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Liberalism

The term liberalism can be used in a variety of ways and can attract people with extremely different views. The left and the right sometimes use the word liberal as a term of abuse. In both cases, liberals can be condemned for displaying weakness in their attempts to balance conflicting interests in society rather than side with capital (the right wing perspective) or with labour (the left’s preference). We should bear in mind, however, that there are different types of liberals. The classical liberals of the late eighteenth and early nineteenth centuries were arch defenders of capitalism and ardent critics of an interventionist state. It was not until the late nineteenth century that liberals began to engage with social problems in a way that allowed the state to increase its functions. The term social liberal will be used when referring to these pioneers of the modern welfare state. This chapter will have something to say about both these forms of liberalism. Given that we are primarily interested in welfare issues, greater attention will be given to the social liberals and to their sensitive handling of social issues. In a later chapter (Chapter 5), we will look at attempts to revive the spirit of classical liberalism and repackage it in the form of neo-liberalism. For now, the discussion of classical liberalism will draw upon the ideas of Adam Smith, Tom Paine, Herbert Spencer and the ever-changing John Stuart Mill. The ideas of T.H. Green, L.T. Hobhouse, John Maynard Keynes and John Rawls will be used to illustrate some of the key features of social liberalism. Material on these theorists will be supplemented by some examples of policies introduced by key liberal regimes including the 1906–1914 Liberal governments in Britain and the Democratic administrations of Roosevelt and Johnson in the United States.

Economy

It could be argued that liberals defend the interests of capitalism and of the capitalist class because they believe that capitalism is capable of serving the public good. Whereas a feudal system based upon inflexible class divisions allowed relatively little social mobility for the talented and the desperate, many liberals regard capitalism as an open system in which people from a variety of backgrounds can aspire to success and pursue their own interests. This promise or potential touches the very heart of liberalism and provides the individual with a way to make him or herself distinctive and unique. Indeed, for liberals it is essential that individuals be allowed room to grow and to prosper.
There are of course many fine liberal economists that could be used to illustrate the liberal approach to the economy. The great enlightenment thinker Adam Smith certainly has longevity on his side. His monumental study The Wealth of Nations (1776) inspired generations of liberals and is still one of the finest examples of classical liberal reasoning. The classical liberals were advocates of laissez-faire. In their view, it was necessary to keep the state out of economic affairs and to allow the economy as far as possible to regulate itself. Working upon the assumption that individuals are primarily motivated by prospects for material gain, they felt that making use of the free market was the best way to ensure that the capitalist system produced what people wanted and that it provided a range of opportunities for those who strived to excel in their working lives. Adam Smith (1776) believed that people are apt to pursue their own interests rather than deliberately set out to promote and enhance the public good. This does not mean, however, that the public good is undermined. Indeed, he believed that the free market economy was capable of serving the public good and that individual self-interest can in turn benefit the wider community. Smith believed that by attempting to maximise individual profit, individuals will also contribute towards the economic progress of society and that the individual is effectively ‘… led by an invisible hand to promote an end which was no part of his intention’ (Smith, 1776, p. 572). In Smith’s view, the public good is advanced to a far greater extent by individual self-interest than by acts intended to serve the public good. Indeed, Smith claimed that he had ‘… never known much good done by those who affected to trade for the public good’ (Smith, 1776, p. 572). Free market economics evidently serves the interests of the capitalist class. Its advocates want the economy to be left to the activity, vision and entrepreneurial skills of the minority rather than rely upon the state taking an active role in the coordination or management of economic affairs.
