William Henry Beveridge, First Baron Beveridge

British economist

• Born: March 5, 1879
• Birthplace: Rangpur, Bengal, India
• Died: March 16, 1963
• Place of death: Oxford, Oxfordshire, England

As an economist, Beveridge was a pioneer in the study of unemployment and the history of prices. He was the force responsible for building the London School of Economics into one of the world’s leading centers of social science scholarship. He is remembered, however, as the intellectual founder of the post-World War II British welfare state.

Early Life

William Henry Beveridge, later known as Lord Beveridge, was born to Henry Beveridge, a judge in the Indian Civil Service, and the former Annette Susannah Ackroyd, the daughter of a self-made Worcestershire businessman. They were mavericks within the Anglo-Indian establishment he was an outspoken advocate of Indian nationalism and home rule, she a pioneer in the education of Hindu women. Strongly attracted to Indian culture, both became well-known translators of Hindi and Persian texts.

Although he would later pretend otherwise, Beveridge’s childhood appears to have been unhappy. While intellectually precocious, he was a sickly and solitary child under the thumb of his mother. In 1892, he won a scholarship to Charterhouse, but he was not good at sports, the school’s dominating passion. Worse, he was discouraged from pursuing his interest in the natural sciences a frustration that would permanently rankle him. In 1897, he went as an exhibitioner to Balliol College, Oxford, and was awarded first-class honors in classics in 1901. Beveridge stayed on at Oxford to study law; won in 1902 a prize fellowship at University College, Oxford; and received a bachelor of civil law degree the following year.

Life’s Work

At this juncture, however, Beveridge abandoned what appeared to be a promising legal or academic career ahead of him to devote himself to the study and solution of social problems. The catalyst for this decision appears to have been his reading of Thomas Henry Huxley, whose vision of applying the inductive methodology of the natural sciences to the discovery of a “science of Society” captivated his imagination. His acceptance in 1903 of the position of subwarden at Toynbee Hall, the famous London East End settlement house, brought him into contact with a group of reform-minded activists who were urging stronger government action to deal with poverty and its attendant social pathologies. He was probably most strongly influenced by the Fabian socialist leaders Beatrice Webb and Sidney Webb. Although not embracing their socialism, Beveridge was strongly attracted by their call for a legally guaranteed “national minimum” income an attraction that was reinforced by a later visit to Germany, where he studied the working of the Bismarckian social-welfare program. Beveridge’s major interest was in the problem of unemployment. His book Unemployment: A Problem of Industry (1909) was a pioneering study of the functioning of the labor market. He called for the establishment of a nationwide network of labor exchanges to aid job seekers in finding work. What he came to see as the key to solving what contemporaries termed the “social question,” however, was the adoption of a comprehensive system of compulsory social insurance covering not simply unemployment but also sickness, disability, and old age. He proposed that the system be financed along the lines of the German model by tripartite contributions from workers, employers, and the state.

In 1905, Beveridge left Toynbee Hall to become a writer on social issues for an influential Conservative daily, the Morning Post. In 1908, he accepted the invitation of Winston Churchill, the president of the Board of Trade in the Liberal Party government headed by Prime MinisterH. H. Asquith, to join his staff. At that time, Churchill was allied with the “national efficiency” school of social reformers who, alarmed by the large number of men found unfit for military service during the Boer War, thought improvement in the conditions of life for the working class vital for imperial security. Beveridge worked closely with the board’s permanent secretary, Sir Hubert Llewellyn Smith, in drafting the Labour Exchanges Act of 1909, which established a countrywide network of labor exchanges, and the provision in the National Insurance Act of 1911 establishing unemployment insurance for two and a quarter million workers in the heavy industries. In 1909, he became a permanent civil servant as administrative head of the new labor exchanges system, and in 1913 he attained the rank of assistant secretary in charge of the Board of Trade’s labor exchange and unemployment insurance department. His hope of achieving a full solution to the unemployment problem by the expansion of the unemployment insurance scheme to all workers, however, was stymied by the outbreak of World War I. He himself, in 1915, was temporarily drafted to the new ministry of munitions set up to deal with the crisis in war production.

Like his chief, the former Chancellor of the Exchequer and future prime minister, David Lloyd George, Beveridge was convinced that the war could not be won without a total commitment of the nation’s resources even if that required the use of coercive methods. Long suspicious of what he saw as the trade unions’ narrow-minded indifference to any interests except their own, Beveridge played a leading role in drafting the Munitions of War Act of 1915, which sharply limited wartime collective bargaining and imposed quasi-military discipline on workers in the munitions industry. The resulting hostility felt by the trade unions against Beveridge was reinforced when, after his return to the Board of Trade in mid-1916, he pushed for legislation to extend unemployment insurance to all workers engaged in war production. Although his purpose was to protect the workers against the danger of a postwar depression, the unions saw the substitution of a government program of unemployment insurance for union-provided benefits as threatening to undermine the loyalty of their members. Union opposition was largely responsible for keeping Beveridge out of the new ministry of labour, which was established in late 1916 to coordinate labor and employment policies. Instead, he was made second secretary of the new ministry of food, with responsibility for rationing and price control. Because of his success in implementing an effective food-rationing system, he was in early 1919 made a knight commander of the Order of the Bath and was promoted to permanent secretary of the Food Ministry at the age of thirty-nine, one of the youngest ever to attain that rank.

