PROBLEMS OF A SOCIALIST
GOVERNMENT
With a Preface by SIR STAFFORD CRIPPS
PROBLEMS OF A
SOCIALIST
GOVERNMENT
by
DR. CHRISTOPHER ADDISON
MAJOR C. R. ATTLEE
H. N. BRAILSFORD
H. R. CLAY
G. D. H. COLE
SIR STAFFORD CRIPPS
J, F. HORRABIN
W. MELLOR
SIR CHARLES TREVELYAN
E. F. WISE
LONDON
VICTOR GOLLANCZ LTD
14 Henrietta Street Covent Garden
»933
Printed in Great Britain by
The Gamelot Press Ltd., London and Southampton
CONTENTS
PAOE
Prtface by the Hon. Sir Stafford Cripps, K.C.,
M.P., Solicitor-General in the last Labour
Government. 7
1 The GiaUenge to Capitalism by the Rt.
Hon. Sir Charles Trevelyan, Minister of
Education in the last Labour Government. 19
2 Caa Socialism Come by Constitutioiial
Methods ? by the Hon. Sir Stafford
Cripps, K.C., M.P. 35
3 Control of Finance and the Financiers
by E. F. Wise, C.B., late Labour M.P. for
Leicester. 67
4 The Break with Imperialism by J. F.
Horrabin, of the Mws Chronicle, lecturer on
Imperialism and kindred subjects to work-
ing-class audiences. 95
5 The Claim of the Unemployed by William
Mellor, late editor of the Daily Herald. 1 13
6 Socialist Control of Industry by G. D.
H. Cole. 150
7 Local Government and the Socialist Plan
by Major C. R. Attlee, Postmaster-General
in the last Labour Government. 186
8 Workers’ Control by Harold Clay, of the
Transport and General Workers’ Union. 209
9 Socialist Policy and the Problem of the
Food Supply by the Rt. Hon. Dr. Chris-
topher Addison, M.P., Minister of Agri-
culture in the last Labour Government. 229
10 A Socialist Foreign Policy by H. N. Brails-
FORD, author of The War of Steel and Gold,
etc., etc. 252
PREFACE
By
The Hon. Sir Stafford Cripps,
K.C., M.P.
Atnotime has it been more necessary for
those who believe in democracy to concentrate
their powers upon the invention of new
machinery of government. So often when
democracy and constitutional action are in-
sisted upon there is implicit in that insistence
the necessity for preserving the present forms.
Yet one thing that has been proved beyond all
doubt since 1918, in almost every country of
the world, is that the nineteenth century form
of democratic government has shown itself in-
capable of adaptation to the economic and
social conditions of the present day. The rapid
growth of dictatorship in its several forms has
taken place, to a large extent, as the result of a
demand for a more efficient form of govern-
ment, a form that would enable rapid and even
startling changes to be made in the constitu-
tion of States and in their economic and social
organisation.
7
PREFACE
In our own country the overwhelming
National majority in Parliament has to some
extent enabled the Government to free itself
from the difficulties inherent in our existing
Parliamentary system, and so long as that
majority can be held together we shall no
doubt be able to continue with the present
form of Parliamentary dictatorship.
Should there, however, be a split in the
National Government’s forces, or should a
general election bring about a more even
balance between the parties, I think that most
people would agree that the existing machinery
of government is bound to prove inadequate
for the task with which it would be confronted.
It is this underlying conviction, based not
only upon our own experience but also that of
other countries as well, that leads to so much
talk of dictatorship at the present time.
There is an essential difference between dic-
tatorships of the right and of the left, not so
much in their form as in the class objective
which underlies them. Fascism is designed to
give the maximum of economic advantage to
the middle classes, and is, in theory, equally
opposed to the predominance of great wealth
or of the working clausses. Communism, on the
other hand, is based on the dictatorship of the
8
PREFACE
proletariat and is prepared to crush out the
upper and middle classes alike.
The absolute necessity for the control by
Governments of individual and class interests
is now universally recognised, except by the
few Liberals who still cling feebly to a modified
doctrine of laissez faire.
It is as apparent now as it has always been
that the interests of different classes in the State
are widely at variance. If the great wealth of the
rich is to be preserved the State must be or-
ganised for this purpose and the workers and
middle classes must suffer in order to preserve
that wealth. If the State is to be organised to
give the maximum of advantage to the middle
classes as represented by the small business
man and the shopkeeper, then the large com-
bines must be broken up or controlled by the
State, and Trade Unionism must be made sub-
servient to middle-class demands. If the
working classes, which include the salary- and
wage-earners, are to be the prime concern of
the Government, then the profit-earning classes
cannot retain their supremacy.
In times of economic stress and difficulty, the
preferential treatment of a particular class or
classes at the expense of other classes becomes
more apparent. The emphasis of legislation,
9
PREFACE
which in times of comparative prosperity may
pass unnoticed, is brought out into the lime-
light, and class consciousness and class feeling
are intensified.
It is this intensification of class feeling which
renders any form of democratic government
so difficult to conduct. No class will willingly
allow legislation to be passed which is con-
trary to its own interests. Each class believes
and insists that its own economic theories,
based upon its own predominance, are neces-
sarily the best for the State, and are most in
consonance with the national interest. Some
class or classes must, therefore, be forced to
give way, and must not be allowed to impede
the progress of the alternative programme by
continual obstruction in a Parliamentary as-
sembly. If this can be achieved by mass mis-
representation, so as to assure an overwhelming
Parliamentary majority, the Parliamentary
forms can be preserved in name. But where
this has been impossible dictatorship has been
snatched by the best organised political force,
and all opposition has been ruthlessly trampled
under foot.
In all cases the appeal has been to the
national interest, except in the case of Russia,
where the appeal has been frankly made to the
lO
PREFACE
class basis which in fact underlies all dicta-
torship.
In our own country, in the election of 1931,
many of the wage- and salary-earners were
misled into believing that a policy designed
solely to benefit the profit-earning class was in
fact a policy designed to benefit the nation.
This attitude of mind can be understood in
those who believe that there can be no alterna-
tive to capitalism, for then a prosperous capi-
talism is the best that can be hoped for. To
achieve this, it is logical and right that the un-
employed, the wage-earner and the salary-
earner should suffer. But it must be remem-
bered that, even under a prosperous capitalism,
if any such thing could be achieved again,
those same classes would continue to suffer in
the future as they always have done in the past.
The basis of democracy is that those who
have the right to take part in decisions of
national policy through the ballot box, should
have the right to determine by a majority the
lines upon which that policy should go for-
ward. As a corollary to this, the minority must
consent to the changes which the majority
desire to bring about. This would be compara-
tively simple if political power were the sole
determining factor in national policy, or even
II
PREFACE
if the economic power were fairly apportioned
between the classes. The fact is, however, that
the profit-earning classes have the monopoly
of economic power, and so long as they con-
tinue to control the economic forces of the
country they are able to exert so great an extra-
parliamentary control on the national fife that
they can impede and indeed destroy political
power. The weapon of the strike, which gives
some power to the worker in the last resort,
has been largely destroyed for poHtical pur-
poses by legislation designed to that end.
It will be seen, therefore, that the problem of
democratic government in the present circum-
stances is by no means an easy one. It can-
not be solved by relying upon our existing
machinery.
There is, however, one fundamental prin-
ciple in the democratic idea to which we must
adhere. Before any great changes are brought
about in the structure of the State, we must
obtain a mandate from the majority of the
people. Once given that mandate, expressed
in clear and unambiguous terms, it is the duty
of the elected Government to sec that the
desired changes are carried through with the
least possible delay. Delay is bound to prove
fatal, for it will provide the opportunity for the
12
PREFACE'
extra-Parliamentary economic power to bring
destruction to a democratically elected Gov-
ernment.
The first task, therefore, of those who believe
in Socialism is to convince a majority of the
electorate that it provides a practical alterna-
tive to capitalism. This cannot be done by the
repetition of vague phrases of a Utopian char-
acter, nor can it be done by advancing a policy
which overlooks the essential class basis of all
present-day Governments. What is required is
a programme which demonstrates beyond
doubt that there are practical means of apply-
ing the basic doctrines of Socialism to present-
day circumstances in this country, which
envisages the ways and times for carrying
through the practical steps, and which at the
same time inspires by its insistence on the
fundamental Socialist principle of brotherhood
and co-operation.
It would pass the wit of man, in the over-
changing economic circumstances of the post-
war world, to lay down any hard and fast line
of advance from which there could be no
divergence. Any programme can only be
illustrative of the main objectives of Socialism
and of the tempo of the advance. The widest
latitude must be demanded in the carrying out
13
PREFACE
of the various steps, but if the electorate is to
be convinced that Socialism is a practical
alternative they must be left in no doubt as to
the intentions of the promoters of the pro-
gramme on two vital points.
First, that the reality of the class basis of
government is fully realised ; that there will be
no attempt to compromise with the economics
of capitalism, which are wholly inconsistent
with the economics of Socialism. Second, that
the economic power of capitalism is fully
realised and that this power will not be
allowed to defeat the change over to Socialism
in its initial stages.
With the main objectives clear, it is wise and
proper to explore the various routes by which
those objectives may be reached. Within the
Socialist ranks there will, of course, be many
differences of opinion as to the precise path to
be followed. The fullest discussion and elucida-
tion of these differences is most desirable and
instructive, for it is only by a frank interchange
of views on such matters that the best course
can be planned. It would be folly to attempt to
incorporate such details in a political pro-
gramme ; that is the place to define the broad
objectives.
It is absolutely necessary to find agreement
14
PREFACE
upon those objectives, but a diversity of views
upon the more detailed matters is even desir-
able. It is from such diversity, and the discus-
sion that it engenders, that political invention
will come. We desire to reach our objectives in
political, economic and social circumstances
without parallel in any other coimtry and
necessarily without any previous experience of
similar circumstances to give us definite guid-
ance. The best that anyone can do is to advance
an opinion, bringing to bear all his accumu-
lated knowledge and experience in the making
of it. We can none of us promise that our
opinion will turn out to be correct. So long as
we are assured of unity in determination to
reach the same objective, there must be an in-
finity of give and take in deciding upon the
precise sequence and nature of the steps.
The machinery of government may appear
of comparatively less importance than the
measmres which the Government will be called
upon to take, yet I consider it to be a primary
consideration. Unless some adequate demo-
cratic machinery can be devised. Socialists will
be left with but two alternatives. Either to
seize a dictatorship or else to abandon power
and hand it back to the Capitalists. I can re-
gard neither of these with equanimity, as I am
15
PREFACE
convinced that both would mean dictatorship.
Obviously a dictatorship of the left based upon
a majority in favour of Socialism, would be the
better of two bad alternatives. It is from this
that the urgency arises for the development of
a machine of government which preserves the
fundamental conceptions of democracy and
freedom and yet at the same time enables the
elected majority to carry through rapidly and
without interference the drastic changes de-
sired by the people.
It was with the full appreciation of these
considerations that the Socialist League de-
cided to hold the series of Forum Lectures
which are collected in this volume. The
Socialist League is rightly pledged to work
within the Labour movement, and has no
power or desire to lay down any programme
for the movement. Labour Party programmes
can only be made by the Labour Party Con-
ference. But as a precmsor to programme-
making, discussion and study are essential, and
that discussion and study should be as wide and
diversified as possible. It is only upon such a
broad basis of knowledge and appreciation of
the difficulties that a sound and effective ad-
vance will be made. The traditional ostrich
hiding his head in the sand may have lulled
i6
PREFACE
himself into a false sense of security but cannot
have succeeded in satisfying his enemies that
he was inedible or obtaining a clear vision of
the course he should follow over the uncharted
desert to obtain his objective of safety.
It is sometimes suggested that a frank state-
ment of the difficulties of a democratic Social-
ism and of the economic and class power of
capitalism, gives fresh opportunities for attack
upon Socialists by their political opponents.
This seems to me to be an adoption of the
ostrich’s mentality. Our political opponents
have never failed to find some fallacy with
which to attack us at the elections. These fal-
lacies derive their efficacy as election weapons
from the ignorance of our own followers of the
implications of Socialism. We can only destroy
their effectiveness by making abundantly clear
what those implications are.
It is because this volume may, to some extent,
assist in that service, and as forming a basis for
discussion and tdtimate decision, that I hope
it may be widely read in the Labour move-
ment.
Bo
17
I
THE CHALLENGE TO
CAPITALISM
By
The Rt. Hon. Sir Charles Trevelyan
At T H E Conference which met at Leicester
within less than a year of the overwhelming
defeat of 1931, the confidence and aggressive-
ness of the Labour Party was the remarkable
feature. Quite evidently forces have been
maturing beneath the surface and are bursting
into life. The rank and file have refused to take
the defeat as a disaster. They are accepting its
lessons and are making it their opportunity.
I am not in the least in the mood, and I do
not think that the Party is, to be repentant of
the past, to declare that everything has been a
failure. No time should be spent on blaming
the policy and leaders of the past fifteen years.
It is much more important to realise how much
has been done, how immeasurable the advance
of public opinion has been and how this period
19
CHALLENGE TO CAPITALISM
of preparation in which a governing Labour
Party has come into existence may come to be
looked back at historically as a natural and
necessary prelude.
The principal fact in English politics since
the war is that a great potential instrument for
proletarian salvation has been created in the
Labour Pzirty. No such organisation and in-
deed no such hope existed at the end of the
war. Now the only question that matters in
the politics of the Labour movement is whether
that potential instrument is actually to be used
for the primary purpose which dominates the
minds of the pohtically minded workers.
In the first place the Labour Party is entirely
unbroken by serious defeat. It stood the shock
of the last election. In the worst hour all its
component organisations remained faithful.
Last autumn its success in the municipal elec-
tions in industrial England reached its highest
point, and to-day it is a common estimate that
another general election would show a rebound
to the figures of 1929.
There is also one permanent consequence of
the Labour Governments, and that is that
workers now know that the Labour Party can
do the work of ordinary adminisif aiibn'as-well
as anyone else. “ Labour cannot govern ” is a
20
CHALLENGE TO CAPITALISM
phrase of obsolete %norance. For everyday
work of governing, man for man, the Labour
Party can produce as good as or better than
its adversaries.
But the most important change of all in the
political situation is that the Labour Party in
its declarations, in its professions of faith, in its
formal and solemn expositions of its intentions
to the country, is now Socialist. What is troub-
ling so many class-conscious workers, so many
politically minded working men, so many
young leaders of proletarian thought, is not the
declarations of the Labour Party, but the ques-
tion of whether there is a sufficient mass of
opinion which not only believes in Socialism,
but believes that it must be and can become
the economic system of the country, and that
the Labour Party can be the effective instru-
ment for establishing it. In other words, while
the Labour Party is and must remain in the
most complete and official sense a Socialist
Party, what is not yet known with confidence
by the rank and file, still less brought home to
the consciousness of the nation at large, is the
methods by which the fundamental change can
be brought about.