For many liberals, however, such profound levels of trust in the workings of the free market seem inconsistent with social compassion and with guaranteeing that all people have the opportunity to excel. Even John Stuart Mill (1836, 1852), a theorist who shared and articulated the classical liberal fear of the state, argued that free market economics was too harsh in its scientific formulations and that there should be room for at least some state intervention in the economy to ensure that the common good is not ignored and submerged under the dominance of self-interest. Social liberals of the late nineteenth century onwards were also among those who argued that an economy that relied too heavily on self-interest would have no effective way of securing common advantage. Hobhouse (1911) claimed that the idea of laissez-faire was far too optimistic in promoting the view that a natural harmony can develop from individuals pursuing their own interests and that leaving individuals to their own devices can benefit society as a whole. He claimed that although economic individualism has created great wealth, this was often done at the expense of the majority of citizens. Hobhouse was adamant that wealth had a social dimension and that it could not be attributed solely to the outcomes of individual effort, for property rights would be unstable without the protection of society.
Liberal economics changed considerably in the twentieth century with the further development of social liberalism. Although liberals continued to maintain a firm commitment to liberal social values, it was recognised increasingly that the classical liberal free market economy could not be relied upon to secure the common good and that the state might be needed to intervene to manage capitalism and to strengthen its long-term vitality. The ideas of John Maynard Keynes (1936) were particularly important in this regard. While he defended the right of capitalists to make their profits, he argued that there were significant gaps in classical liberal economics that needed to be filled. Although he did not want the state to assume direct control over the means of production, he believed that there must be room for the state to cooperate with the private sector in the interests of creating and maintaining a stable economy. In particular, he argued that the state should be willing to pump money into the economy in the interests of stimulating demand and thereby helping to secure full employment (Keynes, 1936, pp. 374–381). The ideas of Keynes had a tremendous impact upon the way that liberals, conservatives and social democrats view the relationship between the state and the economy. Indeed, Keynesian economics provide a foundation for many of the ideologies that seek to stabilise the capitalist system.
Such recognition of the limitations of free market economics became one of the dominant features of liberal political economy during the twentieth century. Echoes of this can be discerned in political debate in the United States. Franklin Roosevelt (1932), for example, argued against unrestrained capitalism but feared state paternalism. He respected that all Americans required the right to life, liberty and the pursuit of happiness but justified government intervention in social and economic affairs on the grounds that it can create opportunities for all individuals to reach their potential (Roosevelt, 1932, pp. 302–304). Liberals in the United States continue to praise the free market because it is consistent with individual freedom and equality of opportunity. However, it is also recognised that markets do not always satisfy all needs and that state intervention in the economy can assist in improving the efficiency of the capitalist economy and in maintaining decent levels of employment (see Rawls, 1999, pp. 240–245). From a liberal point of view, such intervention does not necessarily detract from the social values they hold so dear.
Although many liberals might want to support free market economics, partly because the free market provides an arena in which individuals can grow and pursue their potential, their faith in such arrangements is often predicated on the belief that the free market can benefit all people. This faith, however, can be undermined by the instability of the free market and by the conspicuous absence of Adam Smith’s ‘invisible hand’. Under such circumstances, social liberals in particular become willing to embrace the state as a potential ally and as an instrument that can be used to protect and even humanise the capitalist system. If capitalism was fair and everybody experienced similar levels of freedom and opportunity, then liberals might shy away from using the state in this way. The precarious free market, however, cannot be relied upon to respond to and satisfy the increasingly complex needs articulated in modern society. Given this, the state is recast as a guardian and promoter of the common good.

