THE NEXT TEN YEARS In British Social and Economic Policy

Transcription

1 THE NEXT TEN YEARS In British Social and Economic Policy G. D. H. COLE Volume 6 Routledge Taylor & Francis Croup LONDON AND NEW YORK

2 CONTENTS PREFACE vii CHAPTER I POLITICS, OLD AND NEW I "Things can never be the same again" The period of 'Reconstruction' The return to 'normalcy' Post-war boom and slump Banking and unemployment The restoration of 'private enterprise' a failure The growth of insecurity The decay of capitalism Socialist hesitations Post-war economic problems: the coal industry Nationalisation, old and new Pre-war and post-war unemployment compared The wages question The need for fresh political thinking The flight from politics The vested interests and the common man The post-war generation and its attitude The intelligentsia The case for political Benthamism Are Utopias out of date? The cant of Utopianism And its virtues The need for a self-acting economic system Happiness as a political principle And as a guide to individual conduct The need for intellectual honesty We must think out the new problems of the post-war world. CHAPTER II BRITISH TRADE AND THE FUTURE Free Trade and the international division of labour The growth of world Protectionism The export of British capital and its effects Great Britain loses her monopoly The 'balance of trade' before the War British exports before and after the War The post-war 'trade balance' Can Great Britain afford to specialise as much as before the War? Or must we redistribute capital and labour? Our trade in coal and cotton goods considered We must expect a permanent decline in the export of cheap cottons The coal problem turns on an increased home consumption Oil from coal Increased efficiency may involve displacement of labour We must rely on exports less than in the past This involves the development of the home market And the revival of agriculture The problem of trade with the Empire considered xi

3 xii THE NEXT TEN YEARS 'Europeans' versus 'Imperialists' The policy of the 'City' Impossibilities of Imperial self-sufficiency Economic Imperialism and the export of capital Migration dependent on capital supply The 'trade cycle' considered Does it really exist? The alleged rise of new industries and shifting of industries to the South Unemployment a proof of our political futility. C H A P T E R III T H E U N E M P L O Y E D Work or maintenance Why Governments prefer to maintain the unemployed in idleness False economy of this policy The need for a totally new approach to the problem of unemployment Work for all The proposed National Labour Corps To be based on voluntary enrolment A disciplined body Working at a fixed standard of pay and hours With additional allowances for dependents The need for industrial training Conditions of service in the Corps Answers to criticism of the scheme The work of the Corps Cleaning up England Slum clearance and housing Attitude of building employers and workers considered A retrospect of housing policy The Labour Corps as an emergency organisation Will it become permanent? The problem of women's unemployment Possible use of the Labour Corps by a reactionary Government considered The Corps will increase Trade Union bargaining power Why it is indispensable to get the unemployed back to work. C H A P T E R I V T H E R E S T O R A T I O N O F I N D U S T R Y The National Labour Corps only an interim measure We must take steps for the lasting restoration of industry The Electricity Act A first step towards the redistribution of our economic resources The process of investment under 'private enterprise' Can we afford to leave investment unregulated? Do we save the right amount? Or apply it to the right uses? Saving and interest rates Does the investor's advantage coincide with the good of the community? -Many socially desirable investments are unattractive to the private investor This especially true at present Destruction of old capital through wrong application of new Capital is really power over labour And determines the distribution of labour The Labour Party's proposed Employment and Development Board The Liberals' proposed Board of National Investment Need for a body of this sort Its functions and powers In financing public and statutory bodies And in lending to private industry Argument from the growth of Finance Companies and Investment Trusts Their economic effects considered Wanted: a State Investment Trust Conditions of advances to private firms and companies Proposed extension of

