The post-war consensus is a historian's model of political co-operation in post-war British political history, from the end of World War II in 1945 to the late-1970s, and its repudiation by Conservative Party leader Margaret Thatcher. Majorities in both parties agreed upon it. The consensus tolerated or encouraged nationalisation, strong trade unions, heavy regulation, high taxes, and a generous welfare state.
When Britain emerged victorious from the Second World War, the Labour Party under Clement Attlee came to power and created a comprehensive welfare state, with the establishment of the National Health Service giving free healthcare to all British citizens, and other reforms to benefits. The Bank of England, railways, heavy industry, and coal mining were all nationalised. The most controversial issue was nationalisation of steel, which was profitable unlike the others. Economic recovery was slow, housing was in short supply, bread was rationed along with many necessities in short supply. It was an "age of austerity". American loans and Marshall Plan grants kept the economy afloat. India, Pakistan, Burma and Ceylon gained independence. Britain was a strong anti-Soviet factor in the Cold War and helped found NATO in 1949.
World War II, also known as the Second World War, was a global war that lasted from 1939 to 1945. The vast majority of the world's countries—including all the great powers—eventually formed two opposing military alliances: the Allies and the Axis. A state of total war emerged, directly involving more than 100 million people from over 30 countries. The major participants threw their entire economic, industrial, and scientific capabilities behind the war effort, blurring the distinction between civilian and military resources. World War II was the deadliest conflict in human history, marked by 50 to 85 million fatalities, most of whom were civilians in the Soviet Union and China. It included massacres, the genocide of the Holocaust, strategic bombing, premeditated death from starvation and disease, and the only use of nuclear weapons in war.
Margaret Hilda Thatcher, Baroness Thatcher, was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the longest-serving British prime minister of the 20th century and the first woman to hold that office. A Soviet journalist dubbed her "The 'Iron Lady'", a nickname that became associated with her uncompromising politics and leadership style. As Prime Minister, she implemented policies known as Thatcherism.
The concept states that there was a widespread consensus that covered support for coherent package of policies that were developed in the 1930s and promised during the Second World War, focused on a mixed economy, Keynesianism, and a broad welfare state.In recent years, the timing of the interpretation has been debated by historians, asking whether it had weakened and collapsed before Thatcherism arrived in 1979. There has also been debate as to whether a "postwar consensus" ever really existed.
A mixed economy is variously defined as an economic system blending elements of market economies with elements of planned economies, free markets with state interventionism, or private enterprise with public enterprise. There is no single definition of a mixed economy, but rather two major definitions. The first of these definitions refers to a mixture of markets with state interventionism, referring to capitalist market economies with strong regulatory oversight, interventionist policies and governmental provision of public services. The second definition is apolitical in nature and strictly refers to an economy containing a mixture of private enterprise with public enterprise.
The historian's model of the post-war consensus was most fully developed by Paul Addison.The basic argument is that in the 1930s Liberal intellectuals led by John Maynard Keynes and William Beveridge developed a series of plans that became especially attractive as the wartime government promised a much better post-war Britain and saw the need to engage every sector of society. The coalition government during the war, headed by Churchill and Attlee, signed off on a series of white papers that promised Britain a much improved welfare state after the war. The promises included the national health service, and expansion of education, housing, and a number of welfare programmes. It included the nationalisation of weak industries.
Paul Addison is a British author and historian, specializing in the British experience in the Second World War and its effects on post-war society. Addison read for an undergraduate degree at Pembroke College, Oxford, before moving to Nuffield College, Oxford for postgraduate study. In 1967 after leaving Nuffield College, and a brief stint Lecturing at Pembroke College, Addison became a Lecturer at Edinburgh University and subsequently a Reader, for 23 years. He became an Endowment Fellow in 1990, and Directed the Centre for Second World War Studies from 1996 to 2005.
John Maynard Keynes, 1st Baron Keynes, was a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and was one of the most influential economists of the 20th century. Widely considered the founder of modern macroeconomics, his ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.
William Henry Beveridge, 1st Baron Beveridge, was a British economist who was a noted progressive and social reformer.
In education, the major legislation was the Education Act of 1944, written by Conservative Rab Butler, a moderate, with his deputy, Labour's James Chuter Ede, a former teacher who would become Home Secretary throughout the Attlee administration. It expanded and modernised the educational system and became part of the consensus.The Labour Party did not challenge the system of elite public schools – they became part of the consensus. It also called for building many new universities to dramatically broaden educational base of society. Conservatives did not challenge the socialised medicine of the National Health Service; indeed, they boasted they could do a better job of running it.