Social values

Freedom is undoubtedly the dominant social value within the liberal tradition. From a liberal point of view, individuals should be left to pursue their own interests. This is thought to help both the individual and the community for ‘… self interest would be tempered by reason and a natural benevolence that would deter people from engaging in anti-social behaviour’ (Perry, 1993, p. 216). Liberals are firm believers in education, reason and science and believe that the individual can prosper if freed from tyranny and oppression. This oppression can take many forms. From a liberal perspective, religion, custom and deference are potentially dangerous to the mind of the individual. We are called upon to find our own way through life, to develop our own ideas and not to rely too heavily upon the received wisdom of previous generations. Liberals recognise the importance of tolerance and are generally arch defenders of freedom of speech and religious freedom. A liberal world is one where individuals are free to explore their own interests, while respecting the freedom of others.
The liberal tradition has spawned many great theorists of freedom. One of the most influential must surely be John Stuart Mill. Mill (1859) feared that governments and public opinion were potentially oppressive and he warned of the so-called ‘tyranny of the majority’ through which the majority, or those who represent the majority, can often stifle individual liberty and in turn create a conformist and mediocre political culture. In his view, it is important that individuals have as much independence as possible in matters that concern themselves solely. According to Mill, the adult individual should have sovereignty over his or her own mind and body. He believed that in order for us to be free we need liberty of conscience, thought and feeling, liberty of lifestyle and the freedom to unite with others. Indeed, our freedom was thought to depend upon all of these being respected and observed. For Mill, it was important for us to remain free from the undue influence of others. Given this, Mill was clearly an advocate of negative liberty in which liberty is equated with the absence (rather than with the possession) of something.
Not all liberals view freedom in this way. The social liberals of the late nineteenth century onwards have viewed freedom as far more than the absence of restraint. T.H. Green (1888), for example, claimed that freedom is not simply doing as we wish, but doing something that is ‘worth doing’ in cooperation with others. Freedom is said to contribute towards the progress of society by encouraging people to make the best of their lives. According to this line of reasoning, freedom should not be enjoyed by the minority at the expense of the majority, as had been the case in ancient society, but it relies upon people making the best of themselves and in so doing making a positive contribution to the common good. L.T. Hobhouse (1911) argued that it is useful to distinguish between unsocial freedom and social freedom. Unsocial freedom was said to allow for the free reign of self-interest without regard for the interests of others. According to Hobhouse, this form of freedom was ‘antithetic to all public control’ (Hobhouse, 1911, p. 91). Social freedom, on the other hand, relied upon freedom being distributed throughout the community and upon imposing some forms of restraint to ensure that individuals do not harm others (Hobhouse, 1911, pp. 91–94). This view that freedom should be distributed or redistributed in the community does create room for the state to engineer levels of freedom in society. For those who believe in positive liberty, the state can intervene in social life without detracting too much from the freedom of the individual. Indeed, it is argued that state intervention is necessary to enhance the freedom of the individual and to secure the good of the community.
Liberals in America have likewise placed a high value upon the social dimensions of freedom. Michael Sandel (1996) points out that the American case for the welfare state rests upon a deep respect for freedom rather than upon communal obligation and that American liberals are apt to point out that individual freedom cannot be achieved unless granted to all members of society and that everybody needs freedom to develop (Sandel, 1996, p. 280–281). Consider, for example, the way that Rawls views freedom. John Rawls (1996, 1999) argues that all citizens in a democratic society should have equal rights to a range of liberties including the right to participate in the democratic process as well as to freedom of thought and person. He recognised, however, that these liberties might not necessarily be of equal worth to different sections of society and that members of the poorer sections of the community might have the same right to liberty but have less ability to use this right to fulfil their potential (Rawls, 1996, p. 5; 1999, pp. 178–179). For social liberals, the freedom of significant sections of society needs to be enhanced. There is a general recognition that capitalism creates inequalities and that for freedom to mean anything something needs to be done to reduce these inequalities.
For many liberals, equality of outcome is considerably less attractive than equality of opportunity. As defenders of capitalism, even if in a moderated form, liberals generally have no interest in attacking all inequalities. Hobhouse (1911) argued that inequality in society was legitimate as long as it served the common good and that this applied even to extreme economic inequalities. He did however argue in favour of equal opportunities and he believed that the state should provide such things as free education to ensure that people can benefit from their freedoms (Hobhouse, 1911, pp. 32, 131). John Rawls (1996, 1999) likewise concentrated his attack on inequalities that he considered to be unjust. He argued that if we were asked to choose the starting positions we have in life behind a ‘veil of ignorance’ that obscured our own personal wealth and status, we would chose to begin in a position of equality with others. Although Rawls could be seen as one of the great advocates of egalitarian thinking, he supported the existence of inequalities as long as these inequalities were tied to positions of responsibility. For Rawls, it was essential that inequalities were fair. He was a firm believer in equality of opportunity and he believed that this equality should extend as far as possible in the economy and in access to education and culture. Rawls would only tolerate inequalities to the extent that they mirrored our contributions to society and as long as they did not relegate any section of society to permanent hardship and failure. In his view, a notion of ‘justice as fairness’ could go a long way to harmonise the values of freedom and equality. It was thought to recognise our right to basic liberties and to equality of opportunity. He believed that it should be possible to gain public support for a conception of political justice as long as individuals were left to determine the relationship between this notion and their own philosophies of life. He was adamant that we must respect diversity in society and that governments should avoid attempting to create social unity by imposing a single philosophy of life.
Liberal social values are anchored in a deep respect for individuality and for maintaining a personal space within which individuals can grow. For many liberals, it is important that we have room to develop, for without this freedom our senses become duller and our potential contributions to society could be stifled. From a liberal perspective, it is individuals that make history and the sovereignty of the individual must be protected as far as possible from the intrusive powers of the state. This does not necessarily mean that we need to strip the powers of the state to the minimum. The state can and does have a dramatic impact upon the economic and social welfare of society. Rather than deny the state the ability and power to serve the common good, liberals are more inclined to look for ways to gauge whether state intervention will allow enough room for the ambitious and enough tolerance for eccentric, radical or dissident spirits. It is clear that liberals want to enhance opportunities for all to benefit from the fruits of capitalism. If this means that the state must intervene, then so be it.

