Marshall Aid, however, presents a paradox for both socialists and free marketeers. Politically, its aim was the furthering in Europe of ‘American values’ of which ‘free’ enterprise is the most crucial. It would follow from this that it should have been welcomed by free marketeers. The plan, however also implied that the European economies would not have survived had thy been abandoned to the invisible hand of the market. It was, after all, a plan launched by a state to help other states recover from the war and integrate their economies. The ‘free market’ may have been the desired end, but it was not the means…Socialists and their opponents resolved the paradox by the unstated and informal agreement to drop their long-term goals - socialism and unregulated capitalism, respectively.

In the absence of a plan for the elimination of the capitalist economy, the financial requirements for social reforms had to be provided by the capitalist economy itself. Socialist parties faced an unavoidable paradox: in order to pay for social welfare, it was imperative that the market be made as efficient as possible; to follow ‘socialist’ policies, it was essential to be pro-capitalist. If the private sector could not be abolished - at least in the immediate future - then it had to be encourage to produce as much wealth as possible and to be an efficient allocator of resources, so as to provide employment for all. Only when the private sector failed to function properly could the state be expected to step in through subsidies, encouragement, concessions, special help and, if necessary, nationalisation.

But to return to the question: is the introduction of the universal welfare principle socialism? If socialism is a state of affairs - an ‘end-state’ - which describes the overall organisation of a particular social order, then the universal welfare principle is not socialism because it co-exists with a dominant capitalist production system. If socialism denotes a social relation, then the universal welfare principle whereby access to a service or good is available to all members of the collectivity, irrespective of their incomes, signals the presence of an element of socialism co-existing with elements of capitalism.

The welfare state can also be seen as a response to the needs of advanced capitalism and particularly to the fact that the private sector, on its own, is unable to ensure the reproduction of all the conditions of production, including the following: an ideologically non-hostile labour force able and willing to work without having to provide for its own health care and future pension needs out of wages; an efficient transport and educational infrastructure; and the provision of essential supplies, such as gas and electricity, at reasonable low costs. Thus the welfare state, while it improves the standard of life of the workforce, simultaneously stabilises the capitalist system from an economic, social and political point of view. Herein lies the inescapable dilemma which has faced the socialist movement ever since its origins: does the success obtained in forcing capitalism to reform itself and improve the condition of the population also stablise and legitimise capitalism itself? Do short-term achievements undermine the grounds for the eventual overthrow of the system?

Before 1917 Marxists never ruled out the possibility of the state in the period of transition to socialism - the famous, much debated and ill-defined concept of ‘the dictatorship of the proletariat’ - assuming the parliamentary form. Kautsky, writing on parliamentarism in 1893, declared: ‘a genuine parliamentary regime can be just as good an instrument for the dictatorship of the proletariat as it is an instrument for the dictatorship of the bourgeoisie.’

Socialism distinguished itself form potential rivals (such as utopian movements) by looking frankly to the future and not harking back to an idealised past; though as regards the future nothing more definite than vague generalities was ever said about the end of class society and the withering away of the state.

It is far better to be defeated while attempting to implement Labor policies than to be defeated after surrendering them. I do not believe we can win by surrendering these or, if by any chance we did win, that winning would be worthwhile.

The benefits of universal quality services is that we all share the entitlements. This communality is part of our sense of who we are. If some choose to opt out, it should be because they want a different option, not because the quality is not good enough. If public services become residual services, the default option, they tend to deteriorate. The aphorism, that services to the poor become poor services, still applies as it is the more privileged users that tend to complain if they are badly served.

No nation in the world has eliminated poverty by firing teachers or by handing its public schools over to private managers; nor does research support either strategy.