency towards monopoly in the service sector in Britain concentrated the power of capital.22 At the same time, the deepening capital intensity of goods in mass demand and the strength of luxury demand from wealthy consumers, tended to move workers out of industries producing necessities and into industries producing luxury or comfort goods. The

15 J. A. Hobson, The Evolution of Modern Capitalism: A Study of Machine Production, London, Allen and Unwin, new revised edition 1916, chs. 3-4. 16 Ibid, chs. 5-6. 17 Jose Harris, Unemployment and Politics: A Study of English Social Policy, Oxford, Clarendon Press, 1972 18 Hobson, Evolution of Modern Capitalism, p. 288. 19 Physiology of Industry, p. 108. 20 Peter Clarke, The Keynesian Revolution in the Making, 1924-1936, Oxford, Clarendon Press, 1988, pp. 259-64. 21 J. A. Hobson, The Problem of the Unemployed, London, Methuen, 3rd edition 1906, pp. 79-80. 22 Hobson, Evolution of Modern Capitalism, pp. 181-4, 204-10.

5 latter sector was however becoming more dominated by ‘fashion’, with the result that the production chain tended to shorten as firms produced for customers rather than for stock.23 Thus employment in the luxury trades was becoming less and less stable, with the result that insecurity of employment had spread.

For Britain in isolation, the obvious remedy was to redistribute the ‘surplus’ to those (in Keynesian terminology) with a higher propensity to consume, but to understand the processes involved it is necessary to delve more deeply into Hobson’s concept of economics. As has been noted, Hobson described himself as an ‘economic heretic’ and his heresy rested on his distrust of the narrow, calculative basis of conventional economics.24 He saw the economic, social and political systems as interconnected, as were production and consumption, and regarded any attempt at narrow economic theorising as almost certain to lead to erroneous conclusions. This led him to reject the narrow economism of Benthamite utilitarianism and of Cobdenite laissez-faire. His main objections were that these twin foundations of nineteenth century political economy reduced welfare to a narrow monetary standard and concentrated on one side of the production/consumption nexus. He attempted to reformulate Bentham’s felicific calculus to take account of his more ‘organic’ concept of economic and social affairs. The outlines of his approach are evident in the following lengthy quote taken from Townshend’s recent biography.

The object of [Hobson’s attempt to refine Bentham’s calculations of utility] was to achieve a ‘human law of distribution’ of work and consumption that maximised ‘human utility’ and minimised ‘human cost’. This entailed, first, asking three questions about production: (1) what was the quality and kind of human effort involved in a business ‘cost’? (2) what were the capacities of the human beings that gave out these efforts? (3) what was the distribution of effort among those who gave it out? Second, on the consumption side, what had to be known was: (1) the quality and kind of satisfaction or utility yielded by the good sold to the consumer; (2) the capacities of consumers to obtain utility; and (3) the distribution of those utilities among the consuming public’.25

Thus, social utility was not simply the sum of individual utilities, each equal in weight, but recognised that there were hierarchies of both effort and satisfaction related to socio-economic position. He contrasted the effort expended by those in manual work with the lack of toil by those who lived from the income from accumulated wealth. He also contrasted ‘primary organic wants’ essential to biological survival (for food clothing and shelter),

‘higher’ orders (for artistic and creative endeavours) and bad consumption, representing expenditure on gambling, drugs, stimulants and like pleasures. For Hobson, the richest in society derived their incomes from comparatively little cost in terms of effort and it was among the rich that ‘bad consumption’ was concentrated. It thus made sound sense to remove a significant part of the income of the rich and redistribute it to the poor, who would derive far

23 Ibid, pp. 330-3. 24 Hobson, Confessions, ch. 16. 25 Jules Townshend, J. A. Hobson, Manchester, Manchester University Press, 1990, pp. 58-9 (citing Hobson’s Work and Wealth: A Human Evaluation, London, Macmillan 1914, p. 36).

6 more utility from the consumption power thus released. Thus, in Hobson’s scheme production and consumption were interlinked and the case for redistribution rested upon a wide ethical basis.

Hobson had few expectations of the ability of the trade unions to materially alter the malfunctions of

British capitalism. Trade unions were weak and sectional.26 The proper agency to redistribute income was therefore the state, but Hobson had few expectations that the late-Victorian or Edwardian state would exercise this function without electoral reform and political realignment.27 Like many radicals of the period, Hobson favoured electoral reform, but he was keen to ensure that educational reform accompanied the extension of the franchise. Education was required to generate an informed body of citizens who could see the organic interrelations of society and understand the needs of society as a whole. However, this project also required a solution to the problem of the

‘population question’. Like many of his contemporaries, Hobson broadly supported the view that in the major urban centres were conditions that created racial degeneration.28 He accepted Charles Booth’s notion of ‘the residuum’, the class of the poorest in society who were more or less unemployable because the poverty, bad housing and alcoholism of the major cities, especially London, made them both physically and morally degenerate.29 The widespread concern over the unfitness of the recruits to the British army during the Boer War seemed to confirm this belief in the minds of many middle class commentators.30 Thus, the extension of democracy implied measures to limit the reproduction of the poorest. At first he took a hard-line interventionist stance, arguing that the unfit should not be allowed to reproduce. Subsequently, he was inclined to argue that social reform could direct resources to lift this group out of the pit into which it had descended in the later 19th century.31