4 CONTENTS State control State directors on boards of companies Company Law and Research Associations The Labour Corps and the Investment Board as complementary aspects of a sound unemployment policy The economics of communal and private enterprise contrasted. xiii CHAPTER V THE NEW CAPITALISM 'Rationalisation' and 'Scientific Management' The gospel of 'industrial efficiency' What does 'Rationalisation' mean? Competition no longer extolled as the key to progress Capitalist combination and its growth The effects of war-time control The workers urged to produce more and the capitalists less The workers' reply to the demand for higher output Effects of the post-war slump on Trade Unionism Recent changes in productive technique and workshop practice The decline of manual skill Standardisation and its effects Payment by results under the new conditions The 'Americanisation' of industry Massproduction certain to increase Reaction of technical changes on skilled and less skilled workers and on their relations and relative wages Craft Unionism largely obsolete The increased transferability of labour This weakens the workers' bargaining power And reacts on the appeal of Trade Unionism But it leads the workers to look more for political remedies The future of strikes considered The changed attitude of the worker to his job Workshop discipline A keener demand for leisure Can Capitalism meet the workers' demands, and so outbid the Socialists? This is the 'rationalisers'' hope The dilemma of Capitalism stated Even if it can solve the riddle of production, can it solve the riddle of distribution too? Capitalist restriction of output The obsession of the 'limited market' How coal and cotton met the slump How and why both failed The right policy must band purchasing power on what society can produce, and not 'ration' production within a limited purchasing power. Will 'Rationalisation' solve this problem? Lord Melchett and the Trade Unions 'Left Wing' critics of the Trades Union Congress The expediency of a general negotiation A temporary accommodation needed How >a Labour Government would increase Labour's industrial bargaining power What terms do the Trade Unions want to make? Industrial Psychology and its uses The need for a reorganisation of Trade Union machinery 'Rationalisation* as a challenge to Trade Unionism. CHAPTER VI RATIONALISATION Rationalisation further considered Can it raise the workingclass standard of life? The experience of Germany and America The displacement of labour by mechanisation Why rational-

5 xiv THE NEXT TEN YEARS isation is inevitable But unlikely to advance very fast The attitude of British employers Lord Melchett's policy The legal position of combines in Great Britain And its effect on the forms of industrial combination Should the law be amended? Instability of certain forms of combination Does it benefit the consumer? Probable tendency of capitalist policy Breakdown of divisions between industries Need for State control of combines and State action to regulate their membership and policy. CHAPTER VII SOCIALISATION Socialism and nationalisation The need for diverse forms of social control What is the 'capitalist system'? Socialism not a rigid scheme How far do Socialists wish to 'nationalise' industry? Nationalisation, old and new Control of economic policy the vital matter Parliament cannot administer industry Nor is Civil Service control workable Industrial administration an expert affair Need for a system of responsible expert commissioners Who must be responsible to Parliament But the problem cannot be tackled industry by industry The case of coal considered What is the mining industry? Desirability of maintaining existing business units in many cases Public ownership of minerals Public capital for mining reorganisation Form and conditions of State control A Mining Commission The marketing of coal Is this plan socialisation? Ownership and control The future of the coal mines under socialisation The problem of wages, hours, and employment The Eight Hours Act Need for European agreement on miners' hours Should the mines be subsidised? The cotton industry Need for a wide measure of socialisation, to be carried through with an economy of parliamentary time Should the railways be nationalised? Railways and road transport Methods of railway socialisation Advantages of socialisation without direct purchase : Need for a coordinating Power and Transport Commission Which would be parallel to the Board of National Investment The cotton industry again considered The policy of administrative socialisation summarised The problem of parliamentary control The ordinary man's interest in economic affairs The sphere of expert control Measurement and publicity as the consumer's safeguards Need for a reform of Parliament Long and short views Socialism must be at once opportunist and constructive. CHAPTER VIII WORKERS' CONTROL Rationalisation and workers' control Guild Socialism The influence of war conditions on the demand for control The shop

