United Kingdom

There was, however, only an incremental increase in the level of interest in state involvement in the economy and society in the immediate years before World War II, when the fear of war galvanized politicians and administrators. It was the “total war” of 1939–45 that brought a degree of centralized control of the economy and society that was unparalleled before or indeed since. In some ways this was an expression of prewar developments, but the impetus of the war was enormous and felt in all political quarters. In 1941 it was a Conservative chancellor of the Exchequer, Sir Kingsley Wood, who introduced the first Keynesian budget. Cross-party support was also evident in the response to the 1942 Beveridge Report, which became the blueprint of what was later to be called the welfare state. After 1945 a decisive shift had taken place toward the recognition of state intervention and planning as the norm, not the exception, and toward the idea that society could now be molded by political will. Nonetheless, there was much popular dislike of “government controls,” and the familiar rhetoric of the impartial state remained strong, as reflected in Beveridge’s attack in 1948 on the Labour government’s failure to encourage voluntarism. This voluntarism, however, was decidedly different from 19th-century voluntarism in that Beveridge advocated a minister-guardian of voluntary action. So pervasive was the postwar party consensus on the welfare state that the term coined to identify it, “Butskellism,” is at least as well remembered as the successive chancellors of the Exchequer—R.A. Butler and Hugh Gaitskell—from whose amalgamated surnames it was derived.

Lord Beveridge, photograph by Yousuf Karsh.Camera Press/Globe Photos

From the 1960s onward this consensus began to unravel, with the perception of poor economic performance and calls for the modernization of British society and the British economy. The mixed economy came under pressure, as did the institutions of the welfare state, especially the National Health Service (NHS). In the 1970s in particular, older beliefs in constitutional methods came into question—for instance, in the first national Civil Service strike ever, in 1973, and in the strikes and political violence that marked that decade as a whole. The result was a revolution in the relationship between state and society, whereby the market came to replace society as the model of state governance. This did not, however, mean a return to 19th-century models, though the character of this manifestation of the relationship between state and society was clearly liberal, in line with the long British tradition of governance.

Institutionally, this way of governing was pluralistic, but its pluralism was decidedly statist. It was not, as in the 19th century, a private, self-governing voluntarist pluralism but one that was designedly competitive, enlisting quasi-governmental institutions as clients competing with one another in a marketplace. In economic and cultural conditions increasingly shaped by globalization, the economy was exposed to the benign operations of the market not by leaving it alone but by actively intervening in it to create the conditions for entrepreneurship.

Analogously, social life was marketized too, thrown open to the idea that the capacity for self-realization could be obtained only through individual activity, not through society. Institutions like the NHS were reformed as a series of internal markets. These markets were to be governed by what has been called “the new public management.” This involved a focus upon accountability, with explicit standards and measures of performance. The ethical change involved a transition from the idea of public service to one of private management of the self. Parallel to this “culture of accountability” was the emergence of an “audit society,” in which formal and professionally sanctioned monitoring systems replaced the trust that earlier versions of relationship between state and society had invested in professional specialists of all sorts (the professions themselves, such as university teaching, were opened up to this sort of audit, which was all the more onerous because, if directed from above, it was carried out by the professionals themselves, so preserving the fiction of professional freedom).