Tell it the Marines
Ralph Harris
Small Is Beautiful: A Study of economics as if People .mattered E. F. Schumacher (Blond & Briggs 0.25)
I. fear this is a most perverse collection of eSsaYs, with a tantalising mixture of profound ,
insights and superficial commentary which must drive a conscientious reviewer near to schizophrenia in trying to decide whether to Pronounce a benediction of a curse on Dr Schumacher. Since his final solution is Wrong-headed (and has therefore attracted rave notices in all the usual places — with whole pages or features in New Society, Observer, Times, Peace News). The central thesis is that a combination of market forces and modern technology has conscripted a growing proportion of the poPulation into larger factories and towns, ne_ cause profits take precedence over people: tven if some readers were tempted to fall for this diagnosis, they would surely pause before a,ccepting that the outcome can be adequately described as alienation, despair, misery, ugliness, escapism, vandalism, crime, violence and all the other ills (not forgetting "spiritual death") the flesh is heir to. It is not merely exaggeration which strains credibility, but the touching error of always blaming instrumentalities and missing the
worse culprit of poor old human nature. I personally accept the relevance of Dr Schumacher's frequent quotations from the Bible; but to his "Man shall not live by bread alone," I would reply with Anselm: "Not yet has thou considered the gravity of sin." And I would add that sin may be most vicious of all when masquerading in political garb as 'the national interest'.
This brings me to my central quarrel with the author. The market economy, he says, is "propelled by a frenzy of greed and indulges in an orgy of envy . . . which destroys intelligence, happiness, serenity, and thereby the peacefulness of men." Do we recognise ourselves or our friends — or even our enemies — in this grotesque caricature? If any category 'of humanity comes near this pathological state, it is not the competitive entrepreneur but the monopolistic, political power-monger who would most likely supplant him.
But is the competitive market to blame for the "giantism" our author so valiantly assails? As economic adviser to the National Coal Board for 20 years, why does Dr Schumacher fail to grapple with the truth that of the eight largest companies (by employment, not profits!) in the non-Communist world, four are the major British nationalised industries: NCB (top), British Steel Corporation (second), Electricity Council (third), and Gas Council (seventh). Market forces, forsooth! Patiently turning to manufacturing industry, we find that for all the spectre of mass-production, in the US, Britain, France, Germany, Japan (though not in USSR), between one-half ankl three-quarters of the labour force work in plants with under 500 people. Further evidence that the author has misdirected his indignation is that the size distribution of British public companies did not change appreciably from 1900 right up to the 1960s — when such non-market forces as Wedge-Benn, MinTec, IRC got busy overruling the private judgments of investors and entrepreneurs. Who are the high priests of the superstition 'twice as big, twice as good' but the politicians who since the 1930s have manipulated the market and suppressed competition in the name of 'rationalisation,' 'modernisation' and 'growth.'
It is such sizeable motes in Dr Schumacher's eye which lead him to the earnest error that socialism might be part of the cure — instead of being most of the disease. Of course, he acknowledges, socialism would have to change; and here we run across the author's engaging other-worldliness. Socialism, for him, " is of interest solely for its non-economic values . . . ." Tell that to Mr Wilson — and to the marines! Indeed, let Mr Denis Healey tell socialist voters that the standard of living — and other people's income — are not, after all, up for grabs. Tell them that the (growing) nationalised sector will not seek "to out-capitalise the capitalists . . . but to evolve a more democratic and dignified system of industrial administration, a more humane employment of machinery . . ." and leave the miners (and Marks and Spencer employees?) to guess what effect all that will have on their wage packets.
But then on nationalisation the former economic adviser to the NCB is a true reactionary who simply retreats into innocent quotations from Tawney. The level of critical analysis is fairly indicated by a trio of quotations. Having written off the market on page 40 as "the institutionalisation of individualism and non-responsibility" he proclaims as "The Principle of Motivation" on page 232 that "people act in accordance with their motives" and acknowledges that in large bureaucracies " motivation is the central problem ". Yet on page 251 he calmly asserts that nationalised industries should have a statutory obligation to serve "the public interest in all respects."
What more question-begging, incoherent, truly " non-responsible " basis could there be for leaving fallible, political appointees free to exercise their arbitrary judgement? Recalling those words of wisdom on motivation, imagine the scope for corrupting politicians and their creatures still further. Picture Mr Wedgwood Benn — or Mr Peter Walkei. — judiciously weighing the "public interest" against the pressures from marginal constituencies before deciding where the biggest subsidies are to go. Certainly, Dr Schumacher is right in wishing to elevate human conduct and in preaching against the worship of forecasting GNP, growth and material wealth. But all that our Fabian author rightly spurns has been aggravated by the politicisation of every aspect of life by Labour — followed, alas by Conservatives and Liberals. — I conclude with two pieces of advice, the first to the market men wham the author castigates for thinking economics is all. My text would be from the Book of Proverbs: "Where there is no vision, the people perish...." My advice to Dr Schumacher is that in his laudable effort to subdue human sin — his real target — he should cease making the market system his scapegoat. He should quit the party platform and mount the pulpit. True idealism and more effective preaching — backed by personal example — can certainly help leaven the human lump, and thereby change the weights we ordinary mortals give to what Marshall called the" net advantages" of material and non-material satisfactions. But the " leaders " who have let us down worst. and whom the author should chastise most severely are the socialist heirs of Tawnev and the bishops — who are sometimes one and the same people.
Ralph Harris is Director of the Institute of Economic Affairs.
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