The failure of the Labour Government and\
Party in the last Parliament was that they did
21
CHALLENGE TO CAPITALISM
not use the crisis to force the country to make
a decision on Socialism. The desertion of
MacDonald was much the smallest part of the
catastrophe. His abandonment of all his prin-
ciples, his acceptance of Protection, his doing-
in of the unemployed, his smothering of dis-
armament, his treachery generally, was much
less serious than the failure of the Labour
Party to compel its leaders to offer an audacious
solution of the crisis. This was no one’s fault
in particular, but it was everyone’s responsi-
bility.
The Socialist League exists within the
Labour Party and for the Labour Party. It
does not aim at creating a separate party with-
in the Party, but aims at being a conscious
force to secure that the Labour Party shall be,
in act as well as name. Socialist. I, and the
others who will lecture after me here for the
Socialist League, believe that in our generation
the Labour Party is the only instrument avail-
able for the economic salvation of the country.
If deliberately, courageously and expertly used
it is the greatest instrument ever created in any
country for the purpose of fundamental change.
At various times in history there have been rev-
olutions and insurgent movements which have
carried this and other countries very far. But
22
CHALLENGE TO CAPITALISM
the Parties which carried through those revolu-
tions have almost invariably been improvised
for crises which were not expected, and it will
be a new phenomenon if the Labour Party,
which already has reasonable expectations of
getting the support of half the nation, quite
deliberately plans and announces beforehand
and carries through the fundamental change in
our system.
The defeat of 1931 will have done nothing
but good if it leads the Party to determine that
it will put the country into a position where it
is required to make a choice between the con-
tinuance of the present system and a Socialist
commonwealth. What must be made unmis-
takably clear, first to ourselves and then to the
whole nation, is that the Labour Party exists
henceforward for no other purpose than for
the economic revolution to Socialism. And we
ought to insist on a clear declaration of the
Party, to be openly and aggressively asserted
in the country until it is believed, that the
Labour Party will not again assume govern-
ment unless for the purpose of effecting that
revolution.
Itwould bemuch better to use theword “rev-
olutionary ” freely and to frankly adopt that
adjective for Labour Party policy, disregarding
23
CHALLENGE TO CAPITALISM
any fears that it may create. Revolution in
England is different from revolution abroad, in
France and Russia. Our models and methods
are 1640 and 1832. There is no reason why, in
making the more radical transformation of
Socialism than those previous revolutions, it
should not be made by the constitutional
method. Whether it will be so ushered in and
so completed, or whether in its course violence
and civil overturn will result, will depend, as
it always has done, on the possessing powers
and on whether they choose to act unconstitu-
tionally and create violence and disaster, as
Charles I did, but as the aristocrats in the case
of the Reform Bill did not do.
In order to make this poUcy with certainty
the guiding principle of Labour’s future action
it is necessary to go beyond the will and dis-
cretion of any leaders however trusted. At
Leicester the resolution was passed, which I
moved myself, hoping for agreement, but find-
ing to my surprise and satisfaction a hurricane
of approval which swept the assembly. That
resolution has put the leaders, who may be at
the head of the Labour Party in the event of
another Labour Ministry, under a definite
mandate to introduce Socialist measures at
once and to drive them through Parliament.
24
CHALLENGE TO CAPITALISM
On that main issue of strategy there ought to be
no doubt and no loophole of escape left for
hesitation.
At this juncture leaders are of less importance
than the rank and file of politically minded
men and women. If the representative Con-
ferences of the Labour Party and Trade
Unionism wish, they can make the Labour
movement finally and decisively Socialist. If
they are incapable of that decision no leader,
even if he were a Lincoln or a Lenin, could
make them follow that path. But if they did so
decide, no leader, even a Thomas or a Mac-
Donald, could stop them. Belief in leaders is
fortunately at a discount in the Labour Party.
There will be no trust in one man again. We
shall see no more leaders with a free hand in
our generation, at least until some great leader
has carried us through to an effective triumph.
Our leaders will be exponents and executors of
a policy that will be laid down by a common
determination of the Party and its organisa-
tions.
There has never been a people so capable by
its political traditions and industrial training
of making fundamental decisions of this kind
for itself than the British. There has never been
a people so little likely to submit to any form
25
CHALLENGE TO CAPITALISM
of dictatorship or to the ascendancy of a
national saviour. We are unquestionably cap-
able of the democratic alternative, which is
the assertion of policies, however daring and
subversive, by formidable masses of opinion,
who will insist, not on requiring their execu-
tive leaders to obey them in every detail, but
to submit to their decisions on points of major
policy without which their objective cannot be
reached.
If this is going to be the policy of the Labour
Party, the decisions which are to produce an
entirely new political situation have got to be
made deliberately and made soon. There is
not the slightest use pretending they do not
constitute a complete break with the tradition
which has hitherto governed the Party politics
of our country in certain most important
aspects. Liberal and Conservative Parties for
the last hundred years have always submitted
to being controlled by their leaders, though
they have sometimes in emergency forced their
hand or changed them in order to obtain ful-
filment of their aims. What has never occurred
is that the discretion of leaders has been fet-
tered by peremptory mandates from the Party,
annoimced to the electorate before they took
office. The necessity for the discretion offenders
26
CHALLENGE TO CAPITALISM
has always been pleaded to oppose it. If there-
fore the Labour Party are to take measures to
lay down publicly the main line of policy under
the next Labour Government it must be recog-
nised as a new departure, and in taking such
action there ought not to be any pretence that
it is otherwise.
The first question to come up for decision is
what the first great measures of Socialism are
to^be. When the Labour Government takes
office is it the land, the banks and the mines
that are to be regarded as the key industries
which must be taken over first by the nation ?
And are the industries which cannot be soci-
alised at once to be required to submit to some
form of national planning ? This decision ought
to be taken by the Labour Party as soon as
possible, because if we are to become a Socialist
nation it must be by the conscious approval of
the mass of the workers. It must not be possible,
when the crises occur which are bound to come
in enforcing fulfilment of the mandate, that
ignorance of our intentions as to the fimda-
mental changes involved should be possible to
be pleaded by the opposition.
It is also clear enough that to discuss in
Parliament every detail of the method of tak-
ing over any form of industry or property would
27
CHALLENGE TO CAPITALISM
lead to interminable discussion, which would
never be ended in the presence of any effective
Parliamentary opposition. The Conservatives
of the National Government have shown us the
way. They decreed Protection and relegated
to the Executive the details and extent to which
fit was enforced. The policy which we would
be wise to consider is decreeing the nation-
, alisation of particular industries under a gen-
eral empowering Act and leaving the extent and
methods of its operation to the Executive
Government. A Bill for this purpose placed
before Parliament the moment the King’s
Speech was concluded would at once create a
quite decisive issue, and in the first months the
new Parliament would have to make up its
mind on the primary issue.
The next question which would inevitably
arise and must therefore be faced beforehand
is : How is a mandate given to a Socialist
Government going to be allowed to work?
There is not a single person in this room, what-
ever his politics, who believes the House of
Lords would pass any such Bill carried by any
House of Commons. Well then, the Labour
Government could not reasonably take office
without making it clezu: in general terms what
it intended to do when the House of Lords
28
CHALLENGE TO CAPITALISM
threw themselves athwart the movement of the
people. The House of Lords in the last hundred
years have resisted every single democratic
and popular movement of importance. They
are quite certain to resist a legal revolution
which would affect the property rights of
every single man of them. I for one cannot
conceive the circumstances under which they
would accept the new order. No social or
economic disaster to their country would
deter them from defending their own class
with all their privileged powers of resistance.
The Labour Party ought, therefore, to know
what steps it intends to take in order to end
the power of the House of Lords and to say
beforehand what it is prepared to do when the
inevitable challenge is placed before them.
Some such series of decisions are bound to
be taken by the Labour Party if it has the
courage to start on the new policy ; that is to
say, it has to declare the new strategy and
prepare the nation for accepting it.
There are two points on which our move-
ment must clear its mind if it is to proceed.
This policy implies the relegation of palliatives
to a second place. What in effect each Labour
Candidate and Member has said in the last
fifteen years is this : “ Much can be done by
29
CHALLENGE TO CAPITALISM
Parliament to mitigate working-class suffering ;
we are of course Socialists ; we don’t believe
in the present order ; but even within these
limits the worker’s lot can be far better. The
nation through its social services can make
inequality far less unequal. By pressure and ex-
ample the State can mitigate the capitalist
campaign for lower conditions of living and
lower wages.”
There is little doubt that this view is played
out in the Labour Party. For the accentuated
attack of capitalism, in its desperation, on the
standard of life and the social services shows
that any progress towards a better society or
greater security for the mass of men and
women is absolutely impossible under the
present order. The social services are now
clearly at the mercy of the capitalist creed.
Many decent Conservatives have helped the
progress of education for a generation past.
But to-day at every point education is being
attacked and the instrument of that attack is
the best and most decent of all Conservatives,
Lord Irwin. That he should be used to make
the excuses for the throttling of educational
progress is the greatest proof that it is not on
the more humane aspirations of the well-
meaning bourgeoisie but on the necessities of a
30
CHALLENGE TO CAPITALISM
crumbling capitalist system that the extent of
the workers’ education is to depend. I am quite
confident that the stage has been reached where
the Labour Party will be prepared to act on
the conviction that there will be no working-
class prosperity until there is working-class '
power.
Therefore it is not too much to ask the
Labour Party to decide in the two years that
will precede the next election that it has ceased
to be a party working for palHatives but that it
has become a Party working for fundamental
change.
There remains the fear of the party manager
who never can think beyond the next by-elec-
ttGOf that so definite a challenge, so obviously
revolutionary an attack, so unmistakable a
determination to make alterations which are
liable to affect the life of every citizen, may
mean a delay in the coming of a Labour
majority. Well, there is no use prophesying.
But suppose it were so, how many of us would
be content that there should be a third Labour
Government struggling hopelessly to make the
best of a world which the workers at large have
ceased to believe can ever offer them security
and well-being ?
But it is possible that the party manager
CHALLENGE TO CAPITALISM
may be entirely wrong. A bold policy, may
actually mean more rapid victory. Much of
course is bound to depend on the deterioration
of the present system. Unless there is a war, I
have no behef myself in the probabihty of an
economic crash. What may be expected is the
continuation of the present degeneration and
a disappearance of remaining prosperity, the
security of more and more of the population
dribbling away in pitiful liability to unem-
jployment. The very force of machine produc-
tion, which should make human Hfe a hundred
times easier as it produces a hundred times
more by each unit of human labour, will result
more and more in the spreading of poverty,
unless and until stopped by the re-organisa-
tion of wealth distribution and the planning of
industrial time and effort. Socialism alone has
the will to enforce these against the power that
cares nothing for them. There is no real chance
of more than a temporary revival of the present
system. Already the possessing classes have
given up their old faith in everything coming
right somehow. No longer is a single voice
raised to suggest that unemployment is a pass-
ing phase. The sense of security has gone from
millions who had it fifty years ago. Part of the
salaried classes and of the black-coated workers
32
CHALLENGE TO CAPITALISM
are now proletarians in condition. Whole cities
no longer believe in salvation and security
under the old order. And the leaders of the old
order become wilder in their despair, making
the chance of recovery doubly hopeless by
extravagant Protection and by destroying the
purchasing powers of the workers with increas-
ing ruthlessness.
As the next years go on we may expect the
rapid growth of coherent and incoherent dis-
content and of impatience which will seek its
outlet. All the methods of capitalism for meet-
ing this emergency are played out except re-
pression. No doubt the turn for that is
coming ; but wherever the mind of a people
has turned in a new direction, coercion is only
an episode which passes without altering the
end.
A few years hence there will be certainly a
flood of opinion rising to demand great changes.
But where that torrent will rush is the critical
question. The new movement may spend itself
flooding aimlessly over the land, ruining, not
preserving. But our Party can, while they are
almost helpless to create such a revolutionaiy
force, provide the channel down which it can
flow and which it can tear out for itself into
the course of a mighty river. I hope the Labour
Co 33
CHALLENGE TO CAPITALISM
Party may have a long enough vision to pre-
pare for this inevitable emergency and provide
a policy and an orgeinisation to which men and
women can rally, knowing first what measures
they intend to take and secondly that they
have the courage to take them.
34
II
CAN SOCIALISM COME BY
CONSTITUTIONAL METHODS ?
By
The Hon. Sir Stafford Cripps,
K.C., M.P.
Now THAT the Labour Party is face to face
with the realisation of a policy which it has
consistently preached for many years, the
difficulties of carrying through that poHcy
loom larger and larger as the moment for its
appUcation approaches.
History is fUU of the records of revolutionary
movements which have changed the basis of
society in various countries. Internal strife be-
tween class and class has been one of the con-
stant features of civilisation, but in almost
every case these revolutions, whether successful
or unsuccessful, have been accompanied by
violence and bloodshed. The Labom: Party —
in contradistinction to the more violent revolu-
tionary parties — ^has always urged that it is
possible in this country to bring about such a
35
GAN SOCIALISM GOME
fundamental change by peaceful or constitu-
tional means. It is this claim that I propose to
examine.
It is of no use in this examination to minimise
the difficulties with which such a change is
surrounded. In the past we have been accus-
tomed to see the conflict between Party and
Party fought out with varying degrees of bitter-
ness and intensity. In these major political
battles the fight has ranged around specific
topics of apparent importance — ^Tariffs or
Free Trade, the Irish situation or the right of
some part of the community to electoral fran-
chise — ^but always upon the understanding that,
whichever party succeeded, the fiindamental
capitalist structirre of society would be pre-
served. The Labour Party is not now con-
cerned so much with some particular political
orientation of capitalist society as with the
change from capitalism to Socialism. Con-
tinuity of policy — even in fundamentals — can
find no place in a Socialist programme. It is
this complete severance with all traditional
theories of government, this determination to
seize power from the ruling class and transfer
it to the people as a whole, that differentiates
the present political struggle from all those
that have gone before.
36
BY CONSTITUTIONAL METHODS?
Those who have held radical and humani>
tarian views have counted upon the pressure
of the ever-widening democratic basis of the
electoral franchise to compel capitalism to yield
better and better terms to the workers. In the
pre-war period this theory of gradual advance
seemed plausible enough. With a growing
national prosperity, the national standard of
living showed a steady rise. Capitalism was
ready to pay a price for its continued control
in the form of higher wages and fuller and
better social services of all kinds. During and
immediately after the war this tendency be-
came even more developed. The workers de-
monstrated their strength and their power to
protect capitalism with their lives and their
labour ; their demands were satisfied so far
as the capitalists considered it economically
possible, but always with the reservation that
nothing must be done to deprive capitalism of
its effective power of control, whether in the
financial, economic or political sphere.
As soon as it became apparent that the limit
of concession was being reached and that, with
a growing slump in world trade, capitalism
would break down under the brnden it had
taken upon itself in more prosperous times,
an immediate halt was called ; the National
37
GAN SOCIALISM GOME
Government was formed to protect capitalism
and to bring about a rapid reversal of the pro-
gress by the withdrawal of the concessions
which had been made to the workers. It was
essential that the Government should be called
National, as otherwise it might have occurred
to the great mass of the electorate that it was
merely a device to stabilise capitalism and not,
as was claimed for it, a means to save the
coimtry.
The importance of these recent political
events to our present enquiry is that they pro-
vide the clearest demonstration of the power?
of capitalism to overthrow a popularly elected
Government by extra-Parliamentary means.
