The Magazine

Winston vs. the Webbs

A century-old precursor to the Obamacare debate

Apr 21, 2014, Vol. 19, No. 30 • By GERTRUDE HIMMELFARB
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Asquith and Lloyd George had been enthusiastic about the bill from the beginning, but the other members of the cabinet were not, which makes Churchill’s role all the more important. Unemployment insurance was, as he reminded his wife, the product of “much thought and effort”—and not only unemployment insurance, but social reform in general. “Political freedom, however precious,” he wrote in 1908, “is utterly incomplete without a measure at least of social and economic independence.” To Asquith, who had visited Germany and been impressed by Bismarck’s reforms, he cited the example of Germany. “Dimly across gulfs of ignorance I see the outline of a policy which I call the Minimum Standard. .  .  . Underneath the immense disjointed fabric of safeguards and insurances which has grown up by itself in England, there must be spread—at a lower level—a sort of Germanised network of State intervention and regulation.” Another memorandum, in a curious amalgam of Bismarckianism and Fabianism, proposed a “tremendous policy in Social Organization,” including labor exchanges and unemployment and health insurance. “She [Germany] is organized not only for war, but for peace. We are organized for nothing except party politics. .  .  . I say—thrust a big slice of Bismarkianism over the whole underside of our industrial system, and await the consequences, whatever they may be, with a good conscience.”

 If the Webbs would have appreciated Churchill’s appeal to “social organization,” they did not appreciate the reforms he proposed in that name. Indeed, they were very critical of both the Labor Exchanges Act and the National Insurance Act, for much the same reason, because they were insufficiently rigorous and too permissive, pandering to those they professed to help. The Labor Exchanges Act authorized the Board of Trade to establish “labor exchanges” where workers would be informed of the availability and location of work, would be assisted in applying for a job, and be given money to travel to it. The act was voluntary for both the employer and worker; the employer was not obliged to register his need for labor, nor was the worker obliged to use the facility of the exchange or accept the job offered him.

 

Introduced by Churchill in 1909 to a nearly empty House of Commons, the Labor Exchanges Act was passed with little dispute. To the Webbs, however, it was deeply flawed. What was wanted, they insisted, was a compulsory system, binding upon employers and laborers alike. Anything short of that would encourage “malingering” on the part of workers who need not apply to the exchange or accept the job offered them, relying on unemployment insurance to support them in lieu of work. “My wife and I,” Sidney informed the Board of Trade, “had come to the conclusion that compulsory insurance was impracticable unless we had a compulsory labor exchange; and that, along with a compulsory labor exchange, compulsory insurance was unnecessary.” In her diary, Beatrice described her meeting at 11 Downing Street with the lord chancellor followed by a breakfast with Churchill: “I tried to impress on them that any grant from the community to the individual beyond what it does for all, ought to be conditional on better conduct and that any insurance scheme had the fatal defect that the state got nothing for its money—that the persons felt they had a right to the allowance whatever their conduct.”

“Conditional on better conduct”—this was at the heart of the issue. The insurance bill was “dangerous” because it provided for “a free choice of doctors,” permitting the patient to choose a doctor “who interferes least with his habits” and might order such “medical extras” as food and alcohol. In effect, the bill was “paying the people to be ill.” The Webbs recalled the Workmen’s Compensation Act of 1897, which tempted workers to make “the most of every mishap,” avoid treatment so as to collect compensation, and then squander the money.

 It may seem ironic that socialists (of the Fabian or any other variety) should have opposed the National Insurance Act while a Conservative (temporarily lapsed, to be sure) enthusiastically supported it—and, more ironic, that they both did so under the banner of “social organization.” Both of them took that term seriously, but with different intent. The Webbs wanted to organize society in order to curb the anarchy of individualism and create a rational society in which the average sensual man would be prevented from indulging his whims and vices. Churchill wanted to organize society in order to create the conditions in which individualism would thrive, and the average sensual man—that is to say, everyman—could live his life freely, whims, vices, and all. In a memorandum entitled “Notes on Malingering,” Churchill defended the proposed act to another Fabian, Llewellyn Smith, the permanent secretary of the Board of Trade:

 

I do not feel convinced that we are entitled to refuse benefit to a qualified man who loses his employment through drunkenness. He has paid his contributions; he has insured himself against the fact of unemployment, and I think it arguable that his foresight should be rewarded irrespective of the cause of his dismissal, whether he lost his situation through his own habits of intemperance or through his employer’s habits of intemperance. I do not like mixing up moralities and mathematics. .  .  . Our concern is with the evil, not with the causes, with the fact of unemployment, not with the character of the unemployed.

“I do not like mixing up moralities and mathematics”—that memorable sentence encapsulates the debate between Churchill and the Webbs. The strength and merit of insurance, Churchill insisted, was that it depended not on the moral, or immoral, behavior of individuals (of employers and workers alike, both prone to “habits of intemperance”), but on “clear, ruthless mathematical rules,” the “mathematics of averages.” “We seek to substitute for the pressure of the forces of nature, operating by chance on individuals, the pressures of the laws of insurance, operating through averages.” He made the same point in the House of Commons, praising the bill for bringing “the magic of averages to the aid of the millions.”

While repudiating the “moralities” the Webbs brought to the debate, Churchill attributed to the act a larger moral purpose. By making workers more secure, it would make them better human beings, and by giving them a “stake in the country” (in quotation marks), it would also make them better citizens.

The idea is to increase the stability of our institutions by giving the mass of industrial workers a direct interest in maintaining them. .  .  . With a “stake in the country” in the form of insurances against evil days the worker will pay no attention to the vague promises of revolutionary socialism. .  .  . It will help to remove the dangerous element of uncertainty from the existence of the industrial worker. It will give him an assurance that his home, got together through long years and with affectionate sacrifice, will not be broken up, sent bit by bit to the pawnshop, just because through no fault of his own maybe he falls out of work. It will make him a better citizen, a more efficient worker, a happier man.

This is not the Churchill we remember today, and for good reason. It is a minor episode occupying only a few years in the life of the man who, for more momentous reasons, has been hailed as “the savior of his country,” even “the savior of Western civilization.” Yet it is a major episode in the social history of his country. And it may be an object lesson for Americans today.

Supporters of Obamacare have praised it as in the best tradition of progressivism. Critics have decried it as an ominous example of socialism. A more appropriate term might be Fabianism. We may hear the echoes of the Webbs’ distrust of the “average sensual man,” in the present law that denies the individual a choice of doctors and mandates types of insurance he might not want or require. Or their reliance upon the “professional expert” to “prescribe the remedies” for the individual’s “grievances,” in the administrative agencies now authorized to establish the proper medications for all ailments, overriding the doctor as well as patient. Or their impatience with the democratic process of legislation, in the recent presidential fiats modifying or suspending provisions of the law enacted by Congress. More dramatically, we may see the Fabian vision of “the regeneration of society,” “the reconstruction of the Social System,” in Barack Obama’s exultant pronouncement just before his election: “We are five days away from fundamentally transforming the United States of America.”

The National Insurance Act of 1911 may have been a passing event in the life of Churchill. But its American counterpart is a climactic event in the presidency of Barack Obama and a critical event for Americans today. We may well look back to that debate more than a century ago and recall Winston Churchill’s quip, “I refuse to be shut up in a soup kitchen with Beatrice Webb.”

Gertrude Himmelfarb is the author, most recently, of The People of the Book: Philosemitism in England from Cromwell to Churchill.

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