Less nanny state, more caring mate

Welfare was designed to improve our lives, but hasn’t. What we need is a compromise between Fabian-s

Over most of the past century, the liberal democracies of the west were distinguished from totalitarian regimes in eastern and central Europe - communist, but also at one time fascist and National Socialist - by representative government and a rule of law. But the demo­cracies themselves were increasingly divided by the Atlantic. The countries that now form the core of the European Union developed elaborate systems of public health care, education and welfare funded by taxation and directed by the state (as indeed did those dictatorships). The United States did not.

During the astonishing three decades after 1945 - with the German Wirtschaftswunder and what the French called les Trente Glorieuses - Europeans believed that they could inde­finitely combine rapid growth with public welfare. This was what the historian Tony Judt has called the "social-democratic moment", although it was in many ways also the work of Christian Democratic leaders and governments, as most European politicians on all sides accepted a Keynesian-interventionist consensus. In 1956, Anthony Crosland published The Future of Socialism, making the egalitarian case while deriding the puritanical-bureaucratic traditions of "total abstinence and a good filing system", but also assuming that rapid growth and widening prosperity would continue in any foreseeable future.

Then, in the 1970s, the "Glorious 30" ended with both a bang and a whimper: economic crisis followed by social unrest. The social-democratic moment was over, and governments of a reinvigorated populist right came to power - notably Margaret Thatcher's in 1979 - and assaulted that Keynesian consensus. The future now belonged to markets rather than planning, privatised rather than nationalised industry, the individual rather than the collective ("There is no such thing as society") and, it turned out, the rich rather than the poor.

Thus it is, Judt asserts in his remarkable new book, Ill Fares the Land, that "something is profoundly wrong with the way we live today". Even ardent free-marketeers scarcely foresaw the astonishing increase in disparity of income, particularly in the US. In 1968, the chief executive of General Motors was paid 66 times as much as an average worker on his payroll; in 2005, the head of Wal-Mart made 900 times as much. No politician is very keen to defend this now; the deadly sin of avarice appears more sinful than ever in the lurid light of bankers' bonuses, not to mention BBC salaries and MPs' expenses.

For Judt, the answer to this ill is a renewed commitment to social democracy, which European countries continue to practise but "have forgotten how to preach". Even after the greatest financial crisis in generations, the left is curiously reticent and bedraggled, though in this country the deeply demoralising effect of New Labour might have something to do with that. It is significant that this clarion call comes not from a Westminster politician but from a historian, a Londoner who has spent more than 20 years in exile as a professor at New York University.

In truth, the death of the welfare state has been much exaggerated, at least here and elsewhere in Europe, if not in America. Thatcher's enemies concede that she couldn't dismantle the welfare state, but did she really try? Often we mistake rhetoric for reality, and despite Thatcher's supposed "cuts" and her trumpeting of the virtues of self-help and individual responsibility, spending on the National Health Service increased by 60 per cent in real terms while she was prime minister. Overall public spending as a proportion of GDP was almost the same when she left Downing Street as when she entered it.

The United States was a different story. From the Marxist left, Perry Anderson has observed that, in terms of domestic policy, the Nixon
administration was decidedly more progressive than the Clinton administration (one of those truths that conventional American liberals are incapable of digesting). And Judt mocks the Orwellian name of Clinton's Personal Responsibility and Work Opportunity Act 1996, which, a century and a half after the New Poor Law of 1834, followed the Whig legislation in using the lashes of hunger and humiliation to drive the undeserving poor to work.

A middle-class racket

But perhaps part of our real problem is something different from an imaginary assault on public welfare. Could it be that the welfare state itself has gone wrong, with consequences unintended as well as malign? Judt's book is dedicated to his schoolboy sons, with his awareness of "how inadequately we have furnished them with the means to improve" the world they will inherit. Some of the reasons for that problematic legacy are discussed in another new book, The Pinch, by the Conservative frontbencher David Willetts. He shows how the baby-boom generation, born in the 20 years after the end of the Second World War (which includes Judt, Willetts and myself), has been selfish and thriftless in ways that have greatly attenuated prospects for the next generation, while welfare may have discouraged social mobility, or even the well-being of the masses.