Mention of the Boer War focuses attention on Hobson’s approach to imperialism, the strand of his thought for which he is best known. He did not condemn all forms of imperialism, but distinguished between

‘sane’ and ‘legitimate’ forms of imperialism on the one hand and ‘insane’ and ‘aggressive’ forms on the other.32

His criticism was reserved for ‘New Imperialism’, which could be distinguished by competition between imperial powers (rather than the historical pattern of domination by a single imperial power), the dominance of finance and investment over mercantile interests, and the absorption of new territories populated by culturally unassimilable

26 J. A. Hobson, The Industrial System: An Inquiry into Earned and Unearned Income, London, Longmans, 1909, pp. 208-10. 27 Hobson, Confessions, pp. 49-58. 28 J. A. Hobson, The Social Problem: Life and Work, London, Nisbet, 1901, pp. 215-18. 29 Pat Thane, The Foundations of the Welfare State, London, Longman, 1982, p. 15. 30 G. R. Searle, The Quest for National Efficiency: A Study in British Politics and Political Thought, Oxford, Oxford University press, 1971; J. R. Hay, The Origins of the Liberal Welfare Reforms, 1906-14, London, Macmillan, 1975, p. 43. 31 Hobson, Social Problem, p. 217; J. A. Hobson, Work and Wealth: A Human Valuation, London, Macmillan, 1914, p. 318; J. A. Hobson, Wealth and Life: A Study in Values, London, Macmillan, 1929, p 359; Hobson, Confessions, p. 152.

7 peoples for whom self-government was not a final goal.33 He believed that this form of imperialism had subverted the British political system because of its close connections with the unproductive surplus. The wealthy found in export of capital a method of protecting themselves from the adverse impact of underconsumption and oversaving.

By exporting capital they could engage in super-exploitation of the lower-paid workers in Africa and Asia.34

Moreover, the shift in British economic policy to new imperialism after 1870 had resulted in the creation of an important vested interest within government, producing a large and centralised bureaucracy, which was not subject to Parliamentary control.35 The wealthy also had favoured access to the manipulators of public opinion and could mould British foreign policy to protect their overseas investments by military force. He believed that the imperialist mass media had spawned ‘jingoistic’ mentalities; among the relatively sophisticated, a belief in the

‘White Man’s Burden’ to educate and civilise the lower races and among the masses an enthusiasm for imperial war and expansion.36 Thus, Britain could have a redistributive policy only if it made the choice

Between external expansion of markets and territory on the one hand, and internal social and industrial reforms on the other; between a militant imperialism animated by the lust for quantitative growth as a means by which the governing classes may retain their monopoly of political power and industrial supremacy, and a peaceful democracy engaged upon the development of its natural resources in order to secure for all its members the condition of improved comfort, security and leisure essential for a worthy national life.37

The obvious problem for Hobson was Britain’s heavy commitment to international exchange and the extreme difficulty of changing the trajectory of British economic development from an external to an internal orientation.

Hobson wrestled with these issues for much of the remainder of his career, and flirted with many different versions of external economic policy.38 But for our purposes, the critical issue was the need for wide-ranging political reform in order to create the conditions in which the state could be used to redistribute in favour of those towards the lower end of the social hierarchy. With an extension of the franchise and the curbing of ‘financial imperialism’,

Hobson believed that there was scope for a redistributive welfare state.

Hobson’s reformed state in his reformed political system would attack the unproductive surplus accruing to landlords and other recipients of unearned income in two basic ways. First, it would raise taxes to fund redistributive social welfare reforms. Secondly, it would bring under social control those industries in which

32 J.A. Hobson, Imperialism: A Study, London, Allen and Unwin, Third Edition 1938, pp. 11, 23, 55, 65, 200, 246. 33 Ibid, pp. 6, 37, 124. 34 J. A. Hobson, The Problem of the Unemployed, London, Methuen, third edition 1906, pp. 86-8. 35 Hobson, Imperialism, pp. 145-8. 36 Cain, Hobson and Imperialism, pp. 90-104. 37 J. A. Hobson, ‘Free Trade and Foreign Policy’, Contemporary Review, 74 (1898) p. 179 (reprinted in J. A. Hobson: Writings on Imperialism and Internationalism, edited by P. J. Cain, Bristol, 1992. 38 Cain, Hobson and Imperialism, pp. 200-40.

8 monopolistic tendencies were evident.39 Many of these industries produced goods to satisfy the basic wants, common to all members of society and, by supplying them through socially-owned or socially controlled business units, prices would fall and supply become more regular. The income to the state from these state controlled industries would be supplemented by taxation.40 He proposed an inheritance tax and a graduated tax on income, being levied on the basis of the ‘ability to pay’ determined by his notion of the unproductive surplus.

The priorities for expenditure on social reform were determined by the need to prevent underconsumption and to free the population for Hobson’s more demanding and complex notion of citizenship. It meant that the priorities for public expenditure were ‘health, education and security’.41 The proceeds of the socialised industries would go towards four principle goals: paying workers in these industries the ‘high wages of efficiency’; improving their working conditions; passing the surplus to consumers through lower prices and supporting general public expenditure. He also called for extensions of the social services, delivered in part through socialised insurance.42 Similarly, there would be equal access to the law, which would become a public, rather than a private, profession, free technical education for all and, more broadly, equality of access to knowledge and culture.