The ruling class will go to almost any length
to defeat Pzirliamentary action if the issue is
the direct issue as to the continuance of their
financial and political control. If the change to
Socialism is to be brought about peacefully a
Socialist Party must be fully prepared to deal
with every kind of opposition direct and in-
direct and with financial and political sabotage
of the most thorough and ingenious kind.
The first requisite in bringing about a peace-
ful revolution is to obtain a Parliamentary
majority of adequate size to carry all necessary|
measures through the House of Commons)
38
BY CONSTITUTIONAL METHODS?
This majority must be definitely and irrevoc-
ably pledged to Socialism and must not de-
pend in any way upon the assistance of merelv
radical or humanitarian elements. Given sue'*
a majority, success or failure will be proved i i
the first full Parliamentary term. Unless durii g
the first five years so great a degree of change
has been accomplished as to deprive capitalism
of its power, it is unlikely that a Socialist Party
will be able to maintain its position of control
without adopting some exceptional means such
as the prolongation of the life of Parliament for
a fiirther term without an election. Whether
such action would be possible would depend
entirely upon the temper of the country, and
this in turn would be dependent upon the
actual results which the Government could
show.
“^The most critical period, however, for a
Socialist Government will be the first few
months of power. But there will, even before
this, be a time of great crisis for the country
and of vital importance to the Socialists. As
soon as it becomes apparent to the capitalists
that the Socialists will have a majority, plans
will be laid for coimter-Socialist activities. For
a period the Capitalist Government must
normally remain in power, but obviously
39
GAN SOCIALISM GOME
they will take no active steps to assist their
successors, and their successors will be power-
less themselves to act. This period would
usually last for a few days, but if the out-
going Government decide to meet Parliament
and not to resign until after a Parliamentary
defeat the period may be prolonged into
weeks.
It is during this period that the Socialists will
have to decide upon their tactics. First, whether
under any and what conditions they will
accept office, and second as to who they shall
appoint to hold office for the Party. It is im-
possible to foreshadow all the many different
sets of circumstances that may arise and that
will influence the decision upon the first point.
My own view is that if the Socialists are to take
office they must feel themselves assured of
two things, a working majority in the House
of Commons and a majority of votes in the
country, discounting all plural votes. This
majority must not be merely a majority of discon-
tents against the outgoing Government but a
majority in favour of an active policy of Social-
ism. Satisfied on these two points, it may be
that xmder the circumstances of the moment
some further guarantee would be necessary
as to the behaviour of the House of Lords on
40
BY CONSTITUTIONAL METHODS?
certain urgent and critical matters, or as to
means of dealing with the House of Lords if by
their obstruction they were to make it impos-
sible for a Socialist Government to exercise the
necessary measures of control. The necessity for
any such guarantees cannot now be foretold
but will have to be decided upon by the Party
at the appropriate moment.
When the decision has been taken by the
Party as to whether they will accept office, it
will have to be made clear to the country that
it is the Party that is going to accept power
and not some individual or individuals. Under
existing circumstances the Prime Minister is
theoretically and practically free to choose
his own colleagues, and his primziry respon-
sibility is as an individual minister to the
Crown.
The political Party to which the Prime Min-
ister belongs has no right or power to recall the
Prime Minister and replace him by some person
more able and willing to direct policy along the
lines required by the Party. In a Socialist Party
this power is I believe essential, and more
especially so during its early days of power. I do
not propose to deal here with the method of
selecting Party leaders or Cabinet ministers, as
that is a political rather than a constitutional
41
CAN SOCIALISM COM£
question. But however the selection is made the
constitutional position of the Party must be
clearly laid down. The formation of a Govern-
ment must be the work of the Party, and the
Party must have the right at any time to
substitute fresh ministers in the places of any
it desires to recall.
When the Party has come to a decision upon
these two matters the list of ministers will be
submitted to the Crown and their appointment
will follow. The Socialist Government will then
be in control of the country. The time between ,
the decision to accept office and the actual ^
appointment of ministers must be reduced to,*'
a minimum, as it will be a time of great danger*
in which saboteurs will be able to crystallise
their plans for opposition and to concentrate
their forces.
From the moment when the Government
takes control rapid and effective action must
be possible in every sphere of the national life.
It will not be easy to detect the machinations
of the capitalists, and, when discovered, there
must be means ready to hand by which they
can be dealt with promptly. The greatest
danger point will be the ^ancial and credit
structure of the country and the Foreign
Exchange position. We may liken the position
42
BY CONSTITUTIONAL METHODS?
that will arise somewhat to that which arose
in August, 1914, but with this difference, that
at the beginning of the war the capitailists,
though very nervous and excited, were behind
the Grovemment to a man, whereas when the
Socialist Government takes office they will not
only be nervous and excited but against the
Government to a man. The Government’s first
step will be to call Parliament together at the
earliest moment and place before it an Emer-
gency Powers Bill to be passed through all its
stages on the first day. This Bill will be wide
enough in its terms to allow all that will be
immediately necessary to be done by minis-
terial orders. These orders must be incapable
of challenge in the Courts or in any way except
in the House of Commons.
This Bill must be ready in draft beforehand,
together with the main orders that will be made
immediately upon its becoming law.
It is probable that the passage of this Bill
will raise in its most acute form the constitu-
tional crisis.
It will be necessary — ^if constitutional forms
are to be complied with — to obtmn the con-
sent of the House of Lords to this Bill, and
that consent must be given immediately, as
otherwise the Socialist Government cannot be
43
GAN SOCIALISM GOME
responsible for the safety of the country or the
continued supply of foodstuffs and raw material
from overseas.
It is most probable that the House of Lords
— the stronghold of capitalism — ^will either
reject or more likely delay the passage of such
a Bill. The Commons will be in a strong posi-
tion as the election will have so recently taken
place, and it may be that guarantees as to the
passage of such a Bill may have been obtained
as a condition of the taking of office.
If this is not so, then immediate application
will have to be made to the Crown to resolve
the conflict by the creation of Peers, and al-
though this will necessitate some delay, it is
better to risk this delay, which need not be
excessive, than to adopt any unconstitutional
alternative. Should the Crown refuse there
would then be two alternative lines of action
open to the Government, first, immediate
resignation, throwing the responsibility back
upon the capitalists, or second, an unconsti-
tutional continuance in power with a total
disregard of the Lords. This latter course would
lead to an immediate conflict not only with the
Crown and the Lords, but with the Judiciary,
who would then refuse to recognise the Acts
of the House of Commons unconfirmed by the
44
BY CONSTITUTIONAL METHODS?
House of Lords and the Grown. Such a con-
flict would throw the country into confusion
and would almost certainly result in an up-
rising of the capitalists which would have to be
quelled by force, and would lead to the very
difficulties that it is most desired to avoid.
Returning therefore to the first alternative,
the capitalist Government in a minority would
have to accept office, or an immediate second
General Election would ensue, on the sole
issue of the right of the Lords to obstruct the
emergency legislation. On such an issue the
Socialist Party would, I think, be in a strong
position, and — provided they could “ beg,
borrow or steal ” the fimds to fight the elec-
tion — ^would have a second and perhaps even
greater success. In this event the capitalists
would have to yield ; if they did not, the Socialist
Government, reassured of the country’s sup-
port, would be justified in overriding any
obstruction it found placed in its way.
There is perhaps one other possibility that
we should envisage in the case of such a con-
flict and that is a dictatorship. The Crown has
the right constitutionedly only to accept advice
from the Prime Minister, or such other persbn
as the Prime Minister advises the Crown to
consult. If once the Socialist Gk)vemment
45
GAN SOCIALISM GOME
resigned and advised the Crown to send for
one of the leaders of the other parties, it might
happen that none of them were prepared to
take office and that eventually some stop-gap
Ministry might be found which would rely
upon the support of the armed forces of the
Crown rather than upon any popular mandate,
as indeed has happened in other countries.
To throw the power into the hands of such a
military dictatorship would be the worst
possible thing for the country.
If the Socialist Government came to the con-
clusion that there was any real danger of such
a step being taken, it would probably be better
and more conducive to the general peace and
welfare of the country for the Socialist Gov-
ernment to make itself temporarily into a
dictatorship until the matter could again be
put to the test at the polls.
There is no doubt that at the present junc-
ture of world politics there is a liability in all
countries for the people to be unable to make
up their minds as to whether they desire a com-
plete change or not. That indecision leads to
political stalemates upon which dictatorships
thrive. It will be a tragedy if such a position
arises in this country, especially if the dicmtor-
ship is militarist in form and capitalist in faith.
46
BY CONSTITUTIONAL METHODS?
It is because of this possibility that it is so vitally
necessary to arouse the political consciousness
of the peoples of this country by every possible
form of educational propaganda. At the mo-
ment, as recent by-elections have shown, the
whole coimtry is suffering from political apathy
and it is our duty to see that that apathy is re-
placed by a political consciousness.
I have stressed the critical nature of this early
stage of Socialist power because the possibility
of finding a constitutional way through this
early stage will, I think, largely determine
whether Socialism comes peacefully or by
violence. Every person and Party in the country
will have a share in the responsibility for what
happens, but the responsibility will lie heaviest
on those — ^if any — ^who attempt to bring to
naught the considered opinion and wishes of
the majority of the electorate.
It will be of first-rate importzince to put this
position clearly before the people at the elec-
tion, so that they may give the Socialist Party
a definite mandate upon it. It is upon this man-
date that the Socialists will rely in asking for
the creation of Peers, if that step becomes
necessary. The mandate should be precise upon
the point that the machinery of the Parliament
Act — ^which requires a delay of two years before
47
GAN SOCIALISM COME
Bills can be passed against the Opposition of
the Lords — ^is quite useless and cannot be relied
upon as an argument against taking immediate
steps to deal with the Lords.
This constitutional crisis will thus result
either in the capitalists giving way to the will
of the people expressed and enforced consti-
tutionally, or in a capitalist or Socialist dicta-
torship relying for its power upon force alone.
Such a dictatorship will almost inevitably lead
to revolution and violence, with what result it
is impossible to foretell.
If we imagine that this initial difficulty has
been overcome constitutionally, as I believe it
can be by the means I have described, the
Government will then be in a position to
exercise a general protective control over the
monetary and financial activities of the country.
Many far-reaching chjmges may have to be
made to protect the country from the capitalist
attack, but a more democratic and more satis-
factory method of permanent legislation will
have to be worked out.
With a Socialist Government a far higher
tempo of legislation will be required than any
yet achieved in this country. The changes to be
brought about are so far-reaching and all-in-
clusive that their legislative elaboration must
48
BY CONSTITUTIONAL METHODS?
take time even if the most efficient means are
adopted.
With the present machinery the necessary
legislation would take centuries to pass.
I have already dealt with one aspect of the
difficulties arising from the House of Lords ;
that is the immediate problem, but it will be
equally necessary to eliminate delay and op-
position consequent upon a second chamber in
subsequent legislation. There is only one safe
and satisfactory means of doing this and that is
by the abolition of the House of Lords. Some
form of revising or consultative second chamber
may be set up in the future, but there will be
no time to do this in the initial stages of sociali-
sation, and in any event there can never be
more than one sovereign body and that must
be the House of Commons.
Our constitution is not based upon any fixed
or immutable laws, nor do we require any
special procedure to change it. This so-called
flexibility is our greatest asset, and should enable
the constitution to adapt itself momentarily to
the desires and wishes of the people. The one
flaw in that flexibility is the House of Lords
with its permanent reactionary majority. There
is, however, a safety valve to our political
machine, and that is the right of the Prime
Do 49
CAN SOCIALISM COME
Minister representing the popular majority in
the House of Commons to demand the creation
of Peers. If this has already been done for the
purpose of the emergency legislation, the House
of Lords will probably consent to its own aboli-
tion. If not, and this safety valve is sat upon,
there will be an explosion with the usual un-
fortunate result for those who sit on safety
valves. If on the other hand it is allowed to
operate, we shall be able rapidly to adapt our
constitutional methods to the necessities of the
time of change. It must in any event be made
clear at the General Election that the mandate
of the Party covers the right to call for the im-
mediate abolition of the House of Lords upon
the first signs of obstruction.
The legislative methods of this country have
passed through many phases. In early times
when the subject matter of legislation was far
less complex than now, full play could be given
to discussion and obstruction in ParliEiment.
Every detail could be discussed in set speeches
with due solemnity and interminable repeti-
tion. But as successive Governments extended
the area of control over individual activities the
necessity for a greater legislative output arose
and more speedy and efficient procedinre was
forced upon the legislature. Legislation has
50
BY CONSTITUTIONAL METHODS?
gradually come to be divided into two cate-
gories. Acts of Parliament deading in the main
vnth the more important matters and with
principles are passed through all their numer-
ous stages in both Houses of Parliament, while
the detailed provisions for the administration
of particular services are laid down in Provi-
sional Orders, Orders in Council or Statutory
Rules and Orders. Such orders are made by the
responsible ministers under the authority of
the Cabinet and are subject to either nega-
tive or positive Parliamentary approval. This
method of legislation has been gradually de-
veloped until under the present Government
the most important matters, such as taxation
of the subject by import duties, have come to
be dealt with by administrative orders.
Another means that has been adopted for
getting rid of congestion in Parliament is the
delegation of power to local authorities. This
method is satisfactory provided the local au-
thorities are wilhng and capable, but it is neces-
sary to retain some measure of central control
to ensme that the delegated powers are fully
and properly exercised, more especially while
the pohtical complexion of certain local au-
thorities is different from that of the Central
Government.
51
GAN SOCIALISM COME
Under capitalism it has been necessary to
have, side by side with pubhc Bills regulating
generally the life of the community, a system
of private Bills authorising the interference by
local authorities or corporations with the prop-
erty of particular individuals. It is not neces-
sary to dwell upon this class of legislation,
which has occupied so much Parhamentary
time in the last hundred years, as under a sys-
tem of Socialism Private Bills will no longer
be necessary.
The House of Commons has always con-
sidered itself in a special way concerned with
the guardianship of the country’s finances, and
has insisted, until the National Government
came into power, that it should exert the fullest
and most rigorous control upon all financiad
matters. This perfectly proper attitude has
however led to a good deal of time being wasted
upon such matters as financial resolutions,
which precede practically every Bill intro-
duced and merely lead to a duplication of
second reading debates.
Finally there have been introduced into the
procedure of the House of Commons in com-
paratively recent times a number of procedural
devices for eliminating intentional waste of
time by the opposition.
52
BY CONSTITUTIONAL METHODS?
The opposition has always considered itself
justified in doing all it can to delay the passing
of practically every Act of Parliament on the
assumption that everything its opponents at-
tempt must be bad. To get over the intolerable
waste of time entailed, the closmre, the guillo-
tine, time-table motions, kangaroo procedure
and other devices have been introduced. Of
these, the time-table motion, laying down
specific times for the discussion of specific
matters, is the best and should be applied
throughout to all the work of the House of
Commons.
It is by the reasonable and intelligent de-
velopment of all these methods of increasing
the legislative output that the House of Com-
mons can best be made capable for its new
task.