6 CONTENTS stewards movement The effects of the slump How far do the workers want control? Guild Socialism reconsidered Where it was in the right Industrial Psychology and Welfare Work The German Works Councils A Works Councils Act needed for Great Britain The Councils to be linked up with the Trade Unions The case for 'collective contract' And for a system of Industrial Courts Democracy and representation distinguished Their respective spheres denned Guild Socialism again considered The position of Trade Unionism in the new industrial order The Washington Hours Convention and the International Labour Organisation Industrial legislation and the Trade Unions Scope for 'Guild' enterprise Aided by State credits r The State and the Co-operative Movement Need for diverse forms of enterprise co-ordinated under public control. xv CHAPTER IX WAGES FAMILY ALLOWANCES POPULATION The working-class standard of life Vital necessity of improving it Why it is difficult to bring about a considerable rise in wages The relation between wages and employment The 'economy of high wages' and its limits The redistribution of incomes by taxation the best immediate way of raising the standard of life High taxation need not hamper industry How far incomes are redistributed to-day The case for Family Allowances Why these must be financed by taxation, and not by means of insurance or an 'industrial pool' How large a scheme can the State afford? The policy of a 'living wage' for all considered Developments of the Trade Board system proposed Wanted: a Central Trade Board The attitude of a Labour Government towards Trade Union attempts to raise wages The population problem Effects of Family Allowances on birth-rates, deathrates, and migration Birth-control Quality more important than quantity in considering the population problem Food supply in relation to population The 'optimum' theory criticised Effects of Family Allowances on Trade Union bargaining power Redistribution of incomes as a stimulus to economic progress Rival principles of payment, based on need and service How they can be practically reconciled Dividends for all? Shall we reach full equality of incomes? CHAPTER X THE SUPPLY OF CAPITAL How will the measures so far proposed affect the supply of capital? How far can the rich be taxed? Functions of the private investor The choices open to him Large and small investors The effects of redistribution of incomes on the invest-

7 xvi THE NEXT TEN YEARS ment market And on State borrowing; Income and 'capital appreciation' Can the latter be taxed? Is the flow of capital rightly directed between industries? Or between industrial and other claims? Types of investment Fixed and circulating capital 'Free' capital and 'sunk' capital Do banks create credit? How bank credit affects the flow of capital The relation between credit and capital The international flow of capital Will high taxation restrict the supply of capital? Why men save The importance of business reserve funds The 'national savings' analysed How British industry is financed Should business reserves be taxed more highly? Need for increased reliance on reserved profits for the financing of industry Policy of the National Investment Board as borrower and lender Need for economy in the use of the available supply of capital Development of State Savings Banks and of Municipal Banks The case for the nationalisation of insurance Increased wealth as the key to an abundant supply of capital The future of taxation under Socialism. CHAPTER XI BANKS AND CREDIT The dislocation of the financial mechanism by the War Its consequence in the activities of 'currency cranks' Necessity of tackling the financial problem The power of the banks and the City to embarrass a Labour Government The present banking system considered The Bank of England as the chief controller of the volume of credit The joint-stock banks as the chief controllers of its direction The competing demands for credit Position and functions of the Bank of England And of the jointstock banks The question whether bankers 'create credit' further considered How the Bank of England controls the volume of credit Bank Rate and open market transactions The rate of interest and the demand for money Bankers moved less by the profit motive than by their ideas of 'sound finance' The insistence on the 'liquidity' of banking resources How the banks restrict credit The problem of 'frozen credits' Does banking policy favour speculation at the expense of industrial needs? The reluctance to grant long-term credits The London financial houses and their work Do bank credits involve inflation? The quantity theory of money The relation between credit and currency The expansion of credit and the price level The gold standard and its effects Can credits be issued more freely? Yes, if production can be increased The State must socialise the Bank of England And place it under an expert commission It must also socialise the joint-stock banks But not the financial houses at present The economics of State banking considered Financial policy an essential element in the revival of industry But finance cannot create It is a vital, but subsidiary, instrument of economic reorganisation.

