Dr. Carson, Professor of History at Grove City College, Pennsylvania, will be remembered for his earlier FREEMAN series, The Fateful Tom, The American Tradition, and The Flight from Reality.
Just when government intervention in England had been introduced on a scale sufficient to mark the turn from the liberal state to the interventionist welfare state is problematical and conjectural. There never was a time when there was not some government intervention, of course. Probably the high tide of liberty generally was from the late 1840′s to the late 1860′s, though the tendency had been in that direction for more than a century and a half preceding the mid-nineteenth century. Some measures smacking of the new intervention were passed in the 1830′s and 1840′s, even before the repeal of the last of the major mercantilist measures. And there should be no doubt that intervention gained headway once more from the 1860′s onward.
Writing in 1884, Herbert Spencer perceived already the oppressive character of the trend:
Dictatorial measures, rapidly multiplied, have tended continually to narrow the liberties of individuals; and have done this in a double way. Regulations have been made in yearly-growing numbers, restraining the citizen in directions where his actions were previously unchecked, and compelling actions which previously he might perform or not as he liked; and at the same time heavier public burdens, chiefly local, have further restricted his freedom, by lessening that portion of his earnings which he can spend as he pleases, and augmenting the portion taken from him to be spent as public agents please.1
Spencer gives such examples as the following: an act passed in 1860 providing for the inspection of gas works, establishing quality controls and controlling prices; an act of 1863 requiring compulsory vaccination in Scotland and Ireland; an act of 1866 regulating cattle sheds and allowing local authorities power to inspect sanitary conditions; the establishment in 1869 of a state telegraph system; an act of 1873 requiring merchant vessels to show the draught of the boat by a scale and making it necessary for ships to carry certain life-saving equipment. "Again, there is the Act which… forbids the payment of wages to workmen at or within public-houses; there is another Factory and Workshops Act, commanding inspection of white lead works… and of bake houses, regulating times of employment in both, and prescribing in detail some constructions for the last, which are to be kept in a condition satisfactory to the inspectors."²
On the other hand, one historian holds that the fabric of English liberty had hardly been rent as late as 1914:
Until August 1914 a sensible, law_ abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman. He could live where he liked and as he liked. He had no official number or identity card. He could travel abroad or leave his country for ever without a passport or any sort of official permission. He could exchange his money for any other currency without restriction or limit. He could buy goods from any country in the world on the same terms as he bought goods at home…. An Englishman could enlist, if he chose, in the regular army, the navy, or the territorials. He could also ignore, if he chose, the demands of national defense. Substantial householders were occasionally called on for jury service. Otherwise, only those helped the state who wished to do so. The Englishman paid taxes on a modest scale….
Even so, he notes that the "tendency towards more state action was increasing."
The Turning Point
Actually, though, most historians are inclined to fix the date of the turning point toward government intervention and welfare state in the year 1906. Better still, that year may be taken as the consolidation of the turning, for the turn to a new direction had been building for a goodly number of years. Intervention had been increasing; both major parties had come to champion various sorts of intervention; the thrust to socialism was making an ever stronger impact. Within the next 15 years following 1906 major changes would be made—by legislative acts, within the constitution, by the concentration of power, and changes within party strength—which would set England firmly on its road toward socialism.
Nineteen hundred six was the signal year because of the results of the general election which was held. The Liberals came to power with 377 members in the House of Commons to only 157 for the Conservatives. In itself, the return of the Liberals to power would hardly have been remarkable, for they had many times controlled the government in the nineteenth century. But they were not the Liberals that had once held power. One historian described the change in this way: "Nineteenth-century liberalism… did not win in 1906. In domestic affairs the real significance of the election is in its impetus to social democracy: the rising demand for better standards of living for the workingmen, for greater equality of opportunity, for limitations of economic privilege and for security against sickness, unemployment and old age."4 Reformist ideas had made deep inroads into this old party. Of great importance, too, 53 Labour Party men were elected to the House, the first time that party had any representation to speak of. Moreover, their victory and subsequent activity indicates the way the Liberals were moving.