The Education Act 1944 made numerous major changes in the provision and governance of secondary schools in England and Wales. It is also known as the "Butler Act" after the President of the Board of Education, R. A. Butler. Historians consider it a "triumph for progressive reform," and it became a core element of the post-war consensus supported by all major parties. The Act was repealed in steps with the last parts repealed in 1996.
Richard Austen Butler, Baron Butler of Saffron Walden,, generally known as R. A. Butler and familiarly known from his initials as Rab, was a prominent British Conservative politician. The Times obituary called him "the creator of the modern educational system, the key-figure in the revival of post-war Conservatism, arguably the most successful chancellor since the war and unquestionably a Home Secretary of reforming zeal." He was one of his party's leaders in promoting the post-war consensus through which the major parties largely agreed on the main points of domestic policy until the 1970s, sometimes known as "Butskellism" from an elision of his name with that of his Labour counterpart Hugh Gaitskell.
Her Majesty's Principal Secretary of State for the Home Department, normally referred to as the Home Secretary, is a senior official as one of the Great Offices of State within Her Majesty's Government and head of the Home Office. It is a British Cabinet level position.
In foreign policy, the consensus called for an anti-Communist Cold War policy, decolonisation, close ties to NATO and to the United States and the Commonwealth, and slowly emerging ties to the European Community. [ page needed ]
The Cold War was a period of geopolitical tension between the Soviet Union with its satellite states, and the United States with its allies after World War II. A common historiography of the conflict begins between 1946, the year U.S. diplomat George F. Kennan's "Long Telegram" from Moscow cemented a U.S. foreign policy of containment of Soviet expansionism threatening strategically vital regions, and the Truman Doctrine of 1947, and ending between the Revolutions of 1989, which ended communism in Eastern Europe, and the 1991 collapse of the USSR, when nations of the Soviet Union abolished communism and restored their independence. The term "cold" is used because there was no large-scale fighting directly between the two sides, but they each supported major regional conflicts known as proxy wars. The conflict split the temporary wartime alliance against Nazi Germany and its allies, leaving the USSR and the US as two superpowers with profound economic and political differences.
The model states that from 1945 until the arrival of Margaret Thatcher in 1979, there was a broad multi-partisan national consensus on social and economic policy, especially regarding the welfare state, nationalised health services, educational reform, a mixed economy, government regulation, Keynesian macroeconomics, policies, and full employment. Apart from the question of nationalisation of some industries, these policies were broadly accepted by the three major parties, as well as by industry, the financial community and the labour movement. Until the 1980s, historians generally agreed on the existence and importance of the consensus. Some historians such as Ralph Miliband expressed disappointment that the consensus was a modest or even conservative package that blocked a fully socialised society.Historian Angus Calder complained bitterly that the post-war reforms were an inadequate reward for the wartime sacrifices, and a cynical betrayal of the people's hope for a more just post-war society. In recent years, there has been a historiographical debate on whether such a consensus ever existed.
Angus Lindsay Ritchie Calder was a Scottish academic, writer, historian, educator and literary editor with a background in English literature, politics and cultural studies. He was a man of the Left, and in his highly influential book on the home front in the Second World War he complained bitterly that the postwar reforms of the Labour government, such as universal health care and nationalization of some industries, were an inadequate reward for the wartime sacrifices, and a cynical betrayal of the people's hope for a more just postwar society.
The foundations of the post-war consensus can be traced to the reports of William Beveridge, a Liberal economist who in 1942 formulated the concept of a more comprehensive welfare state in Great Britain.The first general election since 1935 was held in Britain in May 1945, giving a landslide victory for the Labour Party, whose leader was Clement Attlee. The policies undertaken and implemented by this Labour government laid the base of the consensus. The Conservative Party accepted many of these changes and promised not to reverse them in its 1947 Industrial Charter .
The post-war consensus included a belief in Keynesian economics,a mixed economy with the nationalisation of major industries, the establishment of the National Health Service and the creation of the modern welfare state in Britain. The policies were instituted by all governments (both Labour and Conservative) in the post-war period. The consensus has been held to characterise British politics until the economic crises of the 1970s which led to the end of the post-war economic boom and the rise of monetarist economics.
The Future of Socialism by Anthony Crosland, published in 1956, was one of the most influential books in post-war British Labour Party thinkingIt was the seminal work of the 'revisionist' school of Labour politics. A central argument in the book is Crosland's distinction between 'means' and 'ends'. Crosland demonstrates the variety of socialist thought over time, and argues that a definition of socialism founded on nationalisation and public ownership is mistaken, since these are simply one possible means to an end. For Crosland, the defining goal of the left should be more social equality. Crosland argued that
In Britain, equality of opportunity and social mobility... are not enough. They need to be combined with measures... to equalise the distribution of rewards and privileges so as to diminish the degree of class stratification, the injustices of large inequalities and the collective discontents.
