Reappraisals Read Free Page B

northern Europe can confirm. The state, as the history of the last century copiously illustrates, does some things rather well and other things quite badly. There are some things the private sector, or the market, can do better and many things they cannot do at all. We need to learn once again to “think the state,” free of the prejudices we have acquired against it in the triumphalist wake of the West’s cold war victory. We need to learn how to acknowledge the shortcomings of the state and to present the case for the state without apology. As I conclude in Chapter XIV, we all know, at the end of the twentieth century, that you can have too much state. But . . . you can also have too little.
    The twentieth-century welfare state is conventionally dismissed today as European and “socialist”—usually in formulations like this: “I believe history will record that it was Chinese capitalism that put an end to European socialism.” 4 European it may be (if we allow that Canada, New Zealand, and—in respect of social security and national health for the aged—the USA are all for this purpose “European”); but “socialist”? The epithet reveals once again a curious unfamiliarity with the recent past. Outside of Scandinavia—in Austria, Germany, France, Italy, Holland, and elsewhere—it was not socialists but Christian Democrats who played the greatest part in installing and administering the core institutions of the activist welfare state. Even in Britain, where the post-World War II Labour government of Clement Attlee indeed inaugurated the welfare state as we knew it, it was the wartime government of Winston Churchill that commissioned and approved the Report by William Beveridge (himself a Liberal) that established the principles of public welfare provision: principles—and practices—that were reaffirmed and underwritten by every Conservative government that followed until 1979.
    The welfare state, in short, was born of a cross-party twentieth-century consensus. It was implemented, in most cases, by liberals or conservatives who had entered public life well before 1914 and for whom the public provision of universal medical services, old age pensions, unemployment and sickness insurance, free education, subsidized public transport, and the other prerequisites of a stable civil order represented not the first stage of twentieth-century socialism but the culmination of late-nineteenth-century reformist liberalism. A similar perspective informed the thinking of many New Dealers in the United States.
    Moreover, and here the memory of war played once again an important role, the twentieth-century “socialist” welfare states were constructed not as an advance guard of egalitarian revolution but to provide a barrier against the return of the past: against economic depression and its polarizing, violent political outcome in the desperate politics of Fascism and Communism alike. The welfare states were thus prophylactic states. They were designed quite consciously to meet the widespread yearning for security and stability that John Maynard Keynes and others foresaw long before the end of World War II, and they succeeded beyond anyone’s expectations. Thanks to half a century of prosperity and safety, we in the West have forgotten the political and social traumas of mass insecurity. And thus we have forgotten why we have inherited those welfare states and what brought them about.
    The paradox, of course, is that the very success of the mixed-economy welfare states, in providing the social stability and ideological demobilization which made possible the prosperity of the past half century, has led a younger political generation to take that same stability and ideological quiescence for granted and demand the elimination of the “impediment” of the taxing, regulating, and generally interfering state. Whether the economic case for this is as secure as it now appears—whether regulation and social provision were