Civitas Reinventing Civil Society Civitas Choice in Welfare No. 17 Reinventing Civil Society: The Rediscovery of Welfare Without Politics David G. Green Civitas London, 1993 First published in 1993 by Civitas © Civitas 1993 All rights reserved ISBN 0-255 36279-X Typeset in Palatino 11 on 12 point Printed in Great Britain by Goron Pro-Print Co. Ltd Churchill Industrial Estate, Lancing, West Sussex Contents page The Author vi Acknowledgements vii Preface viii Introduction 1 Part I The Ideal of Liberty 1 The Institutions Fundamental to Liberty 6 2 The Indispensable Ethos of Liberty: Personal Responsibility 21 Part II The Lived Reality of Liberty 3 The Evolution of Mutual Aid 30 4 Character-Building Associations 46 5 Cash Benefits and Family Independence 54 6 Who Joined? 63 7 Medical Care 70 Part III The Friendly Societies and the State 8 The Classical-Liberal Heyday: 1834-1911 89 9 1911: National Insurance and the Crowding Out of Mutual Aid 98 10 1948: The Eradication of Mutual Aid 109 Part IV Conclusions 11 Re-Energising Civil Society 122 Tables 1 Registered Membership of General Friendly Societies in 1910 42 2 Initiation Fees, Ancient Order of Foresters, 1907 56 3 Sick and Funeral Fund Contributions, AOF, 1907 56 4 Doctors' Pay in Contract Practice, 1905 83 v The Author Dr David Green is the Director of the Health and Welfare Unit at the Institute of Economic Affairs. He was formerly a Labour councillor in Newcastle upon Tyne from 1976 until 1981, and from 1981 to 1983 was a Research Fellow at the Australian National University in Canberra. His books include Power and Party in an English City, Allen & Unwin, 1980; Mutual Aid or Welfare State, Allen & Unwin, 1984, with L. Cromwell; Working Class Patients and the Medical Establishment, Temple Smith/Gower, 1985; and The New Right: The Counter Revolution in Political, Economic and Social Thought, Wheatsheaf, 1987. His work has also been published in journals such as The Journal of Social Policy, Political Quarterly, Philosophy of the Social Sciences and Policy and Politics. The IEA has published his The Welfare State: For Rich or for Poor, 1982; Which Doctor?, 1985; Challenge to the NHS, 1986; Medicines in the Marketplace, 1987; Everyone a Private Patient, 1988; Should Doctors Advertise?, 1989; Equalizing People, 1990; and (with David Lucas) Medicard: A Better Way to Pay for Medicines?, 1993. vi Acknowledgements This book reflects ten years of continuing conversation with Arthur Seldon and Ralph Harris from which I have been the chief beneficiary. Arthur Seldon's support and encouragement over many years has been valuable beyond measure and Ralph Harris made especially useful detailed comments which improved the final version substantially. My thanks also go to IEA colleagues John Blundell and Colin Robinson for useful criticisms of an early draft. I have benefited from research assistance provided by David Lucas, assistant director of the IEA Health and Welfare Unit, and Gur Hirshberg, who was an intern at the IEA in the summer of 1993. I have also received excellent advice from several members of the Advisory Council of the IEA Health and Welfare Unit, particularly Peter Saunders, Bob Pinker, Tom Griffin, George Teeling-Smith, Jon Davies, Michael Beesley, Norman Barry, Peter Collison, Sir Reginald Murley and Max Hartwell. I feel very fortunate to be able to rely on receiving such high-quality advice. My thanks also go to Tom Palmer of the Institute for Humane Studies, whose request to prepare a paper for the Eastern Europe Outreach Programme prompted me to write this book and who offered valuable criticisms of a much earlier version. Two friends, Norman Dennis and Michael Novak deserve a special mention for their help. I have profited greatly from many hours of discussion with Norman Dennis stretching over 20 years, and usually in the congenial surroundings of the beautiful hills of England. Michael Novak has become a frequent visitor to the IEA during the last four years. He has taught me a great deal, and I am especially grateful to him for suggesting several invaluable improvements to Reinventing Civil Society during his most recent visit as Wincott Visiting Fellow. It goes without saying that the remaining errors, oversights and omis- sions are my responsibility. Finally, may I record sincere thanks to the Esmée Fairbairn Charitable Trust for its generous support of the three-year programme of research and study which made possible the production of this book. David Green vii Preface This book began as an attempt to consider the lessons the former communist countries of Eastern Europe might be able to learn from Western experience of voluntary welfare provision. But, as the study proceeded, it quickly became obvious that we in the West have done almost as much