The essence of his programme before 1914 was to create equality of opportunity, rather than equality per se as proposed by socialists. Hobson took as his distributional maxim, the socialist slogan: ‘from each according to his powers, to each according to his needs’, but because needs varied, inequalities of income would continue in

Hobson’s ideal world. He thought that by seeking to supply basic welfare needs at a lower cost and redistributing incomes, he would encourage citizens to pursue their individual needs and capabilities, which would be supplied through the market system. Because individual needs were so diverse, the pattern of demand would be extremely varied and supplied through small scale enterprise in which craft workers were able to achieve a great deal of intrinsic job satisfaction. To say the least, this was a Utopian vision. But at a more prosaic level Hobson supported practical proposals for reform and many of his closest collaborators before the First World War were engaged in drawing up the welfare schemes implemented by the Liberal government.43 He conceived his role as supplying the intellectual support for what might be termed a broad progressive centre left movement. In fact, Hobson tapped, albeit unaware, into an established flow of underconsumptionist thinking and provided a focal point for further development in the interwar years by Major Douglas, Professor Soddy, Silvio Gesell and others.44 However, this

39 Hobson, Evolution of Modern Capitalism, pp. 126-30. 40 J. A. Hobson, Property and Improperty, London, Gollancz, 1937, p. 183. 41 J. A. Hobson, The Industrial System, London, Longman. 1909, p. 322. 42 J. A. Hobson, The Crisis of Liberalism: New Issues of Democracy, London, King, 1909, part 3, ch. 1. 43 Clarke, Liberals and Social Democrats; J. Allett, New Liberalism: The Political Economy of J. A. Hobson, Toronto, University of Toronto Press, 1981. 44 Hobson, Confessions, pp. 31-2; Keynes, General Theory, pp. 353-8, 370-1.

9 underconsumptionist strand also became a liability. As the Labour Party became more ‘professional’ in its policy appraisal, the inherent weaknesses and confusions became all too apparent. The party’s economic specialists attacked Hobson and sought to create a socialist economics from more orthodox foundations.45 Hobson’s role was to put the mixed economy-welfare state programme into a form that was digestible to non-socialists.

[Charles] Anthony [Raven] Crosland, 1918-77 Anthony Crosland is one of the most original thinkers and the most compelling figures in postwar British politics.

If anything, he came from a more privileged, comfortable social milieu than Hobson. His father was a leading civil servant at the War Office and his mother lectured in French medieval literature at Westfield College, London. In some ways, he assumed the mantle of Sidney Webb and R. H. Tawney, being Labour’s leading intellectual of the left, and became the architect of ‘revisionist’ social democracy before the Smith-Blair-Brown developments of the

1990s. He began with a well-received piece New Fabian Essays, published in 1952 to up-date the original Fabian

Essays written over sixty years earlier.46 He introduced themes that were explored more extensively in his major work, The Future of Socialism, written during the early 1950s in part as an alternative to the life of a parliamentarian, which he found excruciatingly boring.47

His underlying thesis was that western capitalism had solved the problems of stability and of steady growth but the scope for redistribution to promote equality remained substantial. The task ahead was to deal with affluence rather than poverty, and the intellectual heritage of the Webbs provided few clues. The Conservatives had created an appeal based on the rewards of affluence and the virtues of an ‘opportunity state’. Crosland decided that socialists must redefine the role of the welfare state and its place within British socialist ideology. He drew on the revisionist work of Eduard Bernstein fifty years earlier. Like Bernstein he believed that Marxist analyses of class conflict and the imminent collapse of the ruling class were misplaced.48 The British working class had not suffered immiseration; primary poverty had been greatly reduced. Nevertheless, he saw the purpose of socialism as furthering social welfare and redistribution in order to create greater equality:

[F]or all the rising material standards and apparent contentment, the areas of avoidable social distress and physical squalor … are still on a scale which narrowly reflects the freedom of choice and movement of a large number of individuals. Secondly (and perhaps more intractable), we retain a disturbing amount, compared with some other countries, of social antagonism and class resentment, visible in both politics

45 E. F. M. Durbin, Purchasing Power and Trade Depression, London, Jonathan Cape, 1933; Elizabeth Durbin, New Jerusalems: The Labour Party and the Economics of Democratic Socialism, London, Routledge, 1985, pp. 137-8. 46 C. A. R. Crosland, ‘The Transition from Capitalism’ in New Fabian Essays, edited by Richard Crossman, London, the Fabian Society, 1952. 47 C. A. R. Crosland, The Future of Socialism, London, Jonathan Cape, 1956; Kevin Jefferys, Anthony Crosland, London, Politico’s Publishing, 2000, pp. 50-5; Susan Crosland, Tony Crosland, London, Jonathan Cape, pp. 50-67. 48 Ibid, pp. 21-41. He argued that nationalisation, the growing strength of the trade union movement and the expansion of the state had curbed the power of big business so that a Marxist ‘ruling class’ had ceased to exist.

