The “Welfare" State (1965)

From the April 1965 issue of the Socialist Standard

It is sometimes claimed that the case for socialism is now no longer relevant as capitalism has managed to reform itself through such means as universal education and factory and welfare legislation. The underlying assumption behind such claims is that socialists hold that under capitalism the owning class can only be a bunch of rapacious and selfish despots holding sway over a wretched mass of labourers who live in utter destitution amid filth and squalor. This was something like the position in the period between the rapid growth of capitalism in Britain at the beginning of the nineteenth century and the time when the governing classes—then landlord and capitalist got round to tackling the situation in the interests of the further development of capitalism.

The socialist analysis of the so-called Welfare State goes back to the pioneer of scientific socialism,. Karl Marx himself. Capital appeared in 1867. By that time the institutions of the Welfare State were not very advanced. In Victorian Origins of the British Welfare State D. Roberts describes their growth in the period 1833-1854. The Parliament elected after the passing of the first Reform Act of 1832 had to deal with the various social problems which the Industrial Revolution had aggravated: growing rural pauperism, the sad state of education, the utter squalor of prisons and the working class areas of towns, the employment of women and children for long hours in the factories and mines. During this period government inspectors were appointed for factories, schools, health, prisons, mines and railways; the Poor Law and church systems were reorganised. The first Factory Act was passed in 1812; state aid to education was also first given in 1833; the first Mines Act was in 1842; the Public Health Act was passed in 1848 and housing was first regulated by an Act of 1851. By the 1850’s the governing classes had overcome their prejudices against State intervention for social reform.

Social reform came to be accepted as a necessity as conditions changed. This then was the extent of the Welfare State during the period of capitalism about which Marx wrote. Besides the employment of women and children and besides the filth and squalor in which the working class then existed Marx also described, as he says in his preface, “the history, the details and the results of English factory legislation.” Drawing an analogy with soil preservation Marx pointed out that the various Factory Acts “curb the passion for a limitless draining of labour power, by forcibly limiting the working day by state regulations, made by a state that is ruled by capitalist and landlord.” His conclusion could not be clearer: factory legislation, he wrote, was “just as much the necessary product of modern industry as cotton-yarn, self-actors and the electric telegraph.”

From about 1870 onwards the various social reforms were consolidated in a number of measures: the Education Act of 1870, the Public Health Act of 1875, the Artisans' Dwelling Act of 1875, the Mining Act of 1877 and the Factory Act of 1878. In this period also the law on trade unions was reformed. A Workmen’s Compensation Act was passed in 1897. Old Age pensions were first paid in 1909 and the National Insurance Act of 1911 introduced unemployment and sickness insurance for the first time. It was during this period that the SPGB was formed and the back-numbers of this journal contain a very useful analysis of these schemes. The issue for May 1914 explained their character very clearly:

Collective capital is expended through Government departments, with the object of placing at the disposal of individual capitalists an improved commodity on the labour market—workers whose labour will bear richer fruit in the shape of surplus value.

By this time reforms of all sorts were passed by every government whatever its political complexion. The government had now assumed the task of seeing that institutional and administrative arrangements kept pace with industrial changes. In 1925 the pensions scheme was made contributory. A number of Acts—Addison, Chamberlain, Wheatley—were passed granting housing subsidies and allowing slum clearances in the period between the wars. Poor Law assistance was however still administered locally. In 1942 appeared the famous Beveridge Report, Beveridge examined the various welfare services and advocated many changes in the interests of efficiency. The proposal which received the most publicity was that for a national minimum income below which no one should fall, i.e., the transfer of poor relief to the central government. In a pamphlet issued at the time, Beveridge Re-Organizes Poverty, the SPGB pointed out that the Beveridge proposals

will level the workers' position as a whole, reducing the more favourably placed to a lower level and putting the worst placed on a less evil level. This is not a “new world” of hope, but a re-distribution of misery.

After the war many of Beveridge’s proposals were implemented: a National Assistance Board was set up to ameliorate destitution and the chaotic hospital system was co-ordinated into the National Health Service. The much-vaunted Welfare State was complete.

Modern capitalism demands that the State spend capital on maintaining and improving the wealth—and profit—producing capacities of the working class. The NHS, the State education system and even the NAB are State capitalist organisations which work with labour power as their raw material. Although expenditure on such services is an economic necessity under modem capitalism it is not suggested that the relationship between the economy and the Welfare State is direct and mechanical. As a matter of history the present structure of the welfare services is the product of political struggles of varying intensity for over a hundred years. A great deal of idealism and devotion as well as a great deal of calculated self-interest has gone into all the campaign for education, factory and welfare measures under capitalism.

And indeed some aspects of the health and physical environment of the working class have improved considerably: infant mortality has been cut, some killer diseases eradicated, housing and factory conditions bettered. On the other hand, as well as putting more into the worker, capitalism has demanded more out of him more intense work as well as the faster pace of life generally. Aneurin Bevan used to refer to the NHS as “pure socialism” as it gave people free access to medical treatment. However there is nothing to be gained from seeing welfare services as something which they are not. They do not give the worker something for nothing. They are not free handouts.

Reforms—social, economic and political—are necessary all the time to keep the capitalist system running smoothly. They do not represent a challenge to the system or a concession from the system, rather are they demanded by the system. All such reforms, in education and welfare, have left the working class propertyless and non-owners of the means of production. They do not challenge the basis of the capitalist system which is this non-ownership of the means of production by the working class. Poverty is the negation of ownership. Thus the working class still live in poverty.

Today, proposals for the reform of the welfare services are once again being mooted. Douglas Houghton, the Chancellor of the Duchy of Lancaster in the present government, has been given the responsibility of reforming these services. Like Beveridge he has the task of reorganising poverty, that is, of seeing that expenditure on the welfare services is spent as effectively as possible from the point of view of the productive efficiency of the working class: no one must get too much and no one must get too little. He also has the task of working out more efficient ways of dealing with those whose labour power is either worn out or of such low quality as to be useless : those who used to be called the “aged poor" and others who live in destitution pure and simple.

The working class should not be interested in reorganising poverty. Their aim should be to end the present degrading status of those who work. Under capitalism the producers are treated as mere productive instruments. This is a necessary consequence of the ownership of the means of life by a minority, which means that the producers are propertyless, owning nothing but labour power. Only under socialism where all will have free access to the means of life will people be able to live and treat each other as human beings.

Adam Buick