Whilst re-reading Straw Dogs by John Gray, I came across this remark on the post-war consensus:
The welfare state was a by-product of the Second World War. The National Health Service began in the Blitz, full employment in conscription.
Look back to the nineteenth century, to the time between the end of the Napoleonic Wars and the outbreak of the First World War. That great era of peace in Europe was also a period of great inequality. The majority of the population lived from hand to mouth, and only the very rich were safe from sudden poverty.
In affluent, high-tech economies, the masses are superfluous – even as cannon fodder. Wars are no longer fought by conscript armies but by computers – and in the collapsed states that litter much of the world, by the ragged irregular armies of the poor. With this mutation of war, the pressure to maintain social cohesion is relaxed. The wealthy can pass their lives without contact with the rest of society. So long as they do not pose a threat to the rich, the poor can be left to their own devices.
Social democracy has been replaced by an oligarchy of the rich as part of the price of peace.
It is worth reminding ourselves that William Beveridge originally conceived of the British welfare state as a system to “keep men fit for service”.
I have suspected for a long time now that the post-war consensus was an historical one-off. A confluence of global and national factors enabled the creation of a relatively peaceful and relatively prosperous world, at least in the western democracies. Adam Posen argues that we are returning to the Victorian ‘old normal’ of a highly unequal, globalised, and multi-polar world. The world founded on what Cosma Shalizi calls the “useful work of mid-century optimism and intelligence” in monetary policy has collapsed, and been replaced with a world of floating exchange rates and neoliberal trade policy; a policy which benefits the global 1%, and results in stagnant or falling living standards for the majority – at least in the western democracies.
But of course, humanity as a whole has been made better off. The new working classes of China and India are massively wealthier than they were during the so-called ‘golden age’ of capitalism. Essentially, the last thirty years has seen a transfer of wealth from the middle and working classes of the developed world up to the global elite, and down to the Chinese and Indians. What I don’t understand is whether this transition could have been handled better; could it have been possible for politicians to ‘ease the fall’ as jobs went overseas? Is it true that many people in ‘post industrial’ countries are simply surplus to requirements, as Gray implies?
Chris Dillow is fond of pointing out that social democracy faces many inherent limitations in what it can accomplish, because it attempts to reach an accord with a capitalist system that is inherently hostile to the interests of most working people. I don’t know if Chris is right; after all, what was once achieved may again be achievable, but I agree that there are many systemic reasons to be sceptical of social democracy.