Waters Flowing Eastward
The following document entitled Freedom andPlanning emanates from the Jew Israel Moses Sieff, Chairman of the Fabian P. E. P. (Political and Economic Plan) in London. Mr. Sieff is, according to The Jewish Year Book, a Zionist worker, Grand Commander of the Order of Ancient Maccabeans, First Honorary Secretary of the Zionist Commission to Palestine and Vice-President of the English Zionist Federation.
He must therefore participate in all the secret councils of Zionism. He is, moreover, Chairman of the chains stores of Marks and Spencer, where the dumping of Russian and other foreign goods has made possible the underselling of other firms dealing with British manufactured goods, paid according to the tariffs of British labour. It is therefore no wonder that the chain store movement, standardising cheap goods and materials, should be advocated by him.
The views which Mr. Sieff expresses in this document are therefore those which must have had the approval of the Elders of Zion. It must be noted also, lest once again the document be proclaimed the forgery of some Russian Tsarist, that on March 29, 1933, at a dinner of the P. E. P., given at The Savoy Hotel in London, and at which a large number of government officials were present, and subscribed funds, Mr. Sieff made use of most of the contents of Freedom and Planning.
He was followed on the platform by Mr. Kenneth Lindsay, his docile secretary of the P. E. P., who among other achievements, was third chairman of the Labour Club of Oxford University1, Labour candidate for Oxford City at the 1929 elections, and one of the moving spirits in the foundation of the Oxford University Labour Federation in 1921, the aims of which were to make " labour opinion definitely socialist." He also spoke in 1926 before twenty-three colleges in New England and the Middle Atlantic States (U. S. A.) under the auspices of The League for Industrial Democracy. We have therefore, in the P. E. P., the plain evidence of Jewish-Fabian alliance.
We shall now quote in full Mr. Sieff's document, which was privately circulated among the members of the very inner circle of the P. E. P., and was marked " Confidential."
This generation is faced with the threat of a World collapse of modern civilization and the advent of a period comparable with the Dark Ages which followed on the collapse of the Roman Empire in the fifth century A. D.
We are apt to regard such statements as pleasantly scarifying, pardonable exaggerations in the mouths of those who are trying to spur us to action against the very real ills of the times, but not meant quite seriously.
The threat is serious.
Chaos will overtake us if we cannot show intelligence enough to extricate ourselves.
For more than a year now nothing has enabled civilization to keep some sort of course and to ride out the storm except the immense momentum of ordinary economic processes and the inertia of habit and custom. It is the resisting powers of these forces and not human intelligence which have thus far staved off the collapse.
They cannot bring us back prosperity, but they may suffice to carry the world through the immediate crisis. If so, we shall for a time be able to live on our capital, the material capital stored up from past generations, the intellectual and moral capital of men and women trained for civilisation and citizenship. But what chance will the next generation have, if half of them find no employment for their youthful energies, and all of them are living under the oppression of hopelessness and decay ?
What forms collapse will assume no one can foresee. It may not come suddenly. More probably there will be a gradual decline with fleeting periods of revival.
Modern life depends on world-wide interchanges of goods and services. These in turn depend on confidence and credit. Confidence and credit are being progressively impaired. Without them it is impossible to maintain for long not merely existing standards of life but even life itself for a large proportion of the world's population.
Imagine the plight of Great Britain if the complex economic and financial machinery which supplies the vast bulk of our population with its food were to cease to function. Such a catastrophe is not, it is true, as yet in sight, but this machinery depends wholly on confidence and credit, and with dwindling world trade and social and political trouble growing in other countries the moment is not far off when we shall be unable in these islands to support either present standards or our present aggregate population.
Applied science puts at man's disposal food-stuffs, raw materials, services of all kinds, in ever growing abundance, enough not alone to maintain existing standards of life but to raise those standards for all far above the highest now enjoyed by any of us.
Only our intelligence and powers of organization and our moral and spiritual capacity to work in mutual co-operation with each other are proving insufficient to meet the growing complexity of the machinery for regulating production, distribution and consumption.
First one, then another vital part of the machine is being thrown out of gear. Increasing friction is being generated in the effort to distribute to the consumer that which man is producing. The quantity of things produced and things consumed declines. The volume of world trade, both of internal trade within each country and still more of international exchanges of goods and services, is progressively lessened. World-Wide Economic Distress
Cracks are appearing everywhere. In China and in India economic distress is both aggravated and concealed by the social and political unrest of which it is the main root.
In South America revolution has become endemic and all but one or two of the most solid countries are financially in default.
In Central and South Eastern Europe financial default is imminent, but that is by itself of little moment, in comparison with the consequent social and political upheaval which will follow. It is open to question whether the populations of Germany and Central Europe can be fed and kept alive next winter and how long any organized Government can control the situation in these countries.
In the U. S. A. loss of confidence is absolute. The strain of material suffering in a population, none too homogeneous, accustomed for generations to rapidly increasing prosperity, may lead to a breakdown of existing institutions and forms of Government. The outcome is unpredictable but the consequences throughout the globe may be catastrophic.
World disorganization, famine, pestilence, and the submergence of our civilization are visible on the horizon.Why?
Not because nature has been niggardly. Not because individual human achievement or capacity have grown less. They have won ever greater and greater triumphs over nature and throughout the material field in the last two generations.