In 1903, Liberal and Labour representatives had worked out an agreement to concert their efforts against the common Conservative enemy.5 In payment for this, for the next several years Labour members usually voted with the Liberals. In addition, as the result of the election of 1906 there were 83 Irish Nationalists in the House. "The Liberals had thus a majority of 84 over all the other parties combined, and on the natural assumption that they would for most purposes be supported by the Labour men and the Nationalists they could expect a majority of something like 400. There had never been anything like it before…."6
There followed a spate of legislation which began to turn England into a welfare state. In 1906, a Workmen’s Compensation Act was passed, greatly extending the coverage of an earlier act. An Education Act was passed which provided for the provision of meals for needy school children. While the act only permitted such action, it did acknowledge the principle of government responsibility, a considerable breakthrough.7 The Fabians had, of course, advanced the idea for such a measure.
Privileges to Unions; Social Security Measures
Of somewhat different character—though generally reckoned to be of greater significance—was the passage of the Trade Disputes Act. This legislation was passed to alter the effects of the Taff Vale Decision made by the House of Lords in 1901. The Lords had held that a union was financially responsible for damages it had done by a strike against a railroad. The Liberal ministry introduced a measure in 1906 to deal with the matter. However, it was unsatisfactory to Labour members, and one of them submitted a simple measure which was then passed. It provided that labor unions were not financially responsible for damage occurring during strikes. It also authorized peaceful picketing, or, in effect, trespass.8
Further legislation was passed in 1908-1909 taking England toward the welfare state. Of considerable importance as a step was the Old Age Pensions Act. This act provided that everyone, with a few exceptions, who had an annual income of less than 21 pounds would receive a pension of five shillings per week at the age of seventy. Protective legislation was passed for workers in the coal mines, limiting the hours of work for adult male workers to 8 hours per day. Earlier legislation had regulated such employment for women and children, but this was the first for adult males. The Labor Exchange Act provided for employment offices to be set up over the country. Another act set up Trade Boards for certain of the so-called "sweated" industries. These gained the power to establish minimum wages for certain trades. This "established the revolutionary principle of fixing by law ‘a decent wage’ in industries not protected by unions."
The National Insurance Act of 1911 was another major step. This was compulsory contributory health insurance for a large portion of the populace of England. It applied mainly to people remuneratively employed, and covered such things as medical treatment, hospital care, and compensation during incapacity. There was also attached to this act a provision for unemployment compensation.¹º
But before the passage of this last act, important constitutional changes had been initiated from the House of Commons. The House of Lords had been reduced to a virtual nonentity in the Parliament. What was involved was the destruction of the centuries old balance of power in the English government. This action was preceded, however, by a long-term decline in the powers of the monarch. Before telling the story of the assault upon the House of Lords, then, it is in order to survey the power situation and call attention to the decline of monarchical powers.
Disturbing the Balance
Since the late seventeenth century, England had a precariously balanced system of power dispositions. The executive power was vested in the monarch, though it came increasingly to be exercised through Parliament. The legislative authority belonged to Parliament, with much of the initiative located in the House of Commons because that body only could originate money bills. Even so, the negative power of the Lords was great, for that body could not only amend and veto bills but was also the highest court in the land. The independence of the courts was fully established in the latter part of the eighteenth century.