So far as delegation to local authorities is
concerned, I cannot here enter upon the wide
and difficult question of Local Government.
It is however of the first importance that the
whole conception of Local Government re-
sponsibility should be revised. A larger unit
will be required, acting in more direct con-
sultation with the central authority and with
the widest administrative powers in its own
area. Regional councils having such powers
53
GAN SOCIALISM GOME
and functions must form a most important
link in the Socialist scheme if Socialism is to
be more than a name. It will not only be neces-
sary for the Central Government to pass ’
Socialist measures, but it will be necessary to
have Socialist Regional Councils to see that
they are carried through promptly and effici-
ently.
In the extended use of Ministerial orders for
giving legislative effect to the general princi-
ples laid down by Parliament, one great change
must be effected. At the present time it is left
to the Courts to decide whether these orders
are within the powers given by Parliament.
It is always possible for them to be challenged
in the Courts and to be declared invalid. This
power must be taken from the Courts, and the
sole right to challenge such orders must rest
with Parliament. With this alteration a far
greater bulk of the legislative work can be put
through by this method than is the case even
at the present time.
Parliament will not only have to be relieved
of a great deal of work, but even so far as its
remaining work is concerned, the procedure
must be speeded up and made more effective.
There is only one matter that it will be neces-
sary to discuss in any great detail upon the
54
BY CONSTITUTIONAL METHODS?
floor of the House and that is the general plan
of the national life, economic and social. At the
present time there is no plan, the nearest ap-
proach to such a thing that we ever experience
is when a Government chooses to compile a
King’s Speech which gives its programme in
some detail. But such a discussion is divorced
from any financial plan and is really little more
than a discussion of a number of separate and
unrelated suggestions.
Socialism insists upon a planned and ordered
national life. The central feature of Socialist
legislation must therefore be the Planning and
Finance Bill for the year. Every year — as now
with the Budget — a Bill of this nature will have
to be introduced and discussed. It will lay down
the main lines of legislation in every sphere for
the coming year or period of years and will
merit and receive the fullest discussion. Once
this Bill is passed little other legislation by Act
of Parliament will be required, and such as is
necessary will be of secondary importance only
and will be so treated. It will be made impos-
sible, by appropriate resolutions, to re-discuss
the merits of the Plan once that Plan has been
decided upon.
Such a Planning and Finance Bill would take
the place of the King’s Speech, the Budget,
55
CAN SOCIALISM COME
financial resolutions and the second reading
debate on most of the important measures
during the year. It is idle, once Parliament has
decided upon a certain course of action, to dis-
cuss its wisdom again and again. It will prob-
ably be advisable to pass this Bill before the
beginning of each year, that is in an Autumn
Session. Once the Bill is passed, most of its
provisions can be given more detailed legislative
shape in Ministerial orders, which will be sub-
mitted formcilly to Parliament for approval.
Even on this Bill it will be necessary to pro-
ceed by time-table, so as to obviate obstruction
and waste of time.
Such secondary legislation as arises out of
the plan will be brought before Parliament for
a short second reading stage which will be on
the floor of the House, and one final stage,
dming which Government amendments alone
will be dealt with.
The whole of the rest of the Parliamentary
activities will centre around a system of Stand-'
ing Committees. Each Standing Committee
will have assigned to it all the work arising in
connection with a particular group of Govern-
mental activities. Every member of Parliament
will serve upon at least one such committee ;
the personnel of the Committees will be chosen
56
BY CONSTITUTIONAL METHODS?
in the usual mamier so as to ensure a Govern-
ment majority in all cases. These committees
will not only do the usual committee work on
Bills dealing with the subject assigned to them,
but will exercise a general supervision over the
whole area of those functions of the Govern-
ment with which they are concerned.
At the present time control over Govern-
mental expenditure is nominally exercised by
the House of Commons by passing Votes of
Supply. The opposition on the twenty days
allotted by rule to Supply can call for any
particular departmental Vote they wish and
can raise any question upon the administra-
tion of that department, but the rules of pro-
cedme do not allow any discussion upon
matters which would require legislation.
These debates generally take place in a
more or less empty House and serve no pur-
pose except to allow grievances to be aired.
All matters of Supply should be dealt with
by the Standing Committees, and suggestions
as to legislation should be allowed in such
debates. The whole procedure of the Standing
ing Committees must be regulated by time-
table to prevent obstructive tactics being
employed by the opposition.
The right of criticism of the Government
57
GAK SOCIALISM GOME
must of course be preserved, and for this piu:-
pose a certain number of days in the year
should be allotted to the opposition to raise any
matters that they wish, whether by vote of
censure or in any other way.
Many of the Standing Committees could in
this way be dealing with business contempor-
aneously, and a great deal of the time of the
House would be saved. The Standing Commit-
tees, like the House itself, should be in contin-
uous session throughout the years, with the
exception of the summer recess. With the more
expeditious methods of dealing with business
it would probably be possible to limit the
actual sittings to, say, alternative weeks. This
would be of importance, as with a Socialist
Government it would be vital to enable the
Socialist members to spend time in their
regions and constituencies, not only making
known the object and progress of the plan, but
assisting as members of the regional councils
to see that it was carried through.
Back-bench members of the House of Com-
mons, on the Government side especially, com-
plain with justice that their services are not
utilised and that they have nothing to do
except walk through the Division Lobbies.
Nothing can be worse for the morale of a
58
BY CONSTITUTIONAL METHODS?
Party than the disappointment and apathy
which arise from such circumstances. With a
system of Standing Committees there could be
no reason why every member should not take
an active part ; if in addition each member
is expected to do work in his own region
dining alternate weeks, he should find himself
fully occupied with important and responsible
work.
There is one other matter of importance with
regard to House of Commons procedure. At
present it is generally accepted that any Gk)v-
emment defeat — except upon the most trivial
point — should lead to the resignation of the
Government. This theory leads to the necessity
of persons voting with the Government on
matters that are not in any way fundamental,
and in which they do not believe.
With a Socialist Government it should be
made clear that no defeat will be accepted as
fatal unless it is upon a point which the Gov-
ernment declare to be one of primary import-
ance. Such an understanding would enable the
House to discuss and vote upon matters of detail
on their merits, which at present is seldom
possible. Defeats in Standing Committees
would not of course be considered fatal to the
Government, though they might have an
59
CAN SOCIALISM COME
adverse effect upon the minister in charge of
the department concerned.
If the Grovemment were to be defeated in a
Standing Committee, provision should exist
for bringing the matter automatically before
the House of Commons, so that the House, as
a whole, could reverse the decision if it wished.
I have only sketched these proposals in the
broadest outline ; they will require detailed
elaboration, and new standing orders will be
necessary to initiate the alterations. This
change should be made as soon as possible,
as until the procedure is changed there will be
the greatest temptation for the Government to
become more and more dictatorial and even
to merge into a dictatorship.
Perhaps an even more important matter than
Parliamentary reform in tlie initial stages of
the change will be the reform of the Cabinet
and the re-grouping of departments.
It has long been recognised that a large
Cabinet, the members of which are concerned
with all the intricate details of day-to-day
administration, is a very inefficient body for
discussing and deciding many of the major
issues that come before it. This difficulty will
be greatly emphasised under Socialism when
a plan has to be worked out.
6o
BY CONSTITUTIONAL METHODS?
The Cabinet must be a smaller body and the
individuals who compose it must be less taken
up with administrative details.
By a re-grouping of the depairtments, old
and new, into eight to ten main groups, each
under the general charge of a Cabinet min-
ister assisted by a number of efficient assis^t
ministersj the Cabinet can be reduced in num-
Sct and yet retain contact with all the activi-
ties it controls. This contact, which is essential,
will be preserved by the almost daily meetings
of the chief minister with his assistant min-
isters in a sort of sub-Cabinet, which will
decide everything except issues of really first
class importance.
The Cabinet will thus have time to devote
to the working out of the plan of national de-
velopment and as part of this system there
must be a large and expert body of planners
who vdll be able to supply expert Socialist
knowledge on the technical side. It will be
essential for this body of experts to be inspired
by the Socialist ideal, and not to spend their
time looking for difficulties and explaining that
they cannot be overcome.
With the widening of the scope of Govern-
mental action certain new departments will be
required — notably a department of finance,
6i
GAN SOCIALISM GOME
of which the Treasury may form a sub-depart-
ment. The new departments and the old will
be formed into groups, the division being
fimctional and not traditional. The exact form
which this rearrangement will take will depend
to some extent upon the circumstances and
conveniences of the moment, and will no doubt
in the first stages be experimental. There will
be a number of technical difficulties to be
dealt with in this re-grouping, arising out of
existing Acts of Parliament or constitutional
rules which deal with the functions of different
departments and with certain requirements as
to the numbers of ministers and the House
in which they sit. These can easily be over-
come.
The Cabinet should be accommodated in a
single central office building where the closest
touch can be maintained between the members
at all times. Members of the Cabinet will have
to act mainly as a “ general staff” working out
a co-ordinated plan and less as department]
chiefs with competitive claims on the Chan-
cellor of the Exchequer, as is generally the case
to-day.
It is often suggested that one of the difficul-
ties of Socialism will be the impossibility of
running State industries with efficiency. This
62
BY CONSTITUTIONAL METHODS?
argument arises from a complete inability to
appreciate the change that is to be brought
about.
It would be very unfair to expect the present
Civil Service, with its traditions and education,
to enter upon the management and control of
manufacturing and producing units all over the
country.
The State control and ownership of industry
requires the development of a new technique
of direction. Without entering upon the dis-
cussion of the thorny problem of workers’ con-
trol, it must be apparent that quite new
methods of administration will require to be
adopted. The country had a good deal of
experience of this problem during the war,
and even during that orgy of capitalist profit-
eering many efficient departments were set
up to control all sorts of State enterprises of
the most technical character. Of course if a
newly taken over industry were to be sub-
jected to the sort of control which the present
Treasmy would consider right it would in-
evitably fail. That is because the present
Treasury officials have been brought up in a
tradition which abhors State enterprise and
which therefore concludes that it is bound to
fail. There will no doubt be a great opportunity
63
GAN SOCIALISM GOME
in the new departments for young and pro-
gressive civil servants who will set out with the
intention of making a success of their job. The
old departments will still have full scope for
their activities, and it is, I hope, unlikely that
even so complete a change in administrative
outlook will necessitate the retirement of many
civil servants or their replacement by persons
of known Socialist views.
It will be of the first importance to ensure the
rapid and loyal functioning of all departments
of the Civil Service if success is to be won.
These are some of the most important
changes that must be brought about to en-
able our present political machine to be
accelerated to the tempo of Socialism. With
such adaptations as these and a great fund
of enthusiastic support in the country, I think
that we can make the machine work and
gradually change and adapt it further to our
needs in the light of our experience.
The primary object is to preserve democracy
in the sense that the people through Parhament
initiate the main lines of the National Plan
and have power to see that it is carried out.
We cannot hope that any democratic assembly
will be able to carry on the detailed legislative
or administrative work. This must be left to
64
BY CONSTITUTIONAL METHODS?
the ministers, and, if they fail in their respon-
sibilities, Parliament will be able to turn
them out.
There is one fiurther aspect of the constitu-
tional problem which I must mention.
The electoral system in any country influ-
ences the complexion of the Government
elected, and it is important that the system
should be such as to ensure that the Govern-
ment represents the policy desired by the
majority of the electors. It is doubtful whether
time could be found within the first five years
of Socialism — even if it were desirable — to re-
organise entirely the whole electoral system,
but certain glaring anomalies will have to be
removed. The University vote, and all other
forms of plural voting, must be done away with,
and certain reforms introduced to eliminate
the power of money. This at least will remove
the capitalist bias of the existing machinery
and enable the electors to choose fairly the
policy they desire.
However carefully laid the plans of the
Socialists may be, it will be impossible to
guarantee the peacefulness of the change.
This must depend upon the action not only
of the Socialists but of the capitalists too.
It is, I believe, possible to make the change
£o 65
GAN SOCIALISM GOME?
by constitutional means, but I have no doubt
that the first five years will be five years of
continual anxiety and effort — ^an uphill fight
against forces of immense strength. The first
few months of power will probably determine
the issue one way or the other. The decisive
blow at capitalism must be struck while the
people’s mandate is fresh and strong. That blow
can be delivered constitutionally ; if uncon-
stutional means are used to resist it, those who
use unconstitutional means must not complain
if they are met with force. If real achievement
can be shown dming this period, the morale
of the Socialists throughout the country will be
sustained and their support assured. It is only
with that support that any programme of
Socialism can be carried through.
66
Ill
CONTROL OF FINANCE AND THE
FINANCIERS
By
E. F. Wise
I PROPOSE in this chapter to discuss some of
the financial problems which would confront
a Socialist Government immediately on com-
ing into office.
First of all, however, I must define the
general economic policy of such a Government,
for on this will depend the nature of these
financial problems.
I assume that the next Labour Government
will be a Socialist Government, taking office
in order to carry into effect the Trevelyan
resolution of the Leicester Conference, which
laid it down that the next Socialist Govern-
ment must be animated by a ruthless deter-
mination to carry through Socialist measures,
whatever the obstacles. It should hold office
for that purpose only, and only for so long as
67
CONTROL OF FINANCE
that course is possible. 1 contemplate, too,
that, for such a programme to be carried
through by Parliamentary means, fundamental
changes in constitutional methods and pro-
cedure would be necessary. Parliament should
cease to be a tool in the hands of obstruc-
tionists ; it should become an efficient instru-
ment for the rapid passage of legislation em-
powering the Government to put its pro-
gramme into effect.
THE SOCIALIST GOVERNMENT’S OBJECTIVE
The first objective of a Socialist Govern-
ment, as soon as it attains office, should be the
capture of administrative and economic power.
With this in view it should proceed methodi-
cally and rapidly to eliminate private owner-
ship fi:om the leading industries and services
of the country. And it should transfer them to
communal ownership in such a manner that
there can be no return to private ownership.
It must be made quite impossible for any suc-
ceeding Government, by mere repeal of legis-
lation or other means, even to attempt to
reconstruct the capitalist system. We must
68
AND THE FINANCIERS
make such an omelette that it is impossible for
the eggs to get back into their shells.
The second objective will be the bringing
into operation of a National Plan for economic
development. Our great industries must be
considered as services to supply the needs of
the whole community and not to provide pro-
fits for private shareholders. And, since it is
impossible to combine national planning with
the profit-making motive, the rapid extension
of socialisation will be necessary, first of the
key industries and then of the others which
are dependent on them.
The third immediate objective of a SociaUst
Government must be an early alleviation of
the burden of poverty, to the full limit of
the resources available. We cannot, however,
ignore the fact that until the present organisa-
tion and ownership of industry is fundamentally
altered, which must take some time, any big
change in the distribution of wealth is impos-
sible. No wide extension of the social services,
and no large-scale improvement in the workers’
standard of life, is possible until the whole
purpose of industry and trade has been
changed, and its structure drastically reor-
ganised. But the Socialist Government would at
once make a start in this direction. It would
69
CONTROL OF FINANCE
have to find the means to retrace the backward
steps which this present National Government
has taken at the expense of the working-class
population. It would at once abolish the
Means Test, cancel the cuts in unemployment
allowances, and, as part of its unemployment
policy, raise the school-leaving age and begin
pensioning off the older men from industry.