One argument Judt makes for a universal welfare state is that by embracing not only the poor, but also the middle classes, it inoculates them from the political extremism to which the Continental bourgeoisie was so susceptible in the first half of the 20th century. There may be something in that, but there is the other side of the coin. Towards the end of his life, Crosland used to say (albeit only in private) that the welfare state had become a racket run in favour of the middle class. That might sound like Oxonian paradox-mongering, but Willetts fleshes out the point.

Truly, the baby boomers had never had it so good. Cod-liver oil and condensed orange juice may be among the less pleasing memories of a childhood during or shortly after the Attlee years, but we very much benefited from heavily subsidised education. In the 1960s came the great expansion of the universities, encouraged by a huge financial transfusion from the Treasury, well before the present government's meaningless edict that 50 per cent of school leavers should go on to higher education (why not 30 per cent, or 70?).

A social democrat like Judt, who is also an academic, might not instinctively see this, but it was always possible that such state subsidy of higher education would come to represent a net transfer of resources from poor to rich.

So it has proved. One example of many given by Willetts stands out. Between 1958 and 1970, the proportion of girls from better-off homes going to university increased from 21 to 36 per cent; the proportion of working-class girls was 6 per cent in 1958 - and 6 per cent in 1970. There couldn't be a more striking proof of Crosland's apprehension. Women certainly have reason to be grateful for the postwar social revolution. Or, at least, middle-class women do. At the same time, welfare has had another perverse effect, by creating and consolidating a permanent underclass. The extreme case was central Scotland, and especially Glasgow.

I was deeply affected by covering the Garscadden by-election in 1978 - not by the election itself (the seat was, as it happens, held for Labour by Donald Dewar), but by the place, on the north-west edge of Glasgow. Garscadden held a British record, for the proportion of its inhabitants living in council dwellings - more than 95 per cent. In Scotland as a whole, it was then over 60 per cent, more than twice the English figure.

And what dwellings! They were the worst sort of brutalist tower blocks, cheap and cheerless, as if designed to be filthy and run-down within years of their construction. This wasn't so far from the "new serfdom" that Friedrich von Hayek, the classical-liberal critic of socialism, had foreseen. The Scottish masses were expected to vote Labour, and so they did. In return, they were provided with the necessities of life - housing, medical care of a sort, and cash benefits - and then expected to know their place, as they also did.

It would be one thing if vast estates such as Drumchapel in Garscadden or the Red Road towers to the east, from which a family of Russian asylum-seekers recently jumped to their deaths, were hateful to the gaze of fasti­dious observers but enhanced the health and well-being of their inhabitants. That is plainly not the case. Recent comparative figures for life expectancy in Britain range from 83.7 years in Kensington and Chelsea to 70.5 in Glasgow. There are council estates in east Glasgow where life expectancy is now lower than in Bangladesh.

Is that shocking outcome entirely surprising when we look back at those who begat the welfare state? The Labour Party began life as hotpot of disparate ingredients: unions that were large but not socialist, and bodies, such as the Independent Labour Party and the Social Democratic Federation, which were socialist but tiny. (New Labour is less of a hotpot than a hamburger made from insanitary floor sweepings.) None was more important than the Fabians; it is no exaggeration to say that Fabian managerialism became the dominant tendency within Labour.

If the Whigs humiliated the poor, the Fabians condescended to them. Fabian doctrine held that socialism was inevitable but could come gra­dually rather than by violent revolution; that a political economy could be directed by central state planning for maximum effect; that redistributive taxation and spending should be used to reduce inequality; and that, "in the case of nutrition and health, just as in the case of education, the gentleman in Whitehall really does know better what is good for people than the people know themselves".

Those were the words of Douglas Jay, the quintessential educated progressive - Winchester, New College, All Souls - writing in 1937. It is hard to imagine a politician of any party today quoting him with approval, which might be a small change for the better. Behind Jay, and Labour, lay Sidney Webb, the desiccated economist who helped draft the party's first socialist constitution between 1917 and 1918, Clause Four and all. His personal story says a great deal about the kind of society intellectual socialists wanted to create.

Old Uncle Joe

In the 1900s, Webb, like many on the left, had been deeply absorbed by eugenics. He was convinced that "the national stock" was being weakened by an influx of low-grade Irish and Jewish immigrants and by the feeble-minded, whom he hoped to eliminate by sterilisation and scientific breeding. By the 1930s, he and his wife, Beatrice, visited Russia and wrote Soviet Communism: a New Civilisation? (first published in 1935 and reissued shortly afterwards without the question mark). At the very moment when the bloodbath of Stalin's terror was brimming over, the Webbs treated the country he ruled as a noble progressive experiment.

