Political commentary
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Ferdinand Mount
It's not every day you have an axeman down your way. To be strictly accurate, down our way we express ourselves with machetes. Mr Stuart Brickell, the Islington macheteman, was barricaded in his council flat for ten days in defiance of the authorities' efforts to evict him so that they might have the flat redecorated. Mr Mickel] is happy with his wallpaper and seemed rational, according to the police, at least until he came out on Wednesday morning, but the experience of the siege can hardly fail to. have left its mark on him. After all, a man who is besieged by a platoon of police armed with scaling-ladders as a punishment -for being content with his wallpaper has a strong case for assuming that it is the authorities who are round the twist and may well be excused for giving up the effort to stay sane himself.
What, I wondered, could one have said to persuade Mr Brickell that it would be the rational course for him to come out? What hope could be held out to him that the nation might be more sensibly governed in future and that the authorities might be less meddlesome and tyrannical? Probably he had been unable to lay his hands on a copy of the final volume of the Crossman Diaries; that was just as well. He had certainly been unable to attend Mr Thorpe's press conference; again, just as well. Even Mr Healey's decision to free the pound, welcome though it might be, was not wholly a symptom of clear-headedness seeing that in his mini-budget five days earlier the Chancellor had rather sneered at the suggestion. No, on reflection, I decided that the best if not the only evidence for the view that the nation might be returning to a condition loosely approaching sanity was Mr Harold Lever.
In Tory circles, Mr Lever is commonly dismissed as a moderate front man — a kind of cultivated Ambassador Maisky sent out to wine and dine the bourgeoisie while the Kremlin continues about its hideous business. Delegates at the Conservative conference frequently observed that the Government could hardly be serious about helping small business if it thought the left-wing Bob Crycr was a suitable assistant for Mr Lever on the job. And yet Mr Lever does seem to get things done — not always the right things of course. As an economic thinker, he is an unregenerate 'growth man' whose main contribution to debate has usu ally been to suggest that more money be printed. On the other hand, his was appar ently one of the most persistent voices in favour of allowing the pound to rise and the concessions to small businesses in the mini-budget are the most solid evidence so far of one of the most remarkable shifts in political fashion in recent years.
Whitehall has suddenly woken up to the fact that small firms offer the best chance of providing fresh jobs, as large firms already employ considerable numbers of people who are standing around doing nothing very much but who often possess scarce skills which cannot readily be replaced when needed and whom in any case they can't afford to sack.
But underlying this pressing reason for trying to repair some of the damage done to small business over the last three years is a scepticism about the merits of Bigness for Bigness' sake which is sweeping the civil service, Parliament and industry. The Prime Minister's speech, ironically on his visit to the merged firm of GEC-Marconi at Portsmouth, is a landmark: 'Many mergers seem little more than a game of corporate musical chairs. . .Let no one believe that sheer increase in size for its own sake will necessarily bring better management, better industrial relations, increased productivity, higher efficiency or more profitability.'
Welcome to the club. In fact, the evidence has been available for years that mergers are unsuccessful as often as not and, more importantly, that government has not and can't have any reliable means of forecasting which mergers will succeed and which will fail. Dr Geoffrey Meeks in his new book Disappointing Marriage: A Study of the Gains from Merger (Cambridge £6, paperback £3.50) concludes that over the period 1964 to 1971 post-merger profits were on average slightly lower than premerger profits. For government the lesson is inescapable. Governments don't know the optimum size of a company and they should -stop pretending that they do. As Professor John Jewkes puts it in his devastating pamphlet Delusions of Dominance (Institute of Economic Affairs, f1.00): 'Ideas that "big is beautiful" or "medium is beautiful" or "small is beautiful" are oversimplifications amounting to a misunderstanding of the real world. Beauty lies in multiformity, diversity and readjustment in size and form through competition.'
Jewkes shows how little evidence there is to support the conventional wisdom that advanced economies inevitably tend towards an ever greater concentration. Certainly in the US there is no sign of any spontaneous drift towards concentration. New giant firms arise, but others decline; 'the top is a slippery place'.
From Marx down to Galbraith, conventional left-wing thought has clung to a bizarre schizophrenic doctrine, illsupported by evidence yet passionately held: viz, that industry is increasingly dominated by large firms, that this is a bad but inevitable thing which ought simultaneously to be discouraged and to be accelerated. The bigness of big business both terrifies and thrills the Left. According to Tony Berm in 1968, modernisation meant that 'The fragmented pattern of industrial organisation is beginning to give way to large undertakings that have it within their power to compete successfully against their foreign rivals. British Leyland, to take the most recent example, will be a world giant in automotive manufacture — able to increase productivity and exports dramatically. Rolls-Royce, strengthened by its merger with Bristol Siddeley, is another such company. . .Entitely new institutional arrangements are necessary for this purpose. That is why new public agencies like NRDC, NEDC, DEA, Mintech, the NBPI and IRC were set up.'
Where are they now, all those acronymic midwives of monstrous babies? Where is that world giant, British Leyland? As Frank Villon would no doubt have put it if he had been seconded to Mintech, Oa son( les N.E.I.G.E.S. d'antan?
Yet as we have seen so often, they are a volatile bunch in Whitehall. Fashion has changed so quickly, with so little personal acknowledgement of past error, that it could easily change back again. Consider, for example, the masterfully impersonal way Mr Benn disowns his past in introducing the speech quoted above to readers of Speeches by Tony Benn: 'This speech delivered in January 1968 at a Labour meeting in Hampstead reveals the managerial view of industrial policy. It was rethinking all this later that led on to the new industrial policy that emerged in the 1974 manifesto.'
Note the passive voice and the total absence of the otherwise ubiquitous 'I'. The ego shrinks into the shell at the first sign of trouble. And yet on a clear day, out it will pop again. For the very existence of small firms as a major dynamic innovatory component of a modern economy contradicts the socialist premise of the labour theory of value.
Socialism, at least of the Benn variety, rests on the assumption that the dominant resource of an economy is its existing labour force and that government's prime task is to see that this force is conserved in its present form and fed with work. This is in direct opposition to the view that an economy is driven by the entrer reneurial enthusiasm engendered by the profit motive and that government's prime industrial task is to encourage competition. It is the difference between producer sovereignty and consumer sovereigntY. Between these two views there can ultimately be no real compromise. Small firms would therefore be unwise to rely too much on these faint rays of autumn sunshine. We can only hope that Mr Brickell has made the right decision.
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