10 and industry, and making society less peaceful and contented than it might be. Thirdly, the distribution of rewards and privileges still appears highly inequitable, being poorly correlated with the distribution of merit, virtue, ability or brains; and, in particular, opportunities for gaining the top rewards are still excessively unequal.49

These were the three main concerns for socialists.

Physical squalor would be tackled by a combination of economic growth, the universalist welfare schemes established under the Beveridge Report and more benefits tailored to individual need. Universalism was important; Crosland rejected the Conservative approach of concentrating these benefits on the poorest by means testing, which he regarded as undignified, humiliating and bitterly resented by the recipients.50 The cost of the welfare state had become an important political issue, but Crosland noted that the reasons were complex. The universal insurance schemes that paid cash benefits had not grown as a proportion of national income. The fastest growth of expenditure had been in bringing up standards of services in kind (mainly education, the national health service and local authority social services). There had also been significant growth of real expenditure on miscellaneous benefits to meet specific needs (such as university scholarships and sundry supplementary benefits, such as those for claimants with registered disabilities).51 Crosland could demonstrate that the scale of concern had been exaggerated but recognised two main areas of future concern. The first was the impact of changing family size, structure and location, which made it less likely that families would be able to support members in stress or crisis; the state would have to fill the gap. The second was the impact of an ageing population. Demographic trends meant that numbers claiming, and therefore the cost of, state pensions would increase. But the British principle of flat rate benefits meant that the majority of new pensioners were pitched from comfort to subsistence at the point of retirement.52 He thought that earnings related contributions and benefits were the way forward, but regarded this solution as politically impossible, but did not foresee steps in this direction by the Conservative government after

1957.53 He did expect the role of supplementary additional benefits to expand rapidly, especially to meet the help previously provided within the extended family, but underlined the importance of operating the test of need in a sympathetic manner. In short, he expected the cost of social welfare to continue to increase in the pursuit of greater equality. Comparatively little of this cost could be met by higher taxes on the rich. Crosland recognised that the potential benefits for ordinary working class families from politically viable rises in the rate of surtax on higher incomes would be small indeed.54 The additional costs of extending the social services would be met by a

49 Ibid, p. 116. 50 Ibid, p. 141. 51 Ibid, pp. 120-4. 52 Ibid, pp. 124-33. 53 Rodney Lowe. The Welfare State in Britain since 1945, Basingstoke, Macmillan, first edition 1993, p. 142. 54 Crosland, Future of Socialism, p. 139.

11 combination of economic growth, more effective and new taxes on capital and horizontal redistribution within classes.55

However, the bigger role for the welfare state in a modern, prosperous Britain was to erode the debilitating impact of the class system on British life. Throughout the book Crosland drew on comparisons with

Sweden and the USA, drawing on the work of sociologists and quantitative social scientists. He was particularly keen to contrast the greater openness and social mobility in the USA, where he had studied new developments in the social sciences in the autumn of 1954.56 In Crosland’s eyes, Britain wasted intellectual talent through the peculiarities of its education system. Britain had a socially exclusive private education and the state system operated selection (notably at age 11), which was better at selecting by class than ability. In the USA, by contrast, the huge majority of the population shared the same educational experience up to the time that they left school, and its private sector was much less socially exclusive.57 He recognised the problems in US education, but also praised

Sweden, which had introduced its own national, comprehensive system to great success. Crosland proposed that

Britain should end selection at 11 and a big programme of public expenditure on state education to raise standards closer to those in private schools. He also proposed to make these private independent schools take 75 per cent of their pupils on free places funded by the state. He hoped to reduce the social prestige attached to independent schools and to raise educational standards generally:

Gradually, the schools to which children go will become, as in the United States, not an automatic function of brains or class location, but a matter of personal preference and geographical accident. The system will increasingly, if the Labour Party does its job, be built around the comprehensive school. But even in the large non-comprehensive sector, all schools will more and more be socially mixed; all will provide routes to the universities and to every type of occupation, from the highest to the lowest; and it will cease to occur to employers to ask what school job-applicants have been to. The, very slowly, Britain may cease to be the most class ridden country in the world.58

Uncommonly for socio-economic theorists, Crosland found himself in a position to act on this blueprint when made Secretary of State for Education in the first reshuffle of the 1964 Wilson government. He successfully introduced comprehensive schooling and won great prestige for his political and administrative skills.59 Reform of the independent private schools eluded him in his relatively brief spell in the ministry.60

At the end of the book, he looked forward to a time when the welfare state and economic growth had done their jobs and the state could begin to turn its attention to personal freedoms. He thought that the state ought to

55 For Crosland’s discussion of property taxes, see ibid, pp. 297-332. 56 Kevin Jefferys, Anthony Crosland, London, Politico’s Publishing, 197, p. 53. 57 Crosland, Future of Socialism, pp. 253-4. 58 Ibid, p. 277. 59 Jefferys, Anthony Crosland, p.p. 102-11. 60 Susan Crosland, Tonly Crosland, London, Jonathan Cape, 191982, pp. 148-50. Anthony Crosland was Secretary of State for Education for two-and-a-half years from January 1965.

12 relax the divorce, licensing, abortion and homosexuality laws, repeal censorship and promote equality for women.

