Welfarism and Social Nationalism
Gwydion M. Williams
[A different view of why Europe had Fascism and Nazism between the two World Wars.]
A year ago John Smith instigated the setting up of The Commission for Social Justice under the chairmanship of Sir Gordon Borrie. Its main purpose for Mr. Smith was to produce a basis on which to establish a social policy for the Labour Party. It is due to produce a final report in about a year’s time. This article is a contribution to the debate, such as it is, generated by the Commission. Further information on the Commission and its interim report can be found in the Information section of this magazine.
The New Right claim that ‘welfarism’ has failed. They claim this at a time when their own system is visibly coming apart at the seams. They claim this after having pushed the world into its worst economic crisis since the 1930s.
It is time to reassert the merits of the New Deal / Welfare State system. It has been the most stable and successful of all of the numerous social reforms that we have seen during the 20th century. The 1960s and 1970s showed up some of the imperfections of the system. But the 1980s have clearly demonstrated that the alternatives can be far worse. Unjust, socially divisive, and not even particularly successful at wealth creation.
When Kenneth Clarke as Home Secretary proposed to ‘reform’ the police service, one police spokesman described his approach as ‘don’t fix it – break it’. This has been true of .most Tory measures. Any idiot can disrupt an imperfect system on the pretext of making it better. The skill lies in genuinely making it better.
No private enterprise would employ a manager who simply ripped apart existing structures without actually improving them. That sort of person would be out on his ear after one or two bungles. That’s how the capitalists see it when it is their own wealth that is directly at stake. When it is a matter of transferring public wealth to the rich and to the private sector, it is not surprising that capitalists take a more tolerant attitude. Not surprising that a similar tolerance is shown in newspapers and other media that are owned by rich people and which need advertising revenue to survive. But things are now so bad that even some business people are realising that the Tories do net actually know what they are doing.
There can be no going back to the 1970s. History does not work like that. But Thatcherism is not a serious alternative. Thatcherism blew up after less than a decade of power. The crash of 1987 was the decisive down-tum, whatever the myths put about by John Major’s ‘bastards’. Everything since has been an unwinding and revealing of the folly of the years 1979 to 1987. So apart from an updated version of the New Deal/ Welfare system, what else is there?
[This was before Tony Blair gave Thatcherism an enormous boost by treating it as true with the creation of New Labour.]
The years just before 1914 are sometimes cited as a golden age. Possibly it was a golden age, if you were white and middle class and lived in a prosperous nation. A golden age, if you did not catch TB or polio or any of a dozen similar diseases that are now quite easy to cure. A golden age, if you were not greatly disturbed by the misery and sufferings of other people. A golden age, if you were female and content with a life confined to your own house, probably with an arranged marriage; or if you were male and fairly conventional in your sexual desires. (Though it was also something of a golden age for flagellators.)
Life for the bulk of the population in the ‘prosperous’ Britain of the 1900s is well described in books like Jack London’s The People of the Abyss or Robert Tresell’s The Ragged Trousered Philanthropists. In that epoch, most people were short and unhealthy – too unhealthy even for the army. Lack of acceptable army recruits was one factor that prompted the privileged to undertake some small measures of social reform. A fairly basic welfare state was created in the 1900s. A long way below what we have now, even after Thatcher. But much better than anything that Britain had had before.
In any case, that epoch destroyed itself in the Great War. Either by incompetence or malice, Britain got itself in .a war with Germany, Britain’s traditional ally in the wars of the eighteenth and nineteenth centuries. Foreign office ingenuity had somehow locked us into a united front with our former foes France and Russia, over issues where Britain could quite easily have stood neutral. Millions of young lives were wasted in a war that settled nothing. It was criminal folly for Britain to refuse Germany’s offer of a return to prewar borders in the first few months of the war, after the conflict had frozen into a lethal stalemate.
[Since then, I have been persuaded it was malice towards Germany, which was set to overtake Britain economically. See Pat Walsh’s The British Establishment Planned World War One, for the basics of something he has written a lot about.]
This mad behaviour by the ‘Powers That Be’ led to dramatic new political experiments, during and after the war. Not only Bolshevism in Russia, but also Mussolini’s Fascism in Italy, and Pilsudski’ s radical nationalism in Poland.
Please note that racism and anti-semitism had little to do with the birth of Fascism. Mussolini’s followers had nothing against Jews – not until much later, when they came under strong Nazi influence. Pilsudski’ s radical nationalism did have an anti-semitic tinge to it. Indeed, many Polish Jews sought refuge in Germany in the days before Hitler’s rise to power. And yet it was Pilsudski’s heirs who stood up heroically to Nazism. They were the root cause of Hitler’s downfall, albeit at great cost to themselves.