Crosland also argued that an attack on unjustified inequalities would give any left party a political project to make the definition of the end point of 'how much equality' a secondary and more academic question.
Crosland also developed his argument about the nature of capitalism (developing the argument in his contribution 'The Transition from Capitalism' in the 1952 New Fabian Essays volume). Asking, "is this still capitalism?", Crosland argued that post-war capitalism had fundamentally changed, meaning that the Marxist claim that it was not possible to pursue equality in a capitalist economy was no longer true. Crosland wrote that,
The most characteristic features of capitalism have disappeared – the absolute rule of private property, the subjection of all life to market influences, the domination of the profit motive, the neutrality of government, typical laissez-faire division of income and the ideology of individual rights.
Crosland argued that these features of a reformed managerial capitalism were irreversible. Others within the Labour Party argued that Margaret Thatcher and Ronald Reagan brought about its reversal.
A third important argument was Crosland's liberal vision of the 'good society'. Here his target was the dominance in Labour and Fabian thinking of Sidney Webb and Beatrice Webb, and a rather grey, top down bureaucratic vision of the socialist project. Following Tawney, Crosland stressed that equality would not mean uniformity:
We need not only higher exports and old-age pensions, but more open-air cafes, brighter and gayer streets at night, later closing hours for public houses, more local repertory theatres, better and more hospitable hoteliers and restaurateurs, brighter and cleaner eating houses, more riverside cafes, more pleasure gardens on the Battersea model, more murals and pictures in public places, better designs for furniture and pottery and women’s clothes, statues in the centre of new housing estates, better-designed new street lamps and telephone kiosks and so on ad infinitum.
"Butskellism" was a somewhat satirical term sometimes used in British politics to refer to this consensus, established in the 1950s and associated with the exercise of office as Chancellor of the Exchequer by Rab Butler of the Conservatives and Hugh Gaitskell of Labour. The term was inspired by a leading article in The Economist by Norman Macrae which dramatised the claimed convergence by referring to a fictitious "Mr. Butskell".
However, the concept of consensus has also been challenged as a myth. Labour Historian Ben Pimlott says this idea is a "mirage, an illusion which rapidly fades the closer one gets to it."Pimlott sees much disputation and little harmony. He notes the term "Butskellism" meant harmony of economic policy between the parties, but it was in practice a term of abuse, not celebration. In 2002, Scott Kelly claimed that there was in fact a sustained argument over the use of physical controls, monetary policy and direct taxation. Political scientists Dennis Kavanagh and Peter Morris defend the concept, arguing that clear, major continuities existed regarding policies toward the economy, full employment, trade unions, and welfare programs. There was agreement as well on the major issues of foreign policy. British historian David Kynaston considers the period of post-war consensus a unique and distinct period in the history of twentieth century Britain and has undertaken to map the development of British society between 1945–79 in his ongoing series of books titled Tales of a New Jerusalem. So far, three volumes have been published, covering the years 1945–63.
Market-orientated conservatives gathered strength in the 1970s in the face of economic paralysis. They rediscovered Friedrich Hayek's the Road to Serfdom (1944) and brought in Milton Friedman, the leader of the Chicago school of economics. He preached Monetarism to discredit Keynesianism. Keith Joseph played a major role as an advisor to Thatcher.
Keynesianism itself seemed no longer to be the magic bullet for economic crises of the 1970s. Mark Kesselman et al. argue:
Britain was suffering economically without growth and with growing political discontent ... the "winter of discontent" destroyed Britain's collectivist consensus and discredited the Keynesian welfare state.
Global events such as the 1973 oil crisis put pressure on the post-war consensus; this pressure was intensified by domestic problems such as high inflation, the three-day week and industrial unrest (particularly in the declining coal-mining industry). In early 1976, expectations that inflation and the double deficit would get worse precipitated a Sterling crisis. By October, the pound had fallen by almost 25% against the dollar. At this point the Bank of England had exhausted its foreign reserves trying to prop up the currency, and as a result the Callaghan government felt forced to ask the International Monetary Fund for a £2.3 billion loan, then the largest that the IMF had ever made. In return the IMF demanded massive spending cuts and a tightening of the money supply. That marked a suspension of Keynesian economics in Britain. Callaghan reinforced this message in his speech to the Labour Party Conference at the height of the crisis, saying:
We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.