Those triumphs have been won by an ever wider and ever bolder application of the principle of division of labour, till man's powers of-large scale organization have been overstrained. He can control and adapt the forces of nature, but the task which he has now set himself requires more than that. He has still to learn so to control and adapt his own human nature and so to work together with the human nature of his fellows as to fit them and himself into their proper places in the organization without losing for himself and for them all that makes life worth living.
" Mankind is not clever enough to control the machine which he has created."
There is no lack of human goodwill and desire to serve our generation. Yet all of us are acutely conscious of the exasperating frustration of our best efforts. We see the evil plight to which we and the world are being reduced, and we confess that for the moment human intelligence seems bankrupt.A Respite?
This essay cannot concern itself with remedies for the immediate crisis or with the means by which we may hope to restore for a time some semblance of order in the world's economy. It is necessary to assume here that, whether with or without the help of intelligent human leadership, the economic structure will find within itself enough powers of resistance to secure for us a temporary respite.
The respite will be a short one. We must use it to make a new start or our doom is sealed.
Great Britain and some parts of the British Empire have in some degree improved their own position since last autumn. Absolutely the improvement in Great Britain has been small, though relatively to other countries it is striking.
This achievement is of real value to the world, even though some part of it has been made at the expense of added difficulties for others.
It has been attained thanks to a remarkable demonstration of self-discipline and well-disposed spirit of public service and the sober imperturbability and reasonableness of the British citizen in face of a crisis.
It is in this evidence of British character that the best hope for the future rests.
Britain cannot, however, prosper in a distressed world. Entirely dependent on external trade for her food and raw materials Britain cannot escape world catastrophe by isolating herself.
Moreover that world-wide loss of control of the machinery of civilization is all too visible in Britain and in British institutions.
If Britain is to save herself and give the world that leadership which is urgently demanded, the first need is for complete reconstruction of our national life on lines fitted for the new deeds of the twentieth century.
Here a fundamental difficulty must be faced. Economic nationalism is no solution. On the contrary it is among the main causes of the world's troubles. Recovery depends on building up afresh and extending even more widely than before world-wide exchanges of goods and services which everywhere cross national and political boundaries.
The United Kingdom is far too small in area to form to-day an economic unit commensurate with the vast scale of modern commercial and industrial operations.
The aim must always be the widest possible international co-operation.
To assume however that for this reason the first steps must be international would under present conditions result in mere futility. Action, if it is to be both practicable and advantageous, must be taken within the sphere now open to us. Economic reconstruction within that sphere will moreover, at least in the earlier stages, tend to draw other countries within the orbit of returning prosperity.
Our attention must first be directed to the United Kingdom and to those regions, whether within the British Empire or in countries of complementary trade, where political and economic associations offer promising opportunities of effective co-operation.
Every care must however be taken to secure that, in focusing our gaze on our own sphere of action, we do nothing to exclude the wider vision, and that we work gradually for the extension of complementary planned relations over the widest possible area.
" Almost all British constitutional safeguards are safeguards against being governed."
" Communism is a tremendous extension of government and consequently a great encroachment on liberty."
" Mussolini understood that what was keeping the people slaves was their determination to be what they called free."
" No real business that had to do positive work could achieve anything on the British Parliamentary system."
None of these aphorisms of Mr. Bernard Shaw can be rejected as untrue, even though they offer no proof that Communism or Fascism are either necessary or desirable.
Their truth can be illustrated in every branch of our present-day life.
We have allowed the numbers of our feeble-minded to double themselves in the last twenty years.
We have watched the purchasing power of our currency fluctuate wildly and play havoc with our economic life, and have been powerless to help ourselves.
The Road Act of 1910 gave powers both to build motor roads and to prevent riband-building, but we still permit it and spoil our countryside and our motor roads.
Notoriously unsuitable candidates " get themselves elected " (this is our habitual way of speaking of what happens) to Parliament and local Councils.
Prime Ministers get nervously worn out in the mere effort to grapple with the everyday business which faces them.
In the Imperial sphere there is practical unanimity as to the need for organizing the Empire as an Economic Family and yet we have the spectacle of the Imperial Conference of 1930.
In the sphere of foreign affairs the nations sign the Kellogg Peace Pact and arm themselves to the teeth.
Or again we keep alive the pretence that Reparations and Inter-Governmental Debts will continue to be paid; and, because we dare not settle these obligations on terms which seem to involve inequitable distribution of the sacrifices involved, we wait with folded hands for the enforced default which will involve even greater inequity and will strike a further blow at the foundations of the world's economic life. A year ago a broad-minded settlement would have restored economic activity and staved off the financial crisis. To-day, though an essential step on the road to recovery, cancellation of these obligations will by itself be of little avail. Its chief value now would be the evidence it would give of our capacity to reach international agreement.
Our political and economic machinery is breaking down. The great fund of individual and corporate goodwill, greater probably than at any previous period of our history, goes to waste, and all our wills are frustrated for want of a large-scale plan of national re-organization.
Neither in politics nor in economics have we grasped that the first and urgent necessity is planning ahead.
Particular projects often of great potential value are put forward in Parliament or elsewhere without any effort being made to relate them to each other or to a national plan, and they either break down or function imperfectly through needless friction engendered by absence of ordered planning.
Frequently where public opinion has become exasperated at its failure to get something done to remedy a defect which everyone recognises as intolerable, our distracted legislators with desperate unanimity unite to pass into law a compromise which is wanted by no one and merely aggravates the evil.
It is a common occurence for a Government to be pursuing two or more mutually inconsistent policies at one and the same time.