These three movements – Russian Bolshevism, Italian Fascism and Polish radical nationalism – form part of a wider pattern. A pattern that is best called Social Nationalism. Nothing like it had existed before. Bismarck had combined nationalism with a concern for worker’s welfare, but with the traditional Junker ruling class very much in control. Likewise Napoleon III had aped the forms established by Napoleon Bonaparte. In Russia, Italy and Poland, new political systems were established by new men.
This pattern has been repeated in many other countries since the 1920s. Most third world nationalism derives from one or other brand of Social Nationalism. Taiwan, Korea and Thailand, and also India, as well as places like Syria and Iraq. Something similar to Pilsudski’ s radical nationalism is now to be seen in China, even though it still calls itself Communist. And it may well be the end-point in the evolution of many of the former republics of the USSR.
It was not the only possible pattern, however. In the 1920s, the old order of Europe partly reasserted itself.. The Communists, the radical nationalists and the Fascists were marginal for as long as the old order was more or less functional. Ordinary people showed an astonishing patience. They kept going ‘as usual’ in the face of gross incompetence by their governments and appalling greed by the ruling classes,
It was the Wall Street Crash of 1929, and the subsequent Great Slump, that caused the second great wave of Social Nationalism in Europe. Keynes told everyone who would listen that the slump could quite easily be cured wi1th.in the exiting political framework. The world’s economy bad been thrown out of balance by crazy speculation, and only needed a firm lead from the government to right itself. But most governments martyred themselves to false economic doctrines.
During the 1930s, the only successful economies were those that ignored the market and used state power to organise everything. These were the years when Russia industrialised itself. And Adolf Hitler applied Keynesian methods, employing people to build new roads etc. and did indeed cure many of Germany’s economic ills. He bad no strong views on economics, but had a strong need to make himself popular. So be listened to the only people who could offer him a quick fix for unemployment. He began his career as a ‘miracle worker’ by a pure fluke. Any other government could have done exactly the same thing as Hitler did, without all of the dictatorship and race-hatred that went with it.
This indeed was exactly what Roosevelt’s New Deal was about. He wanted a solution, and ignored those who told him that the population must be martyred to satisfy the market. Roosevelt showed that it could all be done within the democratic framework. He did indeed acquire more power than any US president before or since – at the time of bis death be was serving an unprecedented 4th term. But the mechanisms. of democracy remained in place.
No such wisdom. was found in Britain at that time. There was the quasi-dictatorship of the ‘National Government’, an unprecedented combination of Tory, Liberal and part of the Labour Party under Ramsey MacDonald. But the Ramsey MacDonald government was a flop and a disaster. It tried to cure the slump by reducing government expenditure, which was pretty much like pouring water over a drowning man. Things went from bad to worse
Elsewhere in Europe something similar happened – democracies collapsing as conventional governments railed to meet the most elementary needs of their people. As far as anyone could have told at the time, the future belonged to one or other variety of Social Nationalism.
The man who upset all this was Adolf Hitler. By overreaching, be wrecked both Fascism and Europe. Gambling on creating a vast Nazi empire, he lost and discredited Fascism in general, leaving the world divided between Russian Bolshevism and American New Dealism. Hitler was a gambler who was almost bound to take one risk too many. Fascism was almost the norm for Europe when he came to power in 1933, and very influential elsewhere in the world. Within a dozen years he had totally wrecked it as a serious political force. Other forms of Social Nationalism continue, but the Fascist element has been discredited.
In the post-war world, the time was ripe for some extension of the New Deal system to the rest of the world. The British Labour government encouraged this with the Marshall plan. And both Germany and Japan were thoroughly reorganised. British and American administrators were able to reorganise those societies with much more freedom than they could ever have bad at home. It is reasonable to conclude that this freedom bad a lot to do with subsequent German and Japanese success.
France is another interesting case. Gaullism was the last completely successful form of Social Nationalism. When he was swept to power in 1958, lots of people called him a fascist, despite his heroic record in the war against Nazism. In fact be was wise enough to leave the mechanisms of democracy in place, allowing normal multi-party politics to resume after bis departure. And at an economic level, his Social Nationalism worked spectacularly well. The Old Rightism of De Gaulle helped France to become a much richer nation than Britain – they were distinctly poorer than us in the 1950s. Old Rightism in its own time worked much better than the New Rightism of Thatcher and Reagan, neither of whom did anything to reverse the relative decline of their own nations
The big problem in the post-war world was the polarisation between Russia and America. America assumed that it was now ‘Number One’, but Russia was not at all inclined to accept this. Some sort of bust-up was almost inevitable. Even if it had not happened in Europe, China would have been cause enough. Even though Russia lacked the power to stop the Chinese Communists taking over, American public opinion was never likely to accept this. Nor did they understand that Chinese society needed a thorough shake-up of the sort that only the Chinese Communists were likely to deliver.
