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9 - Whose Welfare State? Beveridge versus Keynes

Published online by Cambridge University Press:  06 July 2010

By
Maria Cristina Marcuzzo
Edited by
Roger E. Backhouse  and
Tamotsu Nishizawa
Roger E. Backhouse
Affiliation:
University of Birmingham
Tamotsu Nishizawa
Affiliation:
Hitotsubashi University, Tokyo
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Summary

[Keynes] told me that he no longer believed in the importance of economic reconstruction: what we wanted was more culture and beauty and noble motive, and some sort of creed and code of conduct. But he so sorrowfully admitted that he had no definite social creed and did not see the emergence of a new code of conduct.

(B. Webb to W. Beveridge, 13 July 1936)

[Your general scheme] leave[s] me in a state of wild enthusiasm … I think it a vast constructive reform of real importance and I am relieved to find that it is so financially possible.

(J. M. Keynes to W. Beveridge, 17 March 1942)

INTRODUCTION

There is a widespread tendency to portray Keynes as the founding father of the Welfare State and to claim that the Keynesian revolution provided the justification for the need of a large public sector in the economy. As the literature has amply shown, there are scant grounds for these claims.

Keynes's criticism of laissez-faire policy and disbelief in the smooth working of market forces is antecedent to the General Theory, where the case for intervention is made when faced with aggregate demand failure. The policy message in the General Theory is to sustain the level of investment, but this should be interpreted more in the sense of ‘stabilizing business confidence’ (Bateman 1996: 148) than as a plea for debt-financed public works (Kregel 1985).

Type
Chapter
Information
No Wealth but Life
Welfare Economics and the Welfare State in Britain, 1880–1945
 , pp. 189 - 206
Publisher: Cambridge University Press
Print publication year: 2010

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