Dark Continent: Europe's Twentieth Century (50 page)

THE WELFARE STATES

This “unexpectedly dazzling” revival of capitalism took place, of course, in a world where the extension of state power was accepted not only in the economic sphere itself, but also in the area of social welfare. For many commentators at the time, the two—a booming economy and an extended welfare state—seemed closely connected. “Without the underpinning of welfare-state policies,” argued the SPD reformist Karl Schiller, “the free market economic system might well have collapsed … Welfare state and dynamic market economy are mutually indispensable.”
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In the Thatcher years, of course, such ideas came under attack. Spending on the welfare state, it was argued, had actually held back economic growth, not helped it forward. Less an argument about the economics of the 1950s than about the politics of the 1980s, it must be said that the historical record fails to bear out such a critical assessment. In Britain spending on welfare was actually a lower proportion of GDP than it was in West Germany, for example. In western Europe as a whole, low growth was accompanied by low spending on social services.
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Because the state’s post-war involvement in social welfare coincided with the consolidation of European democracy, some have argued that it was an essentially democratic phenomenon. The phrase “welfare state” had, after all, been coined in opposition to Hitler. In 1950 Attlee talked of his government having laid “the foundations of the Welfare State,” and within a few years the term had passed into common usage. It seemed to mark a watershed in the relationship between state and individual, and perhaps also as the sociologist T. H. Marshall argued, to inaugurate a new understanding of the notion of citizenship in a democracy, with social and economic rights now added to political ones.
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But Marshall’s linkage of democracy and welfare reflected the specific experiences of Britain and Sweden. Elsewhere, post-war welfare arrangements reflected strong continuities with pre-war conservative and fascist regimes, while in eastern Europe they emerged under communism. It is salutary to remember that the term “the life-ensuring state,” introduced into West German discussions of social policy by the constitutional lawyer Ernst Forsthoff, had in fact been first employed by him—approvingly—in 1938 in the context of the Third Reich. Post-war Italian social services, too, basically worked through the network of semi-autonomous agencies set up under Mussolini.
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Yet despite these continuities of tradition, the Second World War did separate two very different policy environments. The world of the post-war welfare state was one of full employment, fast population growth and relative internal and external peace inside Europe. Inter-war social policy, by contrast, had been made against a backdrop of mass unemployment, fears of population decline, revolution, political extremism and war. In both eras, the state took the lead, but whereas before 1940 it aimed to secure the health of the collectivity, the family, and above all, the nation, after the war it acted chiefly in order to expand opportunity and choices for the individual citizen. Each epoch reacted against its predecessor: post-1918 against the individualism of mid-nineteenth-century liberalism, post-1945 against inter-war collectivism. To that extent Marshall’s stress on citizenship hits the mark.

The post-war welfare state reflected some real differences of philosophy and institution across western Europe. West Germany, for instance, like the UK, had an ambitious housing policy and was building hundreds of thousands of council homes each year, while the postwar “sack of Rome” and the sprawling concrete jungle surrounding Athens testified to the indifference of the state in southern Europe where housing was concerned. The British welfare system was financed through national taxation, free at the point of delivery and designed to provide a basic minimum to all citizens. In France, Belgium and Germany on the other hand, the government supported voluntary insurance schemes where contributions were linked to
earnings. In these systems, welfare arrangements perpetuated existing income and status differences and were thus basically conservative in their social impact, whereas in Sweden the state was at the other extreme, intervening actively to reduce income inequality. Thus there were, according to one scholar, at least “three worlds” or models of welfare capitalism in western Europe: conservative Catholic; liberal; and social democratic.

Everywhere, though, state spending on social services was rising. In the UK, spending on social services as a percentage of GNP rose from 11.3 per cent in 1938 to 16.3 in 1955 and 23.2 per cent in 1970. Over the same period total public expenditure was rising from 30.0 per cent of GNP to 47.1 per cent by 1970, by which point social services accounted for nearly half of all public spending. Across most of western Europe, public spending rose after the war proportionate to national income; simultaneously the composition of that spending changed, as the proportion spent on defence fell and welfare rose. Because national income itself was rising fast, as a result of the boom, the result was that per capita welfare spending by the state everywhere rose dramatically, accelerating in the 1960s before slowing down once more at the start of the following decade. During the two decades of the economic boom, moreover, the divergences between different countries became less apparent. In 1950, for example, it was only in Denmark, Britain, Norway and Sweden that the proportion of the labour force covered by accident, health, old-age and unemployment insurance topped 70 per cent; by 1970, this figure had been reached everywhere except in the southern fringe of Greece, Portugal and Spain.
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To generalize, it seems as though the war had created—or intensified—a demand for social solidarity, while the economic upswing created the resources to support this change. Nor, of course, should it be forgotten that the change in attitudes applied to government revenues as well as spending: in other words, after 1945 people enjoying the security of full employment accepted rates of taxation which would have seemed unthinkable ten or twenty years earlier. Why they did so remains a question entirely ignored by historians—the history of taxation is not the most glamorous of subjects—yet it is a fundamental feature of the post-war evolution of west European society which
marks off its own experience of capitalism from that of the USA or Asia.
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Strangely, perhaps, the expansion of the state’s responsibilities in the 1950s and 1960s was accompanied by a growing sense of disillusionment. “All the impulses and ideals of the 1940s to recreate, rebuild and replan have now collapsed,” lamented the British social theorist Richard Titmuss. Rising expectations had certainly raised hopes and demands, and pushed poverty thresholds upwards. But neither the “rediscovery of poverty” of the early 1960s, nor the more general concern at the nature of welfare provision, could be wholly attributed to rising expectations. The limits of the new welfare democracy were becoming clear.
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As the egalitarian hopes of the 1940s faded, people slowly realized that the coming of the welfare state had made little difference to inequalities of wealth. Income distribution was not significantly altered (outside Scandinavia) since there was little attempt to use either the tax or the benefits system for broader redistributive purposes. For whom, then, had the welfare state come into existence? It looked increasingly as though the answer was not for the poor but rather for the better-off, the middle classes and that element of the old working class which was sharing in the fruits of full employment. This suspicion underpins a new view of the origins of the welfare state, which now tends to be seen as the outcome not so much of heroic working-class pressure as of middle-class interest groups, do-gooding paternalistic intellectuals and the risk-averse of all social strata.
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What was so surprising about this? It was just a further instance of the way post-war west European democracy had been stabilized by the middle classes turning radical agendas to their own ends. “It may look at first sight as if the
bourgeoisie
had, as usual, filched what should have gone to the workers,” Marshall wrote. “But in the circumstances, that was bound to happen in a free democracy and is bound to go on happening in the Welfare State. For the Welfare State is not the dictatorship of the proletariat and is not pledged to liquidate the
bourgeoisie
.”
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What some saw as the product of 1950s individualism, irresponsibility and selfishness, others regarded more neutrally as the growth of
acquisitiveness and affluence. But the coming of the Affluent Society did pose new challenges to the Welfare State, which was linked in people’s minds with the years of austerity, and based on a principle of universality that the rise in living standards made seem less urgent and even “rather silly.” “The acquisitive society,” Marshall concluded, “has succeeded in expanding its frontiers and converting its natural antagonists to its own creed.”

