Anyone interested in the history of the welfare state has to come across the works of Gertrude Himmelfarb. Her histories The Idea of Poverty and Poverty and Compassion are crucial to understanding why the welfare state in Britain was created and what British nineteenth-century statists were thinking when they decided to increase government’s role in aiding the poor.
Anything Himmelfarb writes on the history of welfare is worth calling attention to, so her latest article, in the April 21 Weekly Standard, deserves to be read closely. She is looking at the debate in Britain over “social insurance”—which we would call a combination of Social Security, health insurance, and workmen’s compensation—that culminated in the passage of the National Insurance Act of 1911, which lay the foundations for the welfare state created in Britain after World War II. Crucial in the passage of social insurance, she argues, is Winston Churchill.
Himmelfarb’s villains are Sidney and Beatrice Webb, founders of the Fabian Society. We think of the Fabians as moderate socialists who wanted to conquer capitalism slowly. In fact, she notes, Fabians were more radical than even communists, because they didn’t just wanted to abolish corporations: they wanted to abolish individual hopes and desires, and have every British citizen obey the marching orders of the mandarins. “The perfect fitting development of each individual is not necessarily the utmost and highest cultivation of his own personality,” Sidney Webb wrote in 1889, “but the filling, in the best possible way, of his humble function in the great social machine.”
The Webbs were prodigious organizers, and their legacy includes an important university, the London School of Economics and Political Science, and Britain’s leading left-wing magazine, The New Statesman. But they were eager to recruit people to their cause, and in 1903 had dinner with Winston Churchill.
Because of Churchill’s abundant virtues as a war leader, a writer, and a man, and because he was associated with the Tories for most of his career, we think of Churchill as a hard-line conservative. He was—on foreign policy. On domestic policy, Churchill was far wetter, and were he active in politics today he would be closer ideologically to Joseph Lieberman or Michael Ignatieff than he would to the Tea Party.
When the Webbs met Churchill in 1903, they didn’t know what to make of him. “First impression, restless—almost intolerably so, without capacity for sustained and unexciting labor—egotisitical, bumptious, shallow-minded and reactionary, but with a certain personal magnetism, great pluck, and some originality—not of intellect but of character,” Beatrice Webb wrote in her diary.
Churchill started off as a Tory, but switched to the Liberals in 1905 because of his support of free trade. Shortly after he switched, the Liberals came to power and Churchill rose rapidly during the administrations of Sir Henry Campbell-Bannerman and Herbert Asquith, becoming home secretary in 1908.
The two major pieces of domestic legislation at this time were the establishment of labor exchanges, where workers could come and see what jobs would be available, and the introduction of social insurance. The labor exchanges were introduced in 1909, and social insurance was passed in 1911.
Churchill and the Webbs split on the issue of labor exchanges. The Webbs wanted labor exchanges to be mandatory, with workers who refused available work being cut off from the dole. Without a mandatory labor exchange, they saw no need for mandatory social insurance.
The great debate among poverty-fighters in this era was whether aid should be given to the “undeserving” poor. In America, the discipline of social work was created largely so that social workers could “scientifically” show who deserved help and who didn’t.
Churchill saw social insurance as providing what we would call a safety net. If you paid into the system through your taxes, you were entitled to help in hard times, even if you lost your job because you were drunk. “I do not like mixing up moralities and mathematics,” Churchill told permanent Secretary of the Board of Trade Llewellyn Smith. “Our concern is with the evil, not with the causes, with the fact of unemployment, not with the character of the unemployed.”
Why does this century-old debate matter? Himmelfarb says the passage of Obamacare is a style of Fabianism, with consumers forced to buy insurance without being allowed a choice of doctor, with treatments chosen by “experts,” not doctors, and with supporters of Obamacare showing “impatience with the democratic process of legislation, in the recent presidential fiats modifying or suspending provisions of the law enacted by Congress.”
All of this is true, but there is another reason, which Himmelfarb does not discuss. In America, poverty-fighters saw the passage of social insurance as a great triumph that should be replicated in the U.S. These activists—John Commons, I. M. Rubinow, Frances Perkins, Grace Abbott—spent the next twenty years arguing, conducting research, and coming out with books and articles advocating the need for more government. When Franklin Roosevelt came to power they were fully prepared for their agenda, and successfully implemented the welfare state.
If we are to roll back the welfare state we need to know how it was created. So the British debates between 1909-11 over national insurance are worth studying closely.
And if you haven’t read The Idea of Poverty and Poverty and Compassion, these are books you need to read.