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42 Brian Abel-Smith, “The Beveridge Report: Its Origins and Outcomes,” in Beveridge and Social Security: An International Perspective, ed. John Hill, John Ditch, and Howard Glennerster (Oxford: Clarendon Press, 1994), p. 14.

43 Janet Beveridge, Beveridge and His Plan (London: Hodder and Stoughton, 1954), p. 114. It should probably be pointed out that it was Beveridge’s wife who reported on the length of the line, and she was apparently recounting an anecdote that she had received second hand.

44 Brian Abel-Smith, “The Beveridge Report,” op. cit., p. 18.

45 According to Beveridge’s biographer, “the Social Insurance plan formed merely an iceberg tip—and in Beveridge’s view perhaps the least important tip—of the very much more ambitious and far-reaching program of social reconstruction that he had in his mind at the time . . . [which] included such possible objectives as the nationalization of land and housing, national minimum wage legislation, public ownership of up to 75 per cent of industrial production, a public enterprise board to direct both public and private investment, and permanent state control of income, prices, and manpower planning.” See Jose Harris, “Beveridge’s Social and Political Thought,” in Beveridge and Social Security, op. cit., p. 29. The changes instituted by the postwar Labour government would be far less dramatic than what Beveridge privately hoped for, and the levels of assistance once implemented were less than what he outlined in his report. But the welfare state was established, and with it the presumption that the state would be responsible for, and capable of, maintaining “full employment.”

46 Sir William Beveridge, Social Insurance and Allied Services (New York: Macmillan, 1942), p. 6.

47 Letter, Fritz Machlup to F. A. Hayek, October 23, 1942, Hayek Papers, box 36, folder 17, Hoover Institution Archives, copyright Stanford University.

48 In a letter dated June 13, 1943, Hayek reported that he had sent Machlup copies of chapters 13 and 14 “about two months ago” and was now sending him the final chapter (chapter 15) as well as a new preface and table of contents. Machlup confirmed their arrival in his letter of August 9, 1943. Both letters may be found in the Machlup Papers, box 43, folder 15, Hoover Institution Archives. It should perhaps be noted that there are sixteen, not fifteen, chapters in the final published version, but the last chapter is only a two-page conclusion that was added later.

49 Machlup was an editorial consultant for the academic publishing house Blakiston Company, and they told him that they would be happy to publish the book should Hayek want to, but lacking a trade department they would not be able to provide any real marketing for the book. So Machlup decided to see if he could drum up interest elsewhere.

50 Letter, Fritz Machlup to F. A. Hayek, January 21, 1943, Machlup Papers, box 43, folder 15, Hoover Institution Archives, copyright Stanford University. It is difficult to resist adding the sentence with which Machlup’s correspondent, Mr. Putnam, ended his paragraph: “If, however, the book is published by someone else and becomes a best-seller in the non-fiction field, just put it down to one of those mistakes in judgment which we all make.” Indeed.

51 Letter, Fritz Machlup to Harry Gideonse, September 9, 1943, Machlup Papers, box 43, folder 15, Hoover Institution Archives, copyright Stanford University.

52 Letter, Ordway Tead to Fritz Machlup, September 25, 1943, Machlup Papers, box 43, folder 15, Hoover Institution Archives. Tead added that “Also, it is so completely in the negative vein as to leave the reader without any clue as to what line to take in thought or policy,” a complaint others would echo.

53 Aaron Director (1901–2004) did his graduate work in economics at Chicago, and taught there briefly before leaving for a job at the Treasury Department in 1933. He also spent some time in the 1930s at the LSE, where he met Hayek. In 1946 Director joined the Law School faculty at Chicago, and helped found the