While she admired Winston Churchill, his resistance to conditional welfare was exasperating. For years Beatrice Webb had been arguing with Churchill and other Liberals about social insurance and she was getting nowhere. She insisted that: "Doling out weekly allowances, and with no kind of treatment attached, is a most unscientific state aid". But in 1911 the government ignored her advice and set up an insurance system that made relatively few demands on recipients.
Webb wanted to prevent problems like sickness and unemployment by making income support conditional on responsible behaviour. Together with her husband Sidney she argued for a system based on the "doctrine of mutual obligation between the individual and the community." Under this system:
… new and enlarged obligations, unknown in a state of laisser faire, are placed upon the individual — such as the obligation of the parent to keep his children in health, and to send them to school at the time and in the condition insisted upon ; the obligation of the young person to be well-conducted and to learn ; the obligation of the adult not to infect his environment and to submit when required to hospital treatment. To enforce these obligations — all new since 1834 — upon the individual citizen, experience shows that some other pressure on his volition is required than that which results from merely leading him alone (p 270-271).
The Liberal government compulsory insurance scheme posed a threat to the Webb’s vision of conditional welfare. The payment of contributions created an entitlement to assistance. If the authorities were satisfied that a worker was genuinely unemployed, the worker got their benefit. As Winston Churchill wrote in 1909:
I do not feel convinced that we are entitled to refuse benefits to a qualified man who loses his employment through drunkenness. He has paid his contributions; he has insured himself against unemployment, and I think it arguable that his foresight should be rewarded irrespective of the cause of his dismissal, whether he has 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.
A disposition to overindulgence in alcohol, a hot temper, a bad manner, a capricious employer, a financially unsound employer, a new process in manufacturing, a contraction in trade, are all alike factors in the risk. Our concern is with the evil, not with the causes. With the fact of unemployment, not with the character of the unemployed.
In a meeting at with Liberal ministers at Number 11, the Webbs had a heated discussion about unconditional invalidity insurance. As Beatrice Webb recalled:
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 (p 417).
No doubt if Webb found herself arguing about conditional welfare in today’s Australia, she’d feel right at home. Before long she’d be citing papers by James Heckman and stressing the importance of investing in human capital. No doubt she’d be heartened to see that her doctrine of mutual obligation enjoyed bipartisan support. It seems we’re all Fabians now.