Reviews
| Date | 01 July 1938 |
| DOI | http://doi.org/10.1111/j.1467-9299.1938.tb02094.x |
| Published date | 01 July 1938 |
Reviews
Planned
Capitalism
The
Middle
Way.
By
HAROLD
MACMILLAN,
M.P.
Pp.
x,
382.
(Macmillan.)
MEDJO
TUTISSIMUS
IBIS,”
said the Roman poet: but the tag
is
not
for our age. Nowadays
the
man who chooses the middle way finds
himself fired at from both hedges, and
is
soon liquidated. But
Mr. I3arold Macmillan is nothing if not courageous. For this we
owe hirn our thanks.
This book is
a
further development of ideas with which Mr.
Macmillan’s name has long been associated. They start from the
now widely-accepted view that the conditions have passed under
which the wholly self-adjusting economic system
(laisser-faire
for
short) worked pretty well, and that equivalent conditions are not
likely to recur, But the maladjustments of competitive capitalism
are such as gravely to threaten democracy and freedom itself.
“
The
fate
of
democracy
is
linked
up
with the problem
of
economic
pro-
gress,” and the elimination of poverty. What (if anything)
are
we
going, consciously and positively, to do about it
?
This is the question
to
which he offers his
solution.
“The problems of poverty, insecurity,
and liberty, taken together, have
so
far defied solution. The pro-
posals
I
shall advance
will
be drastic and far-reaching. But still
more drastic will be the consequenccs
of
leaving them too long
unsolved
”
(p.
103).
The general standpoint adopted is that commonly known
as
planned capitalism. Private enterprise, working for profit, is to
remain, but it is to be directed away from socially undesirable
channels and policies and
into
those which are desirable, the direction
being given partly by the community acting through its political
organs, partly by trade and industry itself, acting through
its
own
organs
of
industrial self-government.
Now the advocates of this kind of solution find themselves con-
fronted by
a
dilemma.
Is
it possible to establish a working equilibrium
within the economic field between these two forces-the political
forces, based on the masses, working for what they regard as
justice
and social welfare, and the forces
of
enterprise, often controlled
335
jS.
tf
Public
A
dmin
istra
lion
nowadays by large financial interests, working to maximise their
profits
?
And what
of
the small business
man,
who belongs to neither
camp,
is
threatened by both, and uses his very considerable political
power against any change
at
all
?
If
the planning is efficient, must not
the capitalism eventually disappear, and the middle road lead through
Berlin to Moscow?
If
it
is
not effective, shall we not eventually be
putting the brake on economic development and progress, converting
industry into
a
series of closed corporations and making the world
safe for cartels but less secure than ever for everyone except those
who manage them?
Mr.
Macmillan does not shirk
this
fundamental issue, though his
answer to
it
is
empirical.
We
have to
go
some road: let
us
try
this
one,
on
which, indeed, we have already marched some little way.
Society is in
a
phase of accelerated change. We cannot stay where
we are, nor can we
go
back very far. On this road we shall
at
least
escape revolution, we can proceed experimentally, we need take
no step
that
cannot,
if
we are skilful enough, be retraced, or confer
any power that cannot be withdrawn.
The argument may leave us perplexed rather than convinced;
but at any rate it is
a
challenge to examine more exactly what it
is
that
Mr.
Macmillan does propose. He sees the various components
of
the economic system
as
operating in one or other of three phases
-that
of
creation and growth, that
of
stabilisation, and that
of
decline. With the first group he would interfere
as
little as possible,
though he would not debar them from the privileges of organised
self-government when, exceptionally, they were desired. (This seems
dubious.) Such
a
policy leaves
a
large and, indeed, unlimited area
open to free initiative and enterprise. To the second and third
groups he would offer the privileges, and limitations,
of
organised
statutory self-government, with the general object in the former case
of
enabling them to maintain stability, and
in
the latter case
of
achieving the necessary processes of adjustment without
the
long
and painful individual descent through insolvency to liquidation.
There is, however, one very large field
of
business activity in
which the
risks
of such
a
policy are palpably great. The supply
of
those
goods
and
services which are the principal components
of
a
reasonable minimum standard
of
living should,
Mr.
Macrnillan
thinks, be a collective responsibility.
He
would entrust to non-
profit-making
Public
Utility Corporations the distribution of milk,
butter, cheese, eggs, potatoes and bread. He would similarly
nationalise the' coal industry and,
it
would seem, bring
the
provision
of gas, electricitv, and transport wholly under public ownership and
management. The primary object
is
to
eliminate, as regards food,
the notorious distribution wastes at present prevailing, and
as
regar&
336
Re
ZJ
ie
0s
services, to use their strategic character
as
a means
of
guiding and
influencing development and the distribution of population.
Finance, including investment and speculation,
is
to be brought
under public control. There is
to
be a Foreign Trade organisation,
working through various agencies, including
a
Clearing House and
the existing Import Duties ddvisory Committee and Department
of
Overseas Trade with enlarged functions. Import Boards would be
desirable for certain primary commodities.
At
the top, as immediate
adviser to the Government of the day,
a
National Economic Council,
appointed by the Government but including representatives of the
various ol-ganised functions and interests-the Central Bank, the
Board of National Investment, the Foreign Trade organisation, the
Industrial Advisory Council, a National organisation of Employers,
the Trade Union General Council, and others.
Last,
but no means
least, the programme indudes a statutory national minimum wage
structure, based on the Rowntree nutrition minimum, and
a
raising
of
the public assistance provision for the unemployed by means of
additional food allowances in kind.
It
is
not suggested that all this could be done at once: stages,
and
experimentation, are clearly indicated. But the book can claim
the merit
of
a reasonably comprehensive and detailed working
out
of
a general theory. The theory is eclectic: it takes something from
the Liberal Industrial Inquiry; something from the programme of
the Socialist Party. But for the fact that it is based throughout
on the democratic process instead
of
the Fuhrer-princip, and
that
it
is
directed towards economic rather than military security, one
would be tempted to say that
the
system can be seen at work in
Germany to-day. All this, however, is by no means a criticism.
On
the contrary, the fact that conceptions of this
sort
are emerging
in
so
many different quarters is
an
indication that there
is
something
in
them.
It is much to be hoped that
Mr.
Macmillan will carry
his
studies
further. Two aspects
of
the subject in particular clamour for
further
examination. The
first
is,
what part will be played by price in the
system that he envisages? He speaks boldly of levy-subsidies and
export bounties.
He
is
alive to the danger
of
undue, or unduly
prolonged, price-maintenance where conditions
of
complete or semi-
monopoly exist. But the subject calls
for
fuller treatment. The
second
is,
how will the various planning
and
directing bodies work
in actual operation? The omens are not too favourable. Those
who
represent interests, just because they are representatives
of
interests, find it difficult
to
be parties
to
any decision or advice which
is
adverse to their several interests, save in some high national
emergency. Economic Advisory Councils have since the War
been
337
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