Figure 1.--While Britain won World War II, the policies adopted by the governing Lbour Party hasrmed the economy. Labour leaders assumed that socialist policies would lead to widespread prosperity. They duid not. The welfare state Labourv instituted was enormously expensive abd natiionsklization of industry proved a huge drag in the ecionomy and the tax revenue needed to finance it. Other european coyntries instituted welfare systems, but not only delated atiins until the econmy began recovering. And they did not natiolized important segments of the economy. As a result, war time rationing in Britain continued for years after the War. Long adter rationing was ended in other countries--even Germany. The British continued standing in line for restricted quantuties of everything worth having.

Although there were some medieval and early industrial precursors like the Work House, The foundation of the British welafe system was layed by Liberal Party. This began under the leadership of Prime Minister H. H. Asquith and Chancellor of the Exchequer David Lloyd George in the years preceeding World WarI. British liberals unlike the Labour Party was not hostile to capitlism and big business. The Liberals had been primarily interested in free trade (19th century). This was classical liberalism, free trade and laissez faire economics. They were competing with the Conservative Party which at the time was defending the interests of the lannded aristocracy. The Liberal Party by the turn of the 20th century began to shift and became concerned with social legislation to achieve opportunities for working people. They were competing with the Labour Party with a Marxist iderology hostile to capitalism and a Conservative Party which was replacing the Liberal connection with business and the middle-class. Chancellor Bismarck's success in Germany with social reforms, especially old pensions, was influential in Britain. The Old-Age Pensions Act enacted by the Liberal Government was the first major step in building Britain's the modern welfare system (1908). Further reforms followed both World War I and even more importantly World War II following the Labour victory in the 1945 General Election. The Liberals had begun a second pillar to the welfare system in the inter-War era--public housing. After World War II, Labour added the third pillar--the National Health System. A fourth pillar, state ownership as proscribed by Marxist ideology proved to be an unmitigated disaster. Labour differed from the Liberals in that as a result of their Marrxist foundation, did not understand the importance of a sucessful capitalist economy to pay the bills for their costly welfare system. The result was that after World War II, the British economy and as a result the prosperity of the country fell behind America and even war-wrecked Continental Western Europe. Labour leaders bek=lieved rgat state ownership of industry would lead to a new era of poesperity. Instead Brutain which had once been the most prosperous country un Europe became the Sick Man of Europe with wages falling well behind the major European countries--including Germany which had lost the War and been devestated. The erac became known as Austrity Britain. This was occuring at the same time as the German Economic Miracle. Labour simply maintained their left-wing ideological commiment despite the griwing body of ecidence thast socilism does not wirk. This did not change until the premiership of Margaret Thatcher. Lasbour itself dis not chnge its outlook, but the British public finally firmly voted them out of office.

Created: 9:03 PM 5/6/2023
Last updated: 9:03 PM 5/6/2023