Postwar

been agreed, in this case between the Socialists and the conservative People’s Party, to avoid any return to the open conflicts of the inter-war decades. But there the similarities ended.

Austria was indeed ‘social’ (and had, after Finland, the largest nationalized sector of any Western European democracy), but it was not particularly Social Democratic. It was only in 1970 that the country got its first post-war Socialist head of government, when Bruno Kreisky became Chancellor. Although Austria over time instituted many of the social services and public policies associated with Scandinavian Social Democratic society—child care, generous unemployment insurance and public pensions, family support, universal medical and educational provision, exemplary state-subsidized transportation—what distinguished Austria from Sweden, for example, was the near-universal allocation of employment, influence, favours and funds according to political affiliation. This appropriation of the Austrian state and its resources to stabilize the market in political preferences had less to do with social ideals than with the memory of past traumas. In the wake of their inter-war experience, Austria’s socialists were more interested in stabilizing their country’s fragile democracy than in revolutionizing its social policies.[146]

Like the rest of Austrian society, the country’s Social Democrats proved remarkably adept at putting their past behind them. Social Democratic parties elsewheretook somewhat longer to abandon a certain nostalgia for radical transformation. In West Germany the SPD waited until 1959 and its Congress at Bad Godesberg to recast its goals and purposes. The new Party Program adopted there baldly stated that ‘Democratic socialism, which in Europe is rooted in Christian ethics, in humanism, and in classical philosophy, has no intention of proclaiming absolute truths.’ The state, it was asserted, should ‘restrict itself mainly to indirect methods of influencing the economy’. The free market in goods and employment was vital: ‘The totalitarian directed economy destroys freedom’.[147]

This belated acknowledgement of the obvious contrasts with the decision of Belgium’s Labour Party (the Parti Ouvrier Belge) the following year to re-confirm the Party’s founding charter of 1894, with its demand for the collectivisation of the means of production; and the refusal of Britain’s Labour Party, also in 1960, to follow the recommendation of its reformist leader Hugh Gaitskell and delete the identical commitment as enshrined in Clause IV of the Party’s 1918 programme. Part of the explanation for this contrast in behaviour lay in recent experience: the memory of destructive struggles and the close proximity of the totalitarian threat, whether in the immediate past or just across a border, helped focus the attention of German and Austrian Social Democrats—like Italian Communists—on the virtues of compromise.

Britain’s Labour Party had no such nightmares to exorcise. It was also, like its Belgian (and Dutch) counterparts in this respect, from its origins a labour movement rather than a socialist party, motivated above all by the concerns (and cash) of its trade union affiliates. It was thus less ideological—but more blinkered. If asked, Labour Party spokesmen would readily accede to the general objectives of continental European Social Democrats; but their own interests were much more practical and parochial. Precisely because of the built-in stability of British (or at least English) political culture, and thanks to its long-established—albeit shrinking—working-class base, the Labour Party showed little interest in the innovative settlements that had shaped the Scandinavian and German-speaking welfare states.

Instead, the British compromise was characterized by demand-manipulating fiscal policy and costly universal social provisions, supported by sharply progressive taxation and a large nationalized sector, and set against a background of unstable and historically adversarial industrial relations. Except for the Labourite emphasis on the intrinsic virtues of nationalization, these ad hoc arrangements were largely supported by the mainstream of the Conservative and Liberal Parties. If there was any sense in which British politics, too, were shaped by past shocks it came in the widespread, cross-party acknowledgement that a return to mass unemployment must be avoided at almost any cost.

Even after the new Labour leader Harold Wilson took his party back into power in 1964 after thirteen years of opposition, and spoke enthusiastically of the ‘white hot technological revolution’ of the age, very little changed. Wilson’s narrow margin of victory in the election of 1964 (a parliamentary majority of four) hardly disposed him to take political risks, and even though Labour did better in elections called two years later there was to be no radical departure in economic or social policy. Wilson himself was heir to the Attlee-Beveridge tradition of Fabian theory and Keynesian practice and showed little interest in economic (or political) innovation. Like most British politicians of every stripe he was deeply conventional and pragmatic, with a proudly myopic view of public affairs: as he once put it, ‘a week is a long time in politics.’