State and welfare

Liberals are often cautious in the way they view the state. As we have seen, their preoccupation with the freedom of the individual means that they are often fearful of the state assuming too much control and power over the life of the individual. It is argued that the state poses a potential threat to the freedom of the individual and that the state needs to be limited in what it does. The value that liberals are willing to place upon the state depends a great deal upon how its activities impact upon the freedom of the individual. For liberals, the state ceases to be useful or welcomed as soon as it places unnecessary limits upon what individuals do. There are of course variations in the way that liberals view the state. Making use of the distinction between classical and social liberals will allow us to understand at least some of these variations.
Classical liberals tend to be suspicious of the state and regard the state as a necessary evil at best. They are wary of organised collective power and are therefore critical of the state extending its jurisdiction into the private affairs of the individual. Mill (1859) was a firm believer in a private sphere that should be protected from public intervention. For this reason, he drew a distinction between self and other-regarding actions and argued that our freedom should be restricted if our actions pose a definite threat to other people. Although he believed that we should be free in issues that concern us solely and that we need the freedom to judge what is best for ourselves, he pointed out that we are not isolated beings and that many of our actions can impact upon the freedom of others. Where this happened, the state could intervene to prevent the spread of harm. For classical liberals, the state is often seen as a useful force that can be used to ensure that individual rights are not infringed by other individuals and groups. According to this line of thought, it would be foolish and counter-productive to give the state too much power for it too could undermine our freedoms.
A less critical view of the state is often put forward by social liberals who tend to look for ways to balance the interests of the individual with those of the community. They recognise that freedom should be as widely dispersed as possible, rather than restricted to a minority, and that the state can assist in the development of freedom by providing opportunities for the vast majority. Liberals believe that the state can compensate for the volatility of the capitalist economy and that prudent levels of intervention can help to stabilise the economic system and make inequalities in outcome and opportunity less extreme. L.T. Hobhouse (1911), for example, believed that society is an organism and that this has significant implications for the way we view the relationship between individuals and society, the way we understand what could be regarded as the ‘collective life’ of society and the way that society can and does develop. According to Hobhouse, each of us is influenced by society and by interacting with our fellow citizens. All parts of society were regarded as interdependent to such an extent that ‘… nothing of any import affects the social life on one side without setting up reactions all through the tissue’ (Hobhouse, 1911, p. 248). Although he rejected the view that society has a personality distinct from the people in that society, he argued that society has a ‘collective life and character’ that rests upon and is informed by the myriad of ties between people. For Hobhouse, fruitful social reform cannot take place in isolated pockets of society because each of these pockets is far from isolated and is connected inextricably to other parts of the social organism. In his view, the individual parts of society should develop and be reformed in a way that ‘… tends on the whole to further the development of others’ (Hobhouse, 1911, p. 136). According to this view of society, there is plenty of room for the state to intervene to harness the energies and nurture the social organism. Indeed, the state could be seen to have a duty to legislate in the interests of the social organism rather than simply to protect the rights of the individual.
Classical and social liberals have very different views on the role of the state in the provision of welfare. Whereas classical liberals are more prone to believe that individuals should look after their own welfare needs, new liberals are aware that whatever happens to the individual also happens to society. Poor health, for example, affects not only the person who is sick but also the rest of society. Illness can be passed on in a direct way and can also contribute towards social malaise. By viewing society as an interconnected whole, new liberals see the state can have an important role in alleviating poverty and in freeing people from the horrors of poor housing and sickness. For Hobhouse (1911) it was important to define individual rights in terms of the common good and to recognise that the common good depended upon the welfare of all members of society. Hobhouse believed that the state had a responsibility to maintain hospitals, provide a decent system of education and to make provision for the poor. In his view, the function of the state was ‘… to secure conditions upon which its citizens are able to win by their own efforts all that is necessary to a full civic efficiency’ (Hobhouse, 1911, p. 158). This meant that the state had a duty to regulate the economy in such a way as to prevent widespread destitution and to dedicate resources to fighting and preventing harsh levels of poverty. Indeed, he argued that the state must ‘… secure the conditions of self-maintenance for the normal healthy citizen’ (Hobhouse, 1911, p. 174). For American social liberals likewise, the state was seen to have a potentially important role in the provision of welfare. Lyndon Johnson’s ‘war on poverty’, for example, was designed to attack poverty on a variety of fronts. His administration recognised that poverty does not consist in a single thing but stems from a variety of factors including unemployment, poor health, poor quality housing and inadequate or inappropriate education. The solution involved setting up a series of local programmes to provide aid to schools, training for adults and decent housing for all. He recognised that people were trapped by poverty and that these circumstances were passed down through the generations. It was argued that if poverty was to be defeated, it required a reasonable level of community participation. Johnson waged his war on poverty not only for the poor sections of society but also to stimulate the moral and economic well-being of the American nation (Johnson, 1971, pp. 69–87).
It should be appreciated that modern social liberals have had an important role in the development of the welfare state, especially in Britain and in the United States. The foundations of the British welfare state were laid by the Beveridge Report of 1942 and were couched within a social liberal framework. In the United States, the Democratic Party in general and the administrations led by Roosevelt and by Johnson have been extremely important in establishing a range of state funded and directed welfare services. Some of these measures will be discussed in more detail in the next section, but for now it is important to recognise that social liberals will often view the state as a potential ally in the battle against the obstacles to individual freedom and that this will often involve some role in the provision of a range of welfare services. The welfare state envisaged by social liberals is one that exists alongside a regulated capitalist system and one that seeks to enhance positive liberty and equality of opportunity. It does not attempt to supplant capitalism or remove all inequalities. Rather, the welfare state is seen as one of the mechanisms that can be used to stabilise capitalism and to remove at least some of the inequalities created by the system.

Welfare and social policies

Liberals are well aware of the importance of social policies in the promotion of the common welfare. Liberal theorists have been at the forefront of those who argue that the state should assume at least some responsibility for protecting and advancing the economic and social security of the citizen body. Although at times sceptical about state intervention, liberals have still seen that the state can have an important role in providing benefits, housing, health care and education. If the state is neutral and can be used to implement progressive policies, then it makes sense from a liberal point of view to use its power in an attempt to eradicate or at least minimise social problems in the knowledge or belief that this proactive approach can help to stabilise and prolong the life of the capitalist system.