His socialism owed much more to William Morris than to the Webbs:

‘All who knew the Webbs have testified to their personal kindliness, gentleness, tolerance and humour; and no-one who reads Our Partnership can fail to be intensely moved by the deep unaffected happiness of their mutual love. But many of their public virtues, so indispensable at the time, may not be as appropriate today. Reacting as they were against an unpractical, Utopian, sentimental, romantic, almost anarchist tradition on the Left, they were no doubt right to stress the solid virtues of hard work, self-discipline, efficiency, research, and abstinence; to sacrifice private pleasure to public duty, and to expect that others should do the same: to put Blue Books before culture, and immunity from physical weakness above all other virtues … Posthumously, the Webbs have won their battle, and converted a generation to their standards. Now the time has come for a reaction: for a greater emphasis on private life, on freedom and dissent, on culture, beauty, leisure, and even frivolity. Total abstinence and a good filing system are not now the right sign-posts to the socialist Utopia; or at least, if they are, some of us will fall by the wayside’.61

A noted hedonist before his second successful marriage, Crosland looked towards a socialism in which affluence, choice and individual self-fulfilment were the guiding principles. Economic growth and state intervention had eased many of the problems that had preoccupied earlier generations. Cultural and aesthetic problems would assume greater importance. He even suggested, following Keynes, that the spread of affluence might undermine the acquisitive spirit and release a more humane spirit.

Thus, Crosland was not free of social democratic Utopianism about the future of the welfare state. He does, however, represent a thoughtful, incisive attempt to explore the concept of a welfare state in an affluent, highly differentiated society. He knew that Britain lacked the social consensus and solidarity to follow more than part of the Scandinavian model of social democracy. He also knew the importance of economic growth to his vision of the future of the welfare state. Unlike many intellectuals, he had the opportunity to influence priorities. In

1964-7, although a junior minister he was the strongest proponent of devaluation and the opponent of disinflationary policies in the Wilson government. Again in 1975, he led the cabinet opposition to deflationary policies and in 1976 became the most formidable cabinet critic of acceptance of an IMF loan with what appeared to be very restrictive conditions. His brand of democratic socialism rested on an expansionary, redistributive state, and ultimately he failed in both 1964-7 and 1975-6 to defeat the Treasury’s demands for cuts. Left-wing critics have derided his defeat in Cabinet in 1976 as the end of Crosland’s democratic socialism in British politics. This view has much support, but depends upon a particular view of the events of the mid-1970s. The debates of the time were rather hysterical, public expenditure was not out of control and remained high.62 The government borrowed much less than anticipated and repaid its credit very quickly. Neither the end of the Labour government nor the

61 C. A. R. Crosland, The Future of Socialism, London, Jonathan Cape, 62 Jim Tomlinson, Public Policy and the Economy since 1900, Oxford, Clarendon Press, 1990, Table 10.4; Kathleen Burk and Alec Cairncross, Goodbye Great Britain: The 1976 IMF Crisis, London, Yale University Press, 1992, p. 217 and Table 18.

13 political success of Thatcherism was inevitable at the time of Crosland’s death, nor even when the 1979 general election was called. Before the Falklands War, Mrs Thatcher was the most unpopular Prime Minister in British history. The success of Thatcherism was forged in foreign affairs rather than domestic economic policy.

Sir Keith Joseph, 1918-1994 The destruction of the high-spending, redistributive model of the welfare state almost certainly owes more to the

Thatcher government than to the sins of omission or commission of Labour ministers and theorists. Perhaps the central role in the refashioning of British political economy was played by Sir Keith Joseph, born just a few months before Crosland and from a similarly comfortable social background.63 Joseph’s father, Sir Samuel, made a small building firm, Bovis, into one of the major construction companies in London and diversified his interests into services. He became a leading City figure, being Lord Mayor of London during the Second World War. Sir

Samuel Joseph worked long hours in both business and public service. His son shared his father’s capacity for hard work but also retained a respect, bordering on veneration, for the entrepreneur, arguing on many occasions that

Britain undervalued the contributions of this group to national life.64 He was also an academic, a Prize Fellow of

All Souls, and is remembered for his strategic thinking rather than entrepreneurial flair.

The values of the entrepreneur made Keith Joseph a critic of interventionist economic policies from his entry into politics. His early parliamentary speeches revealed an uncompromising preference for market solutions, but Joseph, like his father, was also a man of great compassion.65 He combined liberal economics with a fevered social conscience especially when he came across signs of family distress. His favoured solutions combined private charity, self-help and state support focused on the poorest. He entered Parliament in February 1956 and won his first very junior ministerial post in the Ministry of Housing only three years later, thanks no doubt to his intellect, energy and building industry background. Rising rapidly through the lower ministerial ranks in both economic and social departments, he joined the cabinet in July 1962 as Minister of Housing and Local

Government, with pressure from the Prime Minister, to start big expenditure projects.66 One of the more interesting aspects of Joseph’s is his fertile innovation with extensions of public spending in office while simultaneously preaching the virtues of the liberal market economy. His ministerial career before Thatcherism was spent in

63 Details of Joseph’s personal and family history are taken from: Andrew Denham and Mike Garnett, Keith Joseph, Chesham, Acumen, 2001. 64 See, for example, ‘The Moral and Material Benefits of the Market Order’ in Stranded in the Middle Ground? Reflections on Circumstances and Policies, London, Centre for Policy Studies, 1976, pp. 60-1; ‘Conditions for Full Employment’ originally published by the Centre for Policy Studies in 1978 reprinted in The Economic Revival of Modern Britain: The Debate Between Left and Right, edited by David Coates and John Hilliard, Aldershot, Elgar, 1987, pp. 66-7. 65 His biographers suggest that at this stage his free market and authoritarian views “yoked Adam Smith to Stalin”: Denham and Garnett, Keith Joseph, p. 79.