For all three objectives a complete control
of banking and financial resources is at once
necessary. We could not move a yard towards
the attainment of any of them without meeting
with fierce opposition from the dominating
power of the bankers. Let us not forget that
the last Government was crippled from the
beginning by finance and was finally killed by
the financiers.
So the Minister of Finance (I prefer to call
him that rather than the Chancellor of the
Exchequer, for under a Sociailist Government
he would be dealing not only with the alloca-
tion of that part of the national income at
present passing through the hands of the
Treasury, but also with the whole financial
resources of the nation) — the Minister of
Finance would be concerned first with the
actual transfer of banking from private to
public ownership ; secondly with Ccirrying out
70
AND THE FINANCIERS
the financial policy outlined in our National
Economic Plan ; thirdly, with the provision of
funds for long-delayed industrial development,
for dealing with unemployment and for the
social services.
A PANIC “RUN ON THE BANKS’*
But first in point of time, he would have to
grapple with the panic which will almost
certainly arise as soon as a Socialist Govern-
ment comes into office with an effective pro-
gramme of action. Indeed, it is pretty certain
that the opponents of Socialism will again try
to produce a panic before the Election is over
if they expect a Socialist victory. I do not think
that there is any need to be unduly alarmed
by this prospect. On the contrary, we might
well be suspicious if oxu: opponents did not try
to alarm property owners — particularly the
small ones — ^since it would indicate that they
were not unduly disturbed by our programme
and did not credit our real determination to
put it into operation. A panic is really only
dangerous to a Socialist Government if the
Government itself becomes panic-stricken. If,
on the other hand, the Government resolutely
handles the situation, a panic can be used to
71
CONTROL OF FINANCE
our advantage and for the furtherance of our
policy. We are proposing to deprive property
of its traditional rights of domination and
security at the expense of the rest of the com-
munity, and so we must expect the property
owners to become alarmed. But the more
frankly we face this now the more certain it is
that when it happens the vast majority of pro-
perty-less people will refiise to be frightened.
The Zinovieff panic in 1924 and the Post Office
Savings Bank panic in 1931 no doubt did great
electoral damage, but our people are learning
their lesson. The only danger is that they may
again be caught unawares. Let us warn electors
of its probability and prepare ourselves to
grapple with it.
What exactly would a panic involve? In
various insidious but effective ways the Tory
Press might convince depositors that they
would do better to keep their spare cash at
home than to leave it in the banks’ strong
rooms. In that case, there naight be a run on
the banks. The first thing that the Government
would do would be to see that the banks had
sufficient Treasury notes to satisfy all demands.
The Bank of England should be given authority
to extend its fiduciary issue and to provide the
banks with all the ready money they needed.
72
AND THE FINANOIERS
At the same time the Government would
xmdertake to stand behind the banks and guar-
antee the deposits. This would not be the first
time that a Government has come to the rescue
of the banks. It was done at the beginning of
the War. In fact, at all times the credit of the
community stands behind the banking system.
Neither a capitalist nor a Socialist State could
really permit the banks to default. But the
moment a Socialist Government comes to their
rescue, it is obviously unreasonable ever to con-
template any continuance of private owner-
ship. The panic would provide both necessity
and opportunity for immediate nationalisation
of the banks.
I doubt whether a run on the banks in these
circumstances would continue for very long.
Before depositors had turned any considerable
portion of their two thousand million sterling
of deposits into paper notes, they would realise
that deposits in the bank under Government
guarantee were just as secure as paper money —
piled in their counting houses or hidden under
their mattresses — ^whose value also depended
on the same Government’s guarantee. Eng-
lishmen have long since outgrown the habit,
still practised by French peasants, of keeping
their savings in their stockings.
73
CONTROL OF FINANCE
In any case, even if two or three hundred
millions of deposits were withdrawn from the
banks, it would at least help to free them from
the burden of that vast accumulation of un-
usable deposits whose size to-day so disturbs
their chairmen. In the year 1932 bank deposits
actually increased by about £200 millions, at
a time when their advances to industry and
trade were falling heavily. They have much
more money to lend to-day than they say they
can find borrowers for. Money to lend is their
stock-in-trade, and they are suffering from a
glut of it. A reduction in deposits would do
them no harm.
It is very unlikely that all the money with-
drawn would just be hoarded. People with
money in their pockets, who were being told
that it would soon lose its purchasing value,
and who were terrified lest it should be stolen
or burnt or otherwise destroyed, would cer-
tainly spend a good deal of it. Stocks in the
shops, unsaleable for months, would begin to
move. New orders would be placed and a
useful stimulus would be given to employment
in the home market.
74
AND THE FINANCIERS
A PANIC “FLIGHT FROM THE POUND"
More dangerous and troublesome to combat
would be attempts to transfer capital and bank
balances abroad. Fixed capital, of course, in
the form of machines, houses, railway lines and
so on, cannot so easily be sold abroad, and there
would be plenty of time to take effective steps
to deal with that danger ; but bank balances
can quickly be transferred by foreign exchange
operations. There are not now in London the
large foreign balances which caused so much
trouble in 1931, but many British “ patriots ”
would certainly have a shot at transferring their
money to foreign capitals. It is not very clear
in which land of safety they would try to take
refuge. They used to threaten to send their
money to America, but the financial situation
there to-day is, to say the least, rather dis-
couraging.
Again, the existence of Fascist Governments
and the possibility of Socialist or Communist
Governments in many European countries
diminishes their attractiveness. There is the
additional possibility that if the “ patriots ”
wished later to bring their money back to
this country they would suffer a heavy ex-
change loss on die transaction. Nevertheless,
75
• CONTROL OF FINANCE
an attempt will probably be made on a con-
siderable scale to get money away somewhere.
The immediate result, of course, would be a
heavy drop in the sterling exchange. But we
have learned from experience now that a fall
in the exchange is not an unmixed evil. It
provides an immediate stimulus to export
sales. The more the exchange drops the cheaper
is the price which foreigners pay in francs or
dollars or pesetas for British goods. So that
in this respect also the panic would contain
within itself the means for re-creating confi-
dence. For in these days the British public
watches the unemployment figures as a nurse
watches her patient’s thermometer. A substan-
tial drop in unemployment, whatever the reason,
would do much more to increase confidence
both in the Government and in its policy
than any movement in the foreign exchange.
It is, of course, possible to have too much of
a good thing, and steps would have to be taken
to bring about the rapid restoration of stable
conditions. The Government would at once
take control of the foreign exchanges, profiting
by the example of similar expedients in 1931
both in this country and abroad, and, as was
then shown, the rate of exchange could quickly
be brought under control.
76
AND THE FINANCIERS
The Government would also use all the
means of publicity at its disposal to stop the
spreading of false information. It would deal
firmly with the panic-monger, be he million-
aire Press magnate or anyone else, and it
would use the wireless and the Press — ^not only
the Daily Herald but the whole Press — to ex-
plain the purposes and effects of its policy.
IMMEDIATE TRANSFER OF THE BANKS
For handling a panic, control of the banks
is plainly essential. But the mere issue of
Treasury regulations and orders would not
be enough, either for these immediate pur-
poses or for the wide schemes of national re-
organisation on which the Government would
at once begin to embark. It would not do
to leave the key sources of financial power
in hostile hands. A Socialist Government
could not hope to get loyal, effective and help-
ful service from institutions controlled by boards
of directors, almost every member of which
would be a bitter political opponent of the
whole Socialist policy, quite honestly believing
it to be his duty to his shareholders, and as a
citizen, too, to use all the means in his power
77
CONTROL OF FINANCE
to bring it to failure. Mere rights of control,
even fortified by statutory penalties, would
be quite inefiective. Nothing but transference
of ownership from private to public hands
would suffice.
This would at once make it possible to re-
place the present unwieldy and expensive
boards of directors by small managing boards
whose task would be to carry out the Govern-
ment’s policy, as interpreted to them by the
Minister of Finance. There must be no possi-
bility of divided loyalties on the part of institu-
tions whose complete co-operation would be
essential. There would be no question of dis-
pensing with the services of the highly efficient
managers and staffs of the great banks. Their
experience and public spirit would indeed
be given wider scope in organising these
great institutions on new lines so that they
could more effectively serve the needs of the
community. They would have the added
dignity and prestige of public service, and
the pension and other rights proper to pub-
lic officials. There would be plenty of new
opportunities for the initiative and ambition
of the young and more enterprising among
them.
The actual transfer of ownership would be
78
AND THE FINANCIERS
effected by a short Act which would confine
itself to laying down broad principles, leaving
the details to be elaborated later by Orders in
Council. The need for speed in dealing with an
emergency situation would give it quick pas-
sage through Parliament. This Act would pro-
vide that the ordinary shares of the Bank of
England and the Joint Stock Banks, including
not only the Big Five but also a number of
other banks doing similar business, should
be transferred at once to the Minister of
Finance.
Compensation to former shareholders would
have to be paid, in the form of terminable
annuities, or non-voting shares, or Govern-
ment stock ; though, of course, it would be
liable to taxation in the same way as the stock
of im-nationalised concerns. Only general
principles and maximum limits need to be
laid down in the initial legislation. Figures
and details can be settled later by some
tribunal or authority appointed for the purpose,
but not necessarily directly concerned with the
actual running of the banks as a going con-
cern. These questions are unimportant com-
pared with the urgent need for getting bank-
ing and industry moving on the new lines. Of
course, the principle and basis of compensation
79
CONTROL OF FINANCE
for nationalised industries and services in gen-
eral must be related to the circumstances of the
moment, to the speed at which the transfer-
ence takes place, and to the programme of
taxation, both of income and inheritance,
which the Government has in mind. But in
the case of the banks, shareholders’ money
represents only about five per cent of their
resoTirces ; the remaining ninety-five per cent
belongs to depositors and is mostly withdraw-
able on demand. The confidence of the deposi-
tors in the security of their funds is vital, other-
wise the banks would become mere empty
buildings. Confiscation of the shareholders*
capital, whilst of relatively small financial
significance, would certainly destroy the con-
fidence of the tens of thousands of depositors —
business firms and individuals — whose business
operations depend on their feeling certain that
their money is safe and withdrawable at will.
It is vital to recognise the real nature of this
problem. There would be no time in the early
stages to set up completely new institutions to
perform the banking and commercial services
on which industry and trade depend. The
Socialist Government would be in the position
of engineers who are reconstructing a bridge
whilst traffic continues to pass over it without
8o
AND THE FINANCIERS
intennission. Trade, wholesale and retail, must
be carried on, and the food and clothes zind
other things the population needs must not be
held up. Wages must be paid week by week
all over the country. Our vast population must
be employed and supplied through all the
innumerable existing channels of trade day by
day until new channels can be organised, even
though revolutionary changes are proceeding
in the ownership and organisation of the
machinery by which they are being supplied.
And for this it is necessary that the banks
should carry on their normal routine functions
without serious hindrance, receiving deposits,
paying out cash, granting credits, meeting
obligations as they fall due in the ordinary
way.
Our problem in these respects is very
different from that which confronted our
Russian comrades. Our population is as to
more than eighty per cent dependent on
trade and commerce for its daily bread. On the
other hand, eighty per cent of the Russian
population were peasants, living on the soil and
feeding on what they themselves grew. It did
not matter so fundamentally to them that the
wheels of trade and commerce stopped for a
time. But hundreds of thousands of our town
Fo 8i
CONTROL OF FINANCE
population would be in hopeless difficulties
for their next meal if such a stoppage lasted for
more than a few days. Our task indeed is no
easy one. Rough and ready generalisations or
un-thought-out slogans will be no substitute for
hard thinking and hard work. We must face
it honestly and courageously, neither under-
estimating nor being deterred by its difficulties.
So we must take over the banks as running
concerns. We can then set about the reorgan-
isation, concentration and specialisation of
their work, the amalgamation of superfluous
branches, the initiating of the many methods
and activities necessary to adapt the existing
system to the needs of Socialist planned
industry.
THE LONDON MONEY MARKET
Once we have settled the ownership of the
banks and who is entitled to issue instructions
to the directors and to dismiss them if the
orders are not carried out, we can proceed
speedily and in due order to attain the
objectives I set out at the beginning.
We should deal at once with the Bank of
England and the Joint Stock Banks and similar
institutions. These would immediately pass
82
AND THE FINANCIERS
into public ownership. The Joint Stock Banks,
which handle between them eighty per cent of
the floating working capital of the community
touch home and foreign trade at every point.
But there remain other banking institutions
in London — ^such as the London Branches of
Dominion and foreign banks, the acceptance
houses, a number of private banking houses,
which together link up our banking system
with the banks of other countries ; and the
discount and other institutions, which com-
plete the intricate machinery of the London
money market. The Government should take
full rights of immediate control over their
operations, together with supplementary
powers to transfer to the nationalised banking
system any of their functions necessary for its
smooth working. So long as the Bank of Eng-
land and the Joint Stock Banks were nationally
owned there would be little danger of obstruc-
tion from the smaller units of the banking
system, even though many of them are in-
tegral parts of foreign organisations.
The Socialist Government would endeavour
to retain London as the centre of world bank-
ing. Not only would this continue for us a
source of considerable earning power ; in ad-
dition it would provide valuable opportunities
83
CONTROL OF FINANCE
for influencing the course of events, both
financial and political, in other countries. In
face of a world still largely capitalist and pos-
sibly hostile, the value of London’s financial
influence and power needs no stressing. But of
course a Socialist Government would take great
care not to fall into the mistake of successive
Governments in these last few years of subor-
dinating the interests of British industry and
employment to those of the London money
market.
CONTROL OF INVESTMENT
Banks, however, and the London money
market, are mainly concerned with short-
term credit and deposit operations. There
remains the question of investment. The
Socialist State, though it can dispense with the
control of capitalists, will need, and will put
to socially profitable use, a steady supply of
savings and new capital provided as at present
largely by individuals or from the surpluses of
large corporations. We should therefore set up
a National Investment Board, with wide powers
of control over new issues, and with responsi-
bility for directing capital into channels ad-
vantageous to the community. The functions
84
AND THE FINANCIERS
of the Board should, as it seems to me, go a
good deal further than those contemplated in
the original Leicester resolution. It is not
enough that the Stock Exchange and new
issues should be controlled in a negative
manner. The capital resources of the com-
munity must be directed into the channels
where they are required for the purpose of the
National Plan. Negatively, the National In-
vestment Board should prevent the waste of
capital by which tens of millions of pounds
have been thrown away in Stock Exchange
operations in these last few years. Positively, it
must collect savings, direct them into the in-
dustries and purposes for which they are
needed, and supervise closely the investment
policies of the great insurance companies and
other investment trusts and similar bodies,
which at present handle between them a con-
siderable proportion of national savings.
In this new organisation the C.W.S. Bank,
the Post Office and other Savings Banks and
the Municipal Banks would play their part.
