By the 1880s the prosperity, sense of confidence, and general air of political and social innovation associated with early and mid-Victorian leaders were on the wane. There was an undeniable depression in arable farming, a drop in prices for commerce, and a slowing in the rate of industrial growth.
A general decline in public and private morals and a move from duty toward frivolity seemed to mark the Edwardian period, named after the pleasure-loving though philanthropic King Edward VII (r. 1901-1910). Irish troubles, the war in South Africa (in which world opinion generally supported the Boers, not the British), the rising international tensions that were leading to World War I, and the difficulties of raising the additional government revenue to finance both the naval armament race with Germany and the measures inaugurating the welfare state—all confronted the British people at the same time.
Under such conditions, many Britishers came to doubt the wisdom of the free-trade policies that had prevailed in 1846. For the Germans and others were not only underselling the British abroad; they were invading the British home market! Why not protect that market by a tariff system? Few Britishers believed that the home islands, already too densely populated to constitute a self- sufficient economy, could surround themselves with a simple tariff wall. But the empire was worldwide, with abundant agricultural resources. Within it the classical mercantilist interchange of manufactures for raw materials could still (in theory) provide a balanced economic system.
A reform leader from Birmingham, Joseph Chamberlain (1836-1914), had become a leading protectionist, giving special importance to the establishment of a system of imperial preference through which the whole complex of lands under the Crown would work together in a tariff union. Many Conservatives, never wholly reconciled to free trade, welcomed the issue, and Chamberlain’s new Unionist party had made protection a major plank in its program. Chamberlain organized a Tariff Reform League. In 1903 he made sweeping proposals that would have restored moderate duties on foodstuffs and raw materials and on foreign manufactured goods. But the new Conservative prime minister, Arthur Balfour (1848-1930), did not dare go so far, and Chamberlain resigned with his bill unpassed.
The Liberals were, however, increasingly committed to another policy. This was the welfare state—social security through compulsory insurance managed by the state and in part financed by the state; minimum wage laws; compulsory free public education; and a variety of public works and services. In 1909 the “People’s Budget” was introduced by a relatively new figure on the political stage, David Lloyd George (1863-1945), the Liberal chancellor of the exchequer. This budget, which proposed making the rich finance the new welfare measures through progressive taxation on incomes and inheritances, was no ordinary tax measure.
It was a means of altering the social and economic structure of Britain. The bill passed the Commons but was thrown out by the Lords. This rejection led to a general election, which the Liberals won. They then put through the Parliament Act of 1911, which took away from the Lords all power to alter a money bill and left them with no more than a delaying power of not more than two years over all other legislation. The Liberal program of social legislation was achieved after the new king, George V (r. 1910-1936), promised that, if necessary, he would create enough new peers to put the Parliament Act through the House of Lords. The threat was enough, and the peers yielded.
The dissenting Liberals who had followed Joseph Chamberlain out of the party in the 1880s did not think these measures were appropriate. In the generation after 1880 there was a major change in the political orientation of British parties. The Liberals, who had believed that that government governs best which governs least (and least expensively), had come to believe that the state must interfere in economic life to help the underdog and had adopted Lloyd George’s plan for redistributing the national wealth by social insurance financed by taxation. And the Conservatives, who in the mid-nineteenth century had stood for factory acts and mild forms of the welfare state, were now in large part committed to a laissez- faire program against government “intervention”—a program much like that of the Liberals of 1850.
One factor in this reversal had been the growth of the political wing of the labor movement, which in 1906 won fifty-three seats in the Commons. Labourites wanted the welfare state, and many of them also wanted a socialist state in which at least the major industries would be nationalized. Labour had the backing of many upper- and middle-class people who sympathized with the quest for social justice.
From their ranks came intellectuals like G. B. Shaw (1856-1950), H. G. Wells (1866-1946), G. D. H. Cole (1889-1959), and Sidney and Beatrice Webb (1858-1947 and 1858-1943, respectively), who participated in the influential Fabian Society, formed in the 1880s. The Fabians preached the “inevitability of gradualness,” the attainment of social democracy through the peaceful parliamentary strategy of advancing one step at a time, as was done by the Roman republican general Fabius to wear down the Carthaginians in the third century B.C.
By the early 1900s Fabianism seemed to be working, for the Liberals, who depended on Labour votes to maintain a majority, put through much important legislation in the interest of the worker: acceptance of peaceful picketing, sanctity of trade union funds, and employer’s liability to compensate for accidents (all in 1906); modest state-financed old age pensions (1909); health and unemployment insurance (1911); and minimum wage regulations (1912).
Part of the motivation for Liberal social legislation was a desire to forestall Labour initiatives. But over the long run the workers on the whole stuck by the Labour party. The Liberal party was beginning a long decline that would be hastened by the effects of World War I and would drive its right wing to Toryism and its left wing to Labour.
The imperialist wing of the Liberal party, led originally by Chamberlain, remained unreconciled to this trend, and in 1901 a union between the Fabians and disaffected Liberals began to hint that a new national party was needed to make national efficiency its goal. As the Liberal party fragmented, declined, and sought to hold on to its followers against the rise of Labour, it became more of a coalition than a functioning whole within a two-party system.
On one subject it remained reasonably united, however—the significance of the British Empire. As one member of Parliament, Halford John Mackinder (1861-1947), the creator of geopolitics, noted after his election in 1910, free trade would protect imperialism. He maintained that Britain must become a nation of “organizers,” of workers whose patriotism led them to realize that they existed primarily to serve the national ends of the state.
