Welfare State

Note that the word welfare state is in inverted commas. This is because there has been widespread debate on the right definition of a welfare state. The word itself comes from the German word ‘Wohlfahrstaat’ – used to express the inadequacies of the social reforms introduced in 1920s Germany. Wolhlfahrstaat ‘welfare’ remains today a mainly derogatory term used to express centralised means-tested benefit. The term ‘social service state’ was coined by Beveridge as a response to the something-for nothing connotation related to a welfare state.

Recently ‘social security’ has been used in the US, to express the same thing. Historically, the US Government’s low expenditure on social services and dependency on a private health care means the country is not generally considered a fully functioning welfare state. There are various political and historical undertones embedded with ‘welfare state. ‘ We have no choice but to enter the world of normative economics and have a bias view of its meaning. The term ‘welfare state’ has undergone various evolutions that are historically and economically flexible.

It envisages a set of ideals rather than an entity or set model. In this case we will stick with the following definition for the sake of comparative analysis. A welfare state occurs where it is the Government’s responsibility to protect its citizens against an inadvertent loss of income through possible subsidies and the provision of social services such as health, education and housing – at the highest standard possible. 8th July 1948 is deemed the day the British welfare state was created.

This ‘historic day’ was when five different legislations came into operation; National Insurance Act, National Assistance Act, the National Health Service, Town and Country Planning Act and the Children Act. The American historian Peter Baldwin has compared the event as no less significant or important than the French or Russian revolution. It would however be incorrect to set this day as the start and origination of the welfare system. The social rights and ideals had evolved much earlier but only made history on the 8th of July.

The day when every man, woman and child would be insured against every eventuality from ‘the cradle to the grave. ‘ For the first time people were released from the fear of poverty, a limiting factor to the potential growth and development of a country. More significantly a number of factors from 1942 to 1948 accelerated the process of Government intervention in the free-market for greater equity. The collective impulse brought about by the Second World War, the rise to power of the labour party and the launch of Beveridge’s report all acted as a precursor to the welfare state.

These factors facilitated an evolving process and established the beginning of a welfare state designed to protect individuals. The Second World War brought about a collectivist attitude among the British people. The war exposed poverty, malnutrition and rampant illiteracy previously hidden from the Government or its people. On a wider scale, the war brought with it misery for all and a greater level of equality in deprivation and economic levelling. Higher taxes were imposed on disposable income, wage rates exceeded the inflation rate and unemployment had been abolished.

People from all walks of life, rich or poor were brought together to serve in the armed forces, spend time in the bomb shelters, or experience evacuation and rationing. A greater sense of social solidarity and universalism ensured the ‘people’s war’ turned into the ‘people’s peace. ‘ People wanted remedies to the ailments suffered and exposed in the war. A public more aware of social and political issues and the political need for reform warranted a Government response.

Politicians saw a moral and strategic justification to make available a free-for-all and at the point of delivery welfare system. While the war alone did not give rise to a British welfare system it offered the opportunity for the publication of the Beveridge report, social legislation and other white papers, which received a very popular response. Universal conditions experienced during the war put the wheels in motion for a welfare system after the war. Labour was the party seen most likely to introduce welfare reforms and full-employment to all after the war.

The progress of the welfare state ran in tandem with their rise to power. During the war Labour managed to provide free milk for children, supplementary pensions for the needy and abolished the households means test – applaudable achievements in any case, even more so when you consider that the Conservatives headed by Churchill were still in power. The Labour party saw the working classes’ involvement in the war effort as key to victory at a newer more efficiently run Britain and strengthened its position by promising social services and rights for all.

Key labour ministers played their part in the launch and printing of the Beveridge report. Full employment and the creation of a welfare state were placed top of Labour’s agenda. A Gallup poll in 1943 predicted Labour ahead of the ruling Conservative party by a margin of seven to eleven per cent. The people wanted to make sure peacetime promises were kept after the mass unemployment and poverty of the inter-war years. Labour’s universalistic strategy appealed to the people hungry for social change through jobs, better housing and free health care and education.

While any coalition government might have been forced to accept the peoples’ wishes it was Labour that took the initiative in assessing the political and social atmosphere at the time and pouncing with widespread social reforms. The Beveridge Report is often seen as a prototype for the future welfare state and Beveridge as its founding father. While Beveridge did tap into a broad consensus and a collectivist tide occurring towards social values in the country, he ideas were shaped by political, economic and social factors. Recession, unemployment and poverty experienced in the inter-war years largely influenced Beveridge.

A more socialist democratic slant in Keynesian economics occurred at the same time. To combat the inadequacies of a capitalist state it was thought that greater government intervention would be able to tackle inequality and unemployment caused by privatisation. Keynesian economists offered the national minimum wage as a concept, a largely revolutionary policy of its time. A neo-liberal himself, Beveridge started to see Government intervention in the labour market and social services as necessary to bring about the development of a country as a whole.

The emotional response to ordinary peoples’ welfare and the exposure of the hard realities of life increased concern among the Government and the Beveridge committee. It is clear that Beveridge’s views made a widespread contribution to the creation of the welfare state but the report went much further than just Beveridge. Other wider war-time movements were afoot; the collectivist impulse brought out by the war, exposure of poverty, changes in neo-liberal economic values and the growing influence of the labour party all compounded in the publication and reception of the Beveridge report and eventual inauguration of the welfare state.

The Second World War acted as a catalyst to the emergence of the welfare state. The war effort caused a rational and moral reaction. This penetrated into the politics, economics and governance thinking of the time. The universalistic social policies built up during the war acted as the building blocks of a future post-war welfare state. While the labour party supported and fought for social policies it was not a policy aim born with them. Like in any democratic state, Labour was positively manipulated by the population into accepting the peoples’ wishes of a better Britain after the war.

Beveridge acted as one of the foundations of a future welfare state though not its chief architect. His report did not determine but characterised British feeling and the ordinary man’s consciousness. It is debateable whether his report would ever have gained the media coverage or discussion if it had not been for the collectivist impulse occurring in the country. It was the British people who should be given their due for a very British welfare state. The war applied the shock through exposure of underdeveloped areas and the people responded.

It was the war and the aspirations for a welfare state in the country that caused a domino effect – in the rest of the country; a rise in knowledge of social policies and anticipated response from those in power, the rise of the labour party and the induction of the Beveridge report. In conclusion the emergence of a universal and collectivist British society due to the effects of the war was the main factor towards the creation of a welfare state. This is because its effect was widespread and caused a chain reaction in the political, economic and social dynamics of the country growing into a will and need for a welfare state.