The powers of the constitutionally limited monarch reached their peak under George III (1760-1820). That stubborn ruler was able to bend Parliament to his will in the latter part of the eighteenth century by various expedients, not least of which was the buying of members by astute dispensation of privileges and incomes. Neither of the two dissolute monarchs who followed him for brief reigns—George IV (1820-1830) nor William IV (1830-1837)—were such as would build the power of the office or endear the people to the institution. Queen Victoria (1837-1901) did re-establish monarchy in the affections of the people and stamp the age with her name, but the power continued to slip away. By a series of acts the franchise was extended to more and more of the populace, and the democratic ethos that came increasingly to prevail made it appear unseemly for hereditary authority to be exercised. One historian notes that between "1874 and 1914, while the person of the monarch may even have gained importance as a figure-head, it steadily lost power as a factor in government."¹¹
Twisting the Lion’s Tail
Just how low monarchy had sunk can be illustrated by the following occurrence. The Liberals thought that it might be necessary to have the King appoint hundreds of new Lords in order to get a bill to reduce their power through that House. In any case, Prime Minister Asquith wanted to be able to use this possibility as a threat, so he approached the new king, George V, about the matter in secret in 1910. The exchange went something like this. Mr. Asquith asked:
If he took the responsibility of advising another election and if he then retained his majority, would the King agree to create peers?
The King… asked if that was the advice which would have been tendered to his father. "Yes, sir," said Mr. Asquith, "and your father would have consented." So George V agreed that there seemed to be no alternative.12
The natural affinity of the monarch was with the House of Lords. It was largely an hereditary institution, and its members at one time or another resulted from his appointment. Yet so tenuous had the position become that the King dare not resist the request of the leader of the Commons, though that request be for an action that would lead to the diminution of the powers of the Lords.
The House of Lords
By the early twentieth century, then, there remained only one major check on the power of Commons—the ancient House of Lords. To say that the Constitution checked Commons was little more than to say that the Lords checked them, for without the Lords to interpret that tradition, the Constitution would become what Commons would make of it. Undoubtedly, too, power had been gravitating toward the Commons for a long time. Lord Salisbury resigned as Prime Minister in 1902, and he was the last Peer to head a government."13
However unideal some of its members might be as individuals, the House of Lords was in many respects an ideal body to check the Commons. It did not depend upon the populace for selection. On the other hand, it posed virtually no threat to the liberties of Englishmen, for it was unlikely to originate any legislation. But because of its independence it could serve to limit government to protect the traditional liberties of Englishmen.
There is considerable evidence that many of the Lords were intent on doing just that in the early twentieth century. Their overwhelming victory in 1906 had placed unprecedented power in the hands of Liberals in Commons. The opposition party was reduced to an ineffectual minority. There was, however, a potential counterbalance to overweening partisan action in the Lords. Though the Lords were not technically members of a political party, in their inclinations they lined up this way, according to one tabulation: 355 Conservatives, 88 Liberals, 124 Liberal Unionists (who had lately been inclined to vote with Conservatives).14
While the Lords did not prevent some reform measures from passing, they did tend to place restraints on the reformers. The Liberals in Commons found a number of their measures rejected by the Lords. An Education Bill was greatly altered in the hereditary House. That body rejected a Plural Voting Bill, and vetoed, in effect, a Licensing Bill aimed at curtailing the number of Public Houses.15 And though historians have not generally made much of the fact in this context, the House of Lords ruled in 1909 that labor unions could not use compulsorily collected dues for political purposes.
The Budget Bill of 1909
The event which precipitated the crisis, however, was the Budget Bill of 1909. There are indications that the Liberals in Commons were ready to reduce the power of the Lords almost from the moment they came to power, but the budget affair gave them the occasion. Some of the provisions of the budget were startling enough.
Its unusual features were these:
(1) sharp increases in death duties (inheritance taxes); for example, estates of £1,000,000 and over were to be taxed at about 25 per cent;
(2) increases in income tax schedules which continued the distinction between earned and unearned income first made in 1907; on incomes of £5,000 or more there was to be an additional super-tax, an innovation;
(3) land taxes, of which the most significant was a 20 per cent tax on the unearned increment in value when land changed hands;
(4) higher levies on tobacco and spirits.¹6
The House of Lords rejected the budget by a vote of 350 against to 75 for.
