ABSTRACT
This chapter examines the interrelationship between welfare policy and affluence. In the early 1960s, in reaction to the onset of affluence, the basis was laid for a radically new accommodation between government, private affluence and private enterprise. This modernization of the welfare state testifies to both the extent of the 'heated struggles and interests' which affluence unleashed and to the richness of the response. Britain's response to affluence, therefore, diverged from that in continental Europe where a new accommodation between government and the market was reached not just in social democratic Sweden but also, of more relevance to the Conservatives, in Christian Democratic West Germany. Welfare policy, nevertheless, does illustrate one continuing area of agreement across Westminster and Whitehall: an antipathy in public policy to American influence, as reflected in the isolation of the free market Institute of Economic Affairs.
