Ill Fares the Land by Tony Judt Read Free Book Online Page B

Britain’s Labourites doted on the idea of public ownership. If the state represented the working population, then surely a state-owned operation was henceforth in the hands and at the disposal of the workers? Whether or not this was true in practice—the history of British Steel suggests that the state can be just as incompetent and inefficient as the worst private entrepreneur—it diverted attention from any sort of planning at all, with detrimental consequences in decades to come. At the other extreme, Communist planning—which amounted to little more than the establishment of fictional targets to be met by fictional output data—would in due course discredit the whole exercise.
    In continental Europe, centralized administrations had traditionally played a more active role in the provision of social services and continued to do so on a greatly expanded scale. The market, it was widely held, was inadequate to the task of defining collective ends: the state would have to step in and fill the breach. Even in the USA, where the state—the “Administration”—was always wary of overstepping traditional bounds, everything from the GI Bill to the scientific education of the coming generation was initiated and paid for from Washington.
    Here, too, it was simply assumed that there were public goods and goals for which the market was just not suited. In the words of T.H. Marshall, a leading commentator on the British welfare state, the whole point of ‘welfare’ is to “supersede the market by taking goods and services out of it, or in some way to control and modify its operations so as to produce a result it could not have produced itself.” 7
    Even in West Germany, where there was an understandable reluctance to pursue Nazi-style centralized controls, ‘social market theorists’ compromised. They insisted that the free market was compatible with social goals and welfare legislation: it would actually function best if encouraged to perform with these objectives in mind. Hence the legislation, much of it still in force, requiring banks and public companies to take the long view, listen to the interests of their employees and maintain an awareness of the social consequences of their business even while pursuing profits.
    That the state might exceed its remit and damage the market by distorting its operations was not taken very seriously in these years. From the institution of an International Monetary Fund and a World Bank (later a World Trade Organization as well) to international clearing houses, currency controls, wage restrictions and indicative price limits, the emphasis lay rather in the need to compensate for the palpable shortcomings of markets.
    For the same reason, high taxation was not regarded in these years as an affront. On the contrary, steep rates of progressive income tax were seen as a consensual device to take excess resources away from the privileged and the useless and place them at the disposal of those who needed them most or could use them best. This too was not a new idea. The income tax had started to bite in most European countries well before the First World War, and had continued to increase between the wars in many places. All the same, as recently as 1925, most middle class families could still afford one, two or even more servants—often in residence.
    By 1950, however, only the aristocracy and the nouveaux riches could hope to maintain such a household: between taxes, inheritance duties and a steady increase in jobs and wages available to the working population, the labor pool of impoverished and subservient domestic employees had all but dried up. Thanks to universal welfare provision, the one benefit of long-term domestic service—the presumptive generosity of the employer for his sick, aged or otherwise indisposed servant—was now redundant.
    In the general population there was a widespread belief that a moderate redistribution of wealth, eliminating extremes of rich and poor, was