20 APRIL 1944, Page 12

LIBERALS AND PLANNING

LETTERS TO THE EDITOR

Sut,—Mr. Elliott Dodds' exposition of the attitude of the three great parties towards planning was interesting: one wonders if any of the three have found the real dividing-line between industry which should be planned and that which should not. Surely the point of cleavage is not so dependent on risk-taking as the Conservatives would have us believe, but has much more to do with the capacity of an industry to supply market requirements. So long as capacity is less than potential market requirements there is no case for planning at all, since such an industry can always find a useful field for new entrants. But when an industry becomes overcrowded, when its capacity exceeds possible demand, then the case is entirely different ; further private enterprise in that industry no longer performs a useful service since it no longer offers the public anything which it has not already got in plenty ; on the other hand it depresses prices, reduces profits for all producers, possibly to the vanishing point, and generally throws the industry into confusion— unless, or until, the producers get together and take steps to protect themselves.

The whole question is bound up with the evolution of industry ; the private enterprise and competition (capitalist technique) which were so admirable in discovering a useful product, improving it, also developing the market for it, no longer operate to the public good once the industry is highly developed with a capacity in excess of requirements. Capitalism could be described as the nursery of new industries, and we shall always need it, not only to take care of possible new babies, but because some enterprises never grow out of the nursery stage. But ft:ir the matured industry we have yet to find a suitable technique, one which, among other things, can control, even reduce the size of an industry without a reduction in the number of those dependent on it for employment. When we have found this we shall have a dual form of economy, part laissez faire and part State supervised, each part being complementary to the other. Surely this is the direction in which we must move?—