Benefits

Many liberals recognise that the state could and should have a role in the provision of benefits. In the closing stages of the eighteenth century, classical liberals in Britain helped to place the alleviation of poverty on the political agenda. Tom Paine, for example, believed that there should be some assistance available for the underprivileged. In particular, he was in favour of retirement pensions, family allowance and maternity pay. Writing passionately about the wretched living conditions of the poor, he complained that the poor are raised without morals and without prospects and that social reform aimed to reduce poverty would be of benefit to the nation as a whole (Paine, 1792). Classical liberals did not necessarily want to leave the poor without any protection. Despite all of the rhetoric about the importance of individuals being responsible for themselves, wide-scale poverty is still recognised by classical liberals as a social problem that requires at least some government intervention.
Social liberals have likewise been active in their support of a benefits system. Consider, for example, the ideas contained within the Beveridge Report. One of the aims of the Beveridge Report was to establish a system of benefits to assist the unemployed, the sick and the elderly (Beveridge, 1942). These proposals were made, however, on the assumption that families would stay together, that the majority of men would work, that the majority of women would stay at home and that people would only receive pensions for a short period given that the majority of people did not live long beyond retirement age. The Beveridge system also relied upon government developing policies to prevent mass unemployment. Unemployment benefit would only be paid as an unconditional right in the short term. Thereafter, receiving benefit was to be made contingent upon looking for work or training. The Beveridge Report pointed out that the costs of unemployment benefit could become heavy and ‘insupportable’ and that it was therefore necessary to fight against unemployment, which increased spending on benefits and deprived the state of income. A war was thus declared on mass unemployment and against prolonged unemployment for individuals. The Beveridge plan involved the ‘abolition of want’ through redistributing our incomes through different stages in our lives (Beveridge, 1942; BBC2, 23.10.1997). The aim was certainly not to make us dependent upon welfare but to provide a safety net that all workers helped to construct and maintain. This safety net would be there for times of hardship and for when our working lives are over. It was envisaged, however, that the benefits system would operate under conditions of full employment and that it would not be available as a long-term resting place for those who chose not to work. In more recent times, liberals have recognised the need to adapt the benefits system to the changing nature of work. Charles Kennedy (2001), for example, argued that governments should recognise that many people no longer work nine-to-five and that the benefits system needs to be reformed so that people do not lose their entitlement to benefits if they take on part-time work. This shows that liberals are aware that the benefits system needs to be designed so that it is not confined solely to those who are without any type of work.
In addition to providing some of the theoretical backbone for the post-war welfare state in Britain, liberal governments have had an extremely important role in creating the benefits system in Britain. Most notable of all was the Liberal government of 1906–1914, which was responsible for a batch of welfare legislation that included such important reforms as pensions, national insurance, child labour and minimum wage acts. The Old Age Pensions Act of 1908 gave pensions to all people over 70 as long as their annual incomes did not exceed £31.10 shillings. Those who had previously refused to work, been in prison in the previous ten years or had been denied the right to vote under Poor Law regulations were disqualified. This left the so-called ‘respectable poor’. The issuing of pensions, however, was instrumental in showing that poverty had social roots. Indeed, the character test imposed upon prospective recipients of a pension undermined the view that the pension was a universal rather than a selective right (Pearson and Williams, 1984, p. 164). The Liberal government also made some provision for the unemployed. The National Insurance Act of 1911 made employers and employees responsible for paying a weekly insurance stamp. This money was meant to finance a system of unemployment benefit and health cover for those who paid into the system. This was a compulsory form of insurance, which was thought to benefit the individual and serve the common good. As employers and employees shared responsibility for paying the insurance, it was thought to reinforce mutual obligations in society, encourage cooperation between the classes and be a force in moral education. The architects of the act were said to believe that they were ‘… not restricting liberty but enlarging it, using one form of compulsion to prevent greater infringements of individual liberty’ (Pearson and Williams, 1984, p. 166). According to Asa Briggs, national insurance was introduced in the interests of the medical profession and he claims that it should be seen in relation to ‘… the history of hidden pressures from established interests and a sectional demand for an enlargement of professional freedom’ (Briggs, 1969, p. 25). National insurance gave working people access to medical treatment and some security in the event of being made unemployed. This was not a universal form of social security, but a way for workers to insure themselves against some misfortunes.
Liberals have also stamped their mark upon the development of the benefits system in America. Roosevelt’s Social Security Act of 1935 introduced a range of benefits into American society and went part of the way to supplement previous philanthropic relief. Retirement pensions were introduced and states were encouraged to initiate some form of unemployment insurance. This unemployment insurance did not aim to overcome all hardship but attempted instead to address the problems of involuntary unemployment. Benefits were to be given to those who had contributed to the scheme and were thus deemed to have ‘earned’ their right to relief during times of unemployment. The 1935 Social Security Act also created a programme of Aid to Dependent Children, also known as the ADC system, through which benefit was paid to families in poverty to help towards the maintenance of their children (Clarke and Fox Piven, 2001, pp. 27–28). It is notable that the ADC system sought to give relief to children rather than to those adults who had not contributed towards unemployment insurance. This was in character with the tone of the New Deal, which deliberately set out to reward the hardworking and to deter the feckless.
Liberals tend to approach the benefits system rather hesitantly, as if it draws attention to the failings of capitalism. Classical liberal views on the benefits system show that they are willing to provide a safety net for those who are unable to adapt to the needs of the free market. For social liberals, it was assumed that only a minority of those of working age would need benefits because the state would also have an active role in managing the economy and in creating jobs. Although liberals want the benefit system to be there for those in need, it is certainly hoped by many that capitalism (whether free market or planned) could cater for the needs of the vast majority. Although the benefits system might be a necessity, liberals would argue that there are many other alternatives that can be explored by public and private interests to ensure that capitalism works efficiently and that the need for a benefits system is minimised.

