Political commentary
Gone for a beswick
Ferdinand Mount
I don't know if the name Socrates means anything to you. Ugly-looking type, Greek extraction, came to a sticky end, had this weird theory that the wise man is the man who knows that he knows nothing? That's him. Undoubtedly able, but lacked a positive attitude towards the decision-making process. Probably alpha on the written stuff, if you follow me, but might well fail the interview. Scarcely what we in the Civil Service Department would classify as high-flier timber. And yet he had this curious knack of being able to get at the nub of things. Not the sort of knack you need eve's), day, I grant you, there is a limit to the number of nubs one wants to get at, but it's a handy knack to have around in a crisis. For it is odd how elusive a crisis can be without some kind of nub-detector. You read the headline 'Crisis Shock Row' and you look in all the usual places at Westminster, but somehow you can't quite pin it down. Some of the best crises seem to flit through debates and parliamentary questions and select committees without a finger laid on them, like a springheeled winger on a foggy afternoon.
It is not that the bankruptcy of the British Steel Corporation has escaped attention. Hardly a day of the new session has passed without British Steel being discussed somewhere in the Commons and yet the matter remains somehow miraculously untouched. The calamity is spectacular, but responsibility for it seems to be so diffused that you can never grasp it all at once. As select committees go, Sub-Committee B on nationalised industries is a competent and articulate bunch. All through the miasmic afternoon, its members grill the men who control BSC — Sir Charles Villiers for the Corporation, Bill Sirs for the unions, Eric Varley for the Department of Industry, Joel Barnett for the Treasury.
The Committee grilled them last spring and now it is grilling them all over again, asking the same set of questions but receiving a much more depressing set of answers. And they don't like being re-grilled. It is a spluttery, cross-grained, expostulatory sort of ordeal. The MPs are frustrated because they can get no coherent explanation of what has gone wrong and no coherent statement of how the industry proposes to put it right. The witnesses are aggrieved because each is pilloried for a failure which is not his own but that of the system — the penalty of possessing responsibility without power.
Yet there is no mystery about British Steel. The loss of £500 million projected for this year can be neatly filleted: £200 million is due to the world slump, £200 million is due to overmanning, and £100 million is due to keeping open Beswick plants. We must pause here to celebrate the achievement of this administration which has now added not one but two words to the English language. After mu/ley (v. intr. to doze, or nod off, esp. in the presence of important persons, eg. royalty), we have beswick (adj. uneconomic, obsolete, dud, orig. applied to out-of-date steel plants, after the government's review of same by Frank, Lord Beswick, in 1975).
While congratulating Lord Beswick on adding his name to those of Burton, Lord Yarborough and sweet Fanny Adams as synonyms of nullity, it must be pointed out that if the Beswick plants had been run down as projected under the BSC's own plan of 1973, the steel industry would not still today be facing exactly the same problems as five years ago but from a far worse financial position. I reject the unworthy thought that the delay has been all the greater because many of the Beswick plants are situated in Labour marginals and two others, East Moors and Ebbw Vale, fall within the constituencies of the Prime Minister and the Lord President respectively. The point is rather that, although nobody disputes that the Beswick plants will have to be closed eventually, just as nobody disputes that BSC is overmanned by anywhere between 44,000 and 60,000 men, nationalisation — that is to say, political control — provides an almost infinitely flexible means for avoiding, postponing or botching the necessary decisions. The triangular configuration of power ensures that decisions can be put off by an endless chain of consultations and negotiations. Power does not reside in any one place but rather oscillates within a three-cornered magnetic field. The management puts proposals to the unions which then lobby Parliament and government which then pressurise the management which. . .No decision is quite final, nothing is sealed which cannot be unsealed, no plan is based on a single, clearly understood criterion — whether of employment, profitability, or national advantage. This instability of intention gradually debases the quality of thought within each department so that each party to the discussion loses the ability to focus clearly on its own aims. Far from clearing the way for rational planning, political control simply props up the industry, unpruned and untreated, until it collapses under its own deadwood.
The most fatal of all the politicians' illusions is that there exists somewhere a 'solution', which will enable us to have everything we want without cost or sacrifice. Even now, with steelmakers all over the world running up huge losses (though none as huge as BSC's) and with growing competition in general steels from new producers like Spain and Korea, Mr Varley still goes on saying 'What we have to do is to ensure that we have a substantial, profitable and expanding British steel industry'. Yet the fact is that we can have a substantial industry, or we can have a profitable industry, or we can even have an expanding industry — but we cannot have all three. This 'something-for-nothing' attitude is characteristically political. It has also fatally infected the thinking of British economists, particularly of economic advisers to the government, as Professor Alan Walters demonstrated in his remarkable Wincott lecture last week to be published by the Institute of Economic Affairs in the New Year. Keynesian ideas have proved not only popular but nigh ineradicable in high places because they are so delightfully cost-free. Indeed, if Keynesian theories were correct, they would be morally irresistible. For if you can mop up unemployment just by printing more money with no unmanageable risk of inflation, then you would be criminally callous not to do so. Keynes himself, like Marx, has hitherto been let off lightly. His apparent failures of prediction and prescription have been blamed on hot-headed or thick-headed disciples who misunderstood the master. Wel' ters shows clearly that this won't do. Keynes, is in it up to his neck. For it is just as true 01 the pure Keynesian as of the nen" Keynesian, quasi-Keynesian or New Cain' bridge theories that not a single one Or' vived its first great post-war test in the economic upheavals of the late 'sixties.
Those shiny levers which successive Chancellors pulled up and down, eallY shouting 'full ahead it is, sir,' steady as she goes', and 'just a touch on the tiller, number one', have turned out, as often as not, to be quite unconnected to the engine-room. The reality is that none of us knows how t° 'fine-tune' the economy — and that goes for the monetarists too, as Walters points oilt. The only difference is that the monetarists, or at least the more sensible monetarists, know that they don't know. In this state 0' socratic ignorance, therefore, the least foolish course for governments is to behave like motorists when the traffic lights aren't working — proceed with extreme caution and try to behave as predictably as possible, The Treasury's application of fixed mon& ary targets is welcome because it represents a return to known rules. But have the t Treasury mandarins really changed a heart? Have they really discarded ale dogma of a working lifetime? Did you ever, hear of an economic adviser who admitten that he didn't know what to advise? Waiters, says: 'It is difficult to admit ignorance. Aftei all, we are a highly paid profession — surely we should know better than the Ionia", where the economy is going and how to pu_i it right. There is a powerful temptation itv., respond to this understandable dernanu And how.
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