This budget reads as if it might have been the result of a collaboration between Karl Marx of the time of The Communist Manifesto and Henry George of the somewhat later Progress and Poverty, with bemused Fabians peering over their shoulder. Actually, of course, it was the work of David Lloyd George. Lloyd George played such a significant role in these years in the centralization of power in the Commons, in its concentration in the Prime Minister, and in the demise of the Liberal Party that he deserves a little closer look. In 1909, he was a member of the House, a Liberal, and Chancellor of the Exchequer in the government of Asquith. He was of obscure Welsh parentage, and came to the fore in the late 1890′s as a Welsh nationalist, radical, and outspoken critic of the Conservatives.
Lloyd George was indeed influenced by Henry George,” had obviously adopted some of his central terminology, and would off and on devote himself to schemes for land reform for the rest of his political career. He was a socialist, too, in all but name. His budget was a "war budget," he said, a budget for a war on poverty; as a result of which he hoped that poverty would become "as remote to the people of this country as the wolves which once infested its forests."¹8 One writer describes him in this way:
If his convictions had been otherwise than emotional, he would have been a Socialist by this time…. He was less a Liberal than a Welshman on the loose. He wanted the poor to inherit the earth, particularly if it was the earth of rich English landlords….19
Whether chosen for the spot or not, he was to spearhead the movement to destroy the older British order and set the stage for full-fledged socialism.
Parliament Act of 1911
Following the rejection of the budget in 1909, the movement to reduce the powers of the Lords accelerated. It did not reach its fruition, however, until two elections had been held, and a new monarch had come to the throne. The House of Lords was shorn of most of its powers by the Parliament Act of 1911. It provided that, in the case of money bills, if they are not passed without amendment by the upper house within one month, they become law without the assent of that body. In the case of most other bills, if they are passed by the House of Commons once in each of three successive sessions, they can become law if the Lords refuse their assent.²º The Lords could now delay legislation temporarily, but they could no longer prevent its passage. All governmental power was now centered in the House of Commons. The forms by which power had been balanced were outwardly preserved in the institutions of monarchy and an upper house, but the content was gone from them.
Lloyd George’s War Cabinet
The concentration of executive power in the hands of the Prime Minister occurred during World War I. The man who did it was, once again, David Lloyd George. H. H. Asquith had formed a coalition government in 1915, with the Liberals preponderating in it. But he gave way in 1916 to new leadership headed by Lloyd George. The latter proceeded as quickly as possible to concentrate effective power in his own hands. One historian described the development this way: "Lloyd George’s accession to power in December 1916 was more than a change of government. It was a revolution British-style. The party magnates and the whips had been defied. The backbenchers and the newspapers combined in a sort of unconscious plebiscite and made Lloyd George dictator for the duration of the war."21
The traditional cabinet was subordinated, its members losing most of their historic independence. Most of the governmental functions were directed by a "war cabinet" made up of five members who were chosen primarily to execute the will of Lloyd George. "Lloyd George’s war cabinet was a committee of public safety, exercising supreme command under his direction…. The holders of the other great historic offices merely received their marching orders."22
In effect, the government took over the direction of many facets of the lives of Englishmen during World War I. Military conscription was instituted; the merchant marine was appropriated; the mines were taken over. The whole paraphernalia of controls, with which peoples have become familiar in wartime, were introduced: price controls, rent controls, rationing, allocation of materials, manipulation of the money supply, confiscatory taxation, and so on. Some British historians call this development "war socialism." The phrase is apt, for socialism is the generic term to describe the large role that government assumed in the lives of the people during the war.
It is a commonplace of historical generalization that this development was born of wartime expediency. This judgment should not be casually accepted. Undoubtedly, socialists have discovered grist for their mills in the methods employed during wars. But have they not also helped to shape those methods? There is no doubt that England was being bent toward socialism before the war came. Lloyd George was full of plans for accomplishing what should certainly be called socialistic, at the least. Given the occasion of the war, he would think in such terms to deal with it. So would many another.