Housing

Liberals have often been reluctant to allow the government to intervene too directly in the ownership and management of housing. If we were to employ the logic of classical liberalism, it could be argued that housing is too personal to allow for extensive government intervention. This argument would be perfectly compatible with the liberal distinction between the public and private spheres, which attempts to keep the government out of the private lives of individuals. Herbert Spencer (1884), for example, was extremely critical of government intervention in housing. Spencer argued that the British government had introduced too many housing regulations and that these were deterring private investors and penalising private landlords unnecessarily. As the private sector turn away from investing in housing, greater pressure would be exerted on local government to provide housing and to increase taxes to finance its intervention (Spencer, 1884, pp. 57–58). Although classical liberals might be opposed to government intervention, social liberals are far more prone to recognise the value of government intervention in housing. For modern liberals like Charles Kennedy (2001), the government can assist in the development of decent housing if it adopts a holistic approach to community development. Kennedy points out that a sensible approach to housing consists not so much in investing in more housing but in investing in struggling communities where there exists plenty of empty housing stock and in attempting to improve environmental conditions in the inner cities (Kennedy, 2001, pp. 57–58). This approach shows that government intervention in housing should not be seen in isolation of other economic and social policies. From a liberal perspective, there is room for both private and public initiatives. This can be illustrated by reference to the housing policies supported by the Liberal Democrat Party in Britain and the Democratic Party in the United States.
The Liberal Democrat Party in Britain supports the extension of private ownership alongside a safety net of public or social housing. In the party manifesto in 1992, the Liberal Democrats argued that housing relief should be available for people in owner-occupied and rented accommodation and that restrictions placed on local authority house building, introduced by the Conservative government during the 1980s, need to be lifted so as to allow local councils to enter into partnerships with housing associations and to encourage the development of tenant cooperatives. The Liberal Democrats argued that local councils should be made responsible for housing the homeless, that short-term rented accommodation should be made available and that all 16–18 year olds should be given preferential status on council house waiting lists (Liberal Democrat Party, 1992). The Liberal Democrats have been particularly active in calling for the creation of sensible partnerships between the public and private sectors. In their 1997 election manifesto, for example, they claimed that councils should be allowed to approach the private sector for help in financing social housing and that the money raised from the sale of council housing in the past should be used to build up the stock once more (Liberal Democrat Party, 1997, p. 29).
The Democratic Party in the United States has addressed the problem of housing but has done relatively little to challenge the dominance of private sector provision. Roosevelt failed to deal effectively with poor housing conditions. In many areas, especially where there were defence plants during the war, people often lived in temporary shacks, trailers and tents (Burns, 1970, pp. 52–53). The Johnson government in the 1960s was a little more proactive and it pledged its support for a massive programme of slum clearance and inner-city regeneration. Johnson believed that a comprehensive housing programme was necessary as part of a general attempt to increase the aspirations of the poorer sections of the community. In his view, slums were ‘… a breeding ground of human failure and despair, where hope is as alien as sunlight and green grass’ (Johnson, 1971, p. 330). The Johnson administration introduced the Model Cities Act in 1966 that forced cities, with the aid of federal grants, to embark upon inner-city reconstruction. This was followed in 1968 with the National Housing Act that envisaged the building of 26 million new homes, again with federal assistance, over a ten-year period. Although the administrative machinery was established to implement this programme, it was abandoned because of the costs involved and because of a significant rise in interest rates (Johnson, 1971, pp. 329–332).
For social liberals, the government can have a role in the ownership and control of housing but they believe that this should not usurp the role of the private sector and the innovative activities of the voluntary sector. It is often the case that liberals will lend support to the public provision of housing when the private sector is unable to meet the housing needs of the nation rather than out of principle. Liberals in the twentieth century and beyond recognise that the government should assume at least some responsibility for housing, even if that role is to facilitate and coordinate the activities of different private and voluntary sector groups. Liberals would argue that playing an active part in addressing the housing needs of the nation does not mean that the government must own housing stock, as long as there are feasible alternatives at hand. Although housing might be seen as a personal issue, liberals have shown that they are willing to allow the government to intervene when the private sector fails to provide suitable housing.

