A CASE FOR SOCIALISM
The Socialist Case. By Douglas Jay. (Faber and Faber. x2s. 6d.) THE dust cover of this work by the financial editor of the Daily Herald states that its object " is to supply a simple summary of the case for democratic socialism written in the light of the Great Depression and of the advances made in our understand- ing of monetary and economic realities in the last few years." It is open to question, however, whether it really accomplishes this aim. Mr. jay writes well and forcibly. He is not afraid to paint on a wide canvas ; and his argument is copiously embroidered with references to recent technical literature which will no doubt be diverting to his readers even if they may be somewhat surprising to the authors from whom he quotes. But, in spite of such embellishments, it all seems rather familiar ; and many of the most important questions suggested by the experience of the last few years seem somehow to have escaped attention. If this is the case for socialism, then, for all Mr. Jay's piety and wit, it is really becoming a little moth-eaten.
The indictment of the present order is reared on a threefold basis. We suffer from inequality, monopoly and monetary instability. Mr. Jay devotes much space to rather technical discussions of this last evil. But as he definitely states that it would be possible to go far to remove it by measures not specifically socialistic, it is permissible to regard his main case as being concerned with inequality and monopoly. Of these he writes with a zest which is reminiscent of the great morning of the world. It would be wrong to say that he claims actually to have discovered the distorting effect on the working of the price system of unequal power to demand : the " greatest economists " have perceived it. But he certainly seems to think that it has been ignored by the advocates of economic liberalism : and he is so preoccupied chastising the ignorance and hypocrisy of such creatures that he omits to treat of the matters on which one would have liked an up-to-date socialist opinion. He talks much of the institution of inheritance. But he does not tell us whether gross inequality is a necessary characteristic of a system of private property. He devotes much space to the taxation of inheritance. But he gives only a few. lines to the principle of Succession Duty, which, it is certainly arguable, would, if properly applied, remedy the worst evils of inequality and incidentally provide some fiscal corrective to a declining birth-rate.
Similarly, in the treatment of monopoly, all the interesting points seem to go undiscussed. Mr. Jay elaborates for his readers the pure theory of imperfect competition. But he has no time to enquire into the institutional origin of market imperfections—which is surely the matter with which men of lively minds are likely to be concerning themselves : the broad outlines of the theory of the subject are not nearly so new as he thinks. On such matters indeed his attitude seems almost Marxian : given private property, such evils are inevitable under modern conditions of production. I venture to doubt whether this is really the fruit of the " advances made in our understanding of economic realities in the last few years."
When we come to the discussion of policy, the somewhat remote nature of Mr. Jay's deductions from recent experience is even more disconcerting. His main road to collectivism is by way of increased taxation. He sees—quite rightly in my judgement—that mere nationalisation will not diminish inequality : it will only create a class of functionless rentiers. And since he eschews confiscation, he is driven to the fiscal weapon. Greatly increased death duties, administered on Rignano-cum-Dalton lines, and large increases of income tax are rapidly to transfer to the State the ownership of the instruments of production. On all this his reflections are extensive. Lengthy passages reproduce the traditional dis- cussion of the effects of taxation on willingness and ability to work and to save. And the conclusion is reached that all is well. But he does not devote such minute attention to the not unimportant question whether the proceeds of such taxes are in fact likely to be treated as capital. That presumably is a question of " political strategy " which the dust cover says is to be left undiscussed. Nor does he investigate at length the problem whether the prospects of taxation, increased as he proposes, may not lead to transfers of capital beyond the reach of the taxing authority. Indeed, the whole book is avowedly written on the assumption of a " closed " system- " such as the world as a whole "—to quote the words of the preface—as if the great problem of socialism at the present
day was not the effects of such measures in a world of inde- pendent sovereign States !
The last part of the book deals with the organisation of production in a system in which " the" State has come to own the bulk of industrial property. Here Mr. Jay does attempt to take account of some of the more fundamental issues revealed by recent discussion. But the result, for one reader at least, is not very convincing. We start well enough with acknow- ledgments of the necessity of some sort of price system. (Socialists, he thinks, should keep this in mind, even if the men who pointed it out did not realise that incomes were unequal !) But very soon all the old prepossessions begin to assert themselves. There are some lines of production where the gentleman in Whitehall really does know better than the poor what they actually want. Then there must be subsidies to farmers' rents. There are of course dangers in State mono- polies. But State monopolies of coal and cotton seem to be called for ; also agricultural marketing boards. Armaments ought, of course, to be nationalised—" armaments " just like that ! Perhaps—Mr. Jay is not quite sure—established but not unified manufacturing industries, such as the motor-car trade, should be made public corporations. In the end we are not quite sure about anything save garages, taxis, book-makers, street hawkers and village shops. Mr. Jay admits with some candour that it may be said that he has reached a " lame and impotent conclusion " ; and in a final paragraph he makes a number of extremely sensible remarks about the dangers of ad hoc planning. But I doubt whether he realises how far the measures he already admits are subject to his own strictures; nor how great are the dangers to democracy and the abolition of poverty of the type of top-heavy over-centralised State machine which he wishes to enlarge and perpetuate. But that in fact is the chief lesson of " our experience of the Great Depression and of the advances made in our understanding of economic realities in the last few years."
LIONEL ROBBINS.
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