A PROGRESSIVE POLICY : H. PLANNED SOCIALIZATION
By SIR ARTHUR SALTER
IT is useless to discuss simply whether to plan " or not. - For " planning " is a new term in economic discussions, without any accepted and standard defutil tion, and may cover anything from a mere demand for more order and reason in our existing public policy to the ideal of a meticulously regulated collectivism which is scarcely distinguishable from communism. " Planning" in the first sense at least we must certainly have, and of a kind which our present methods and traditions of government are ill-equipped to give us. For so far as there is in fact public control and direction of economic activity, it obviously ought to be planned and not improvised. At present, here and in most of the world, a form of State collectivism is being improvised piecemeal under the successive pressures of organized interests or emergencies. Instances of these methods, and of the consequences, are at once too familiar and too numerous to need enumeration.
" Planning " then must extend as far as the public regulation- and direction of economic activity. But how far is this ? How far should public or collective direction replace the automatic adjustments of the old system of changing prices and individual competition ?
Certainly, to my mind, not completely. For complete State collectivism is incompatible with either economic or political freedom.. It cannot leave us free, except within narrow limits, either to buy what we want, or to choose what we want to do, or to govern ourselves through our representatives. And it is not easily com- patible with a very highly developed economic system or a very high standard of life ; for when we pass from scarcity to abundance, from the comparative simplicity of meeting the need for stable and calculable necessaries to that of meeting the variable taste of those who demand, and can afford, luxuries, we usually pass the limits of man's present powers to plan, direct and regulate cen- trally and comprehensively. If, however, collective control should not extend to complete collectivism, it must certainly have a wider range than it has had or has now ; and within that -range it -must in many respects be more intimate and effective. Our system is, and will remain, a mixed one, in which a large measure of socialization is combined with A large field of private enterprise- and competition ; but the proportions are changing, and destined to change, in favour of the former. Can we forecast the sphere and character of collective control and direction in the State of the future ?
I need not dwell upon the increase in the State's external regulation of economic activity; the elabora- tion of the law against fraud,, factory legislation, the establishment of .compulsory conditions as to • wages and -hours of work and so on ;. nor upon the increase of the social services, unemployment assistance, pensions, and so on; nor on the further extension of public utilities, of which broadcasting, London Passenger Transport and electricity are recent examples.
In .all these directions we shall clearly have a large increase -of socialization, upon lines already -familiar; Much more significant, however, for the future- is the action taken as regards currency, capital issues, and the association of protective tariffs and marketing schemes with conditions as to reorganization in both industry and agriculture.
For the most characteristic recent development, of which these are examples, is not the extension of social services or public enterprises, but the new relation of the State to the economic activities that are still left within the sphere of private enterprise. Competition and changing price levels will be left, within this diminished sphere, to stimulate effort, to eliminate inefficiency, to encourage invention and new technique, to discover, develop and satisfy new demand ; but they will do so within a framework, and in an environment, no longer left to similar automatic forces, but deliberately and col- lectively imposed. Competition with changing prices will be left to adjust in detail, but not to construct the system itself within which competition operates. Cur- rency, the main distribution of capital, and the general character of the country's economic structure, including the balance between home and foreign trade, will, I think, all be collectively planned and regulated in main outline.
Similarly, in large spheres of economic activity the auto- matic system cannot, and will not, be left alone to create the general environment within which the individual concerns compete. In many cases redundant concerns will have to be eliminated, not through a slow process of accumulating debt and ultimate bankruptcy (accom- panied by desperate measures which spread disaster among otherwise sound concerns) but by collective decision and compensation. The development of this new method will require a skilfully planned organization in industry ; a carefully considered delegation of powers by Parliament, with adequate safeguards against the pos- sible abuses of monopoly ; a close co-ordination with the Government's policy as to tariffs and protection.
In this last sphere, perhaps, we find in present circum- stances the most urgent and imperative reason for planning of a kind which no country has as yet seriously undertaken. In a free-trade world, even to some extent in a free-trade country, the automatic system of adjust- ment at least has a chance. But once a country imposes substantial and varying tariffs, it is necessarily re-forming its -own economy. It can no longer evade the responsi- bility of considering deliberately at what sort of economy it is aiming. To improvise without a real plan, as every country has done, means a series of national policies each of which is not only injurious to the others but also incon- sistent with itself. One country after. another proceeds, without any general plan, based upon its balance of trade and payments, to try to export more than it imports ; and to receive more in respect of past loans and investments than it sends out in the form of new ones. It is piece- meal and persistent improvisation of this kind which is chiefly responsible for the intensity of the depression ; and, half at least of the worst features of national policies would disappear if—even apart from any question of consideration for other countries—they were made consistent with themselves and with the laws of arithmetic.
I am therefore in favour of a planned and extending socialization within an economy whose detailed adjust- ments continue to be made through changing prices and whose most quickly changing economic developments are still left to private enterprise and competition, controlled but still effective. I think this process of socialization can, and should, go far. But I do not think of it as extending indefinitely, and without a decisive issue of principle, till complete collectivism is achieved. The character of the socialization we now have, extensive as it is, is essentially determined by the necessity of private enterprise being left with .conditions which enable it to function in the sphere which still remains to it. The prosperity and conditions of private enterprise set limits to the cost and standard of wages in the socialized sphere. If and when these limits are passed, the State will be compelled to accept a complete and direct responsibility for the whole. In my view we have not yet the capacity for government and collective management, the broad vision and public spirit throughout the community and the electorate, without which such a responsibility could be assumed without disaster. Not socialism but extending socialization, based upon more and more deliberate planning, is not only, in my view, the right policy for the present but the best way of developing the qualities and capacities upon which the more unified system, if it ever comes, must depend for its success.
[Lord Eustace Percy will write in this series next week on " Foreign Affairs."]
Previous page