The C.W.S. Bank, ceasing to be merely the
banking department of the English Co-opera-
tive Wholesale Society, would become the cen-
tral banking organisation of all co-operative
organisations — consumers’, agricultural, and
85
CONTROL OF FINANCE
productive — and would be owned 'and man-
aged jointiy by them so as to cater for their
special needs, in Scotland as well as in England
and Wales. The Post Office Savings Bank
would no longer be confined within the narrow
limits permitted by the great private banking
institutions. The Municipal and other Savings
Banks would provide a convenient channel for
individual savings, and a ready source from
which to finance local communal enterprises.
CURRENCY POLICY
The establishment of control over the bank-
ing system is only the first step towards our
objectives. The Government would at once
have to define the policy which it desired the
nationalised and controlled banks to carry
through and see that they complied with it.
The Bank of England, as the bankers’ bank,
and the centre of the whole banking system,
would continue to be responsible for currency
and exchange problems and for control of the
money market. In currency policy its first
steps would plainly be to undo the results of
the deflationary policy of the post-war period.
There is evidence that in the last few months
the Bank of England has seen the error of its
86
AND THE FINANCIERS
ways in this connection and is beginning to
retrace its steps.
We must definitely set our face against any
nineteenth century ideas as to the merits of a
Gold Standard. Helped by a series of accidents,
the Gold Standard may possibly have worked
more or less satisfactorily before the war, but
if a Socialist Government went back to gold
to-day it would at once put itself at the mercy
of the capitalist world, and it would limit and
hamper unnecessarily its whole programme of
expansion and development. In this connec-
tion we must watch carefully the operations of
the Bank of International Settlements at Basle.
It was not for nothing that the American and
other banking interests insisted that it should
be free from any form of international or
political control. There is a real danger at this
moment, when public opinion in all parties
is prepared to nationalise the Bank of England,
that the control of world finances may be
shifted from London to Basle.
The fact that sterling has already been
accepted by half the world is an advantage
which should be maintained and utilised so far
as is possible. For this purpose we should keep
the purchasing power of sterling approxi-
mately steady in terms of commodities. But
87
CONTROL OF FINANCE
there is nothing sacrosanct in the present price
level, and the aim of a Socialist currency policy
should be to extend credit and currency until
the resources of the country in labour and pro-
ductive power can be fully employed and then
to endeavoiu: to maintain a steady level of
prices and employment.
Progress in mechanical and other methods of
production would be reflected in a rising level
of real wages, increased leisure and an exten-
sion of communal services.
THE NATIONAL PLAN
The nationalised Joint Stock Banks in their
credit policy and the National Investment
Board in its capital investment policy will both
carry into efiect the National Plan. This, of
course, pre-supposes that such a Plan exists.
It must be admitted that so far the Party is
very far from its completion. Its elaboration is,
in present circumstances, one of our most
urgent tasks. We cannot present a convincing
policy on general economic matters to the
electorate, nor begin to apply Socialism effec-
tively, nor deal on a national scale with un-
employment, until we have thought out, at
least in broad principle, the future economic
88
AND THE FINANCIERS
development of this coimtry that we wish to
bring about, apd the place that it is to occupy
in world trade.
For instance, what is the attitude of the
Party towards the level of agricultural pro-
duction? Do we intend that this country
should be self-supporting in foodstuffs, or at
any rate to a definite degree less dependent on
imports, or are we content, as in the nine-
teenth century, to let this question be deter-
mined by what happens to prices and produc-
tion in other countries ? What is to be our
policy in relation to home produce for which
markets and prices are now guaranteed by
quotas or tariffs ? It will not do to evade this
question nor to take refuge in mere negation.
We cannot combine Socialist planning with
pre-war free trade. We are committed to the
control of imports, and we must make up our
minds definitely what purpose this control is
to serve. Through its proper constitutional
machinery the Party must come to conclusions
on these matters and must leave the electorate
in no ambiguity as to what these conclusions
are.
Problems raising issues of comparable diffi-
culty are presented by the cotton industry
and other exporting industries faced with a
89
CONTROL OF FINANCE
diminishing world market for their goods and
with a temporary or possibly permanent surplus
of productive and labour power.
IMMEDIATE MEASURES TO RELIEVE
UNEMPLOYMENT
The furthering of the National Plan and the
provision of funds for it will not be the only
responsibility in relation to industry which
nationalised finances will have to face. Indus-
try under a Socialist Government would at
once have to deal with financial responsibilities
of a more human kind. We must frankly face
the fact that in its early stages, before industry
has got going on its reorganised basis, we can-
not hope to effect any substantial improvement
in the general wages level. Nobody can
deliver goods before they have been produced,
nor can we wipe out the results of generations
of capitalism in a night. But we must cope at
once with some urgent problems. We must, for
example, deal with the position of the older
workers, in industries which cannot for years,
or perhaps never again, hope to employ their
previous complement of workers. We must in
these circumstances make it easier for the older
generation to retire, so as to provide places
90
AND THE FINANCIERS
for the younger men. We must extend the
school age for the whole population and pro-
vide far wider facilities for secondary educa-
tion. All this will need money, but it is not
beyond our power to find it. So far as the pen-
sioning of the older workers is concerned, the
situation varies between industries, and the
best course would seem to be to deal with it
industry by industry, leaving the details to be
worked out by the appropriate Trade Union,
so that arrangements for recruiting and retire-
ment may be properly co-ordinated. And in
that case funds might be provided by long
term loan to the industry, which might be
repaid when it becomes prosperous on a reor-
ganised basis.
There will be no difficulty in obtaining
sufficient capital, both for the above and for
financing industrial reorganisation, provided
that we stop waste of capital in socially useless
enterprises and through mere purposeless
speculation.
THE PROBLEM OF FOOD SUPPLIES
It is said that if we attempt these measures
we shzill starve because foreign countries will
blockade us. That fear is quite unfounded.
91
CONTROL OF FINANCE
Qjlite plainly we should have to set up
machinery for organising and controlling food
imports, in the form of Import Boards. There
is no reason to suppose that the Dominions
and South America would be unwilling to
sell us their goods. Their only alternative
would be not to sell at all. It is equally mis-
taken to suppose that, if these overseas coim-
tries cease paying tribute to us in interest on
old bonds, our food supplies would be en-
dangered. At the present moment the South
American sends his goods here and they are
sold to provide income for the bond-holder
in the South of England, South America in
fact getting no present return. It seems ridicu-
lous to suppose that they would not send us the
same goods in return for manufactured articles
of which they are in need. The result would be
that the rentier and bond-holder would be
in difficulties, but the unemployed would
be put into work. Most of the arguments used
by the Government and others as to the harm-
ful economic effect of the payment of War
Debt to America applies equally to the payment
of tribute to our bond-holders by South America.
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AND THE FINANCIERS
CONCLUSION
I do not deny that a programme on these
lines will give us an immense number of de-
tailed difficulties to overcome. We shall have
strong and dangerous opposition from existing
interests. The transference of the sources of
wealth and power is in effect what our
opponents have always feared as the operation
of the class war, and they will certainly do
their best to stop it. But the worst danger
confronting a Socialist Government is hesita-
tion and uncertainty. If we know what we want
we shall get it — and probably by peaceful means.
If we show any doubt we shall find that the
opposition to use is redoubled. There is no
other way but to face these issues. The money
power is the master of the capitalist system.
We cannot proceed to nationalise even the mines
without having control of the banks and
finance. We cannot begin to carry out our
wider plans for the transformation of industry
and the removal of the age-long injustices
which poverty inflicts without having control
of the banks and finance. Money has held in
its power millions of workers of all classes —
93
CONTROL OF FINANCE
including the professional and managerial
classes. We can rally all of them to the service
of the working class if only we show an un-
swerving determination to carry our policies
into effect.
94
IV
THE BREAK WITH IMPERIALISM
By
J. F. Horrabin
The British Empire is the supreme ex-
pression of British capitalism. British Socialists,
therefore, cannot plan their offensive against
capitalism on the home front alone, but must
inevitably relate it to an almost world-wide
struggle. The economic life of the folk of these
islands has been, by capitahsm, so closely
linked with that of other and widely differing
peoples that a Socialist Government must per-
force accept, as the very basis of all its econ-
omic planning, this interdependence of Britain
and certain outside territories. Empire policy
is accordingly necessarily part of a wider
foreign policy ; since, to put it baldly, if the
British connection with any economically im-
portant part of the Empire is broken, you will
have to enter into agreements and economic
relationships with some other country or
countries in its place.
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BREAK WITH IMPERIALISM
Not only because of Britain’s inability to
stand alone and self-sufficient is it impossible
for British Socialists to rest content with a
merely negative policy of flat opposition to
imperialism ; but the fact that the Empire is
in being — and that, at any rate, considerable
parts of it are likely to remain in being when
a Socialist Government “ takes over ” — means
that we Socialists will inherit from capitalism
certeiin liabilities and responsibilities to the
subject peoples of the Empire. And we cannot
without disloyalty to the world workers’ move-
ment, of which we are a part, wash our hands
of these responsibilities.
It is highly important, before we begin the
attempt to formulate a Socialist policy with
regard to the Empire, that we should get our
point of view with regard to it quite clear.
There are Socialists who can see quite clearly
the need for ending capitalism here at home,
but who yet think and speak of the Empire as
though it were something quite distinct and
separate from capitalism — as though, like the
technical and scientific advances which have
been made under capitalism, it was something
from which we could eliminate the element of
exploitation and private profit, and thence-
forth adapt to our own uses. Surely such a view
96
BREAK WITH IMPERIALISM
ignores the basic historic facts as to how the
Empire has grown up and what it actually is ;
and it could only be put forward by those who
may have got so far as to think on Socialist
lines concerning Britain, but who have swal-
lowed, maybe unconsciously, certainly un-
critically, the stock capitalist ideas about the
Empire.
I began with the assertion that the Empire
is the supreme expression of British capitalism.
That is not Socialist propaganda, but bare
historical fact. The formation of the Empire
is indissolubly linked with the growth and
development of the capitalist class in Britain.
British capitalism could not have been what
it has been, or be what it is, either in relation
to the British working class or to the rest of the
world, but for the existence of the Empire.
You can no more think of British capitalism
as something apart from its Empire basis than
you can think of British Socialism as apart
from its Trade Union basis. (Some Socialists
do — or try to ; and I fancy these are largely
the same people who talk nonsense about the
Empire.) From the days of the first overseas
voyages in Tudor times — coming just when
English merchants were at last in the position
of having accumulated a surplus, and when
Go 97
BREAK WITH IMPERIALISM
the investment of that surplus in foreign trading
ventures still further enormously increased
their wealth and strengthened their economic
position ; down to the present day, when the
only possible policy for British industrialists
and financiers (now supreme in the State) is
by a more intensive exploitation of Empire
peoples and resources to defend themselves
against the competition of new and stronger
industrial powers ; all through four centuries,
the development of British capitalism and of
the British Empire have been two sides of the
same story.
This does not mean that the Empire is the
result of a conscious plan — any more than is
British capitalism. Planning is only to-day, in
both, being realised to be necessary. But both
are the result of the same driving-power — the
search for profit by the British capitalist class.
And it is again not mere Socialist propaganda,
but historical fact, to say, in flat opposition to
the orthodox capitalist schoolbook talk about
“ spreading civilisation,” “ the white man’s
burden,” etc., etc., that nothing has been done
in any part of the Empire which could not be
justified to that class as in some way, directly
or indirectly, either increasing or safeguarding
its profits. It is perfectly true that British
98
BREAK WITH IMPERIALISM
Imperialism has drained marshes, built dams
and bridges, irrigated vast areas, conquered
diseases. But it did these things not from
philanthropy, but because systematic exploita-
tion was impossible without them — ^in precisely
the same way as the mill-owners of the In-
dustrial Revolution realised a century ago that
factory laws and health regulations were in-
evitable if, in their mad reaching after bigger
and bigger profits, they were not to kill off the
whole race of Lancashire and Yorkshire wage-
slaves on whose labours the continuance of
those profits depended. There is surely no need
to stress this point unduly. The history of
British relations with India — India, where the
great mass of the people was deliberately
ruined economically in order to make Lanca-
shire safe for British capitalism — ^is proof enough.
The cant capitalist assertion is that the
Crown is the link binding the Empire together.
“ Crown ” here is merely camouflage for
dividends.
Unless, in thinking out our plans in relation
to the Empire, we keep this central historical
fact steadily in mind, we shall certainly court
failure. For rest assured the exploited peoples
of the Empire will neither forget it nor omit
to remind us of it ! They at any rate, however
99
BREAK WITH IMPERIALISM
much or litde they may understand of the
nature of capitalism, do know from experience
what white domination means. And on our
success at the very outset in making it clear to
them that we stand, unequivocally, for the
ending of that domination, depends our chances
of wiiming even their partial co-operation in
the task of building Socialism.
Here let me discuss briefly — though it in-
volves wider issues than strictly “ Empire ”
policy — how far we shall actually be dependent
on their co-operation. We have already re-
marked that Socialist planning must perforce
accept as its very basis the economic depend-
ence of Britain on outside areas. There seems
no doubt that we must accept that depend-
ence, in such a vital matter as food-supply for
instance, as to all intents and purposes abso-
lute. Certainly, for a good many years after
a Socialist Government took over all the land
of this country, and, by the elimination of
every sort of private profit and the applica-
tion of scientific methods to every branch of
agriculture, increased the food production of
these islands, Britain could not be self-
supporting. (Could it ever be ? And in any
case is our Socialist aim the creation of self-
sufficient units ?)
100
BREAK WITH IMPERIALISM
We cannot, in short, make — and mzdntain —
a Socialist revolution if we plan in terms of
Britain alone. Other territories, producing the
things we need, must come into our plan. Can
we, as some Socialists urge, build on the basis
of a Socialised British Empire ?
I think not — emphatically not. I think both
the historical and the geographical facts about
the Empire make it impossible. The co-
operation we must have must be voluntary
and must be based on mutual understanding
of, and agreement upon, the social changes we
are making. Otherwise it will break down in
a crisis. Can we expect the exploited races of
the Empire, the vast majority of them at widely
differing stages of development from our own,
to understand and share in our planning ? To
a certain extent, maybe. But we should not be
Socialists if we did not at once offer all of them
who are capable of deciding upon the matter
the choice of full and free self-determination.
We could not dragoon them into our plan.
And is it not reasonable to assume that peoples
more nearly on our own stage of development
— ^peoples whose problems are essentially the
same as our own and who are accordingly
ready to make the same revolutionary changes
as we are making — ^will be more reliable
lOI
BREAK WITH IMPERIALISM
partners in the critical period ? In plain words,
would it not be better Socialist policy to come
to the closest possible agreements with the
working-class movements of Europe — our
neighbours — than to make the realisation of
our aims dependent upon the understanding of
peoples further removed from us, intellectually
and socially as well as geographically ? Surely
close co-operation with the workers of France,
Germany and the Scandinavian countries,
above all with the workers of Russia, is more
practicable than with the great mass of the
peoples in various parts of the world over
whom the flag of British capitalism waves.
Even if we limit our attention to those Do-
minions with a white proletariat (the Union
of South Afiica, of course, stands in a class
apart) we shall, I think, be compelled to
recognise that their Labour movements are
much less likely to co-operate with us step by
step than are those of our own European
neighbours. A Workers’ United States of
Europe is much more likely to be realised in
our time than a socialised British Empire.