14 ‘social’ departments and was invariably marked by big projects, new schemes and increased spending.67 There were tensions within Conservatism (and especially within Joseph’s own value system) between controlling aggregate expenditure and increasing ‘compassionate’ spending on the victims of economic and social contingency.

Thus, Joseph explained the pre-Thatcher Conservative approach to social policy:

The Tory approach is both more selective and less dependent on the State. We desperately want to end hardship but because our resources are limited we shall end it sooner if we concentrate our efforts and the taxpayer’s money on those in need and if we try wherever possible to help people help themselves. To us self-help and voluntary action are more desirable and more likely where practicable to be effective than state intervention.

We can state our objectives: to strengthen the family, thrift and self-reliance; to strengthen voluntary service; to remove crutches from those who can walk; to strengthen the social network; to help those in need better than ever before, setting to work forces that will of themselves reduce the need for poverty, particularly in old age; to reduce delinquency, boredom and purposelessness; to reinforce the growing volume of voluntary effort so as to give far more people the grace of helping others.68

These views obviously contrasted strongly with those of Crosland. There is no mention of equality or redistribution as underlying goals for welfare policy. Indeed, he was soon to deny that individuals wanted equality – they wanted more, and equality was the enemy of more.69 Nevertheless, both Joseph and Crosland were within the parameters of what might be termed a postwar consensus on welfare policy. Joseph’s compassion had the upper hand over his liberalism. However, Joseph’s assessment of the impact of the Heath government (1970-74), of which he was a very prominent member, changed his position dramatically.

The Conservatives came to government in 1970 intending to reduce the state’s involvement in economic affairs, impose a tougher competitive framework and curb trade unions.70 Nevertheless, they began relatively slowly and soon found themselves overwhelmed in the economic and political turbulence of the early 1970s, after which they resorted to crisis avoidance measures to buy off powerful interests.71 The government appeared to have

66 Denham and Garnett, Keith Joseph, pp. 100-2. 67 Rodney Lowe’s judgement of Joseph’s spell in charge of health and social security in 1970-74 is far from complimentary. He notes the tensions in Joseph’s philosophy between promoting competition and compassion and argues that these were not resolved by the minister: ‘policy remained an ‘unholy muddle’ of universal and selective benefits – a muddle compounded by the creation of a poverty trap which was privately acknowledged to be an affront to common sense. The outcome of policy therefore reflected the evasion by government, and by Keith Joseph in particular, of the hard political choices to be made if the twin objectives of competitiveness and compassion were to be attained’. ‘The Social Policy of the Heath Government’ in The Heath Government, 1970-74, edited by Stuart Ball and Anthony Seldon, London, Longman, 1996, pp. 204-5. 68 Sir Keith Joseph, Social Security: the New Priorities, London, Conservative Political Centre, 1966, pp. 18-19. 69 Sir Keith Joseph, ‘Equality: An Argument Against’ in Stranded on the Middle Ground? Reflections on circumstances and Policies, London, Centre for Policy Studies, 1976, p. 77. 70 John Ramsden, ‘The Prime Minister and the Making of Economic Policy’, in The Heath Government, eds. Ball and Seldon, pp. 23-8. 71 Dilwyn Porter, ‘Government and the Economy’ in Britain in the 1970s: the Troubled Economy, edited by Richard Coopey and Nicholas Woodward, London, UCL Press, 1996, pp. 42-3; Robert Taylor, ‘The Heath Government and Industrial Relations: Myth and Reality’, in The Heath Government, eds. Ball and Seldon, pp. 176- 90; F. T. Blackaby, ‘Narrative, 1960-74’ in British Economic Policy, 1960-74: Demand Management, edited by F. T. Blackaby, Cambridge, Cambridge University Press, pp. 63-76.

15 lost its sense of direction and lost successive general elections in 1974. Joseph’s reaction was to rethink the underlying approach of Conservatism and found a solution in Friedmanite monetarism, which he encountered at the Institute of Economic Affairs72. The notion that government should make as its primary responsibility the control of the quantity of money and the promotion of free competition came as such a revelation that Joseph claimed that he had not been a real Conservative until he had realised these points.73 If the central point of sound economic policy was to ensure the stability of money, then postwar governments had failed, and since the

Conservative Party had been in power for much of that period, the failure was mainly of Joseph’s own party. He blamed the postwar consensus and the formation of the welfare state for that failure:

Because we failed to examine the implications of full employment policies, and the Welfare State, as well as the high taxation that accompanied them, we were inhibited from recognising the symptoms of failure when they appeared.