Thatcher reversed other elements of the post-war consensus, as when her Housing Act 1980 allowed the residents to buy their flats. Thatcher did keep key elements of the post-war consensus, such as nationalised health care. She promised Britons in 1982, the National Health Service is "safe in our hands."
Economists Stephen Broadberry and Nicholas Crafts have argued that anticompetitive practices, enshrined in the post-war consensus, appear to have hindered the efficient working of the economy and, by implication, the reallocation of resources to their most profitable uses.David Higgins says the statistical data support Broadberry and Crafts.
The consensus was increasingly seen by those on the right as being the cause of Britain's relative economic decline. Believers in New Right political beliefs saw their ideology as the solution to Britain's economic dilemmas in the 1970s. When the Conservative Party won the 1979 general election in the wake of the 1978–79 Winter of discontent, they implemented New Right ideas and brought the post-war consensus to an end. A similar Thatcherite consensus would exist during John Major's premiership, with Neil Kinnock, John Smith and Tony Blair mostly accepting the policies advocated by the Conservatives at this time-this would continue until the 2008 Financial Crisis which convinced politicians to abandon New Right neo-liberal markets and deregulation in favour of Keynesian methodologies.[ citation needed ]
Outside Britain, the term "post-war consensus" is used for an era of New Zealand political history, from the first New Zealand Labour Party government of the 1930s until the election of a fundamentally changed Labour party in 1984, following years of mostly New Zealand National Party rule. As in the UK, it was built around a 'historic compromise' between the different classes in society: the rights, health and security of employment for all workers would be guaranteed, in return for co-operation between unions and employers. The key ideological tenets of governments of the period were Keynesian economic policy, heavy interventionism, economic regulation and a very powerful welfare state.
Thatcherism comprises the conviction, economic, social and political style of the British Conservative Party politician Margaret Thatcher, who was leader of her party from 1975 to 1990. It has also been used to describe the principles of the British government under Thatcher as Prime Minister from 1979 to 1990 and beyond into the governments of John Major, Tony Blair and David Cameron. An exponent of Thatcherism is regarded as a "Thatcherite". Thatcherism represented a systematic, decisive rejection and reversal of the post-war consensus, whereby the major political parties largely agreed on the central themes of Keynesianism, the welfare state, nationalised industry and close regulation of the British economy. There was one major exception, the NHS, which was widely popular. In 1982, she promised the British people that the NHS is "safe in our hands".
One-nation conservatism is a paternalistic form of British political conservatism advocating preservation of established institutions and traditional principles combined with political democracy, and a social and economic programme designed to benefit the common man. This political philosophy views society as organic and values paternalism and pragmatism. The describing phrase 'one-nation Tory' originated with Benjamin Disraeli (1804-81), who served as the chief Conservative spokesman and became Prime Minister in February 1868. He devised it to appeal to working-class men as a solution to worsening divisions in society through introducing factory and health acts, as well as greater protection for workers. One-nation conservatism is also defined as a political philosophy that sees the purpose of the elite as reconciling the interests of all classes, labour as well as management, instead of identifying the good of society solely with the interests of the business class.
New Labour refers to a period in the history of the British Labour Party from the mid-1990s until 2010 under the leadership of Tony Blair and Gordon Brown. The name dates from a conference slogan first used by the party in 1994, later seen in a draft manifesto published in 1996, New Labour, New Life for Britain. It was presented as the brand of a newly reformed party that had altered Clause IV and endorsed market economics. The branding was extensively used while the party was in government between 1997 and 2010. New Labour was influenced by the political thinking of Anthony Crosland, the leadership of Blair and Brown, as well as Peter Mandelson and Alastair Campbell's media campaigning. The political philosophy of New Labour was influenced by the party's development of Anthony Giddens' "Third Way", which attempted to provide a synthesis between capitalism and socialism. The party emphasised the importance of social justice, rather than equality, emphasising the need for equality of opportunity and believed in the use of free markets to deliver economic efficiency and social justice.
The welfare state of the United Kingdom comprises expenditures by the government of the United Kingdom intended to improve health, education, employment and social security. The UK system has been classified as a liberal welfare state system.
The 1945 United Kingdom general election was held on 5 July 1945, with polls in some constituencies delayed until 12 July and in Nelson and Colne until 19 July, because of local wakes weeks. The results were counted and declared on 26 July, to allow time to transport the votes of those serving overseas.
Keith Sinjohn Joseph, Baron Joseph,, known as Sir Keith Joseph, 2nd Baronet, for most of his political life, was a British barrister and politician. A member of the Conservative Party, he served in the Cabinet under four prime ministers: Harold Macmillan, Sir Alec Douglas-Home, Edward Heath and Margaret Thatcher. He was a key influence in the creation of what came to be known as "Thatcherism" and the subsequent decline of one-nation conservatism and the postwar consensus.