Geography points the same way — and if geo-
graphy is occasionally ignored on Socialist as on
other platforms it is not to the credit of Social-
ists. The British Empire is not a geographical
102
BREAK WITH IMPERIALISM
unit. That indeed is its main weakness, re-
lative to its chief capitalist competitors for
world dominance ; as Russia’s geographical
unity has been perhaps her greatest strength
and defence during the years of capitalist in-
vasion, blockade and boycott. Britain is not
a part of Asia or Africa. She is not situated in
the Indian Ocean, but off the north-west coast
of Europe. With Russia’s experience to leam
from, we shall be wise to base our Socialist
plaiming on the facts of our geographical
situation, and keep vital lines of communica-
tion as short and as well protected as possible.
For these two sets of reasons, then, historical
and geographical, I think we may rule out
a socialised British Empire as a possible begin-
ning for our Socialist planning.
But as I have already said, the Empire — or
parts of it — ^will still be in being when the
power of capitalism is broken in Britain ; and
we shall inherit certain responsibilities which
we cannot shirk. Furthermore we are com-
pelled by the fact that capitalism bases its
principal policy to-day on a (capitalist) theory
of Empire development to counter that policy
with a precise programme of our own. There
can be no sort of “ continuity ” between
capitalist and Socialist policy on the Empire.
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BREAK WITH IMPERIALISM
I have no space here to do more than indicate
the broad, general principles which must
underlie such a programme. Their precise
method of application will necessarily vary
with the varying conditions in the different
territories of the Empire. (Indeed, on no
matter is Socialist education more needed than
on the actual facts, as distinct from rough
generalisations, about the British Empire’s
constituent parts.)
Let us first divide those territories into two
obviously differing classes :
(a) The self-governing Dominions ; territories
in which, with the exception of South Africa,
the original inhabitants have been either
exterminated or reduced to neghgible
minorities, and which are now white capita-
list states.
{b) The Possessions, including India (whose
population is about three-fourths of the total
population of the Empire) ; territories
governed and administered by British
officials, the Native populations having no,
or very hmited, political rights of any kind.^
^ There are varying ** grades ” in this respect. Ceylon, for example,
has recently been granted a constitution based on adult suffrage.
In the West Indies and in Cape Colony (as distinct from the Union
of South Africa as a whole), there is a tradition of ** equal political
104
BREAK WITH IMPERIALISM
In territories where there are white settlers
or traders these are permitted some voice in
the government.
Let us deal with the Dominions first. Re-
member, the Dominions are to-day independ-
ent capitalist states. At various Imperial Con-
ferences since the war, culminating at Ottawa,
it has been made perfectly clear that there is
no longer any question of subordination to
British interests, but that even in those formal,
constitutional questions which are but the
reflection of fundamental economic issues the
Dominions claim, and actually possess, absolute
independence. British capitalist policy aims,
by exploiting to the full the ties of sentiment —
“ children of one mighty mother,” etc., etc. —
at persuading them to enter into preferentiail
economic relationships with their ex-mother,
in order that Britain’s inadequate natural
resources should be strengthened for the
competitive struggle against the U.S.A., Japan
and her other commercial rivals.
A Socialist Government would make no such
agreements with the Dominions as such. We
rights for all races,” dating from a time (early nineteenth century)
when British capitalism could make satisfying profits by merely
selling British goods, and was not concerned with the exploitation
of people and territories.
105
BREAK WITH IMPERIALISM
are not out to build Socialism on the basis of
one race or one language. Whatever com-
mercial relations were entered into with the
Dominions would be of exactly the same kind
as we should be ready to make with any other
capitalist state. If a Socialist Government made
any preferential agreements at all these would
obviously be made with Socialist, or near-
Socialist, countries. As Socialists, for instance,
we are much more concerned with linking
ourselves to Russia economically than with
making any bonds which would tie us to
capitalists of the same race and language as
our own present masters.
A Socialist Government, in brief, would face
the facts ; and one obvious fact is that it could
look for no special assistEmce, but rather the
reverse, from the capitalist ruling classes of the
Dominions. It would make its alliances, so far
as possible, with its own friends — ^with states
ruled by people of its own class. (And I think
this implies a close contact with the working-
class movements of other countries, and not
merely with Governments.)
Let us turn to the Possessions ; the areas
administered directly by British capitalism for
its own profit. As Socialists we are as absolutely
opposed to the exploitation of one people by
io6
BREAK WITH IMPERIALISM
another as of one class by another. There is
a sort of working-class imperialism — ^it showed
its head once or twice during the lifetime of
the last Labour Government — ^which would as
unhesitatingly subordinate the interests of, say,
Africans to our class needs here as capitalist
imperialism would subordinate them to its
own desire for profits. You can “ develop ”
Africa with the primary aim of finding work
for British unemployed. But you can scarcely
describe that as Socialism. Somehow or other,
by some kind of mutual co-operation, you have
to reconcile your own needs with those of the
other fellow.
A Socialist Government would start with
a flat denial of the right of any British Govern-
ment to “ possess ” overseas territories without
regard to the desires of the inhabitants of those
territories. It would admit fully the right of
every one of those peoples, not merely to self-
government, but to complete self-determina-
tion. Wherever there is already an effective
demand for self-determination, and where it
is apparent that the people concerned can
exercise self-government (giving an effective
voice to at least a majority of the population
in that government), the dememd would
be immediately granted ; the only question
107
BREAK WITH IMPERIALISM
remaining to be settled being the actual condi-
tions during the probably necessary “ transi-
tion ” period. During that period a Socialist
Government would be ready to give whatever
assistance was asked for — ^if it was asked for ;
using the bargaining power thus given it to
insist on such working-class safeguards as it
deemed necessary.
This, surely, is the position in India. The
effective demand has there been made. Only
those who wilfully turn blind eyes to what they
do not want to see can deny it. Nor does the
fact that the various Indian sections put for-
ward contradictory demands afford adequate
reason for postponing any and every kind of
settlement. There is no chance of those differing
demands being reconciled so long as an alien
Government rules, and has it in its power to
further the interests of one section or other. A
Socialist Government would have to cut the
knot by the immediate placing of responsibility
on the Indians themselves. It would not con-
cern itself overmuch with the “ constitutional ”
claims of princes. It would, as suggested above,
concentrate on safeguarding, so far as it could,
the position of the great mass of Indians —
peasants and industrial workers. Those Socia-
lists who suggest that it is necessary for us to
io8
BREAK WITH IMPERIALISM
Stay in India in order to do this must face the
fact that we can only now stay in India at all
(in a position of control, that is) by the use of
military force, repression, martial law, etc.
Only as a fellow working-class movement can
we effectively assist our Indian fellow-workers
in their own struggle for emancipation. Most
certainly we cannot do it as an alien army of
occupation.
Burmah, Ceylon, and the West Indies are
also ripe for responsible self-government.
But there are other areas, particularly in
Afkica, in which the issue of self-determination
is not an immediate one — ^where indeed our
withdrawal would leave the inhabitemts worse
and not better off. Here, it seems to me, we
have no choice but to keep control until we
have put right some of the wrongs done by
capitalism.
What would be the main lines of our
policy ?
First, surely, we should end, or limit, the
activities of private capitalism in precisely the
same ways, and at the same rate of progress,
as we were ending or limiting them here in
Britain. If it was desirable to grant concessions
to private enterprise in any area, such conces-
sions would be subject to the same kind of
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BREAK WITH IMPERIALISM
Stringent conditions as, for example, are at
present insisted upon in Russia.
Second, we should at once begin to associate
native Africans both with the political and
economic administration of their territories.
Their political status must not be limited to
a voice in a Native Council dealing in the main
with local affairs. They must be given a direct
voice in the central legislature of the territory ;
and their share in government must increase
as their experience and capacity grows. Equally
— ^nay, even more importantly — they must not
be left to pick up what they can of European
technique while working as wage-labourers
(three hours for a penny ! ) for white land or
mine owners. In Government-run “ collective ”
or experimental farms they must be shown
how to make use of modern methods of cultiva-
tion ; and they will have, of course, equal
economic rights with whites (in Kenya at pre-
sent you may grow coffee if your skin is white,
but not if it is black).
Third, we should earmark whatever surplus
was produced in every territory first and fore-
most for financing a system of education, free
from any religious propaganda, which would
aim at fitting the people for self-government
and at making accessible to them whatever
no
BREAK WITH IMPERIALISM
kind of knowledge was necessary to that end.
Such education would not aim at turning
Africans into bad imitations of Europeans. It
would not, for example, assume that the
standards of elementary education laid down
by capitalism for the children of European
workers are necessarily the best ones for people
in a largely different environment. It would
take the best that is in African culture and
combine it with a knowledge of European
science to form the basis of an education fitted
to enable such people to stand as equals with
Europeans ; needing, eventually, no guides or
supervisors of an alien race to enable them to
hold their own in the twentieth-century world.
In brief, a Socialist Government would seek
to apply, in the letter and in the spirit, the
terms and conditions laid down for mandated
territories under the League of Nations ; it
would act as a trustee, putting first the interests
of the native inhabitants. Whether it would
render account of its stewardship to the League
of Nations so long as the League remained a
predominantly capitalist body, I doubt ; but
it would, I suggest, be perfectly ready to report
to the Labour and Socialist International.
Ill
BREAK WITH IMPERIALISM
I have tried to indicate, jfirst, that we must
necessarily base our Socialist planning on
economic agreements with areas outside our
own country ; second, that the British Empire
offers us no practical foundation for the build-
ing of a Socialist Commonweedth. In the mean-
time, we must accept the responsibilities which
capitalism has left us in those parts of the
Empire which it has exploited, and, as Socialist
trustees, teach the people how to develop their
own resources in co-operation with the outside
world.
These seem to me the main points of a Socia-
list Empire policy. There are a hundred and
one other detailed points which must neces-
sarily be left out in a discussion of general
principles.
112
V
THE CLAIM OF THE UNEMPLOYED
By
William Mellor
Poverty of the workers and unemploy-
ment are twin evils bom of capitalism. They
represent the failure of the system of wealth
production to which that name is applied to
solve the problem of the distribution of what
is produced. They are not new phenomena.
To-day’s world army of 30,000,000 workless
is only the inevitable culmination of zm his-
torical development which has now reached
the point where new methods must be applied.
These methods must be applied consciously in
the interests of a class which hitherto has
always been the hired slaves of the machine.
Nothing in recent years has in any degree
modified the Socialist case that the cause of
unemployment lies not in financial malad-
justments but in the operation of a system
of private enterprise of which financial
Ho 1 13
CLAIM OF THE UNEMPLOYED
maladjustments are, at the moment, one of
the most apparent symptoms.
Unemployment cannot, in fact, be cured
without complete Socialist planning on the
basis of complete social ownership and control
of wealth, production, and distribution. The
“ Peace ” treaties and their economic conse-
quences, the growth of economic nationalism,
the adoption of tariffs, the fall in wholesale
prices, are not the essential causes of unemploy-
ment any more than are the spots on the sun.
Nothing we can do to lessen the impact of
these effects of capitalism will cure unemploy-
ment ; we may modify it, reduce its propor-
tions, but without Socialism we cannot cure.
Nor, let me add, will those who desire to make
effective demand for goods equal to the pro-
ductive capacity of the machine, be able to
achieve their purpose as long as production
is left unplanned and motived by the desire for
profit. The “ leisure State ” depends on com-
plete communal control of production.
Labour in power on its accepted method of
achieving the change from capitalism to
socialism will not be able to do more, in its
first five years, than modify the effects of un-
employment and by conscious communal effort
extend die area of employment. For, remember,
ii4 f
CLAIM OF THE UNEMPLOYED
we are trying to work out a programme
and a plan not for a Government after the
revolution, but for a Government that hopes
to achieve the revolution piecemeal.
Two immediate problems will face a Labour
Government. “ How shall we translate into
effective action the slogan ‘ Work or Main-
tenance ’ ? ” “ Can we so translate it ? ”
Whatever be the final answer it is impera-
tive that a Labour Government should hon-
estly and fearlessly try to give effect to its
slogan, even though, as a consequence, it has
to challenge — ^in new ways and much sooner
than some now contemplate — the whole extent
of capitalism. Immediate short-term amehora-
tive plzms are essential if the Government is to
survive and thus be given the chance to im-
plement its Socialist programme. Whoever else
can wait for results, the unemployed cannot.
There are, to-day,^ probably 3,500,000 people
in this country for whom society can find
neither work nor adequate maintenance. They
include all grades and classes of labour from
so-called unskilled to the teacher and pro-
fessional man. Over half a million of them
have had no job for over twelve months and
thousands have “stood idle” for years. In every
1 June I, 1933.
115
CLAIM OF T.HE UNEMPLOYED
industry and service they exist, an occupation
for the charitable and the pawns of politics.
Let us look for a moment at what is coldly
called their “ density.” Out of a registered
employment list of over 1,000,000 in coal min-
ing, almost 350,000 are unemployed. Thirty-
three per cent in Britain’s main basic industry
“ sitting on their haunches ” waiting for some-
thing to turn up ! Cotton, on which Britain’s
capitalist prosperity has been largely based,
faces to-day over 145,000 out of its half-million
workers for whom it cannot provide employ-
ment — and this total is being added to almost
daily by rationalisation and the machine.
“ Gruesome ” is the only word to apply to
the third great “ stand-by ” of capitalism —
shipbuilding and general engineering. In the
former industry sixty per cent are registered as
imemployed, and in the latter, despite its home
market, the percentage is twenty-eight. Or,
turn to docks and shipping and you will find
some thirty-five per cent of those engaged in
these occupations “ signing the register at the
local Bureau.”
All these trades and occupations are, in
present-day economy, dependent to a high
degree on export markets and international
conditions. They, present a special and difficult
116
CLAIM OF THE UNEMPLOYED
problem to statesmen and revolutionaries alike.
But the dimensions of unemployment are
enormous, even in those industries so falsely
called “ sheltered ” — ^industries that cater
directly for immediate consumption.
Consider this catalogue : Twenty-seven
thousand boot and shoe operatives out of
140.000 with nothing to do ; 200,000 builders
out of 860,000 idle and adrift ; 120,000 of the
290.000 employed on public works contracting,
with brawn and muscle going to waste ; some
250.000 distributive workers with no customers
— and over the whole of insured industry
an average “ density ” of over twenty-one per
cent for whom society has no productive use.
There lies the challenge to capitalism and the
challenge to a Labour Government.
To expect any real solution without a whole-
sale economic revolution is just romanticism.
To accept the need for taking immediate steps
to tackle the problem is ordinary horse-sense.
What, then, shall we try to do ?
Our long-term plans must, in my view, be
designed to secure a new and better relation-
ship between industry and agriculture. We
must make up our minds that, in the future
society of which we are building the founda-
tions, the top-heaviness that capitalism has
117
CLAIM OF THE UNEMPLOYED
produced cannot continue. Our planning must
redress the balance of heavy and export indus-
try and, for a long time, we must lend our
energies to creating in our own country a new
and more self-sufficient economy.