Beveridge’s wartime experiences, however, had undermined his former confidence in state intervention in the economy. All too typically, decisions were made not on the basis of expert knowledge but rather simply on the basis of political expediency. His opposition to continuance of food controls after the end of the war then led him to resign from the civil service in September, 1919, to accept the directorship of the London School of Economics (LSE). Founded by the Webbs in the 1890’s as a college of the University of London, the LSE had not made much of a mark and attracted mostly part-time students. Beveridge proved a highly successful fund-raiser and made the LSE one of the favored beneficiaries of Rockefeller Foundation grants for social science research. He expanded the school’s physical facilities and built up a distinguished faculty that included economic historians R. H. Tawney (who was also Beveridge’s brother-in-law) and Eileen Power, legal historian T. C. Plucknett, political scientist Harold J. Laski, economists Lionel Robbins and F. A. Hayek, sociologistLeonard T. Hobhouse, and anthropologists Bronisław Malinowski and Raymond Firth. Perhaps his most innovative step was his establishment of the Department of Social Biology with Lancelot Hogben as its chair. Hogben brought in an outstanding group of young researchers, and the department turned out an impressive series of monographs on heredity, population control, statistical method, and human reproduction before Hogben’s resignation in 1936 and the department’s subsequent dissolution. By the early 1930’s, the LSE ranked as one of the world’s centers for work in the social sciences.

By mid-decade, however, Beveridge faced worsening difficulties at the LSE. Not only did the Depression reduce the outside funding available, but Beveridge had become the center of bitter intramural controversy. Despite his own continued public activities, Beveridge came strongly to disapprove of political involvements by academics a position that brought him into recurring conflict with activist-minded members of the staff such as Laski. An even more important source of conflict was his personal commitment to empirical, quantitative-based research and his hostility to the more theoretical and analytical interests of the majority of the school’s sociologists and economists. Hogben who shared Beveridge’s view on this methodological issue became, along with him, a major target of resentment. Beveridge’s relations with his staff were further soured by what most saw as his high-handed and dictatorial administrative methods. A faculty revolt in 1936 succeeded in sharply reducing his powers as director. The following year, Beveridge resigned to accept the mastership of University College, Oxford. The public reason he gave was that he wanted more time to continue the research he had begun in 1919 on a history of prices. His hope was that such a history would supply the key to understanding the mechanism responsible for the cyclical ups and downs in economic activity. He succeeded in finishing only the first volume, however, of his planned four-volume Prices and Wages in England from the Twelfth to Nineteenth Century (1939), and his scorn for theorizing as “unscientific” made the work a less important contribution than might have otherwise been the case.

At the same time, Beveridge’s faith in state planning was undergoing a revival. The confidence in the free market that he had had in the 1920’s and early 1930’s was undermined by the failure of orthodox economic policies to bring about recovery from the Great Depression. Pushing him in the same direction was his conviction, dating from Adolf Hitler’s occupation of the Rhineland in 1936, that another war with Germany was almost inevitable and that, accordingly, Great Britain must prepare. When the war finally did come, Beveridge’s ambition was to be placed in charge of directing the mobilization of staff for both industry and the military. In December, 1940, he was brought back into government service as an undersecretary in the ministry of labour. Its head, Ernest Bevin, however recalling Beveridge’s clashes with the trade unions during World War I shied from allowing him control over wartime staff policy and instead shunted him off to chair an obscure interdepartmental inquiry into the coordination of social insurance programs. Beveridge was at first bitterly disappointed but quickly saw how the new position offered him the opportunity to lay plans for reshaping postwar Great Britain into a more just and equal society. First, he made a detailed investigation of the inadequacies of existing programs. Then, working in close consultation with representatives of the Trades Union Congress, he set forth in his December, 1942, report, Social Insurance and Allied Services , a comprehensive program for overcoming the five evils of idleness, ignorance, disease, squalor, and want. His proposed remedies included a free national health service, family allowances, and universal social insurance covering all contingencies from the cradle to the grave. He regarded as the linchpin of the program government policies to maintain full employment which became the focus of his follow-up recommendations in Full Employment in a Free Society (1944).