Embedded liberalism is a term for the global economic system and the associated international political orientation as they existed from the end of World War II to the 1970s. The system was set up to support a combination of free trade with the freedom for states to enhance their provision of welfare and to regulate their economies to reduce unemployment. The term was first used by the American political scientist John Ruggie in 1982.
The Anglo-Saxon model or Anglo-Saxon capitalism is a capitalist model that emerged in the 1970s based on the Chicago school of economics. However, its origins date to the 18th century in the United Kingdom under the ideas of the classical economist Adam Smith.
Blatcherism is a term formed as a portmanteau of the names of two British politicians, Tony Blair and Margaret Thatcher. It has been used by critics of monetarism and economic liberalism to refer to the thesis that a policy model of the Thatcher government, distinct from one-nation conservatism, was resurrected when Blair came to power. It echoed "Butskellism", frequently used to describe the post-war consensus on a mixed economy with moderate state intervention to promote social goals, particularly in education and health.
Clement Attlee was invited by King George VI to form the Attlee ministry in the United Kingdom in July 1945, succeeding Winston Churchill as Prime Minister of the United Kingdom. The Labour Party had won a landslide victory at the 1945 general election, enacting much of the post-war consensus policies, especially the welfare state and nationalisation of some industries. The government was marked by post-war austerity measures, in giving independence to India, and engagement in the Cold War against Soviet Communism.
The Future of Socialism by Anthony Crosland, published in 1956, was one of the most influential books in post-war British Labour Party thinking. It was the seminal work of the 'revisionist' school of Labour politics.
The British Labour Party grew out of the trade union movement of the late 19th century and surpassed the Liberal Party as the main opposition to the Conservatives in the early 1920s. In the 1930s and 1940s, it stressed national planning, using nationalization of industry as a tool, in line with Clause IV of the original constitution of the Labour Party which called for the "common ownership of the means of production, distribution, and exchange, and the best obtainable system of popular administration and control of each industry or service".
Tory! Tory! Tory! is a 2006 BBC television documentary series on the history of the people and ideas that formed Thatcherism told through the eyes of those on the New Right. It was nominated for the best Historical Documentary at the Grierson Awards in 2006.
Social democracy is a political, social, and economic ideology that supports economic and social interventions to promote social justice within the framework of a liberal democratic polity and a capitalist economy. The protocols and norms used to accomplish this involve a commitment to representative and participatory democracy, measures for income redistribution, and regulation of the economy in the general interest and welfare state provisions. Social democracy thus aims to create the conditions for capitalism to lead to greater democratic, egalitarian and solidaristic outcomes. Due to longstanding governance by social democratic parties and their influence on socioeconomic policy development in the Nordic countries, in policy circles social democracy has become associated with the Nordic model in the latter part of the 20th century.
Gaitskellism was the ideology of a faction of the British Labour Party in the 1950s and early 1960s. It opposed many of the economic policies of the trade unions, especially regarding nationalisation and controlling the economy for the benefit of unions.
The post–World War II economic expansion, also known as the Golden Age of Capitalism, postwar economic boom, the long boom, was a period of strong economic growth beginning after World War II and ending with the 1973–75 recession. The United States, Soviet Union, Western European and East Asian countries in particular experienced unusually high and sustained growth, together with full employment. Contrary to early predictions, this high growth also included many countries that had been devastated by the war, such as Japan, West Germany and Austria (Wirtschaftswunder), South Korea, France, Italy, and Greece.
The social history of the United Kingdom from 1945 began with the aftermath of the Second World War. The United Kingdom was one of the victors, but victory was costly in social and economic terms. Thus, the late-1940s was a time of austerity and economic restraint, which gave way to prosperity in the 1950s. The Labour Party, led by wartime Deputy Prime Minister Clement Attlee, won the 1945 postwar general election in an unexpected landslide and formed their first ever majority government. Labour governed until 1951, and granted independence to India in 1947. Most of the other major overseas colonies became independent in the late-1950s and early-1960s. The UK collaborated closely with the United States during the Cold War after 1947, and in 1949; helped to form NATO as a military alliance against the spread of Soviet Communism. After a long debate and initial scepticism, the United Kingdom joined the European Economic Community along with Ireland and Denmark on 1 January 1973, but voted to leave the European Union in a nationwide referendum held on 23 June 2016. Immigration from South Asia, the West Indies, and Eastern Europe laid the foundations for the modern-day multicultural society in today's Britain, while traditional Anglican and other denominations of Christianity declined sharply.