Mr. Bernard Shaw's mordant words pose directly the poignant question. Is national reconstruction possible without sacrifice of the essentials of personal and political freedom?
For all their differences Bolshevism and Fascism have two outstanding features in common. Both stress the primary need for conscious forward planning on a national scale. Both repudiate the claims of personal and individual freedom.
In this country we hold fast to the concept of freedom as one of absolute validity.
We know in our hearts that we are in imminent danger of losing both our freedom and our material well-being if we go on drifting.
But if indeed national re-organization has to be bought at the price of losing our freedom, many of us feel that it would be better for humanity to descend once again into the abyss of barbarism and struggle back painfully at some later epoch to a civilization capable of satisfying both its material desires and its spiritual aspirations.
Is the dilemma absolute? Can conscious forward planning of our economic life be reconciled with the essential and over-riding claim of freedom?
Is it true that what we need is more government and a great encroachment on liberty ?
Observe that it is in the sphere of our economic life, in the sphere of material things only, that conscious forward planning is demanded.
May it not be that an unprejudiced re-examination of what we call freedom may reveal unexpected possibilities ?
Our ideal is a nation of free men and women self-disciplined by an active social conscience.
The growth of a code of law and of custom for motorists shows what can be done by free co-operation. The law and the custom are dynamic; not static. They are continually developing. At the moment indeed the toll of life and limb on the public roads is evidence of the urgent need for further improvements both in law and in custom. As a rule the law steps in only to interpret the collective will already expressed in a code of behaviour, and to put compulsion not on the motorist in general but only on the road-hog.
Self-discipline and collective action enable the motorist to enjoy a large measure of freedom. Without the help of the code and without the intervention of authority to help him to enforce it, the will of the motorist in general would be everywhere frustrated and he would enjoy far less freedom than is now secured for him.
Is this " more government and a great encroachment on liberty?"
Can we not do for ourselves as a nation what we as motorists have done for ourselves as motorists ?
" The law came in because of sin," but in so far as we are self-disciplined and our social consciences are active, we have won true freedom for ourselves in the particular field of motoring.
We do not rely solely on the enlightened self-interest and unregulated competitiveness of motorists to serve providentially the greatest good of the greatest number, and sternly forbid legislative intervention.
Yet so long as we worship at the altar of laissez-faire as the guiding principle of our economic life, we are trying to conduct our industry and commerce in exactly that spirit which we have wisely rejected in the field of motoring.
Laissez-faire represented a reaction against the doctrines of mercantilism and in its day has served this country and the world admirably, but our free institutions were won long before the principle of laissez-faire was enunciated.
There is no a priori reason for regarding freedom of thought, freedom of speech, freedom of conscience, free institutions, as incompatible with conscious forward planning of our economic life.
The problem then is to find a new economic philosophy to replace the doctrine of Laissez-faire. The great virtue of this doctrine was that it seemed to provide a miraculous self-adjusting system of regulating the flow of production in accordance with demand in a freely competitive individualistic world. Even to-day there are unrepentant individualists whose cry is for a return to unrestricted laissez-faire. Sweep away, they urge, all governmental and bureaucratic interference, abolish unemployment insurance and health insurance and all these new-fangled social services. Reduce taxation correspondingly: and industry will look after itself.
It is not always realised how fortuitous and temporary were many of the conditions on which the successes of laissez-faire depended in the nineteenth century.
In many cases the economic life of the world has become too complex, the scale too large, the marvellous stream of new scientific invention too bewildering, the annihilation of distance and the speed of transport and communication have drawn the nations too closely together, to allow of any return to nineteenth century methods. The mere size of the modern industrial unit is alone enough to destroy the effectiveness of the old methods.
And the social conscience of mankind has rightly revolted against the brutality of the economic adjustments on which in the last analysis depended the self-regulating machinery of the system of laissez-faire.
Moreover, however firm their faith in the doctrine, statesmen and governments always tempered its rigours with pragmatic justice by intervening at this point and at that to enforce factory acts, acts restricting hours of labour and the like. And the rigidity of trade union regulations to-day is part of our evil inheritance from the intolerance of laissez-faire doctrinaires.
With the advent of the twentieth century and particularly after the war, government intervention began rapidly to operate in increasingly wider spheres. And by this date, the nature, form and extent of government intervention tended to be more and more uneconomic and anti-economic in their results, precisely because they were conceived and applied by Local Authorities. Government Departments and Parliaments and Cabinets which still did lip service, without conscious hypocrisy, to the principles of laissez-faire.
It was in principle permissible for the State to levy taxation on industry according to the needs of the Public purse. It was in principle permissible for the State to make laws and regulations restricting the freedom of business activities in the interests of health, sanitation, safety of life and limb, conditions of labour. It was not permissible in principle for the State to recognise responsibility for the efficiency or remunerativeness of business. That was intolerable State interference in a region which it had no right to enter.
The rigidity of the doctrines has indeed been relaxed in many directions and with the advent of a protective tariff we have entered on an entirely new era in the relations between State and business. Yet it remains true that taxation and regulation of industry have been excessively and needlessly hampering in their effects just because our political and economic philosophy forbade the State to " interfere with the free-play of natural economic forces."
It must be left for separate essays to deal in greater detail with suggestions for building up a plan of national reconstruction in the special fields of agricultural and industrial production, finance, marketing, transport, housing, town and country planning and the like.
