Road to Serfdom, The - Hayek, F. A. & Caldwell, Bruce [9]
A planned society must replace the old competitive system . . .
The basis for our democracy must be planned production for community use . . .
As a necessary prerequisite to the reorganization of society, the main Wartime controls in industry and agriculture should be maintained to avoid the scramble for profits which followed the last war.39
These ideas were incorporated into a resolution proposed by Harold Laski and passed at the Party Conference on May 26, 1942. In his speech defending the resolution, Laski noted that “Nationalization of the essential instruments of production before the war ends, the maintenance of control over production and distribution after the war—this is the spearhead of this resolution.”40
Party boilerplate is one thing, concrete plans as how to carry it out are quite another. A start at the latter was made in the famous Beveridge Report.41
The story of how Hayek’s former director at the LSE came to chair the Interdepartmental Committee on Social Insurance and Allied Services is not without interest. The committee was originally set up in early 1941 to respond to trade union complaints about the mishmash of government programs then in existence to provide for unemployment benefits, sick pay, pensions, and the like. The Treasury, busy trying to finance the war, did not want a comprehensive review, fearing it would only lead to recommendations for further expenditures. They pushed for the appointment of a “safe” chairman who would do a patch-up job, and made sure that the committee was staffed principally with equally safe middle-level civil servants. But then the Minister of Labour Ernest Bevin intervened, and ultimately prevailed in having Beveridge appointed to chair the committee, his motivation being, according to one account, to get “the pushy Beveridge at last out of his Ministry”!42
By December 1941 Beveridge had received only one of the 127 pieces of evidence that his committee would ultimately collect, but this did not deter him from circulating a paper that contained most of the main points that would be contained in the final report. Beveridge turned out to be anything but safe. His proposals provided the foundations for the postwar British welfare state, including the provision of family allowances, comprehensive social insurance, universal health care coverage, and a government obligation to maintain full employment.
Though the Treasury was horrified at the projected cost of the plan, over the course of 1942 Beveridge, through public appearances, radio talks, and the like, managed to leak to the press the broad outlines of the report, thereby building up popular support and undermining the ability of the government to either ignore or dismiss it. He was successful as impresario: when the 299-page government document was finally released on December 2, 1942, the line for it at the government bookshop was said to have been over a mile long.43 It ultimately sold about a half a million copies, influencing policy not just in Britain, but worldwide. (In America, an edition that was “reproduced photographically from the English edition” to ensure a speedy delivery was quickly made available and sold about fifty thousand copies.)44
The Beveridge Report was an immediate success. The British economy had been stagnant throughout the interwar period, and no one wanted a return to such deprivation. The common sacrifices that the war necessitated bred a feeling that all should similarly share more equally in the reconstruction to come. Universal medical provision was itself virtually a fact of life during the first few years of the war, certainly for anyone injured by aerial bombing or whose work was tied to the war effort—and whose work was not, in one way or another? The war, then, was transforming the climate, and Beveridge’s hope—and he was not alone—was to build on this transformation in the future.45 Indeed, the first of the “Three Guiding Principles of Recommendations” with which he began