The Ideas That Shaped Post-War Britain. Anthony Seldon

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СКАЧАТЬ rhetoric which ultimately displaced it. Progressive illusions, imputing boundless competence to projects for reform, may have a timeless element, as may a conservative wisdom, tempering enthusiasm with wholesome pragmatism. The story of the rise and fall of Keynesianism in post-war Britain however, hardly suggests that one side had a monopoly on illusions and the other on wisdom.

      The ideological impact of Keynesianism makes a more straightforward, less ironical story than that of its administrative reception. The enemy here was clearly unemployment rather than inflation. It was unemployment, rhetorically termed ‘Idleness’, which had a star billing in the Beveridge Report as one of ‘five giants on the road of reconstruction’, along with ‘Want, Disease, Ignorance and Squalor’.⁷ Beveridge reached for no elevated soubriquet to characterise inflation, which retained its lower-case pygmy status throughout his Report. Conversely, ‘Want’ could not be slain without first dealing with ‘Idleness’. Progressive reforms marched together in a happy example of mutual support – what Hirschman identifies as ‘synergy’.⁸ Beveridge needed to banish mass unemployment in order to make his grand vision of social insurance viable. Hence the third assumption of the Beveridge Plan, that full employment would be maintained. True, the actuarial premise here was for an overall level of unemployment up to 8.5 per cent, which was soon to seem an unacceptably high, rather than a desirably low figure. What was required, the Report explained, was ‘not the abolition of all unemployment, but the abolition of mass unemployment and of unemployment prolonged year after year for the same individual.’⁹

      Beveridge adduced five reasons for this contention. One was that cash payments, while suitable for tiding workers over, would, in the longer term, have a demoralising effect. Another was that it became impossible to test unemployment by an offer of work if there were no work to offer. The availability of work, moreover, actively drew in people who would otherwise lapse into debility. These three reasons were concerned with the working of a social insurance scheme, showing its administrative inter-dependence with a buoyant labour market. ‘Fourth, and most important,’ Beveridge continued, ‘income security which is all that can be given by social insurance is so inadequate a provision for human happiness that to put it forward by itself as a sole or principal measure of reconstruction hardly seems worth doing.’ Participation in productive employment, he suggested, was a great end in itself; the ethic of work thus provided a higher symbiosis between reforms which tackled the linked evils of unemployment and poverty. Finally, Beveridge pointed to the heavy cost of his Plan, warning that ‘if to the necessary cost waste is added, it may become insupportable.’ For unemployment simultaneously increased claims while depleting available resources¹⁰

      Beveridge himself soon became converted to the practicability of reducing unemployment below 3 per cent. It was this more ambitious target which defined ‘full employment’ in the debates of 1944, as against ‘the maintenance of a high and stable level of employment after the war’ which was what the Coalition Government’s White Paper more prudently promised.¹¹ Either way, it was unemployment which was at the centre of the arguments.

      The White Paper began by clearly identifying mass unemployment as a macroeconomic problem, for which the Government now accepted responsibility. True, many caveats followed. Nigel Lawson, as Chancellor of the Exchequer more than forty years on, mischievously strung some of them together in an address to economists. Not only (so he found in paragraph 56) would it be ‘a disaster if the intention of the Government to maintain total expenditure were interpreted as exonerating the citizen from the duty of fending for himself’, but he was able to seize upon the remarkable comment in paragraph 74 that: ‘None of the main proposals contained in this Paper involves deliberate planning for a deficit in the National Budget in years of sub-normal trade activity.’¹² The provenance of the document is thus evident, as a compromise achieved through committee work. Hence paragraph 66 upholds the ‘notion of pressing forward quickly with public expenditure when incomes were falling and the outlook was dark’ despite the ‘strong resistance from persons who are accustomed, with good reason, to conduct their private affairs according to the very opposite principle’.¹³ Yet this counter-cyclical fiscal doctrine is promptly undercut by the wholly inconsistent paragraph 74, in which Lawson took comfort.

      The fact is that everything else in the White Paper is by way of qualification to its central claim. Lawson knew this perfectly well in 1987, just as Keynes did in 1944, when he wrote that it was ‘the general line and purpose of policy’ that mattered at this stage. ‘The object of the White Paper,’ he affirmed, ‘is to choose the pattern of our future policy.’¹⁴ This it did, most prominently in the foreword: ‘A country will not suffer from mass unemployment so long as the total demand for its goods and services is maintained at a high level.’¹⁵ That this claim was founded on a Keynesian multiplier analysis was later made explicit.¹⁶

      The policy to be followed included not only strictly Keynesian measures for the counter-cyclical regulation of public investment, but also parallel measures, chiefly due to Meade, for controlling swings in consumption expenditure by varying the rates of social insurance contributions. ‘The ideal to be aimed at is some corrective influence which would come into play automatically – on the analogy of a thermostatic control – in accordance with rules determined in advance and well understood by the public.’¹⁷ The analogy chosen here may seem banal and commonplace to us but must have inspired mixed feelings in the chilly British homes of an era of open fires and fuel rationing.

      The general tone of the White Paper, however, is authentically that of the 1940s and did not, despite claims by some subsequent historians, hold out easy promises of a ‘New Jerusalem’:

      It cannot be expected that the public, after years of wartime restrictions, will find these proposals altogether palatable; and the Government have no intention of maintaining wartime restrictions for restriction’s sake. But they are resolved that, so long as supplies are abnormally short, the most urgent needs shall be met first. Without some of the existing controls this could not be achieved; prices would rise and the limited supplies would go, not to those whose need was greatest, but to those able to pay the highest price. The Government are confident that the public will continue to give, for as long as is necessary, the same wholehearted support to the policy of ‘fair shares’ that it has given in war-time.¹⁸

      This kind of language made an obvious appeal to the political left. This was congruent with the way that the case for macroeconomic regulation of the economy was commonly meshed into a debate about planning, the buzz-word of the 1940s. It was under this guise that Keynesianism was assimilated to conventional arguments for socialism. When John Parker was commissioned by Penguin to put the Labour case in a book published in 1947, he struck this chord in the chapter called ‘A Planned Economy’:

      At the back of the minds of all those who have been through the two wars is the fear of a fresh slump and of widespread unemployment. The effect of Lord Keynes’ teaching and of wartime experience has been the creation of a very widespread belief in Britain that unemployment can be practically prevented by the full development of a planned economy. Booms and slumps, it is hoped, can be ironed out if a deliberate attempt is made to do so.¹⁹

      The fact is that planning had become an essentially contested term, a Humpty-Dumpty word which was invested with glosses appropriate to the arguments in which it was currently imbricated. ‘Am I a planner?’ asked James Meade in 1948:

      If a planner necessarily believes in a quantitative programme of output, employment and sales for particular industries, occupations and markets and the exercise of such direct controls by the State as are necessary to carry this out, I am certainly no planner. If an anti-planner necessarily denies that the State should so influence the workings of the price mechanism that certain major objectives of full employment, stability, equity, freedom and the like are achieved, then I am a planner.²⁰

      This was consistent with Meade’s advocacy since 1945, as head of the economic section, СКАЧАТЬ