This paper seeks to examine the influence of Fabian Socialist thinking as the primary force in the development of critical theory as applied to higher education in Britain. The paper covers the impact of scientific Fabian Socialism and the establishment of the London School of Economics and Political Science, the Frankfurt School and the rise of critical theory and pedagogy, and offers a critique of these perspectives. The social reconstructionist theory, worked out in the USA, posits schools and teachers as planned agents of social and cultural reform by addressing and solving practical social problems. The reconstructionists and critical theorists embrace notions of equality, the eradication of social injustices, multiculturalism, increasing levels of social consciousness and the discussion of controversial issues through employment of critical forms of pedagogy. In Britain, Fabian Socialism led directly to the establishment of the Labour Party as a political entity.