harm to our own voluntary associations as the communist countries, not as part of a deliberate effort to create a mass society of individuals ruled by an elite, but as a result of the inadver- tent displacement effect of the welfare state. By narrowing opportuni- ties for personal idealism in the service of others, the welfare state has eroded the sense of personal responsibility and mutual obligation on which a resilient civil society rests. As I began to think about how best we could re-invigorate our once rich and varied voluntary, communal life it also became obvious that the economic philosophy which had come to dominance in the 1980s did not provide intellectual tools adequate to the task. This inadequacy was particulary reflected in the social policies of the Thatcher years, which were dominated by a hard-boiled economic rationalism which failed to do justice to human character and potential. We only have to look at our own language to discover the rich variety of virtues that make a free society work and which describe the obligations we all owe to one another. Good character, honesty, duty, self-sacrifice, honour, service, self-discipline, toleration, respect, justice, self-improvement, trust, civility, fortitude, courage, integrity, diligence, patriotism, consideration for others, thrift and reverence are just a few. Yet many of these words cannot readily be used today in ordinary talk. To the modern ear, they have a ring of either antique charm or total obsolescence. The leading voices of Thatcherite philosophy invariably saw the Thatcher revolution in moral terms. They hoped to restore what Shirley Letwin, in her excellent book The Anatomy of Thatcherism, called the `vigorous virtues' of self-sufficiency, energy, independent mindedness, adventurousness, loyalty to friends and hardiness in the face of enemies.1 The Thatcherite emphasis on the vigorous virtues was of central importance in halting the pace of Britain's genteel economic decline. And today, the superiority of robust market competition compared with socialist planning is accepted across the political spectrum. But, Thatcherism suffered from a missing ingredient. It is the thesis of this book that the missing dimension was its inadequate emphasis on the `civic virtues', such as self-sacrifice, duty, solidarity and service of others. Over twenty years ago in 1971 the IEA's Editorial Director, Arthur Seldon, commissioned The Morals of Markets2 by the philosopher H.B. Acton to examine the moral questions raised by competition. In the heat of the subsequent battle to improve public understanding of viii economic problems, the issues raised in that book were put to one side but now, in recognition of its continuing relevance, the Liberty Fund has republished The Morals of Markets. Reinventing Civil Society is an attempt to refine and develop further our thinking about the moral dimension of a free society. David G. Green ix Introduction During the Thatcher years there were many who feared that the welfare state would be `dismantled'. In fact, the welfare state remained almost unscathed because the most radical reforms attempted by Thatcher administrations did not even aspire to `dismantle' the welfare state. Thatcher Governments often used market rhetoric, such as `money following the patient's choice' or `money following the parents' choice of school', but in reality ministers were working with a very restricted idea of the market. The NHS reforms, for instance, led to an `internal market' not all that different from any other government procurement programme. Thatcher Governments also worked with too narrow a view of human character. The education reforms, for example, were based on a consumerist view of parents as outsiders standing in judgement of schools, rather than as co-partners in the long process of equipping their own children with the skills, knowledge and personal qualities necessary in a free, open and tolerant society. Economic rationalism dominated the 1980s primarily because we had come through a period in which the battle of ideas had been fought between two economic systems, capitalism and socialism. The conflict between collectivist economic planning and dispersed commercial decision-making in competitive markets inevitably dominated post- war debate because the world was divided into two blocs, communist and capitalist. And the ideology defending communism, as well as milder forms of collectivism, insisted that the economic base deter- mined the social order. Opponents of collectivism had little option, therefore, but to concentrate their attack on communist economics. But in drawing attention to the merits of markets, some advocates of freedom lost sight of the historic ideal which in reality made Western civilisation superior