The purpose of this essay is rather to examine how far it is true that conscious forward planning involves encroachment on freedom.
The basic principle of human economic activities, except in Soviet Russia, is, and has been ever since the first steps in the direction of the division of labour were taken, that the would-be consumer determines for himself which of his competing wants he will satisfy within the range of choice which his available purchasing power (even when he was living under a system of barter before money was invented) and the available supply of goods and services offered.
It is the consumer's choice which settles the relative prices of the various goods and services which the producer (or middle-man) oifers for sale.
The Communist system attempts to fix relative prices and to deny to the consumer the right to exercise this fundamental freedom of choice. The reason for this is that the Communist ideal is a mechanised State which will produce, according to plan, the maximum output of consumable goods and distribute them with maximum efficiency. The State accordingly fixes by decree the quantity and quality of production of all kinds and cannot afford to leave it in the power of the human consumer to cause variations in demand by exercising a free choice among his competing wants.
The consumer in fact is treated not at all as a consumer but as a part of the mechanism of production requiring a given quantity of fuel,_etc. to keep him going as a producer. There is no reason whatever to regard this ultimate denial of freedom to humanity as necessary to conscious forward planning.
Reasonable standardisation of some articles of ordinary consumption and some limits to excessive stimulation of the demand for the satisfaction of mere whims which arises from unbridled competition among those who cater to them may indeed be welcomed. But the economic aim of a free community must always be to give the consumer the widest opportunities for satisfying as many of his wants as possible.
If there is to be a planning authority, its function must be to attempt to forecast demand and to regulate production and distribution accordingly, not to control or dictate consumption.
Control of consumption in special cases, e. g. of alcoholic liquor, may be necessary for reasons arising out of human weakness, but the limits of such control are narrow, and its existence does not invalidate the general argument.
Again rates and taxes levied for such purposes as the provision of free education or for a display of flowers in a public park involve the enforcement of a form of collective consumption, but the individual is not compelled to use the public park or the free education if he has the desire and the means to choose alternatives.
This last example is however a significant illustration of our ready acceptance of collective restraints in our own or the general interests without feeling that our freedom is being filched from us.
Conscious planning leaves the consumer free but involves the substitution of some organized control over production and distribution on behalf of the community to take the place of that free play of supposedly automatic economic forces on which laissez-faire relied.
Control implies a controlling authority. To the average man and woman among us there jumps to the mind at once the picture of a large number of new government departments and hordes of new officials attempting to take the place and to do the work of the business man, the manufacturer, the farmer, the banker, the shopkeeper, or at least to tie them all up hand and foot and dictate to them in the management of their daily affairs. And we see further a glimpse of Parliament and Local Bodies finally overwhelmed by the task of fulfilling their new functions.
Few people to-day would deny that the old socialist idea of putting the whole business of the nations into the nands of bureaucratic government departments would prove a hopeless failure in practice and would be no improvement on present conditions.
Is there not a middle way, or better still a new way, of meeting the need for organisation and co-ordination of those economic tasks which the breakdown and laissez-faire is leaving unaccomplished ?
Without much distinction of party, successive Governments have tended in recent years to try, in various fields, to find a way forward through the setting up of Public Utility Bodies, of which the B. B. C, the Central Electricity Board, and the projected London Passenger Transport Board are outstanding examples. These bodies are not Government Departments and their methods of management and direction and control are modelled rather on those of commercial concerns. Their purpose is to perform collectively for the community certain functions and to provide collectively certain services, in which monopoly rather than competition is, in the general belief, likely to give the best results. For this reason it is felt to be necessary to put the emphasis on the rendering of public service and not on the securing of profits, while insisting that the work ought to be done on a self-supporting basis and not be dependent on a subsidy from the rates or taxes.
In all the instances cited the earning of surplus profits for private shareholders is excluded, and this must no doubt be the usual arrangement where monopoly is involved. It need not, however, be an invariable rule.
One special merit of this form of organization is that it claims to give flexibility of management and avoid the major risks of red-tape, and while maintaining the ultimate control of Parliament and the nation provides for a large degree of self-government and so reduces rather than increases the amount of governmental interference.
It is possible to envisage a considerable extension of this form of organization of the nation's business. A new picture begins to emerge in outline of industry, agriculture, transport, etc., enjoying, if not Dominion Status, at any rate wide powers of local self-government, with the Cabinet, Parliament, and the Local Authorities liberated from duties to which they are not ideally suited and free to perform their essential functions on behalf of the community.
The analogy of the Grid system of the Central Electricity Board, not itself undertaking the production of power nor the final distribution of electricity services to the consumer, but providing a co-ordinated system of carrying the electricity produced from the big generating stations to local distributing centres all over the country, can be suggestively applied to other services.
Imagine the dairy farmers of the country or of various regional divisions of the country as the milk generating stations, and the retailers of milk as the local distributing centres, with a Central Milk Board conducting the business of bulk marketing of milk as the providers of the Milk Grid of Britain. Already under the Agricultural Marketing Act there are signs of the coming of such a Milk Grid as a natural development to meet the needs of the day. An extension of the system with suitable adaptations to other agricultural products easily suggests itself, and even more directly as a method of dealing with the needs of modern transport by rail, road, water and air.
