TOPICS OF THE DAY.
THE DE VELOPNENT BILL WE are obliged to write before the details of Mr. Lloyd George's Development Bill are fully known. The forecasts as to that measure, however, coupled with the passage dealing with the policy of development in the Chancellor of the Exchequer's Budget speech, render the ways in which public money is to be made to " fly " fairly clear. We desire here to give some of the reasons why we are totally opposed to the attempt to enrich the country by Government action. It is hardly necessary for us to say that we desire to see prosperity of all kinds, agri- cultural and industrial. Nothing could be more welcome than development "in farming, in forestry, and in fishing," better rural transport in the matter of light railways and canals, and better roads. If our bogs are drained and made to yield good crops, and our harbours extended, no one will be better pleased than we shall. The question is not whether one is in favour of develop- ment, but how that development is to come about. Here we differ fundamentally from the Cabinet, the Liberal Party, and their Socialistic and semi-Socialistic advisers. When they assert that the proper way to develop is through the action of the State, we take leave to tell them that they are suffering from a mischievous delusion.
As a rule, no doubt, argument is not of much avail in political matters, for in that region most people act on instinct rather than on reason. So clear, however, is the case against the attempt to develop a country like the 'United Kingdom on the lines proposed by the Chancellor of the Exchequer that we feel sure that if people would only listen to the arguments on the other side, and profit by the teachings of experience, they would be obliged to admit that the State cannot be made richer or more prosperous through Government expenditure. If the Government were able, by some sort of magic, to carry out great public works without paying for them, we should be entirely in favour of their undertaking such works. In that ease it would be their duty to develop early and often. Unfortu- nately the Government have no secret of this kind. What- ever development work they do they must pay for in hard cash. Further, they must obtain the money for doing this by teeing the individuals who make up the nation. We are far from saying, of course, that this fact alone proves the policy of development to be wrong. If it can be shown that the State can spend people's money for them better than they can spend it for themselves, then we shall find no difficulty in endorsing the policy of the present Cabinet. In that case the State is justified when it, in effect, says to its citizens :—" You think you can employ your money best when you are left to spend. it in your own way. You are entirely mistaken. We can spend it much better than you can, and we mean to insist that you shall spend it on a number of things—such, for example, as raising timber and building light railways and canals, draining bogs and providing harbours—which you have hitherto neglected." The State knows how to spend people's money better than they know how to spend it themselves. That is the mother- thought of the Development Bill. Unless, then, this contention can be made good, the Government policy falls to the ground. On the other hand, this is the proposition which we are bound to disprove if we are to sustain our opposition to the Development Bill.
Let us, to begin with, ask our readers to remember the old parable about the things seen and the things unseen. The spending of Government money is a very visible performance. A magnificent viaduct of hewn stone, a great quay wall, a new road climbing a mountainside in graceful curves, a splendid canal, the conversion of what was once a quaking bog into firm land, or the covering of a barren moun inaide with neatly kept and fenced plantations of young firs, are one and all impressive spectacles. We see them, and we repeat to ourselves Pope's sonorous lines :-- "Bid Harbours open, publia ways extend, Bid Temples worthier of the God ascend, Bid the broad arch the dangerous flood contain, The mole projected break the roaring main. Back to his bounds the subject sea command And roll obedient rivers through *lie land. These honours peace to happy Britain brings, These are Imperial works and worthy Kings" But though this would make a fine peroration for Mr. Lloyd George or Mr. Winston Churchill, we must not be bemused by its glittering rhetoric into forgetting all the unseen things which would have come into existence had. not the taxpayers' money been spent on these pompous public works. Say that the things just enumerated have cost altogether ten million pounds. We must not suppose that those ten million pounds, if they had not been seized by the tax-collectors and swept into the Treasury, would have remained idle. On the contrary, we know very well that they would have been used for a thousand industrial and productive purposes. Some of the money would have been spent by railway or other companies in making docks or tramways. Some would have gone in erecting factories or improving the cultivation of the land. Other portions would have been used in developing foreign trade, in building cheaper homes for working men, or in countless other forms of useful human activity. Since wealth is strictly limited, and since it is impossible to eat your cake and have it, the fact that ten millions is spent by the State must always mean that ten millions less has been spent by private individuals, and that all sorts of enterprising business men have had to go short of money which they could have turned over, either by themselves or in co-operation with others, for their own, and therefore for the public, benefit. No man can spend money on any sort of enterprise without directly or indirectly benefiting the public as well as himself. -Very often, indeed, the wonderful carrot of 6 or 7 per cent. dangled before the nose of the speculator leads far more to public than to private benefit. The men who lent their money to build the " tube " railways of London were no doubt on the look-out for a profit for themselves, but the result of their pursuit of that profit has been of very little benefit to themselves, but an immense boon to the public. The advantage which the community obtains by the speculator being allowed to indulge himself with the hope of his 6 or 7 per cent., and by an occasional realisation thereof, is, how- ever, not the point at issue just now. What we want to emphasise is the certainty that if instead of raising money for public developments the Government leave that money in the pockets of the taxpayers, it will not be lost or wasted, but will be employed in a, number of useful undertakin • s. In fact,- it will, aecordi g to the old but now discredited maxim, fructify in the packets of the tax- payer. Here, then, is another way of putting our proposi- tion. Will money be likely to fruetif-y more when. used by individuals or when used by the Government ? If the answer is that it will fructify more in the private pocket, then if our object is the increase of the wealth and, prosperity of the community—as it undoubtedly is—it is obvious that we had better leave it there. A Government may be able to spend money more magnificently than any individual or collection of individuals, but when the question is one of profit—i.e., an increase of the world's goods and the stimulation of exchanges—the private man will always teat the Government, and beat them hollow.
