The period 1929–33 was perhaps the most traumatic in the inter-war history of the British Labour movement; the ignominious collapse of the second Labour government led the Labour party to question not only the role of its former leaders but also its ideology. This article will reassess the role of the Oxford academic and socialist intellectual, G. D. H. Cole, in this period and will argue that his contribution to the reshaping of the party in the wake of the 1931 financial crisis and the formation of the national government was of much greater significance than has previously been acknowledged. In addition, it will analyse the effects that the political events of the 1920s and the failures of the Macdonald government had upon Cole's socialist ideology and will illustrate that his move away from his earlier guild socialism to a collectivist philosophy was more profound than he himself, and many commentators since, have been prepared to concede.