The announcement that the Cambridge academic George Watson had left the Liberal Democrats £950,000 in his will was one of the most surprising political stories of 2014.

George Watson was a distinguished literary scholar and a lifelong Liberal. After working for the European Commission as a translator and interpreter during the 1950s he became a Fellow of St John’s College, Cambridge, in 1961 and remained there until he retired in 1990. As a scholar, he was known for serious bibliographical work, spirited polemics, and a traditional approach to literary criticism. He also made two forays into electoral politics, contesting Cheltenham in 1959 and Leicester in the 1979 European Election.

Watson is perhaps best remembered by Liberal Democrats, however, as the editor of The Unservile State – a 1957 volume billed as ‘the first full-scale study of the attitudes and policies of contemporary British Liberalism since the famous Yellow Book’ of 1928. In truth, it was a collection of essays by a diverse group of authors, designed to fly policy kites and showcase the party’s intellectual talent – much like The Orange Book half a century later. Yet the book has lasting value as a cogent exposition of the kind of Liberalism which prevailed within the party during the late 1940s and 1950s – Keynesian in macroeconomics, market-oriented in microeconomics, and distributist in ethos.

The late Sir Alan Peacock described the background to the book in his 2010 memoir Anxious to Do Good. Peacock traced its origins to an informal gathering of Liberal MPs, candidates, and sympathetic academics in the summer of 1950 ‘in a down-at-heel Bayswater hotel’. The academics were all economists from Oxford and the LSE – including George Allen, Peter Wiles, and Neville Ward-Perkins – and talked about how recent research could help inform Liberal policies, but their comments were met by ‘weary scepticism’ from the seasoned politicians. Peacock himself was taken aback when Lady Violet Bonham Carter complained that his paper on social security reform made no reference to proportional representation!

One senior Liberal who did take the academics seriously was Elliott Dodds, the editor of the Huddersfield Examiner and party president in 1948-9, who had long been keen to sharpen the party’s ideological edge. (Indeed, Dodds had been the driving force behind the Ownership for All report before the Second World War.) In 1953 the Liberal academics formed the Unservile State Group, which met periodically in Oxford and London with a view to compiling a book, and by 1955 Dodds had raised some funds to underwrite printing costs. Other prominent Liberals such as Jo Grimond, Nancy Seear, and Graham Hutton also agreed to contribute. However, the first editor resigned, and progress stalled until George Watson agreed to take it on. Peacock credited Watson with improving the book’s coherence and readability through ‘a combination of tact, persuasion and genial brutality of editing’. Watson also suggested that each essay should carry the main author’s initials, allowing the contributors to take credit for their ideas without destroying the cohesion of the whole.

In this short article, it is hardly possible to do justice to a book in which the essays ranged from parliamentary reform (Grimond’s contribution) to industrial relations and foreign policy. Its main intellectual concern, however, was the relationship between liberty and welfare, which formed the subject of Elliott Dodds’ opening chapter. Liberals had long taken pride in the fact that it was the Asquith government that laid the foundation of the twentieth-century welfare state and Beveridge who provided the blueprint for its post-war development; ‘along the path of social reform’, Dodds wrote in 1949, ‘all progressives have marched together.’ Eight years later, Dodds still believed that welfare provision was compatible with liberty – indeed, it was ‘actually a form of liberty in as much as it liberates men from social conditions which narrow their choices and thwart their self-development’ (a formulation of which the Edwardian New Liberals would have been proud). He argued, however, that Liberals could not regard the system of state welfare provision created by the Attlee government as intrinsically desirable:

With the value they attach to self-direction, Liberals must naturally desire that people should be able to make more adequate provision for themselves… We recognize that the State must remain responsible for those for whom other sources of Welfare are not available, but in a Liberal society we should look increasingly to the release and stimulation of private endeavour and voluntary agencies of service and mutual aid to diminish the rôle of the State. Eventually society, i.e. individuals and groups of individuals, would be able and ready to provide most of its welfare for itself.

This argument was taken further in the chapters by Peter Wiles on ‘Property and Equality’ and Alan Peacock on ‘Welfare in the Liberal State’. Wiles suggested that the welfare state would become redundant if private property were distributed so widely that all citizens could draw a subsistence income from their labour and assets, and speculated that ‘with good luck and good management’ this state of affairs might be reached around 2010. Peacock argued that, in the meantime, the state should focus on cash transfers between citizens rather than benefits in kind, and perhaps even finance health and education through voucher systems.

This critique of the welfare state drew on a long tradition of distributist thought which stretched back through Hilaire Belloc and G.K. Chesterton to the classical liberals of the nineteenth century; in some ways it also chimed with the thinking of ‘One Nation’ Conservatives such as Iain Macleod and Peter Goldman, and anticipated the backlash against the bureaucratic and centralized character of the social services which began in the 1960s and 1970s. On the other hand, Dodds, Watson, and their colleagues were arguably ill-informed about the level of poverty that still existed among pensioners and low-income families, overly optimistic about the possibilities of private provision, and too vague in their proposals for redistributing wealth. Friedrich Hayek thought they also ignored the political loyalties which the welfare state inspired and the vested interests it created.

Perhaps for these reasons, The Unservile State marked the end of an era in Liberal thought as much as a beginning. By the time Watson edited a second volume of essays, Radical Alternative, in 1962, Jo Grimond had allowed young activists such as Frank Ware, Christopher Layton, and Harry Cowie to push Liberal policy in a more social democratic direction, calling for higher public investment and indicative planning to generate faster economic growth. Far from allowing the welfare state to wither away, the party redoubled its commitment to the NHS and state education and pressed for more adequate pensions and unemployment benefits. Even so, Dodds’ distributism lived on, in different ways, in the party’s enduring interest in employee ownership and in the community politics movement of the 1970s and 1980s. The Unservile State thus deserves much more than a footnote in history.

* Peter Sloman is a junior research fellow in history at New College, Oxford, and author of The Liberal Party and the Economy (Oxford University Press, 2015).