When we come to the organization of producers, agricultural, industrial and extractive, the Central Electricity model becomes more difficult to follow, Generally speaking, organization on public utility lines seems to be adapted rather to the rendering of services in the sphere of distribution than to the business of production. It may be significant that the Central Electricity Board was excluded from the ownership of generating stations. For reasons which have their roots deep in our human nature, we seem to be much readier to admit the principles of controlled monopoly and the domination of the motive of public service over the motive of private profit in the sphere of distribution than in the two spheres of original production and final retailing, between which distribution services are intermediate.
Methods of retailing cannot indeed be left entirely unchanged in the face of twentieth century needs. The multiple shop and the chain store are already bringing about notable modifications. The waste involved in the 500,000 or more retail shops, one shop for every twenty households, cannot be allowed to continue to block the flow of goods from producer to consumer. And re-organization of retail methods is necessary to achieve adequate organization of production. In general, however, it will probably be found that there is a large place in the business of retailing for the continued play of individualism and personal enterprise. The individualist consumer and his free choice call for some corresponding individuality of outlook in the retailer who caters to him.
Not so in the sphere of production. The business of production must be planned if it is to possess adequate means of keeping the volume and quality of the goods produced in reasonable relation to demand.
The development of an organized Grid system for the distribution of milk must, it is certain, lead to a profound modification of the traditional individualism of outlook of the Dairy Farmer. And so it will be in other producing industries. Co-operative organization of the business of distribution cannot fail to bring about conditions in which both the need and the will to organize themselves on a co-operative basis will arise amongst the producers whether they be agriculturalists, or producers of coal or of iron from the mines, or manufacturers of steel or of cotton or of wool.
Whether we like it or not—and many will dislike it intensely—the individualist manufacturer and farmer will be forced by events to submit to far-reaching changes in outlook and methods. The danger is that in resisting them because he regards them as encroachments on what he calls his freedom, he will make things worse for himself and for the community. Resistance is likely to play into the hands of those who say that tinkering is useless and that full-blooded socialism or communism are the only cure. Or he may be tempted to flirt with Fascist ideas. In either case he loses his cherished freedom, and it is only too probable that Fascism and Communism alike would be but short stages on the road to barbarism.
It is idle to deny that some at least of the changes required when conscious forward planning extends into the field of production are of a revolutionary character.
It is all important therefore that we should appraise them soberly and without prejudice and distinguish clearly between unavoidable alterations of methods of economic organization and fundamental attacks on our personal and political freedom.
Our economic freedom must be and always has been tempered by the conditions of our environment and by our relations with our fellows, without whose mutual aid we could not enjoy the advantages which material well-being brings. Spiritual freedom in a highly organized and complex society of civilised men and women is attainable only by ready co-operation in so arranging our economic life as to provide the best attainable material surroundings.
Without entering more deeply into details than space here allows, the position of the farmer and manufacturer under a system of planned production can only be sketched in broad outline.
He may be conceived of as remaining in full control of all the operations of his farm or factory, but receiving from the duly constituted authority instructions as to the quantity and quality of his production, and as to the markets in which he will sell. He will himself have had a voice in setting up his constituted authority and will have regular means of communicating with it and of influencing its policy. He will be less exposed than at present to interference from above, that is from Government Departments and Local Bodies and their inspectors. He will be less free to make arbitrary decisions as to his own business outside the region of day to day operation of plant or farm.
It must be presumed that the constituted authority will be armed by an enabling Act of Parliament and by a majority decision of its own members, presumably elected by the votes of those with whose affairs they deal, to exercise powers of compulsion over minorities in clearly specified cases.
All this is not very different from what already occurs in particular organized industries, but must be conceived of as applying generally to most if not all of the major fields of production, and as part of a consciously and systematically planned agricultural and industrial organization.
An outline of the organization contemplated would be somewhat as follows:—
A National Planning Commission, with advisory not executive functions, subordinate to the Cabinet and to Parliament, but with clearly defined powers of initiative and clearly defined responsibilities, its personnel representative of the nation's economic life.
A National Council for Agriculture, a National Council for Industry, a National Council for Coal Mining, a National Council for Transport, and so on, all statutory bodies with considerable powers of self-government, including powers of compulsion within the province with which they are concerned.
A series of statutory or chartered Corporations, e.g. a Cotton Industry Corporation, a Steel Industry Corporation, a Milk Producers Corporation, organized on the lines of Public Utility Concerns, serving at least to federate, and in suitable cases to own, the plants, factories, etc., engaged in production.
A series of Public Utility Corporations dealing with distributive services, e. g. the Central Electricity Board, the National Transport Board (or a number of Regional Transport Boards), the National Milk Marketing Board.
In the constitution of these bodies provision would naturally be made for suitable representation of interests, including organized labour, and for their due co-ordination by means for example of the election by the various corporations of some of their members to serve on the National Councils. To all of them Parliament would delegate considerable powers to regulate the affairs of their particular industries.
From the standpoint of encroachments upon freedom, apart from the denial of the tenets of individualism, the most obvious targets for attack are perhaps the proposed grant of powers to compel minorities and (point not yet mentioned) the probable necessity for drastic changes in the ownership of land.
Powers of compulsion of minorities are not unknown even under present conditions and will probably not arouse very violent antagonism on grounds of high principle.
The question of private ownership of land is one which never fails to encounter deep-rooted passions. It is also one which arises immediately in almost every aspect of consciously planned reconstruction.
The conclusion seems inescapable that whether in the field of Town and Country Planning or in that of Agricultural (or Rural) Planning or in the organization of Industry it is not possible to make reasonable progress without drastic powers to buy out individual owners of land.
