TOMORROW’S ECONOMY

In her quest for a new social contract, the most diplomatic of technocrats, Minouche Shafik, singles out one nation for special praise— and politely buries the third way

TOM CLARK & CLIVE COWDERY

Gamekeeper turned poacher: Minouche Shafik has quietly broken with the thinking of many of the institutions she has spent her career in

© JASON ALDEN/BLOOMBERG VIA GETTY IMAGES

Since the dawn of the 20th century, Britain’s social settlement has been recast four times: Edwardian New Liberals laid the welfare state’s foundations; Beveridge and Attlee built on them after the Blitz; the Thatcherites knocked out a few pillars; finally, New Labour’s third way crew redecorated again. Sadly, the cheery new wallpaper began to peel after the financial crisis. Many citizens were sorely exposed by the time the pandemic hit, and as the country emerges dazed and blinking from the disruption, the sense is growing that our shelters against adversity must be overhauled yet again. But how?

History suggests that, as the director of the London School of Economics, Minouche Shafik should be an influential voice in this discussion. Previous welfare state blueprints have had LSE fingerprints all over them. Beatrice Webb co-founded the university before becoming an influential force on the royal commission on the Poor Law in the days of the People’s Budget. A few years before the wartime coalition plucked him out of his ivory tower, Beveridge had been a long-term director of the LSE. The godfather of the neoliberal turn, Friedrich von Hayek, spent two decades at the same institution, during which he produced his most influential work, The Road to Serfdom. New Labour intellectual Anthony Giddens, author of The Third Way, was yet another LSE director.

After she arrived at the LSE in 2017, Shafik launched a “Beveridge 2.0” research programme. This suggests she has hopes of encouraging something more substantial than more third-way-style tweaks. Namely, as put in the strapline of her new book What We Owe Each Other, an enduring “new social contract.” So where is she coming from? How does she understand the moment we’re in? And what’s on her menu for reform?

Afew moments of chatting to the charming Shafik are enough to realise she is cut from very different cloth to Beveridge. He was a Window of opportunity reliably opinionated and occasionally cranky figure, but also a man who—as Shafik tells us—was ultimately influential because he “made a nuisance of himself in Whitehall.” It is hard to imagine Shafik being any kind of nuisance, and difficult to get her to say anything disobliging about anyone: she is a very diplomatic technocrat.