8 CONTENTS xvii CHAPTER XII PAGP AGRICULTURE AND THE LAND Political parties prolific in agricultural policies The farmer as an instinctive protectionist But no party dare give him protection Why a tariff on foodstuffs is impossible The economics of British wheat-growings Reactions of higher prices on rents Forms of protection without a tariff Proposals to stabilise prices by the control of imports Bulk purchase schemes considered and approved But will they benefit the farmer? They are more likely to lower prices than to raise them Agricultural production can be increased only if more can be produced at an economic cost It is therefore necessary to concentrate on improving the efficiency of production and marketing of home produce Wheat the least hopeful field for experiment Imports of foodstuffs analysed Cost of imported meat, butter, cheese, eggs, vegetables, and milk We could produce far more of these at home The case for an extension of small holdings for market-gardening, poultry-keeping, dairying, etc. Access to the land The British land system and its breakdown The case for land nationalisation The method proposed Urban land values should be taxed And the revenue given to the Local Authorities Sitting tenants should usually be left undisturbed The State directly, as well as the County Councils, to provide small holdings A State Agricultural Commission The provision of capital for the farmer And of long-term credit The creation of co-operative agencies for short-term credit A National Agricultural Bank The reasons for the slow growth of agricultural co-operation In what forms it can best be developed Co-operative bacon factories and their problems The function of co-operation in reducing swollen marketing costs Need for State action to stimulate and co-ordinate local co-operative effort Progress bound to be gradual Immediate steps summarised The position of the agricultural labourer Effect of Family Allowances on his standard of life Agricultural wages and their regulation Small holdings and the labourer Do the unemployed want to go back to the land? How far should Britain feed herself? The idea of self-sufficiency abroad But the position of our export trades does indicate the need for greater food production at home. CHAPTER XIII THE CONTROL OF TRADE AND PRICES.., Middlemen's costs too great Need for improved marketing conditions The work of the Co-operative Movement The tendency of productive concerns to do their own marketings Or to start joint selling syndicates Similar to producers' Co-operative Societies How far can such bodies control prices? Bulk of

9 xviii THE NEXT TEN YEARS distribution still 'unrationalised' Dealers and their functions Could these be performed more cheaply? Desirability of stimulating the growth of consumers' co-operation Co-operation and municipalisation: their respective spheres Position of the small trader Progressive socialisation of large-scale retail distributing agencies The promotion of joint selling agencies under State control The produce Exchanges Lessons of war-time control of trade The rebuilding of Control Boards The problem of prices The Food Council Need for a better technique of continuous investigation and report And for a public mechanism for the control of prices The organisation of the export trades The future of the merchant capitalist. - - CHAPTER XIV THE EMPIRE FOREIGN AFFAIRS This chapter limited to the purely economic aspects of imperial and foreign policy The possibilities of developing Empire trade And migration Gains and losses of Empire The exploitation of native labour British and native capitalists British policy in Africa Impossibility of withdrawal from imperial commitments Great Britain and the Dominions Investment of capital within the Empire Bulk purchase of imperial products The case against tariff preference Forms of preference without a tariff Should the Dominions grant tariff preference? Trade relations with the non-self-governing territories of the Empire Case against planter-control The Empire Marketing Board and its work Need for its development Desirability of pooling the world's economic research Is 'Imperialism' the enemy? Modern growth of Empires Need for a change of policy designed to put native interests first The problem of 'mandated' areas The League of Nations in relation to non-self-governing peoples Economic functions of the League Disarmament The International Labour Organisation The International Economic Conference of 1927 The lowering of barriers to international trade The growth of international capitalist combination prepares the way for international State control Need for international action to raise the standard of life Great Britain's interest in this The Russian problem Case for full recognition China Imperialism as a cause of war The rights and duties of Britain as an imperial power Why the British Empire should not be broken up. CHAPTER XV LOCAL GOVERNMENT Four reasons for the breakdown of the British system of Local Government Changes in the distribution of population The unsoundness of local rates The reactions of unemployment

