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LONDON - MAY 7: The National Health Service logo is shown on the wall outside St Thomas's Hospital May 7, 2003 in London, England. Britain's Health Secretary Alan Milburn is trying to convince critics of his foundation hospital plans ahead of a House of Commons vote. Milburn has told MPs the NHS had to change to keep pace with the modern world.
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The UK’s most cherished institution.
"THE GREAT LEVELER"

History shows that big social programs only emerge after global disasters

Adam Rasmi
By Adam Rasmi

Reporter

From our Obsession

Global Economic Disruptions

Globalization, automation, and inequality—oh my!

Major upheavals—like today’s coronavirus pandemic—can often reduce inequality. The first and most immediate reason is that they tend to hurt almost everyone financially, and the rich have more wealth to lose. The falling fortunes of these well-to-do folks bring them relatively closer to how everyone else is doing.

As the Stanford University professor Walter Scheidel has written in The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, only four things tend to bring about that kind of outcome. They are: mass mobilization for war, total revolution, state and economic collapse, and epidemics and pandemics. Democracy doesn’t appear to play a role, he argues.

Though these events trigger mass suffering, they also demand sacrifice—particularly from the rich who can afford to do more. Historically, governments have stepped in during these crisis periods with major social programs that help the poor or the vulnerable.

Here are some noteworthy examples in the 20th century:

Public housing

In the UK, this took off in 1919, a year after World War I concluded. The then-prime minister David Lloyd George launched a “Homes fit for Heroes” campaign to ensure that veterans—six million men served; 700,000 were killed—had adequate shelter after their wartime service. It was part of a wider program that required local authorities to provide “council housing.”

The Housing Act of 1919 stipulated that 500,000 properties would be built within three years. Even though that target was not met, it was a watershed piece of legislation in the UK.

Council housing picked up again following World War II, another extraordinary upheaval in British life. The Labour government under Clement Attlee built more than a million units—mostly council ones—with the vast majority of them replacing homes that had been destroyed by German aerial bombardment. The construction of council housing peaked in the early 1950s and, in recent years, successive governments have faced calls to build more.

Social Security

In the US, which has a much smaller social safety net than western European countries, significant gains were made during the New Deal era under president Franklin D. Roosevelt.

The Great Depression had begun with the Black Tuesday stock market crash of 1929, with unemployment hovering around 25% the year FDR took office in 1933. One of the biggest achievements of this period was the creation of Social Security, which still provides retirement, disability, and other benefits to millions of people. Its services cost more than $1 trillion a year, and make up about a quarter of the US government’s federal budget.

Universal health care

In Europe, the UK launched a universal health care system in 1948, the year the NHS was established. But the seeds for a national system were firmly planted in 1942, during the height of World War II, when the liberal economist William Beveridge produced a government report arguing that “a revolutionary moment in the world’s history is a time for revolutions, not for patching.”

The report was overwhelmingly popular among Brits, in part because state control and mass mobilization during the war helped convince citizens the government could play a more proactive role in social provisions. The report became the basis of the welfare state, which was enacted by the Labour government under Attlee.

European countries followed suit with universal health care systems of their own in the 1950s. Other places including Canada set up similar health care systems in the years that followed.

The interlude

It’s been a long time since any major new welfare programs were launched in Europe or the US (Obamacare, set up as a mandate to buy private insurance, was a market-led initiative based off an idea from the conservative Heritage Foundation think tank). Though the immediate post-war decades were a period of broad economic growth in wealthy countries, that began to change in the 1970s, as real wages stalled and inequality increased.

What about today?

Public support for more robust welfare programs appears to have grown across rich countries—including the US—particularly among young people. That trend helps explain, in part, the growing popularity of big-spending left wing politics in recent years, whether that’s Bernie Sanders in the US, Jeremy Corbyn in the UK, Podemos in Spain, and Syriza in Greece.

Today, even moderate and conservative governments are embracing drastic measures due to coronavirus. From the Trump administration to the normally fiscally-reserved German chancellorship of Angela Merkel, governments are readying trillions of dollars in spending and loans to keep economies afloat.

The pandemic might, to hark back to the Beveridge Report, lay bare the need for “revolutionary action”—and a host of other social issues that predate it. Already, Spain has nationalized its private hospitals. In the US, there’s increasing talk of universal healthcare and Universal Basic Income, even from some unlikely quarters. (What’s actually being proposed is more akin to temporary stimulus, and UBI remains controversial because it treats rich and poor the same.)

To be sure, the pandemic will mean a lot of people getting sick and dying. But as the past shows, that prospect might prompt people—and the societies they form—to take better care of one another in the future.

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