Blueprint for George
The British Economy in 1975. By W. Beckerman and associates. (C.U.P., 80s.)
THE secret is out. We all wondered how Mr. George Brown and his staff of economic a' perts could have managed to produce a National Plan of nearly 500 pages within twelve months of their taking office. Apparently the groundwork had already been done by a back- room boflin at the National Institute of Eco- nomic and Social Research and his team of professional economists. This was Mr. W. Beckerman, who began work as early as the beginning of 1962. The fruits of his and b's colleagues' work have now been published by the National Institute under the title The British
Economy in 1975. Most of them, including Mr. Beckerman, are now working in the Department of Economic Affairs. They did not set out to make a forecast of what is most likely to happen; they were 'merely making a projection of what the economy would look like in 1975 and what it would demand of the key industries if a certain rate of growth were maintained.
Of course, Beckerman and Brown do not always run along the same lines. The econo- metricians of the National Institute have banked on a greater competitiveness in our export trade and have assumed that our overseas capital position will have to be strengthened—and 'worthy contributions' made to the development of the poorer countries—as and when our balance of payments situation is improved. In- deed, they believe that private investment over- seas—as well as official aid—is justified by the return it brings and that `rising property income emerges as the main hope of a more favourable trend in the balance of payments over the next ten or fifteen years.' (R. L. Major: chapter IV.) This must surprise Mr. Brown's government, which has set its face against private investment overseas. Mr. Beckerman's team projects a balance of payments surplus of £550 million in 1975- £350 million from Invisibles' and £200 million from visible trade—and distributes it as to £250 million in official aid to, and £100 million in private investment in, the developing countries and as to £200 million in private capital outflow elsewhere. They have assumed that there will be no further restrictions on the movement of long- term capital in and out of the country and that Britain will progress as a net capital-exporting nation. Mr. Brown had estimated a net capital inflow by 1970!
Mr. Beckerman's team is more likely to be right over the Jong period than Mr. Brown's over the short, but as Mr. C. T. Saunders, the director of the National Institute, says in his introduction, they have laid down certain pre- conditions which imply many changes in the atti- tudes of managements and workers towards wages, prices, productivity, investment and inno- vation and `the development of more effective forms of government policy for long-term eco- nomic progress.' In other words, if things turn out badly they can blame the government. The book, which has special studies of certain key sectors of the economy—energy, inland trans- Port, housing, health and welfare and education— shows clearly where their criticism will lie. Un- doubtedly this long-term econometric projection of national growth is the best piece of economic professionalism which the worthy National In- stitute has yet turned out.