10 CONTENTS The development of road transport The Conservative De-rating scheme considered Its effects on local finances Block versus percentage grants The reform of the Poor Law Highway administration The case against the de-rating proposals Unfairness to householders and traders De-rating virtually a subsidy Not needed by prosperous industries The new Government grant scheme unfair in its effects Block grants an instrument of reaction The future of the Poor Law A half-hearted reform Unemployment and the Poor Law Roads and the Road Fund Further reforms of the rating system The case for a combination of block and percentage grants The redistribution of Poor Law functions The problem of powers Wanted: a Local Authorities Enabling Act The future of municipal trading The problem of areas Town and country in Local Government Housing problems Town-planning and region-planning The government of London The case for Regionalism First steps towards regional organisation Electricity and regionplanning The classification of urban areas The reform of local finance The District Auditor and his powers The growth of central control Need for administrative devolution The future of regional government. xix CHAPTER XVI EDUCATION Recent educational progress reviewed The rise in educational standards The 'economy' campaign The Report of the Hadow Committee Defects of the present administrative system The false division between 'elementary' and 'higher' education Growth of the 'elementary' system Central Schools Need for unification of administrative control Primary and post-primary education The present position of 'secondary' education Raising the school-leaving age A new secondary school system The curriculum The place of manual education Should the schools provide vocational training? Secondary education for all The Grammar Schools and their functions Future of the school-leaving age Free places and maintenance allowances Class-divisions in the educational system Administrative reforms Scotland The problem of educational areas Regional Universities The school medical services The supply and equipment of teachers The teachers and the Universities The State in relation to University education University extra-mural education Research at the Universities A standing Universities Commission State grants for University work The development of Adult Education The Workers' Educational Association Adult Education and the Trade Unions Education versus propaganda The National Council of Labour Colleges The problem of State grants The need for better adolescent education A summary of immediate reforms.

11 xx THE NEXT TEN YEARS CHAPTER XVII THE LABOUR BUDGET DEBT AND TAXATION Changing attitude towards the problem of taxation Taxation as an instrument for the redistribution of income The level of taxation before and after the War The growth of national expenditure analysed How the national revenue is raised The National Debt The problem of debt conversion Repudiation impossible The Capital Levy The Colwyn Report and the proposed surtax The Sinking Fund The case for its suspension The American debt The Socialist way of wiping off the debt The taxation of inheritance The Death Duties The Rignano scheme Dr. Dalton's proposals A plan for the abolition of inheritance The case of landed estates Income tax and surtax Suggested revision of the taxes on incomes Customs and Excise The incidence of indirect taxation The liquor taxes Tobacco Sugar and tea Other indirect taxes Protective duties and their yield Prohibition of imports preferable to a tariff Repeal of protective duties Socialism and Free Trade contrasted Luxury taxes The effect of the proposed changes in taxation as a whole. CHAPTER XVIII THE LABOUR BUDGET EXPENDITURE An analysis of the national expenditure as it is Revenue-producing expenditure Debt charges The fighting services The costs of government The social services War Pensions Proposed reductions in military and naval expenditure Only the Debt and the fighting services offer real prospects of economy New expenditure required The cost of unemployment The distinction between capital charges and charges on current revenue The methods of new borrowing Its effect on conversion operations Cost of the National Labour Corps How far will it be an additional cost? The Unemployment Insurance Acts Rates of pay for members of the Labour Corps Saving in Poor Law expenditure Family Allowances Cost of various schemes Case against differential rates Cost of educational reforms The school-leaving age Effects on unemployment of a high school-leaving age Cost of Local Government reforms Taxation of Land Values The Labour Budget as a whole Total potential increases in expenditure Reductions in existing charges Loss of revenue Yield of new taxes Are the proposed rates of taxation too high? The sum raised will be largely redistributed as income The relation of the proposed taxation to the national income Its effects on the supply of capital Will there be enough 'saving'? Difficulties of the transition The vital problem is the restoration of industry.

12 CONTENTS xxi CHAPTER XIX THE NEXT LABOUR GOVERNMENT This book deals solely with immediate measures and not with Socialism in the abstract A Labour Government is an imminent possibility But it cannot attempt to establish Socialism at a blow Importance of selecting the right issues for immediate action Why this book does not discuss personalities The Labour Party's official programme What is Socialism? Need for a redefinition in the light of post-war problems Post-war stabilisation and its effects The stabilisation of unemployment The differences between the Labour 'right' and 'left' wings considered How far are they real differences? Communism in Great Britain A negligible factor The task facing the next Labour Government summed up. CHAPTER XX CONCLUSIONS The arguments and conclusions of the preceding chapters briefly summarised. APPENDICES I. BRITISH TRADE II. UNEMPLOYMENT III. WAGES IV. THE FLOW OF CAPITAL INDEX 4S3