The craving to control MONEY
NICHOLAS DAVENPORT
Professor John Jewkes, dedicated anti-planner (The New Ordeal by Planning, Macmillan 42s), has one great advantage over his critics the arch- planners: he writes so much better English. But I think he is naughty in tacking forty pages of a new essay on planning in the 'sixties on to the old essay on planning in the 'forties (first, published in 1948) as if it were the continuation of the same story. It is a very different story. The ordeal of planning in the 'forties was really the ordeal of the controls carried on unintelli- gently from the war-time apparatus. We will always remember the priceless absurdities of some of them—for example, Dr Summerskill announcing in the House of Commons in June 1947 that licences were to be issued to obtain wedding cakes free from price control for the celebration of golden weddings, or Dr Dalton excepting boats and oars for the Olympic Games from the timber control, while holding on to it for wooden huts in gardens and allot- ments. The classic example of a planning crisis in the 'forties was when Mr Shinwell, then Minister of Fuel and Power, told Parliament one Friday afternoon in February 1947 that as from Monday electricity supplies for industry were to be cut off completely in London and the south-east, the midlands and the. north-west.
It is difficult to imagine how the planners of the 'forties could plan a coal shortagein an island geologically so rich in the coal deposits of the carboniferous period. But ministers and their civil servants were .then very ignorant, overworked; overtired and not overbright. It was alarming to hear the Lord President of the Council complaining recently that the civil ser- vice today is still largely ignorant of the facts and unskilled in the processing of what facts it possessed. Clearly, central planning remains built upon flimsy, inadequate foundations. But that does not mean that we must have no plan at all. What sort of plan should it be?
Although I am temperamentally inclined to anarchism, that blessed state when men are rational enough not to need being governed, I have always acknowledged the need for a macro-economic or 'conjucture' plan to ensure the full employment of our labour and re- sources. That requires—in the words of the Keynesian White Paper .of 1944 on Full Employment—that (i) total expenditure on goods and services must be prevented from falling to a level where general unemploy- ment appears; (ii) the level of prices and wages must be kept reasonably stable; and (iii) there must be sufficient mobility of workers between occupations and localities. If planning is kept strictly to these requirements it will not end up in the totalitarian state which Professor Jewkes and all good people abhor. Unhappily, the more fanatical planners have not been con- tent with that modest, if illusive, elysium. They have demanded faster and faster growth and this has led them on to more and more inter- ference with the private sector and more and more inflation of the public sector. To make the two sectors grow faster at the- saine pace has proved impossible in a free or still loosely- controlled economy. Really it was asking planning in a non-communist state to do too much.
The rot, says Professor Jewkes, was started by National Plan (I) published by the Conserva- tive party in 1962 and strongly advocated by the then Federation of British Industries. This was a plan far a national growth rate of 4 per cent per annum. It was followed by National Plan (II) for a growth rate of 3.8 per cent proclaimed by the Labour government in 1965 and wel- comed by all parties. In both cases the proce- dure was to think of a number for the annual growth rate and then to work out the implica- tions of it. There is no known technique of any repute, remarks the Professor, for fixing the original growth number and the methods of working out the consequences are primitive and unreliable.
The first plan failed because Mr Maudling did not control the too-rapid growth rate in public sector investment, and the second because it ran into the balance of payments crisis caused by the first, so that growth had to be cut down to 2 per cent or less. 'Damned bad planning' would be your comment! But the Professor has a more fundamental criticism. The promulga- tion of a growth rate of 4 per cent encouraged wage and salary earners to demand rises of 4 per cent or more which, after the usual wage 'drift,' caused a gross inflation of incomes. He might have added that as long as the trade unions remain primarily interested not in in- creasing productivity and efficiency but in increasing their cash flow there will always be a danger in advertising growth in any national plan. The popular league table in national growth has really been for us a national disaster.
The Professor goes too far when he argues that all planning is unscientific because it eery ploys methods which involve reasoning in a circle, and that it must always lead to gross misdirection of production and widespread neg- lect of the needs of the consumer. A compre- hensive national plan of the Brown variety may be unscientific and superfluous, but the Govern- ment is now responsible for about half the national investment, and it has always got to plan that investment and relate it to investment in the private sector.
The Professor seems to think that all plan- ners acquire an evil disposition or a 'turbulent craving' to interfere, control and prohibit and that no planned economy can operate without finally suppressing free speech, freedom of spending and movement and freedom to acquire and hold property. In this neurotic approach he carries on the dire warnings of Professor Hayek in The Road to Serfdom. But I cannot
see the British falling naturally into an authori- tarian way of life through an- excess of plan-
ning. They prefer compromise and common sense. Everyone knows that a sophisticated in- dustrial economy cannot now be left to the market forces of prices and costs or 'boom and bust.'
Without a Monopolies Commission and a restrictive practices law the big firms will be fixing prices and parcelling out markets between themselves before you can say Joan Robinson. And, to be logical, you cannot get prices work- ing freely in the British economy unless you have a floating rate of exchange. (Enoch Powell, being the most logical of anti-planners, believes that this is the right solution.) I agree with the Professor that there are dangers of 'vast errors' and disagreeable interference in our private life in the monolithic central planning advocated by K. Galbraith, M. Shanks, A. Shonfield or P. Jay, but I believe that in the end the sensible com- promising British will reject it and content themselves with the more modest attempt to plan their capital investment in a businesslike way.
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