Although our postwar growth rate has been historically fast until recently, in retrospect it can be seen that the postwar policies of stimulating demand and high taxation began to eat away the sinews of the economy. This was not immediately evident – though we should have reacted to the skew in favour of consumption and against investment which has long been known. The resulting decapitalisation affected not only the range and effectiveness of our productive capacity, but also our infrastructure and stock of savings.74

Monetarism was not enough (in large part because the Labour government under its Chancellor of the Exchequer

Dennis Healey had committed itself to more vigorous control of the money stock). The government needed to reduce the scale of state expenditure and encourage enterprise.

We are over-governed, over-spent, over-taxed, over-borrowed and over-manned. If we shirk the cure, the after effects of continued over-taxation will be worse than anything we have endured hitherto. Our ability to distinguish economic reality and economic make-believe will decline further. We shall experience accelerated worsening of job prospects, the growing flight of those with professional skills, talent and ability to other countries, and an increase in the shabbiness and squalor of everyday lives.

That is why, by itself, the strict and unflinching control ofd money supply though essential is not enough. We must also have substantial cuts in tax and public spending and bold incentives and encouragements to wealth creators, without whose renewed efforts we shall all grow poorer.75

That Joseph should have defined himself as an economic liberal in the Ricardo mould is unsurprising. It is more interesting to chart the shift in his views on social welfare policy from a paternalist interventionist to a social conservative with harsh Victorian attitudes to the poor.

72 The IEA had been founded in 1957 to counter what its proponents believed was over-big, over-interventionist government and published pamphlets, mainly concerned with the application of market solutions to problems of policy. The IEA was also a key forum for the propagation of Friedmanite ideas in Britain: Richard Crockett, Thinking the Unthinkable: think-Tanks and the Economic Counter-Revolution, 1931-83, London, Harper-Collins, 194, pp. 165-70. 73 In his speech given to Upminster Conservatives on 22 June 1974, reprinted in Reversing the Trend: A Critical Reappraisal of Conservative Economic and Social Policies, London, Barry Rose, 1975, pp. 1-12 74 Sir Keith Joseph, Monetarism is not Enough, London, Centre for Policy Studies, 1976, p. 9. 75 Ibid, p. 19.

16 Keith Joseph came to the position that we associate with Thatcherism from two separate directions. The first was an economic route and had to do with the composition of the unemployed. Although Joseph called himself a monetarist, there are grounds for seeing him more as an interwar deflationist. He was convinced that

Keynesian demand management had been too lax. The goal of creating more job vacancies that registered unemployed was mistaken because the number of unemployed given in official figures grossly overstate the number of real unemployed ready and able to offer themselves for employment at the prevailing wage. Within the official figures of the “unemployed” were the unenthusiastic, the unemployable and the fraudulent.76 The second direction was more ‘social’ and was discovered during his period as Secretary of State for Health and Social

Services. He was much concerned by the idea that poor children became poor adults and in turn raised poor children of their own. This might be caused by circumstances beyond the family’s control, and Joseph’s original formulation identified “cycles of deprivation”, which had to be tackled by new research and additional resources mobilised by the state.77 However, during his monetarist, anti-state phase, the emphasis changed and he began to distinguish between a “deserving” and an “undeserving” poor, despite the lack of intellectual support in the findings of the huge research effort unleashed by his original comments.78 He began to wonder whether the architects of the welfare state had exacerbated the problem by removing the incentives for self-improvement and the basis for personal, moral responsibility. He went still further in a celebrated or infamous speech at Edgbaston in October 1974 suggesting that since the poor tend to have more children than the rich and the undeserving poor had most of all, “the balance of our population, our human stock is threatened”.79 This apocalyptic vision recalls the point from which we started, with late-Victorian fears of contamination passing from the residuum to the deserving poor. However, there is one final point to make to establish the importance of Sir Keith Joseph and to understand his impact on British politics and the British welfare state.

Having become convinced of the need to change attitudes, Joseph established the Centre for Policy

Studies, a think-tank to promote the idea of market solutions to problems of policy. The CPS issued numerous pamphlets on all aspects of social and economic policy and began to clash with the Party’s own research and policy machinery. The Conservative party under Margaret Thatcher was always a coalition of interests. The activities of Joseph and the CPS so antagonised the centre of the party that leading moderates (“wets” in the terminology of the time) organised to keep Joseph away from the post of shadow Chancellor of the Exchequer. In

76 See the report of his speech at Preston on 5 September 1974: The Times, 6 September 1974. 77 Keith Joseph, ‘The Cycle of Family Deprivation’, in Conservative Party, Caring for People, Conservative Political Centre, 1972, pp. 31-8; Denham and Garnett, Keith Joseph, pp. 219-21. 78 Ibid, pp. 223-5.

17 this they were successful, but Joseph was given responsibility for the development of new policies and license to campaign for his views across the range of policies. Using the CPS, Joseph did much to shift the terms of the debate towards his agenda of reduced state welfare provision and increased protection against “scroungers” who drew benefit fraudulently, or with no real intention of rejoining the market for paid labour. His preference for greater inequality of income; to incentivise entrepreneurs by allowing them to protect a larger share of income from taxation, while incentivising the poor by reducing the real value of benefits. The Conservatives achieved at least temporary success in associating the obvious signs of Britain’s aggregate economic weakness in the 1970s with the idea of mistaken state policies arising from the extension of the welfare state in the 1940s.