This is not to say that land nationalisation,^ the ordinary sense of the term, is either necessary or desirable. Far from it. Nothing would be gained by substituting the State as landlord. What is required, if only with a view to equitable treatment of individuals, is transfer of ownership of large blocks of land, not necessarily of all the land in the country but certainly of a large proportion of it, into the hands of the proposed Statutory Corporations and Public Utility Bodies, and of Land Trusts.
In many cases all that would be needed would be the conversion of rights of ownership of land into rights of participation as share-holders or stake holders in the new Corporations or in Land Trusts. It would be possible further in a large number of cases to leave management undisturbed, together with the enjoyment of many of the amenities which at present go with ownership, subject to the transfer of title to the Corporations or Trusts.
Here again limits of space preclude fuller treatment of the subject. All that is here relevant is the inevitable conclusion that the planned economy which the nation needs to meet the demands of the twentieth century must clearly involve drastic inroads upon the rights of individual ownership of land as at present understood.
Thus far in this essay Finance has been purposely left aside.
The assumption is that consciously planned reconstruction of the economic life of the nation will increase, and indeed is necessary, to maintain the present national dividend. There is no reason to believe that overhead charges for government and administration will be increased. On the contrary they should be diminished by the elimination of the friction and waste arising from the present lack of planning and disorder.
It should be possible also with industry and production replanned and co-ordinated so to re-arrange taxation as to take from the national dividend that part of it which is required for collective expenditure by the community at an economic cost less burdensome to the nation than is involved by our existing rates and taxes.
From the standpoint of the national and local budgets therefore there is no cause for anticipating financial difficulties.
The question remains what changes are required in the financial machinery of the country. It is in the sphere of Distribution, and especially in that important part in the mechanism of Distribution which belongs to Finance, that the worst disorders of the present economic system have shown themselves.
In no sphere is the evidence of our loss of control of the Machine of Civilization more evident than in that of Finance.
The catastrophic fall of prices has resulted in complete disequilibrium between -the costs of production and the price which the consumer can pay, and in particular between the relative prices of agricultural and manufactured products.
Mismanagement of the standard of value is apparent throughout the world.
It is by no means so clear how recovery is to be brought about. Cheap money is obviously essential but it is only if and when it leads to a revival of activity, to increased demand for goods and services and an increase in the volume of trade, followed by a recovery of prices to a remunerative level that it serves any useful purpose.
Mere manufacture of paper purchasing power is of little avail, more especially if with waning political confidence the basis of credit shrinks faster than the manufactured paper money increases.
This is not the place to examine the problem of escape from the immediate financial crisis.
The same assumption must be made as was made earlier in this essay that the inertia and momentum of the economic structure and of habit and custom will carry us somehow through for the moment and that we shall be given a respite.
One basic need of the new economic organization is the stabilization of the purchasing power of money. Stable money and conscious forward planning are mutually dependent.
The elimination of violent fluctuations of the general price level will immensely facilitate improved organization of production and distribution.
No question arises of fixing the prices of individual commodities.
Once equilibrium between costs of production and prices to the consumer has been re-established, our first efforts must be directed to securing stability of the purchasing power of our money.
This question is dealt with at length in a separate essay and the conclusion must perforce be taken for granted here.
Stable money cannot be secured without considerable extension of control on behalf of the community over the flow of investment and the uses which the individual makes of his capital.
While as consumer he can retain full freedom of choice as to which of his competing wants he will satisfy, there are real difficulties in leaving him entirely free to invest his savings in any way he chooses.
It'is probable that many of these difficulties can be solved on the one hand by extension of the system of insurance, on lines to which recent developments of the motoring law again supply suggestive analogies, and on the other hand by means which, while leaving the small capitalist untrammelled, will so canalise the flow of both long term and short term investment of the large sums which are at the disposal of banks and financial institutions, as well as funds in the hands of large insurance companies, as to ensure that adequate capital is available for the big industrial, agricultural and distributive corporations already envisaged. It is necessary to insist that Finance shall take its proper place as the servant and not the master of industry and commerce. The stabilization of the purchasing power of money will by itself go far to secure this subordination.
The Bank of England has in the course of its history lost practically all of its original profit-making characteristics and become in fact if not in form a leading example of a Public Utility Corporation devoted to rendering public service. It has also many of the features of a self-governing institution, its relations to the Government delicately adjusted so as to combine both due subordination and administrative independence, so as to offer a significant parallel to the new institutions suggested earlier in the spheres of industry and distribution. It would appear to be sufficiently flexible to enable it to adapt itself to filling its place in the new order without requiring any radical changes in its constitution.
The logical completion of the process of amalgamation which has reduced the number of the major Joint Stock Banks to five would clearly be to merge them all in one and to give them some monopolistic privileges in return for converting themselves into a real Public Utility Corporation.
This is a delicate process and it may be unwise to force the pace, seeing that natural developments are tending to bring about much the same results without outside intervention.
Careful study is needed of the relations between planned industry and the Stock Exchange, the Acceptance Houses, the Issuing Houses, and other parts of our financial machinery. It may well be that, with industry, agriculture, transport, etc., organized in the lines suggested, and with the adoption of the steps necessary to stabilise the purchasing power of money, the problems which are, in prospect, somewhat terrifying of bringing about a suitable re-organization of our financial institutions will be found largely to have solved themselves. For Finance as the servant of industry can have no motive to do otherwise than adjust itself to the new needs.