We shall be told, of course, that all this is theory, that some German or Italian or Russian economist with an unpronounceable name has proved conclusively that money left in the taxpayers' pockets either mortifies or is uselessly or wastefully expended. Frankly, and in spite of the foreign Professor, we do not believe a word of it. Unlearned as we may be in the new economies, we are sure that the greatest source of human wealth is human energy and enterprise. The State whose inhabitants are most energetic, resourceful, and enterprising Will be the richest State. But to encourage these qualities in mankind an incentive is required, and all experience shows that the best incentive is the hope of being able to make a profit,- i.e., the possession of money to speed, not as the State or some prim official wills, but as the man wishes to spend it himself. One man finds his thief incentive in a flower garden, another in the collection of butterflies, a third in mountaineering during his holidays, a fourth in boating or fishing or shooting or racing carrier-pigeons. If you take away his incentive of free choice E spending the money he has earned, the man ceases to caretfor work. But to a very large extent these incentives are doubly taken away by G-overnment action. The money extracted in taxes cannot be-taade subject to free choice in spending. Again, men who are working for a fixed Government salary are, as a rule, very little inclined towards enterprise and energy. They will do their bare duty, no doubt, but they know exactly what can and. what cannot be got for their salaries, and therefore the incentive of hope has largely disappeared. Whatever happens they will be no better off. Hence what is known as "the Government stroke "—the leisurely fall of the pickaxe of the man who knows that he is working for a public body—pervades all Government work from the top to the bottom. When a Government spend money the majority of the individuals engaged in that spending have no incentive to make it fructify, and so Government work always tends to be sterile.
Fully convinced as we are of the soundness of our objections to taxing people in the belief that the Govern- ment blow how to spend their money for them better than they know how to spend. it themselves, we admit that there is one principle even higher than that which we have set forth,—namely, that though one may lay down rough general truths, nothing absolute, as Burke said, can be affirmed on any moral or political question. We admit that our roads require development and improve- ment, and that, owing to a series of circumstances which we cannot enter upon now, it is hopeless to think that roads will ever be developed by private enterprise. That being so, we hold that the Government are justified in proposing to do something to improve the roads. What makes us the more inclined to such a policy is the fact that Govern- ment action in the matter of roads can be strictly limited. When the Government have made the roads, and kept them in repair, there is no necessity for them to run the vehicles on the roads, as in the case of railway nationalisation. Good, broad, well-kept roads not only do not check private enterprise, but actually encourage it. Nothing gives the small trader of all kinds a better chance than good roads, and this is specially true since the introduction of motor- traction. It has been said, and, we believe, said truly, that the French peasant has been kept on the land through the excellence of the French roads. Yet even here there is a great risk of pushing a good principle too far. It would -be very easy for the G-overnment to spend so much upon the roads as to throw away with one hand the benefit which was being reaped with the other. We do not doubt, for example, that in France a great deal too much has been and is being spent in this way, and that if we were to plunge into any wild expenditure on roads we should fall into a grievous error. By all means let something be done, but let it be done with great prudence and. circumspection, and on ,the understanding that every pound. spent on the "roads will come out of some poor man's pocket or other, _whether he knows it or not, and. whether it is destined to return to his pocket with interest or not.
' May we suggest to Members of Parliament that before they commit themselves irrevocably to Mr. Lloyd George's seductive Bill they should ask the Government for a report on a great scheme of internal development which took place some twenty-five to thirty years ago ? Unless we are greatly mistaken, in or about the year 1880, or possibly a year or two before, M. de Freycinet, the Minister of Public Works in France, launched a scheme under which about thirty millions sterling (eight hundred million francs) was raised by the Government and spent in internal development of all sorts. We should like very much to see a balance-sheet giving the results of that expenditure. Such a balance-sheet must, of course, include an estimate of how the money would have teen spent by individuals if, instead of being used by the Government, it had been left to grow and. develop "in the pockets" of the taxpayers.
The crux of the whole matter is, as we have said already, to be found in the question : Is there more waste in Government expenditure than there is in private expendi- ture? We believe there is ; but if so, such wasteful ,expenditure becomes an unforgivable crime. It mean s, if men would only trace it out in detail, taking clothes, fire, 'housing, and food unneceseaaily from the poor man's home. People often talk as if the expenditure upon things which they do not care about themselves were waste. For example, some men think that giving a largO sum for a beautiful picture or a tie piece of tapestry, or riding or sailing or .climbing tot pleasure, is waste. They are mistaken. That is not oiva.ste in the economic sense. It may even, indeed, be the very reverse if such expenditure is an incentive to the prime source of wealth,—human energy and enterprise. True economic waste consists alone in doing things, productive or unproductive, less well than they can be done. For example, employing a hundred men for a hundred days doing a particular job, when under better conditions fifty men could have done it in fifty days, is an example of waste. That is the only waste which is in the scientific sense uneconomic, and therefore unfor- givable. But that is the very waste which we believe in- variably takes place when Government action is substituted for private enterprise. If that is so, then Government action must be restricted to the narrowest possible limits. There must be no pretence that the Government can ever make a profit where the private individual fails to do so.
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