An inkling of the no expedient character of much compulsion may be gained from the matter of military conscription. A Military Service Act was passed in January 1916 introducing such conscription. Yet one historian points out: "The army had more men than it could equip, and voluntary recruitment would more than fill the gap, at any rate until the end of 1916. Auckland Geddes, who was in the best position to know, later pronounced this verdict: ‘The imposition of military conscription added little if anything to the effective sum of our war efforts.’ "23 David Lloyd George wanted it, and much of the country had apparently come to favor such compulsion.
The Decline of Liberals
One other major development needs to be told here: the decline of the Liberal Party and the rise of the Labour Party. The election of 1922 foreshadowed the downfall of the Liberals. The Conservatives won with 347 members elected; the Labourites came in second with 142; the Liberals were a poor third with 117, and these were divided about equally between followers of Asquith and Lloyd George. The Liberals gained a few members in the election of 1923, but they were still the third party. A new election in 1924 returned only 42 Liberals, and a one-time major party had fallen from the national councils.
It can be argued that the Liberal Party was on the way out, in any case. The party had been increasingly abandoning the historic principles of liberalism. In the nineteenth century, the Liberals had championed free trade and generally worked for the removal of governmental restrictions by which liberty might be extended. By the twentieth century, they were turning more and more to reforms which restricted liberty. As ameliorative reformers, they were doing little more and not much different from what the Conservatives would do. The Labourites, on the other hand, preempted the position at the forefront of the movement for more radical change.
Even so, David Lloyd George played a major role in the division and destruction of his party. He undermined its leadership at the outset of World War I. He formed a coalition government which relied mainly on the Conservative opposition. He gave short shrift to what remained of the historic liberal principles in the conduct of the war effort. In 1918, he fostered an election which was aimed at continuing his personal leadership of a coalition rather than the victory of his party, and he succeeded. The Liberal Party was then divided between followers of Asquith and himself. Probably, Lloyd George did not intend these results, but his actions contributed much to them.
There was no longer a major party in England devoted to the protection and extension of liberty. The Conservatives were trimmers in such matters, as they had ever been.
The Rise of Labour
The rise of the Labour Party parallels that of the decline of the Liberal Party. One is reminded of the limerick of the lady and the tiger. Labour had become a factor in English politics largely by the tacit aid of Liberals. When the Liberal majority dwindled in 1910, the Liberals governed with the support of Labour. The latter had provided support for reducing the Lords. During the war years, Labour Party leaders had served in the coalition government, most prominently under David Lloyd George. (It is interesting to note, once again, the role of Lloyd George. He wooed Labour members astutely to bring them into the government. "He promised state control of the mines and of shipping, and the introduction of an effective system of food rationing."²4 "War socialism" was perhaps politically "expedient." The Liberal Lady had ridden the Labour Tiger for a number of years. But at the end of the ride, the Lady was inside.
Even while it was being ridden, however, the Labour Party could and did occasionally get a quid pro quo. Most notably did it do so in the Trade Union Act of 1913. A few years before, as has been noted, a decision was rendered making it illegal for union funds to be used for political purposes. These funds were, of course, the potential life blood of the party. The Trade Union Act permitted the union funds to be used for party purposes. It required that they be kept separate from other funds so that union members who did not wish to contribute to the political fund could refuse to do so by making a written statement to that effect. Obviously, they would have been much more effectively deterred in gaining such funds if union members had to sign an authorization for them to be so used. But the Labour Party overrode such objections in the Commons.25 Thereafter, the Labour Party had an assured source of income.
Infiltration of the Unions by Fabian Socialism
In the early years, the Labour Party was not clearly a socialist party. A considerable portion of the men who represented it in Parliament were trade union men advancing what they conceived to be the interest of trade unions. The party drew its members from the trade unions and from socialist societies, the former providing most of the numbers. It was transformed into a thoroughgoing socialist party at the end of World War I, at about the time that it separated clearly from the Liberals.
