The New Beveridge

When Sir William Henry Beveridge released his 200,000-word "cradle-to-grave" plan to the British public, he warned that the plan was not financially feasible unless Great Britain could bring full employment to its people in peacetime. Last week the 65-year-old professor, recently elected to Parliament, detailed the policies Great Britain must follow if it hopes to provide full employment.

Had Sir William called for socialization of production, he probably would have been labeled a Socialist, which he says he is not. But the Beveridge Plan No. 2 would provide jobs for all in a free society by what he calls "the socialization of demand." Instead of the State's taking over productive facilities, it will underwrite consumption. Says he: "The experience of war is relevant to peace. . . . Unemployment disappears when the State sets up unlimited demand for a compelling common purpose."

The new Beveridge plan starts from a premise familiar in the U.S. Depressions, says he, following the Keynesian theories, are caused by withholding too much of the national income from current consumption and current investment. To correct this condition, Sir William proposes an extension of the wartime type of budget. This sets forth not only public revenue and expenditures, but also estimates income and outlay of the nation as a whole. From this budget the State would determine how much it would have to spend, in addition to private outlay, for full employment. State spending and controlled investments would be aimed at supplying good houses, food, fuel and other necessities at stable prices for all.

Sir William wants his budget guided only by three rules: 1) spending must always be sufficient for full employment; 2) spending must be directed to essentials; 3) it is usually better to tax than to borrow. Total outlay at all times must be sufficient for full employment. The WPA idea is lifted to new heights when Beveridge declares: "It is better to employ people on digging holes and filling them up again than not to employ them at all."

Worldwide Ideal. Great Britain's foreign trade must be coordinated with its full-employment policy. Sir William regards worldwide multilateral trading as the ideal. But the ideal can be attained only if all other important industrial nations also achieve full employment. Depressions, he states, as well as prosperity. are spread by multilateral trade. Other prerequisites for the ideal system: stable tariff and monetary policies. If multilateral trade cannot be secured on these conditions, then Britain should aim at regional arrangements. And if those fail, it is better to make bilateral bargains with raw-material producers. Whatever the form of trade, Sir William foresees increased Government control of capital, exchanges and imports. To stabilize purchasing power in agricultural nations, and thus provide steady markets for British manufactures, he advocates long-term contracts for the purchase of essential foods and raw materials.

The concept that unemployment is as unnecessary in peace as it is impossible in total war is now popular in the U.S. For Great Britain, Sir William has now supplied a bill of particulars for carrying a planned economy from war to peace. Throughout, he insists his program of "enlightened socialism" can be carried out without abolition of private ownership, an assertion with which many would disagree. The new Beveridge plan will be published by W. W. Norton & Co. in the U.S. in February. The report may have as much of an effect on U.S. opinion as did publication of the first Beveridge plan on social security.

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