In some ways, mass opinion had turned full circle since 1900. In Hobson’s time, extensions of welfare were seen by many as a method to attack inefficiency as well as inequality; by the time of Sir Keith Joseph, the welfare state, in the widest interpretation of the term, was portrayed as a key element in the so-called “British disease”. Interventionist governments had sapped the entrepreneurial spirit and had allowed families to pass their moral responsibilities to care for their members to national and local welfare services. However, the final ironic twist was that Joseph yet again allowed his compassion to override his economic liberalism, even during this critical phase of Thatcherism. Even as the Minister for Industry in the first Thatcher government, he expended huge amounts of public subsidies to the loss-making nationalised industries rather than cutting financial support for the public sector.80

Conclusion The debates over the British welfare state have involved broad macroeconomic questions as well as the more detailed debates on the specific structure of individual welfare measures. The nature of welfare policy has been a battleground not only between political parties but also between broad conceptions of policy that transcend party boundaries. Changing perceptions of Britain’s position in the world have frequently stimulated deep reassessments of Britain’s institutions and political economy. The three commentators examined in this paper were attempting to provide the intellectual support for politicians who might otherwise lose their way. Hobson was convinced that

Liberalism as an intellectual force and a political organisation was doomed unless it reformed itself. He attempted to create the intellectual foundation for a progressive centre-left coalition that would make efficiency and redistribution its watchwords. Similarly, Crosland, writing at a time of deepening splits within the Labour Party and an apparently tenuous hold on the politics of affluence, was immensely worried about the drift into orthodox

79 Ibid, pp. 265-6; Michael Rutter and Nicola Madge, Cycles of Disadvantage: A Review of Research, London, 1976, p. 227. 80 Martin Holmes, The First Thatcher Government, 1979-1983, Brighton, Wheatsheaf, 1985, pp. 161-71.

18 short-termism of the moderate Labour Party leadership. He attempted to convince the party as a whole that the case for equality and continuing redistribution was still strong. Labour could both unite and regain electoral credibility with a positive programme of support for the varying needs of an increasingly affluent population and indeed striving to achieve faster growth in the aggregate economy. Joseph, believing that the majority of his party had forgotten the true meaning of conservatism threw his considerable energies into redefining postwar conservative ideology, using the burgeoning literature and comment on the ‘British disease’ under the postwar settlement to galvanise his audience. Together, these three political economists show how central debates on the relationship between the state and the citizen have been to twentieth century British political discourse.

We might also speculate on the effectiveness of these three commentators. Of the three, Keith Joseph has probably had the most lasting impact. The Thatcherite agenda of shifting the boundaries of state and private responsibilities for welfare and sharpening income inequality has not been reversed since the fall of Mrs Thatcher in 1990. New Labour has accepted the rhetoric of the supremacy of markets and the encouragement of ‘wealth creators’, but has coupled this with a growing interest in redistribution (albeit primarily from the employed to the unemployed). Joseph’s impact is all the more remarkable since he singularly failed to keep to the liberal straight and narrow when given ministerial office. Both Hobson and Crosland had their moments, however. Hobson’s ability to link contemporary political and economic developments (increasing pressure on the markets for manufactures, the gross inequality of income, the growing power of the City of London, the vivid reporting of imperialist adventures in Africa) into an attractive, plausible analysis of the defects of capitalism aided reformers.

There is very little doubt that Hobson’s analysis, developed as it was within a circle that had good access to the designers of the welfare reforms introduced by the Liberal governments of 1905-14, had a substantial impact on this phase of British welfare policy. However, his influence waned after the First World War, despite his growing prominence in Labour Party circles.81 Labour remained highly ambivalent towards underconsumptionist ideas.82

Crosland’s brief period in charge of education was probably his opportunity to exert his biggest influence on welfare policy, but his early death deprived him of the opportunity to become Chancellor of the Exchequer, the post to which he was ideally suited. The Prime minister planned to switch him from the Foreign Office to the

Treasury in the year of his death, which probably hastened splits in the Labour Party and made the path to

81 For his work for the Independent Labour Party’s ‘Living Wage Commission’, see Alan Booth and Melvyn Pack, Employment, Capital and Economic Policy: Great Britain, 1918-1939, Oxford, Blackwell, 1985, pp. 24-6; H. N. Brailsford, John A. Hobson, A. Creech Jones and E. F. Wise, The Living Wage, London, ILP Publications, 1926. 82 G. D. H. Cole was very favourably disposed to Hobsonian approaches (Clarke, Liberals and Social Democrats, pp. 272-3), but Dalton, leading labour’s policy review in the 1930s, tended to ignore Hobson: Elizabeth Durbin, new Jerusalems, p. 45.

19 Thatcherism simpler. It is ate least possible that had he lived into his mid-60s Crosland could have worked out a method of reconciling budgetary controls and redistributive policy. Unfortunately, he did not get the opportunity.

Thus, the central issue faced by these three prominent commentators on British welfare policy, the relationship between the state and private individuals, has remained vibrantly unresolved throughout the twentieth century. These three commentators thus give good insights into the main philosophical issues surrounding the role of the welfare state in British society since the later nineteenth century.

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