A new constitution for the party was adopted in 1918, and a general statement of policy soon followed it. These were the work of the Fabian Sidney Webb primarily who, according to his wife, had become "the intellectual leader of the Labour Party" by this time.²6 The constitution opened the way for those not associated with the societies or trade union members to become members of the party. More importantly, it committed the party to socialism. It read, in part:
To secure for the producers by hand and brain the full fruits of their industry, and the most equitable distribution thereof that may be possible, upon the basis of the common ownership of the means of production and the best obtainable system of popular administration and control of each industry or service.27
Shortly thereafter, a statement of Labour’s aims was set forth in Labour and the New Social Order, the work again of Sidney Webb.
It called for the establishment of a general national minimum, for the political control of industry, for heavy taxes, and a more general appropriation of private wealth for the general populace. One writer describes its importance in this way:
Labour and the New Social Order was a significant document. Its socialist objective clearly distinguished the new party from its older rivals…. The Fabian gradualism of the program and the reliance upon parliamentary democracy enabled Labour to win support where its new Communist competitor failed dismally. It outlined the policies to which Labour has consistently adhered.28
In 1924, Ramsay MacDonald, a Labourite, became Prime Minister of England. Socialism was not yet in power—his ministry lasted only months, but that one of its spokesmen had risen so high was surely a portent of things to come.
Within fifteen years or so, great changes had occurred in England. In 1906, England still afforded a good example of the liberal state with limited government, protections of private property, and extensive liberties for the inhabitants. After 1906, England made lengthy strides toward the welfare state, had its constitution altered so that power was centered in the House of Commons, experienced "war socialism" and the concentration of power in the hands of the Prime Minister, witnessed the decline of the Liberal Party and the rise of the Labour Party, and the transformation of the latter party into a socialist one. Nor would the effects of all this be long in making themselves felt.
The next article of this series will discuss "The Decline of England’
The Flight from Reality, the series by Dr. Carson which first appeared in THE FREEMAN (October 1964 through November 1966), will soon be available in book form. Order from: The Foundation for Economic Education, Inc. Irvington-on-Hudson, New York 10533
1 Herbert Spencer, The Man Versus the State, Albert Jay Nock, intro. (Caldwell, Idaho: Caxton, 1940), p. xii.
2 Ibid., pp. 10-14.
3 A. J. P. Taylor, English History: 1914-1945 (New York: Oxford University Press, 1965), p. 1.
4 Alfred E. Havighurst, Twentieth Century Britain (New York: Harper and Row, 1962, 2nd ed.), p. 85.
5 Ibid., p. 83. ²5
6 D. C. Somervell, British Politics Since 1900 (London: Andrew Dakens, 1953, rev. ed.), p. 55.
7 Carl F. Brand, The British Labor Party (Stanford: Stanford University Press, 1964), pp. 20-21.
8 Stephen B. Baxter, ed., Basic Documents of English History (Boston: Houghton Mifflin, 1968), pp. 250-51.
9 Havighurst, op cit., pp. 99-100.
10 See Baxter, op. cit., pp. 257-58.
11 R. C. K. Ensor, England: 1870-1914 (Oxford: Oxford University Press, 1936), p. 31.agreed that there seemed to be no alternative.¹²
12 George Dangerfield, The Strange Death of Liberal England (New York: Capricorn Books, 1961), p. 40.
13 Havighurst, op. cit., p. 69.
14 p. 94.
15 See Dangerfield, op. cit., pp. 14-15.
16 Havighurst, op. cit., p. 102.
17 See Carlton J. H. Hayes, Contemporary Europe Since 1870 (New York: Macmillan, 1958, rev. ed.), p. 319.
18 Quoted in Encyclopaedia Britannica, XIV (1955), 251.
¹9 Dangerfield, op. cit., pp. 18-19.
21 Taylor, op. cit., p. 73.
22 Ibid., pp. 74-75.
23 Ibid., p. 53.
24 Henry Pelling, A Short History of the Labour Party (London: Macmillan, 1961), p. 39.
26 Ibid., p. 42.
²7 Quoted in ibid., p. 44.
²8 Brand, op. cit., pp. 56-57.