Little has been said hitherto on the subject of organized labour.
Clearly Labour must have effective representation and play an adequate part in the new Statutory Councils and Public Utility Corporations and in all the activities of the re-planned nation.
The most difficult task will perhaps be to reconcile the Trade Unions to the re-modelling of many of their existing regulations and to the change in outlook which conscious planning requires.
Stable money and the discarding of the doctrines of individualism and laissez-faire will between them make obsolete many of the objectives and many of the issues which at present bulk largely in the minds of Trade Unionists. In planned industry the employee takes his true place more clearly than before as a partner in production.
The changes required in the organization of Labour are obviously not such as can rightly be described as encroachments on freedom.
Difficult therefore as the right solution of the knotty problems which arise may prove, they need not detain us further in this examination of the relations of planning to freedom.
Nor need we pause here to examine what planning may mean in other parts of the structure of our economic life, education, health services, housing, provision for leisure.
Each of these subjects and others will need detailed investigation and the methods of organization adopted must be fitted into and form part of a complete whole with the new model for Industry. It is high time that man should make effective use of biological knowledge to improve the human race and make himself more fit for his twentieth century responsibilities. In the health services and the province of medicine it is urgently necessary to shift the emphasis from cure to prevention, from negative to positive health, and this may well call for a big change in the organization of the Medical Profession, which has at present too often a vested interest in disease. But there is no reason for supposing that in order to deal with these various questions any new invasions of freedom will be called for which in degree or in kind go further than what has already been contemplated in the industrial field.
Many of the problems of national reconstruction extend into the imperial and international field. The United Kingdom by itself is far too small to provide an adequate economic unit for planning.
A planned economy for Britain implies as the next step a planned imperial economic family. Considerable interrelations, imperial co-operation from the outset, is essential as a minimum, for success in certain directions.
The stabilization of the purchasing power of money calls for action not only in the Empire but also in such countries as Argentina and Scandinavia, which belong to " Ster-lingaria," the area where British Sterling is indisputably the international medium of exchange. Tariffs and agreements for industrial co-operation with other parts of the British Empire will have to be fitted into the framework of our national industrial system in order to make reasonably possible the successful functioning of such projected bodies as the Steel Industry Council or the Statutory Cotton Corporation. The subject matter with which these bodies will deal includes large questions of export trade, and is not as in the case of the Central Electricity Board confined to the provision of services within our national boundaries.
The inter-relations of National Planning and International problems are peculiarly difficult. An ideal national plan cannot be framed and brought into operation without complete international co-operation. Yet to wait till conditions are propitious for an intelligent international reorganization of our own and the world's economic life will not help us.
And with Russia and Italy embarked on plans which definitely override the claims of freedom, complete worldwide agreement is not within reach.
The better is the enemy of the good. Within the boundaries of the United Kingdom we have ample opportunities, if we set ourselves wholeheartedly to the task, to achieve within the British Empire and even beyond it in countries whose economic ties with Britain are historically close and whose trade is complementary, we have reasonable prospects of securing fruitful results by political and economic co-operation.
We dissipate our strength and over-strain our resources if we attempt more before first putting our own house in order. It is not selfishness or aggressive nationalism or imperialism which puts a limit on our immediate sphere of action, but a sober estimate of our political and economic powers.
The goal of world-wide international co-operation must never be lost from sight, and advantage must be taken of every opportunity for bringing it nearer. The very fact that it extends planning across existing political boundaries is of special value. Nevertheless our first task is to replan Britain, with an economic organization that will fit harmoniously into the planned imperial economic family, and in so doing to give leadership and new hope to a distressed world.
Man's powers of large scale organization and of harmonious co-operation will be further tested by the need for economic planning which transcends national boundaries and in due course demands world-wide co-operation. National and imperial and ultimately international political and economic practices and institutions will doubtless undergo profound modifications in adapting themselves to the twentieth century.
The constitutional development of the British Empire may indeed provide a model more suitable for adaptation to the needs of world co-operation than any at present in existence. The harmonious and free co-operation within a single system of a number of States enjoying sovereignty and independence as equal partners in a commonwealth of nations would appear to offer possibilities of extending itself indefinitely till it covers the whole world. Proof of the ability of the British Commonwealth to provide its citizens with an economic organization that ministers effectually to their well-being will be the surest way of winning world-wide approval.
The only rival world political and economic system which puts forward a comparable claim is that of the Union of Soviet Republics.
If planning and freedom are to be reconciled, the solution must be found along the lines of the British approach.
Effective planning on the economic side and even the introduction of desirable reforms in detail has become impossible without a drastic overhauling both of Parliament and the Central Government and of the machinery of Local Government. Political and economic planning are complementary and supplementary to each other and must be carefully inter-related. We need new economic and political institutions to match the new social adjustments which applied science has created, and a new technique both in politics and in industry to enable us to find intelligent methods of surmounting new difficulties and complexities.
It has been suggested more than once in the course of this essay that devolution of powers to statutory bodies will be an important feature of the new order, and that in the result Parliament and the Cabinet will be relieved of some part of their present duties and set free to the great advantage of themselves and of the nation for their proper tasks of directing and guiding public policy.
Big consequent changes will follow in the machinery of government. The British constitution is however accustomed to changes of this sort. It is continually developing and adapting itself to new conditions. The further development now contemplated will be a natural evolution along lines consistent with British traditions.