Health

Liberals have earned the reputation of supporting government intervention and investment in health care. Health could be viewed as a purely personal possession, but many liberals are aware of the social context of health and of health care. For social liberals like Kennedy (2001), the health care needs of the nation cannot be satisfied by a private sector motivated by the desire to make profit. In his view, all citizens need equal access to the National Health Service. This, indeed, was regarded as ‘… vital for securing individual liberty’ (Kennedy, 2001, p. 104). Although Kennedy wants significant government intervention in the provision of health care, he harboured severe reservations about the virtues of centralised control and he argued that the control of the National Health Service should be decentralised to the regions of Britain and opened up for patients to be involved in decision making. In this way, the health service could be made more accountable and responsive to the needs of the citizen (Kennedy, 2001, p. 118). Even if liberals support the principle of government intervention in social provision, their fear of the authoritarian and centralised state control means that they are often likely to favour the administration of schemes in a way that makes use of local skills and knowledge.
Liberals in Britain, especially in recent years, have tended to be supportive of direct and quite extensive government involvement in health care. The Liberal Democrat Party in Britain claims that it supports the original aims of the National Health Service, which purports to provide free health care financed through direct taxation and available according to the needs of the patient. The Liberal Democrat Party argued during the 1990s that it was against the application of market principles to the health service, which had been introduced by the Conservative government (see Chapter 6), and favoured long-term funding arrangements between the various branches of health care. It claimed that although the National Health Service was efficient and cost-effective, shifting more resources into primary health care and into preventative services could make improvements. It argued that the National Health Service concentrates too much upon curing illness and that more time should be spent on preventing people from becoming ill by helping them take responsibility for their own states of health. Extra funds would be raised for health care by increasing taxation on cigarettes which, it was hoped, would also reduce the numbers of people smoking and the levels of smoking-related illnesses (Liberal Democrat Party, 1992, 1997; Wallace, 1997, pp. 94–97). In many ways, the Liberal Democrats have shown themselves to be quite collectivist in the way they approach health care and considerably more aware than the Conservative Party of the social origins and context of poor health.
The most notable American liberal programme on health care was introduced by the Johnson administration, though vested interests blocked attempts during the 1960s to socialise health care and led to a compromise in which health care was subsidised for those in need. Medicare was established as a system of social security for the elderly and was introduced by the Johnson government in response to the mounting costs of illness faced by people in old age. Medicaid was also established to assist the poor, but this was plagued by the stigmas attached to public assistance packages. Aware that medical professionals might resist the measures, given their history of resistance to ‘socialised medicine’, Johnson played an important personal role in gaining the support of health workers. His administration introduced 40 new bills on health care and increased annual federal spending on health from $4 billion to $14 billion. Johnson claimed that these measures helped to show that ‘… good medical care is a right, not just a privilege’ (Johnson, 1971, pp. 220, 212–221; Ginsburg, 1992, p. 131; Clarke and Fox Piven, 2001, pp. 30–31). Although American liberals have recognised the social dimension of health care and that the government should have a role, the systems they have introduced continue to reflect class differences and fall short of supporting ‘socialised medicine’.
Liberal perspectives on health care reflect a diverse range of views. While some liberals are against the state intervening to any great degree, others consider it an essential feature of modern social policy. For many liberals, health policy needs to take into account the social context of health and they recognise that a lot can be gained from paying attention to the views and needs of patients. Simply having a well-funded health service is not enough in itself to guarantee that high levels of care are available where the need is the greatest. Liberals are well aware that the most vulnerable sections of the community are often virtually invisible to centralised government departments and that a more democratic and decentralised system of care is often warranted.