As early as the original Fabian Essays in Socialism of 1889, edited by George Bernard Shaw, Webb had defined his creed:

The perfect and fitting development of each individual is not necessarily the utmost and highest cultivation of his own personality, but the filling, in the best possible way, of his humble function in the great social machine. We must abandon the self-conceit of imagining that we are independent units, and bend our jealous minds, absorbed in their own cultivation, to this subjection to the higher end, the Common Weal.

If socialism meant that vision of an insect-society, realised after a fashion in Russia and China, then maybe it is neither surprising nor regrettable that socialism had withered away before the 20th century ended.

Even now it is too often assumed that bureaucratic-collectivist state socialism was the only alternative to naked finance capitalism. There is - dare one say it? - a third way: the path of voluntarism, reciprocal respect and co-operation, free from political command. None wrote more eloquently about this than that admirable anarchist, the late Colin Ward, a one-time columnist for New Society and then the New Statesman.

In one marvellous passage, Ward looked back at the Victorian age and the institutions designed to run the lives of the poor in anticipation of the modern welfare state. He contrasted them with the contemporary organisations, founded on mutual aid, which grew up with no official support or encouragement at all. As he said, "the very names speak volumes".

On the one side, the Workhouse, the Poor Law Infirmary, the National Society for the Education of the Poor in Accordance with the Principles of the Established Church; and, on the other, the Friendly Society, the Sick Club, the Co-operative Society, the Trade Union. One represents the tradition of fraternal and autonomous association springing up from below, the other that of authoritarian institutions directed from above.

That was the world we lost when such voluntary patterns of co-operation were flattened by the steamroller of the modern state, as well as oligopolistic capitalism. But there are examples today that still deserve looking at. The Royal National Lifeboat Institution performs a vital function with the help of volunteer crews and funds given by the public. Or compare Chelsea, ignominiously ejected this month from the Champions League, with Barcelona, who won their place in the quarter-finals with a majestic display. Chelsea is owned by one foreign billionaire; Barça is owned by its 170,000 members. Now there's something that might be debated, along with Judt's and Willetts's stimulating books, in what otherwise looks like being a depressing election campaign.

Thinking heads

A few words about the authors. Despite the Tories' recent ups and downs, Willetts is likely to be a cabinet minister in a few weeks' time and, whatever one's own views, we should be grateful that there are still some thinking people in politics. Crosland would have thought Willetts a worthy political and intellectual adversary.

And we should feel more than mere gratitude to Judt, one of the best political essayists, and greatest historians, of our time. Those who haven't read his short book on Europe, A Grand Illusion?, his latest collection of occasional writings, Reappraisals, or his magnum opus, Postwar, should do so. He had already shown considerable moral courage in taking on anyone from communist apologists to the Israel lobby, before he was diagnosed in 2008 with amyotrophic lateral sclerosis, an incurable wasting disease. He describes this unsparingly, but also with something like bleak humour, in wonderful short essays for the New York Review of Books. In October he gave a lecture in New York from which Ill Fares the Land has grown, awe-inspiringly in the circumstances. He told the audience why he was in a wheelchair; paralysed from the neck down, he was, he said, literally a talking head, and added that he had been asked to say something uplifting about his condition and treatment, "But I'm English. We don't do uplifting."

In the age of Blair and Iraq, duck islands and champagne flutes, Ashcroft and Chilcot, meph­itic popular culture and sham art, many of us
more often feel shame about our country than its opposite. But at least one fellow Englishman, hearing those words, felt a thrill of patriotic pride. What a mensch.

“Ill Fares the Land: a Treatise on Our Present Discontents" by Tony Judt is published by Allen Lane (£20). David Willetts's "The Pinch: How the Baby Boomers Took Their Children's Future - and Why They Should Give It Back" is published by Atlantic Books (£18.99)

Geoffrey Wheatcroft's books include "The Strange Death of Tory England" (Penguin, £8.99) and "Yo, Blair!" (Politico's, £9.99)

This article first appeared in the 29 March 2010 issue of the New Statesman, Hold on tight!