Here as elsewhere vested interests will doubtless feel themselves challenged, and be inclined to resist. That is inevitable; but the essentials of constitutional freedom will remain unshaken. In some of its aspects the Tariff Advisory Committee already suggests the nucleus of a National Planning Commission. In due course we shall perhaps be astonished not at the magnitude of the changes but at their relative smallness.
One further question remains to be touched upon before the summing up is reached.
Let it be granted, a well-disposed critic may say, that what you propose involves no fundamental attack on freedom : granted that your plan of reconstruction is not open to the charge of encroaching upon spiritual freedom and, if successful, would provide a better material environment for the realization of humanity's higher aspirations : do you not run the risk of so trammelling and shackling man's economic freedom that the result will be less production, not more, less enterprise and initiative, a drying up of the incentive to progress, and final loss, not gain, in material well-being ?
One possible answer is of course to refer our critic to what was said at the outset as to the imminence of catastrophe if we continue to drift. We must regain control of the machinery of civilization if we and it are to survive.
Reluctance to embark on a doubtful adventure deserves a less negative treatment.
The dangers which our critic fears are real dangers. Red-tape is not confined to Government Departments. Our Statutory Corporations and Public Utility Boards may all too easily become unadventurous obstacles to progress, determined enemies to all new ideas.
It may be indeed that one of the lessons we have to learn from our present distresses is that scientific invention itself required some planning in its application to the economic structure of the nation.
The problem of progress is no longer the problem of getting enough change to prevent routine from deadening effort, but the problem of preventing change from destroying both routine and all social stability.
This however is no justification of institutions which deaden effort.
Our proposals must rather be defended by the claim that they will liberate the spirit of initiative and not deaden it, in that they will provide means by which the energetic man of business may escape from the disheartening frustrations and failures which are caused by the complexity of the machine, and will give him scope, for serving his generation in a larger kingdom than the narrow field of competition with rivals in particular industrial or commercial pursuits.
Though organized on public utility lines with monopolistic privileges, the great Chartered Industrial Corporations will find ample room for energy and initiative in performing their primary task of combining maximum output with minimum costs of production. The executive heads of particular factories will not lack the spur of competition.
It is no part of our plan to enshrine equalitarian doctrines or to eliminate from business life the desire to better oneself and the motive of personal reward. Subordination of the motive of profit to the motive of service does not imply that the motive of profit has no useful part to play, even within a Public Utility Concern not working for profit. It is not absent in the B.B.C., nor in the Central Electricity Board.
Nor is it suggested that Public Utility Concerns or bodies analogous in character should be set up to deal with any but the major or " Key " business activities of the nation.
For example the specialized steel industries of Sheffield would not, unless by their special desire, find a place within the organization of the Chartered Steel Corporation. They would be ancillary to it and would no doubt co-operate with it in suitable ways, but would remain independent.
In general, specialized production and skilled craftsmanship would continue to be the field of individualistic effort. So also would retail business.
Experience alone can prove the justice of our claim that economic freedom will not be fatally shackled by the effects of conscious forward planning. Experience too will be needed to make clear the boundaries of the province within which individualistic effort can best be relied upon to secure the highest national dividend.
But we do make the claim that national reconstruction along the lines indicated is not only urgent and essential to salvation, but is also rightly calculated to improve the economic environment of our national life.
Indeed the Socialist or the Communist will condemn our planning as mere tinkering with the outworn machine of capitalism. To him it will appear as a hopelessly conservative and anaemic attempt to stave off the red-blooded revolution which alone can satisfy him.
Our plan is, we claim, conservative in the truest and best sense. It is constructive not destructive and builds solidly upon the present and the past. It faces the issues boldly and is not afraid to challenge vested interests and deeply-cherished habits of thought and action. It does not however propose to expropriate anyone, and in requiring the application of compulsion in a limited sphere it is not doing more than to extend and make explicit and give systematic application to tendencies and practices already at work.
The purpose of this essay is not to put before the reader any complete or fully worked out plan of national reconstruction. That can be done only in a series of separate essays and even then much of the necessary detail would have to be left out.
Such sketch, in the broadest outline of the lines which reconstruction might take (as has been given here), must inevitably raise more questions in the mind of the attentive reader than it answers.
Our purpose has been to vindicate by reasoned presentation our faith that national reconstruction on the basis of conscious forward planning, besides being urgent and necessary, is compatible with the preservation of our freedom.
Vested interests, ingrained prejudices, traditions, customs, and points of view which have proved their value in the past, are challenged by us to give way to the needs of the present.
This generation is called upon to accept modifications in the structure of its economic life, which are profound enough to require an altogether new outlook on the content and meaning of economic freedom. The old spiritual values which belong to personal and political freedom are not challenged. They are accepted in full. It is because they are accepted as absolute, and because there is urgent need to safeguard them in the changed world of the twentieth century, that new methods of economic organization have to be devised.
Economic freedom must always be relative to its environment. Economic freedom demands that form of economic organization of civilized society which will provide men and women with the highest standards of material well-being attainable by the use of their powers of scientific production and co-operative endeavour, in order that the environment thus afforded may present the widest possible opportunities for the exercise of the highest faculties of human nature.
In the haphazard and disorganized economic structure of to-day, men and women are baulked alike of economic and of spiritual freedom.
If by conscious forward planning they can escape present frustrations, they will rightly be judged to be more truly free.
1. See Red Oxford, by M. P. Ashley and C. T. Saunders, published by The Oxford University Labour Club.
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