Beveridge’s 1942 recommendations met with a chilly reception from the cabinet, but the report was tremendously popular with the public, with more than 100,000 copies sold within a month of publication. Beveridge himself toured the country making speeches in its support, and a revolt by backbench Labour and Liberal members of the House of Commons in early 1943 forced the government to endorse postwar implementation of the Beveridge proposals. In the hope of positioning himself to take charge of postwar reconstruction, Beveridge ran successfully in a 1944 by-election as the Liberal Party candidate for the seat in the House of Commons from Berwick-upon-Tweed. He was defeated, however, in the 1945 general election. The following year, the new Labour Party prime minister, Clement Attlee, named him the first Baron Beveridge of Tuggal. Although becoming leader of the Liberal Party contingent in the House of Lords, he had to watch from the sidelines as the Attlee government proceeded to erect the postwar British welfare state. Beveridge was not fully satisfied with the results. He regretted the failure because of the cost to adopt subsistence-level old-age pensions and in the 1950’s strongly complained about how inflation was further eroding their benefits, which had been inadequate from the start. His major complaint, however set forth most fully in his book Voluntary Action: A Report on Methods of Social Advance (1948) was the exclusion of the voluntary “mutual aid” organizations from a share in the administration of the social insurance program.

Beveridge was a complex personality. He could be kindly, generous, even humorous. At other times, however, he was abrasive, domineering, and dogmatically sure of his own views and impatient with opposition. He had a passion for hard work. Although he idealized family life, he himself did not marry until late in his life, on December 15, 1942, when he wed Janet “Jessy” Mair, the widow of a cousin who had been associated with him first as his secretary and aide during World War I and then as academic secretary of the LSE. The couple had no children, although she had one son and three daughters from her first marriage. Over his lifetime, Beveridge accumulated a long list of honorary degrees from universities around the world. Although he resigned his mastership of University College when he ran for the House of Commons, he was an honorary Fellow of Balliol, Nuffield, and University colleges, Oxford. In 1947, he published an affectionate account of his parents titled India Called Them. Six years later he published his autobiography, Power and Influence. Beveridge and his wife retired to Oxford in 1954. She died five years later; he followed on March 16, 1963.

Significance

Beveridge denied that his commitment to reform grew out of any sentimental do-goodism. Poverty was a disease threatening the health of the social “organism,” while he saw himself as a scientist who would find the cure through empirical research leading to the discovery of objective socioeconomic laws. His larger aim was to heal the class antagonisms that were so pronounced in British society. Nor did he have any illusions about human nature: People worked only because they were compelled to do so. Thus, care must be taken to avoid disincentives to work and the penalization of thrift.

Beveridge was a champion of the contributory principle for social insurance so that beneficiaries would not feel the stigma of receiving charity. Yet he simultaneously had major blind spots. He had no interest in larger philosophical questions about what constituted a good society. He tended to think that all problems were solvable given the proper administrative techniques. He overestimated the disinterestedness of “experts” and thus ignored the possibility that government officialdom could become itself a narrow special interest. In his enthusiasm for governmental planning, he underestimated the danger that expanding the powers of the state could pose to the personal freedoms that he recognized as central to the British political tradition.

Although his marriage proved a happy one, there was otherwise an almost tragic quality to Beveridge’s last years. He never overcame his disappointment at not having a role in the postwar reconstruction of British society. He was depressed about the international situation, seeing in Soviet expansionism a threat to peace. He witnessed how the class lines that he had hoped would be eliminated were paradoxically reinforced by the welfare state. Moreover, he came to lament the stifling of the voluntary sector by the bureaucratized social welfare system that he had done so much to bring about. While reaffirming in his autobiography his faith that the human condition could be improved through the force of “reasonable” ideas, he concluded on a more somber note: “The world is an unhappy place; the picture of yesterday’s hopeful collaboration in curing evils of want and disease and ignorance and squalor, as I have tried to draw it here, looks like a dream today.”

Bibliography

Beveridge, Janet. Beveridge and His Plan. London: Hodder and Stoughton, 1954. A biography written by Beveridge’s wife that provides illuminating sidelights drawn from her long association with him prior to their marriage plus information he supplied.

Beveridge, William Henry. Power and Influence. 1953. New York: Beechhurst Press, 1955. Beveridge’s autobiography is too determinedly cheerful about his life and glosses over the degree of intellectual uncertainty and mind-changing that marked his career.

Chorley, Lord. “Beveridge and the L.S.E.” Part 1. L.S.E. 44 (November, 1972). Part 2. L.S.E. 45 (June, 1973). These articles provide a detailed treatment of Beveridge’s eighteen years as director of the London School of Economics.

Harris, José. William Beveridge: A Biography. 2d ed. New York: Oxford University Press, 1997. A thoroughly researched, analytically perceptive, and lucidly written work that should remain for the foreseeable future the definitive biography.

Moos, Siegfried. A Pioneer of Social Advance: William Henry Beveridge, 1879-1963. Durham, N.C.: Durham University Press, 1963. A brief, eulogistic sketch of Beveridge’s life and work.

Walker, Robert, ed. Ending Child Poverty: Popular Welfare for the Twenty-first Century? Bristol, England: Policy Press, 1999. Collection of writings examining the work of Beveridge, among others, on the issue of childhood poverty, child welfare, and public welfare in general in the twenty-first century.