THE INDIVIDUALISTIC MOBILIZATION OF EUROPE

“Many people of my generation,” wrote Shonfield in 1965, “who in the 1930s had come to take for granted the ineradicable destructiveness of capitalism, have lived through a major personal experience in witnessing the metamorphosis of the system since the war.” This metamorphosis could be interpreted negatively—by disappointed socialists—in terms of waning social responsibility and the decline of wartime egalitarian goals; it could also, however, be cast in a more positive light as part of a profound social transformation—what Alessandro Pizzorno termed the “individualistic mobilization” of Europe. Capitalism’s success eroded class rivalries and replaced the activist and utopian mass politics of the inter-war era with a more bloodless politics of consumption and management. Goods, not gods, were what people wanted.
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The origins of Europe’s consumer society of course could be traced back well before the Second World War. If Henry Ford’s USA was the prototype, it is true that even in inter-war Europe first signs could be found of the change in attitudes and aspirations that would become so evident in the 1950s and 1960s. Opening the 1934 Berlin Automobile Show, Hitler had stated that:

As long as the automobile remains a means of transport for especially privileged circles, it is with a bitter feeling that millions of obedient, diligent, and able fellows, who in many cases live lives of limited opportunities, know themselves to be denied a mode of transportation that would open for them, especially on Sundays and holidays, a source of unknown, joyous happiness …
The class-emphasizing and therefore socially divisive character that has been attached to the automobile must be removed; the car must not remain an object of luxury but must become an object of use!
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Such bold proclamations, however, ran up against the realities of the 1930s. Hitler’s words were belied by the fact that economic stringency and war mobilization prevented a single Volkswagen being sold to the public in the Third Reich. But once the war ended, the popular tolerance of rationing and austerity quickly vanished. Even when people recognized the fairness of rationing, they increasingly demanded its ending and the reinstatement of the market. From the early 1950s onwards, as wartime controls were cast aside, the outlines of the new shopping culture became clearer.

The production of desires preceded the purchase of goods. Well before more than a small minority were able to afford the new consumer durables and other wonders, advertising agencies and retailers had revolutionized their practices. In the words of the Burton’s Manager’s Guide for 1953: “Create desire to possess strong enough to overcome a natural antipathy to parting with money and you will make sale after sale.” Traditional salesmanship was transformed. Women, far from being ignored, were spotlighted as the “motor” of “modern life”: advertisers saw them in the 1950s chiefly in domestic terms and concentrated on “hitting the housewife.” “You can’t do any longer without electricity, espresso and Cola,” ran one German ad. “But you can do without cooking! All these wonders are now yours, dear housewife! What your grandmother and mother had to suffer through by hand, a tiny miracle machine will handle in seconds … Tell your husband to dig a little deeper into his pocket!” “I put the woman in first place,” commented an Italian businessman, “then the dog, the horse and finally the man.” By the early sixties, advertisers were starting to distinguish the “little Mums” from the “timid mouse-burger” and the sexy, single “Cosmo girl” whom models popularized with the new “leaping about” style.
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Old-fashioned snob appeal, which in a way acknowledged the permanence of status and class differences, was now being challenged by advertising which made a purchaser believe it was possible to move a
few steps up the social ladder. “American” advertising methods targeted the “new status hunters … the C2 commuters who drink lager instead of beer, smoke tipped instead of plain, eat plain chocolate instead of milk, and the young AB executives who’ve just acquired an open-plan and garden in the suburbs.” In 1937 only four American agencies had branches outside the USA; by 1960 there were thirty-six, with over 280 offices.
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Their techniques of classifying potential buyers rested on a foundation of new disciplines—market research, testing and applied psychology—dissected in Georges Perec’s novel of sixties consumerism,
Les Choses
(Things). “Psychology, the science which we thought was to be the handmaiden of education,” wrote one alarmed observer, “has been prostituted to serve the ends of salesmanship, the panjandrum of the inflated economy.” Such voices were crying in the wilderness: advertising as a profession lost the disreputable associations it had had before the war and became an exciting and even glamorous occupation.
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