Education

Liberals have long been aware of the need for some state involvement in the provision of education. Even Adam Smith (1776), the arch defender of the free market and of limited government, argued that the government should invest in education because the division of labour in industrial enterprises was apt to stupefy the modern worker. Smith called upon the government to establish district or parish schools and to invest something alongside parental contributions. He was particularly keen on people having the ability to read, write and to have some numerical skills and he believed that geometry and mechanics were particularly useful areas of study because they could be applied in the industrial setting. Although this education was deemed necessary for the development of the citizen body and was therefore of intrinsic value, Smith was careful to point out that the state benefits from developments in education because educated people are less likely to be guided by ignorance and superstition, less swayed by sedition, less opposed to the government and more respectable and respectful of their social superiors (Smith, 1776, pp. 987–994). In this early vision of a state-assisted education system, it was recognised that education can have an important role in transmitting safe value-systems and that if the state is not involved in the provision of education it can leave a gap for other more critical movements and causes to fill. A state that is interested in establishing an intellectual consensus could do far worse than invest in a centrally controlled education system.
It could be argued that education is also necessary to further other parts of the liberal agenda. As we have seen, liberals place a high value upon individual freedom and upon individuals deliberating on public matters. A liberal society relies as heavily upon our ability to distinguish between our own interests and those of other people, as it does upon us scrutinising and challenging those who would seek to deprive us of our liberty. For social liberals like J.A. Hobson (1974, 1998) intellectual liberty was of paramount importance and he believed that without this liberty all other freedoms were damaged. In his view, true intellectual liberty could not be achieved unless education was made available to all sections of society. He was extremely critical of elitist education and he was condemning of the power wielded over education by the church and by wealthy patrons because such control would inevitably tinge the education made available with subservient values. Hobson recognised that the employers wanted the workers to have nothing more than a technical education that would serve the interests of the employers rather than the interests of the workers. Concessions towards working class education were thus often meagre and offered with ulterior motives and with a distinct lack of grace. Hobson was scornful of such education and he doubted whether the workers could be educated in this limited way without liberating their minds to other possibilities. Hobson believed that the state had a duty to provide free education to all, financed through general taxation, because the alternatives outlined above retarded intellectual development. He claimed, indeed, that if ‘… intellectual liberty in the sense of free access to disinterested culture is to become the common heritage of all, public ownership and control of the instruments of this education is indispensable’ (Hobson, 1974, p. 111. See also pp. 109–113 and Hobson, 1998, pp. 55–57, 186–191). For social liberals, we all have (or should have) an interest in protecting and promoting the freedom of the individual. Such an aim, it could be argued, cannot be furthered by sentencing sections of society to perpetual ignorance and by leaving the business of education to market mechanisms.
The Liberal Party in Britain has been active in campaigns to ensure the involvement of the state in educating the British people. The coalition government during the First World War, which was established by and dominated by liberals, extended state education for children up to the age of fourteen and began to develop plans to expand provision for children under the age of five. In addition to wanting the state to assume greater responsibility for education, liberals have often opposed the use of education to promote a specific religious creed. This was shown, for example, in the way that the Liberal Party attempted to overturn the Conservative’s Education Act of 1902 because it gave state support for Anglican schools at the expense of other faiths. Although the House of Lords and the Anglican Church crushed attempts by the Liberal government of 1906–1911 to reduce the power of the church over the education system, the aspiration to create a free and inclusive education system remains a hallmark of liberal education policy (see Cross, 1963; Lawton, 2004). For many liberals, state involvement in the provision of education must always be tempered with a healthy respect for intellectual and religious diversity. Education is not always a progressive force and, as liberals are inclined to point out, it can often be used to enslave the minds of people.
Liberals in the United States have likewise found it difficult at times to expand government provision of education without falling foul of powerful religious groups. Lyndon Johnson, who had been a schoolteacher three decades before becoming president of the United States, placed education at the heart of his social programme in the election campaign of 1964. Central government in the United States had always found it difficult to deal with education effectively because of long-standing antagonism between the church and the state and the constitutional separation of these two institutions. Given the importance of religious freedom in America and the extreme diversity of religious beliefs practised in America, the federal government was unable for many years to provide aid to state schools for fear of being accused of meddling with the curriculum and thus, inadvertently or otherwise, promoting one religious creed over another. The Catholics in particular had been critical of federal involvement and had effectively scuppered J.F. Kennedy’s plans for education. Johnson chose to woo the leaders of a variety of religious communities and passed a bill that allowed for federal aid to state schools to be used for employing extra teaching staff and buying audio-visual equipment. This was seen as part of a programme to extend educational opportunities to the poorest sections of the nation (Johnson, 1971, pp. 206–212; Taylor and Hawley, 2003). Liberals in the United States seem acutely aware of the need to respect diversity, even if this limits the scope of their broader social programmes.
It is apparent that for many liberals, education is of supreme importance. Whereas benefits, housing and health care help to provide a foundation for individual life, education creates prospects for individual development and is therefore clearly indispensable for the achievement of broader liberal social aims. The liberal thirst for freedom is motivated in part by the belief that giving people access to education and to realistic opportunities can help to prepare us for autonomy and for responsible citizenship. It could be argued indeed that liberal aspirations would fall flat unless accompanied by at least some commitment to educational provision. Even classical liberals have been willing to suspend their mistrust of the state in order to allow it to have a role in cultivating the intellect of the many. What, it could be asked, is the value of freedom without education? For a liberal, the two are intimately connected.

Conclusion

Central to liberalism is the belief that capitalism can benefit all citizens. We have seen that for some liberals, capitalism should regulate itself and the individual be left with as much freedom as possible. For these classical liberals, the state might still have some role in providing basic education and even a minimal benefits system. But what happens if the market fails and if the opportunity to live a free and prosperous life is restricted to the few? Once liberals realised that capitalism is too unstable to guarantee sustainable employment and opportunities, they turned towards the state and helped to draw the state into social programmes designed to bring balance to the system. Social liberals believe that all citizens need access to freedom and to equal opportunities. They focus far more than classical liberals on community development and call upon the state to intervene alongside the private and voluntary sectors in social provision. These liberals have been extremely important in developing welfare states (especially in Britain and the United States) and in addressing with considerable skill the need to find a way to reconcile individual and collective interests. It would seem quite likely that social liberalism will continue to have a future for as long as the capitalist system needs to be tamed. Although the policies introduced by some liberal administrations are sometimes regarded as too interventionist, liberal attempts to balance individual and collective interests seem to have almost perennial significance. Although it is clear that many liberals fear too much state intervention, they have some interesting things to say about the vibrancy of civil society and about the role of the state in facilitating individual and social development. It could be argued, however, that liberal social philosophy, which recognises the importance of civil liberties and human rights, is likely to survive long after their designs for the welfare state have been redrafted beyond recognition. They leave the curious, however, with some salutary lessons about the nature and importance of freedom.
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