[L]ate-Victorian Oxbridge positively harmed the prospects of the British economy by completing the work of the public schools in turning out a govern… - Correlli Barnett

The urgent challenge of winning a total war against so formidable an enemy as Germany, indeed the peril of national defeat, jolted Britain as an industrial society far more effectively than mere peacetime world-market competition, to which she had failed to respond as she should have done according to classical economic ideas. A remarkable technological revolution began in Britain in 1915 and was consummated in 1918 – remarkable not only because of all the deficiencies that had got to be made good, but also because the revolution was accomplished under wartime conditions and at utmost speed. It is also noteworthy that it was masterminded by the government, and that many of the new American-style factories were actually owned and operated by the state.

"Niceness", the desire "to do the decent thing" – these qualities constituted then, and still constitute today, the emotional essence of small 'l' liberalism. They are qualities desirable in a friend, a neighbour or a colleague, and admirable in the citizen of a democracy. But they serve ill as a guide to a nation's total strategy in a ruthless world of struggle. The dominance of these qualities over the British public mind and feelings therefore accounts more than any other factor for the contrast between British power in 1918 and British power in 1956. For the desire to be "nice" and "do the decent thing" lay at the heart of "appeasement", whether of dictators in the 1930s or trade unions in the 1940s and 1950s; it explains why the British saw their colonial empire as a trust, a civilising mission, rather than as a resource to be exploited if profitable, and dumped if not; it explains why the British saw the Commonwealth and the Sterling Area – indeed, world affairs in general – in terms of altruistic responsibility rather than of self-interested calculation. And it was this same desire to be "nice" and "do the decent thing", rather than a resolve to improve the competitive quality of Britain's human resources, which provided the inspiration behind "New Jerusalem".

That idealism was of course shared by the whole Cabinet, including its chapel-bred working-class members. All their adult lives the vision of New Jerusalem had inspired them to struggle through the sloughs of committee work and along the stony paths of electioneering. However, in the expectation of coming to power in a rich imperial Britain, they had always assumed that they would build New Jerusalem by the simple method of redistributing wealth from the rentier class to the working masses. Now, in Government, they found themselves in a plight to which a lifetime's assumptions were quite inappropriate, for instead of redistributing wealth they were faced with the urgent and immensely more difficult task of creating it. Their problem in adjusting their minds to this sordid need was shared by the small-'l' liberal Establishment as a whole, especially in the opinion-forming intelligentsia, as Lord Annan acknowledges in his book Our Age: "Unfortunately we were more concerned with how wealth should be shared than produced."