With the development of the Cold War, Stalin covertly devised an ingenious method of subverting the new system. Rather than frankly saying that it was their desire to overthrow and smash all possible rivals, Communists would repackage themselves as ‘super-reformists’, deliberately pushing left-wing politics beyond what was possible at any given time. This was begun in the UK, where Communism was relatively weak, with the publication of The British Road to Socialism. People suppose that Communist ‘reformism’ began with Khrushchev, but actually the “British Road” never changed very much from what had been approved in Stalin’s day. And at no time was it ever serious about reforms. Every actual and possible reform was subverted on the grounds that it was less than ideal. So that numerous chances for left-wing reform were missed, making something like Thatcherism inevitable in the long run.
Khrushchev, who· had. learned politics under Stalin, continued and extended the policy of sounding reformist without actually doing anything about it. Possibly in his own mind he was entirely sincere about reform, despite invading Hungary in 1956. It’s a fairly academic issue now, anyway. Even if the man was an absolute saint, the actual results of his actions was to mess up the left. And it was Khrushchev who began the move away from the planned economy, the move that finally killed off the USSR, since twenty years of Stalinism had intentionally destroyed all of the classes or strata that might have been capable of spontaneously generating capitalism. The only practical result of Khrushchev’ s policy was to restore credibility to the idea of the free market.
The threat of revolutionary communism had led the traditional ruling classes to accept reforms and a curb on market forces. Since the economy in the 1950s and 1960s was working far better than any free market system had ever worked, these gains seemed permanent. But then you had the odd spectacle of the leaders of the Communist Parties throughout the world suddenly falling in love with market forces. Without this unexpected gift from Moscow, characters like Hayek might have remained as scorned and obsolete in our time as Chesterton and Belloc were in theirs.
Chesterton and Belloc were actually more substantial thinkers than Hayek: The Road to Serfdom is a poor copy of Belloc’ s The Servile State. They could feel in tune with a worldwide substantial and popular Catholicism, whereas Hayek had to look back to the failed liberal Catholicism of Lord Acton. Lord Acton was the fellow who said “Power tends to corrupt and absolute power corrupts absolutely“. Like Pitt the Elder before him, who said “Unlimited power is apt to corrupt the minds of those who possess it“, Acton knew that not everyone is corrupted by power. Such a view would make for cynicism and inaction, rather than pointing out a danger. It is sad that the only remark by Acton that anyone remembers is usually misquoted as “Power corrupts”, as if it were unavoidable and not the fault of those who succumb. But Hayek is the only person I have ever come across who attributes the misquotation to Lord Acton himself. (Header to Chapter 10 of The Road to Serfdom.)
Given the mess the left made of things in the 1970s, the New Right needed no particular intellectual strength to come to power. They were backing the people who already had wealth, power, position and control over the media. They played on the greed and vanity of the mainstream – got them obsessed with small sums fiddled on social security by the poor, while thousands of millions were quietly shifted to the rich and out of the control of the society. But there was also a failure of left policies to gel in the 1970s. The Social Contract was the best way forward for socialism, particularly .if it had been combined with Workers’ Control. But the bulk of the left attacked it for the crime of being less than perfect And the core of this self-destructive behaviour was the Communism. Party, strong and well-organised and possessing great intellectual credibility.
The damage they did has set us back a generation and may set us back further. But at least they are now gone. And socialists ought to learn the lesson that societies can evolve in almost any direction. Any social movement that is going in more or less the right direction should be supported: you will never get perfection.
Social Nationalism is now breaking down, dissolving ra.to a world market. The economic benefits for ordinary people can be greater – though not necessarily, as the East Europeans are discovering. The East Europeans used to exchange second-rate goods with each other. They broke those links so as to get hold of first-rate goods from the world market – but now have nothing much to exchange for them. So all of those economies are for the moment getting poorer.
It is now too late for them to correct matters: hopefully the world market will pick up again and absorb them. Or perhaps the genius of tile New Right will wreck everything and we will descend into another cycle of rival nationalisms. It remains uncertain.
[As things worked out, the heirs of Thatcher have managed to fragment world culture in the 21st century, with Russia, Iran, India, China and many others each going off in a different direction.]
This article appeared in January 1994, in Issue 39 of Labour and Trade Union Review, now Labour Affairs. You can find more from the era at https://labouraffairsmagazine.com/very-old-issues-images/ and https://labouraffairsmagazine.com/very-old-issues-images/m-articles-by-topic/.