Nevertheless, there was a certain distinctiveness about the British Social Democratic state, beyond the insular refusal of all parties concerned to describe it thus. What the British Left (and, at the time, much of the Centre and Centre-Right of the political spectrum) were taken up with above all was the goal of fairness. It was the manifest injustice, the unfairness of life before the war that drove both the Beveridge reforms and the overwhelming vote for Labour in 1945. It was their promise that they could liberalize the economy while maintaining a fair distribution of rewards and services that brought the Conservatives to power in 1951 and kept them there for so long. The British accepted progressive taxation and welcomed universal health provision not because these were presented as ‘socialist’, but because they were more intuitively just.

In the same way, the curiously regressive workings of the British flat-rate systems of benefits and services—which disproportionately favoured the better-heeled professional middle class—were broadly acceptable because they were egalitarian, if only in appearance. And the most important innovation of the Labour governments of the nineteen sixties—the introduction of un-streamed comprehensive secondary education and the abolition of entrance examinations to selective grammar schools, a longstanding Labour commitment judiciously ignored by Attlee after 1945—was welcomed less on its intrinsic merits than because it was deemed ‘anti-elitist’ and thus ‘fair’. That is why the educational reform was even pursued by Conservative governments after Wilson’s departure in 1970, despite warnings from all sides of the perverse consequences such changes might have.[148]

The Labour Party’s dependence on trade union backing led it to postpone the sorts of industrial reforms that many (including some of its own leaders) knew to be long overdue. British industrial relations remained mired in adversarial shop-floor confrontations and craft-based piece-rate and wage disputes of a kind virtually unknown in Scandinavia, Germany, Austria or the Netherlands. Labour ministers made half-hearted attempts to break clear of this encumbering inheritance, but without much success; and partly for this reason the achievements of continental social democracy were never quite emulated in Britain.

Moreover, the universal features of Britain’s system of welfare, introduced two or even three decades before those of France, or Italy, for example, hid from view the very limited practical achievements of the British state even in the field of material equality: as late as 1967, 10 percent of the UK population still possessed 80 percent of all personal wealth. The net effect of the re-distributive policies of the first three post-war decades was to shift income and assets from the top 10 percent to the next 40 percent; the bottom 50 percent gained very little, for all the general improvement in security and welfare.

Any overall audit of the era of the welfare state in Western Europe will inevitably be side-shadowed by our knowledge of the problems it would face in later decades. Thus today it is easy to see that initiatives like the West German Social Security Reform Act of 1957, which guaranteed workers a pension keyed to their wage at the point of retirement and linked to a cost-of-living index, would prove an intolerable budgetary burden in changed demographic and economic circumstances. And with hindsight it is clear that radical income-levelling in Social Democratic Sweden reduced private savings and thus inhibited future investment. Even at the time it was obvious that government transfers and flat-rate social payments benefited those who knew how to take full advantage of them: notably the educated middle class, who would fight to hold on to what amounted to a new set of privileges.

But the achievements of Europe’s ‘nanny states’ were real all the same, whether introduced by Social Democrats, paternalist Catholics, or prudentially disposed conservatives and liberals. Beginning with core programmes of social and economic protection, the welfare states moved on to systems of entitlement, benefits, social justice and income redistribution—and managed this substantial transformation at almost no political cost. Even the creation of a self-interested class of welfare bureaucrats and white-collar beneficiaries was not without its virtues: like the farmers, the much-maligned ‘lower middle class’ now had a vested interest in the institutions and values of the democratic state. This was good for Social Democrats and Christian Democrats alike, as such