There is, indeed, a patent need for wide
Socialist reorganisation of the basic industries,
but that reorganisation may well, at the out-
set — ^in my view certainly will — ^increase, not
diminish, the intensity of unemployment in
some of the main reorganised industries. It is
idle to expect the re-absorption in their own in-
dustries of any really appreciable number of
the 350,000 miners, of more than a proportion
either of the 110,000 shipyard workers, or of
the 145,000 cotton operatives, and we ought to
face the fact that the reorganisation of trans-
port, with electrification of railways or adapta-
tion to new forms of combustion will tend, in
the first stages, to decrease the number of
workers in that occupation.
It is, of course, true that the reconditioning
of these industries will lead to an increase of
employment in others — engineering, electrical
equipment, iron and steel and so forth. But that
will not meet the immediate needs of coal-
miners, cotton and shipyard workers. They will
stiD be “ out.” Moreover, the effects of a
118
CLAIM OF THE UNEMPLOYED
programme of reconditioning will not be felt
in the supply industries without an appreciable
“ time-lag,” and it would be unwise to “ bank
on ” more — even in these stimulated trades —
over the first years than the cessation of short-
time and the absorption of a portion of those
now scheduled as unemployed.
All our Development Schemes — ^with the
exception of slum clearance and house building
— ^will take time to operate, and their full
operation may well meet with impediments
from those bitterly opposed to the purpose of
the whole Labour experiment.
These considerations drive me to the view
that the maintenance question will assume
immediate urgency. The first piece of “ am-
bulance work ” which must be attended to will
be the lightening of the burden of insufiicient
income now borne universally by the unem-
ployed. It is really more than “ ambulance
work ” : it is the declaration of an essential
principle. Moreover, the effect of thus increas-
ing the purchasing power of twelve million
people will be immediately reflected in the
demand for consumption goods. I would urge
that power to do this be included in the Emer-
gency Powers Act, which a Labour Government
will have to secure at the outset of its career.
”9
CLAIM OF THE UNEMPLOYED
Nor shoiild it be forgotten that the Labour
Movement has pledged itself time and time
again on this matter. And pledges had better
be kept ! Indeed, on the extent to which pledges
are kept on issues such as this depends, in my
judgment, the securing of the necessary con-
fidence among the workers which will enable a
Labour Government to begin, and push through,
its Socialist reconstruction and planning.
What, then, as an absolute minimum, does
the carrying out of our policy and pledges
involve ? An immediate increase of over
twenty-five per cent in the maintenance pay-
ments to the unemployed, the immediate
abolition of the Transitional Benefit and the
Means Test, the ending of the Anomzilies Act
and its regulations, the cutting down of the
“ waiting period ” to three days, the compul-
sory utilisation of Employment Exchanges for
the registering of all vacancies, the ending of
the contributory scheme — ^which is in ruins —
so that the slogan “ Unemployment a National
Responsibility ” shall become a fact.
The minimum maintenance figure a Labour
Government, that means business, can coun-
tenance is that twice recommended by the
industrial and political movements before
Royal Commissions. Let me remind you of
120
CLAIM OF THE UNEMPLOYED
what was demanded. Twenty shillings a week
for men over eighteen ; i8r. for women over
that age — ^incidentally, I am very doubtful
whether this differentiation can, or should,
be sustained ; loj. a week for a wife or de-
pendent adult ; 5^. for each child while at
school ; 1 55. for youths and 14J. for girls be-
tween the ages of sixteen and eighteen, and lor.
for children entering employment from four-
teen to sixteen.
The present scales give an unemployed man
with a wife and two children ayr. $d. a week,
if the man is in full benefit and not under the
Means Test as a Transitional case ! The new
scale would raise the income of this family to
£2 a week — more than agricultural workers
in full employment receive to-day and as
much as hosts of workers now “ take home ”
for a week’s work. That, let me add, is no rea-
son for not raising the scale, but an added
reason for so ordering economic life with speed
that utterly inadequate wages shall be raised !
In terms of over-all cost on the existing
register of unemployment, with the re-inclu-
sion of those struck out of benefit, there would
be required, as near as one can estimate,
5(^200,000,000 a year. The present cost to the
Exchequer of unemployment benefit, including
121
CLAIM OF THE UNEMPLOYED
“ Transitional payments,” on a 3,000,000
register is about ;(^85,ooo,ooo a year, and the
“ charge on the workers apd employers for
contributions ” is 5^39,500,000. The total cost
to the Exchequer and production is therefore
5(^124,000,000 — a difference of ^(^76,000, 000 a
year in comparison with the scheme proposed
here for a Labour Government.
Later I shall put forward emergency plans
to reduce, directly or very largely directly, the
3,000,000 by some 1,250,000, but for the
moment I am concerned to assess the imme-
diate requirements which the Finance Minister
of a Labour Government in control now would
have to meet. His task will be less alarming if
it is agreed that all industries and occupations
must be brought within the maintenance
scheme — professional workers and agricultural
labourers alike — and that the principle shall
operate that the wherewithal to maintain the
unemployed shall come from production as a
whole.
Having settled the maintenance question in
principle, and contemplated, with varying
degrees of gloom or appreciation, the cost, let
us turn for a moment to two other remedial
measures calculated to have some real effect
on the volume of employment. I refer to the
122
CLAIM OF THE UNEMPLOYED
raising of the school age to fifteen, with
adequate maintenance grants, and the lowering
of the pensionable age to sixty, with rates of
pensions designed to take the older people out
of industry.
Here again we must contemplate speedy
action, for in so fiur as these proposals are
motived by a desire to combat unemployment
the short-circuiting of legislative methods and
delay is vital.
Obstruction, if the events of 1929-31 are any
criterion, may be forthcoming on the first
question from those to whom religious questions
assume in matters of education tremendous
importance. They will have to be met and their
opposition overcome without sacrificing the
educational needs of the children, the rights of
the teachers or the claim of the unemployed.
It is to be hoped that this present period
will be used to work out a plan which will not
be opposed by those in Labour’s ranks who
set such store on religion in the schools. We are
not yet in a position — though an increasing
number wish we were — to put secular educa-
tion firmly and unequivocally in our pro-
gramme.
I mention the religious difficulty because in
dealing with the raising of the school age it is
123
CLAIM OF THE UNEMPLOYED
too often ignored or “ pussyfooted.” It has
got to be surmounted. Let us assume that it has
and that the way is clear to advance to our
immediate objective.
On the basis of the proposals put forward by
Sir Charles Trevelyan during the last Labour
Government’s period of office, the cost of
raising the school age, including the suggested
— but inadequate and circumscribed — main-
tenance allowances, would be not less than
£ 6 , 000,000 a year. That figure may, for our
immediate purposes, be accepted as covering
the cost of the charge, though it is obviously
only a very rough estimate. Nor can I here
enter into a discussion as to whether any of this
cost should fall upon local authorities. Person-
ally, I would certainly make the maintenance
grants a national charge, and, unless the ad-
ministrative difficulties were likely to cause
delay, the whole charge.
The effect of this charge on unemployment
is difficult to assess with any pretence to
accuracy. That it would have an immediate
effect is certain, for it would exclude from in-
dustry some 400,000 children. The jobs they
would have taken would be filled from the
unemployed among the very young, who to-
day number over 120,000 and from those
124
CLAIM OF THE UNEMPLOYED
between eighteen years of age and twenty-one.
One may hazard that 200,000 would in con-
sequence be employed. Its effect would be in-
stant in the first year of its operation, but this
change should, of course, be followed by a
progressive reorganisation of education and a
further raising of the school age.
Indirectly there would be immediate effects
on the employment of teachers, for, coupled
as it should be with the compulsory lowering
of the maximum size of classes, it would
involve the taking on of 15,000 extra men
and women to staff the schools. Indirectly
the building trades would benefit by the de-
mand for new school buildings, though I have
not been able to discover any reliable estimate
as to the capital expenditure required for build-
ing purposes. It would seem reaisonable to
estimate for 1,500 buildings and ,(^45,000,000
capital expenditure, spread over four or five
years.
After the young the aged. And here one
enters a realm of hope and surmise, in which it
would be most unwise to be dogmatic. It is
obvious, however, that if one of the main
intentions is to make it immediately possible
for workers at sixty years of age to “join the
leisured classes ” the present pittance of lor.
125
CLAIM OF THE UNEMPLOYED
a week will have to be substantially raised,
and the present scheme — partly non-contri-
butory and partly contributory — ^first supple-
mented by the State and then supplanted by
a national non-contributory scheme.
In my view the very least we can contem-
plate is an increase of the existing loj. to
a week for a man or woman. This is suggested
only as a temporary measure, and not as really
adequate. It brings the pensioners just over the
standard regarded as the minimum for the
unemployed who will re-enter employment.
Forty shillings a week for two can hardly be
described as over-generous, even as an emer-
gency proposal !
Assuming that, of the people over sixty,
750.000 have now a greater “ unearned ” income
than the contemplated rate, the remaining
3.500.000 would be eligible for pensions. The
total cost, if all received pensions^ can be esti-
mated at about ^,^200,000,000 a year. This
represents an increase on existing expediture
of some 5^125,000,000.
The over-all cost is calculable, but the effect
on employment is much less certain, as is the
method of administration. Of the people
above sixty years of age it has been calculated
that at least 1,250,000 are in work or are still
126
CLAIM OF THE UNEMPLOYED
trying to obtain it. Can we compel them to
cease working or to cease looking for work?
In my view we must, in all the industries most
heavily hit by unemployment, and in others
we shall have to institute some sort of sliding-
scale for retirement. We may have to increase
the pension rate for those now in employment to
effect our purpose, but this has been allowed
for in part in the over-all estimate. We should
aim at and secure a speedy retirement from
industry of some 250,000 people, and a pro-
gressive increase of that number over a period
of years.
Neither the raising of the school age nor the
giving of earlier old age pensions will carry us
far in our attack on unemployment — they will
make a small dent in the line, but that is all.
Moreover, the dent will not by itself be lasting.
Can we expect more substantial results from
the proposals so unanimously backed by the
Trade Union Movement, nationally and inter-
nationally, for a shorter working week, and no
diminution of earnings ? In the long run
“ Yes,” but it would be idle to dream that this
proposal would, so long as capitahsm exists,
“ cure ” unemployment, even were its adop-
tion universal. Employers in every country
have shown a reluctance to accept the economic
127
CLAIM OF THE UNEMPLOYED
view of Trade Unions, even when that view
receives the support of professional economists
and of the staff of the I.L.O. That reluctance
— ^stupid and short-sighted as it may be re-
garded — ^will not be diminished by the advent
of Labour to power in this country !
Within capitalism, despite the technocrats,
shorter hours will have to be won by the
workers ; they will not be granted. That has
been again made clear beyond question during
the discussions at Geneva on the Preparatory
Commission. The melancholy history of the
Washington Hours Convention is additional
proof.
As part of the struggle of the workers against
capitalism the universal demand for “ sharing
the work and sharing the leisure ” should be
vigorously supported. The Trade Unions
should fight for it. It is essentially a right
demand. And a Labour Government, seeking
to secure Socialism by employing the difficult
and hazardous tactic of encroaching control,
must, at the outset of a period of political
power, definitely proceed to translate this
slogan into practice.
What might it do ? First reduce the hours o
labour in all industries and services catering
for the home market. In the distributive
128
CLAIM OF THE UNEMPLOYED
trades, in municipal and State employment, in
gas, electricity and transport, and building,
there should be decisive progress towards a
forty-hour working week. In industries nation-
alised during the first five years provision should
be made for a progressive diminution of hours.
But this unilateral action, especially in indus-
tries with an existent export market problem,
might have economic repercussions which
would compel a much speedier approach to
Socialism than the Labour Party as yet contem-
plates. Such a possibility ought not to be
shirked, nor its prospect result in inaction.
What is perhaps most needed on this question
to-day is the setting up by the Labour Party,
the Trades Union Congress and the Co-
operative Movement of a Joint Commission
charged with the responsibility of working out
in detail, for examination and decision by the
membership, a shorter-hours policy which should
be applied by a Labour Government. Such an
enquiry would have to come out of the realm
of perorations and tidy statistics such as those
produced by the I.L.O. It would have to face
consequences fearlessly.
Here I must content myself with a warning
that employers do not act from humanitarian
motives. Nor are the calculations of the effect
lo
lag
CLAIM OF THE UNEMPLOYED
of shorter hours, under private ownership of
industry or a system of mixed ownership, here
private, there public, likely to prove correct.
Rationalisation will not stop because hours of
employment are reduced ; and under capit-
alism rationalisation is hardly a boon and a
blessing to the workers. The demand for shorter
hours is, in my view, a weapon of attack
against capitalism, not a method of dealing
with unemployment which the employing
class are likely with equanimity and cordiality
to adopt, or which can produce its theoretical
results save under a Socialist regime. The
moral is obvious.
To those whose lips the word “ construc-
tion ” comes more aptly than the words
“ maintenance ” or “ revolution ” I have been
so far able to afford but little comfort. Their
moment has arrived, and it may be that the
projects now to be discussed — ^projects which
are already implicit or explicit in Labour
policy — ^will go some way to meet their
desires. They may also be of practical service in
finding a partial answer to the second conun-
drum in the slogan “ Maintenance or Work.”
The full answer will be post- and not pre-
revolutionary !
The Party’s immediate programme envisages
130
CLAIM OF THE UNEMPLOYED
the nationalisation of several of the main
industries and services and the efficient develop-
ment of those industries and services. For the
latter purpose it is obvious that there will be
required very large capital expenditure —
expenditure on plant, on machinery, on
electrification. I say nothing here of terms of
transfer — ^beyond registering a protest against
the plans of compensation now envisaged — nor
of the ways and means of financing the
schemes. I content myself with pointing out
that the necessary outlay in the State-owned
concerns will bring men and women in the
supply services back into employment, will
end short-time and intermittent work — ^but,
as I suggested earlier, its effects will not be
immediate. Nor should we be wise to contem-
plate an easy passage !
The planning and effecting of this develop-
ment must be among the first constructive tasks
of a Labour Cabinet, and it would be well if
now those responsible for the movement could
more clearly and decisively tackle the urgent
need for having plans prepared in advance. The
economic, technical and business ability in the
ranks of the Party should be mobilised nationally
and locally and the problems of the industries
and services it is proposed to nationalise in
131
CLAIM OF THE UNEMPLOYED
the first five years grappled with realistically.
Is there anyone to-day who can give a
reasonably decisive answer to the question
“ What are your plans for the cotton in-
dustry ? ” — ^not in terms of organisational
structure — and even here all is in a mist — but
in terms of re-equipment, modernisation,
markets, employment, technique and so forth ?
These or similar questions are too urgent to be
left entirely to the “ expert ” after a Labour
Government has got under way.
Nor will it be possible until this more detailed
type of planning and thinking is undertaken to
assess either the cost or the effects on outside
industry of the reorganisation schemes on
which our whole Socialist attack depends. I
would remind readers that the Labour Party
is attempting to transform capitalism by
encroachment and will be building the new
with the foundations and superstructures of the
old still standing ! Weaker brethren may quail
at what this may entail, but the way of
MacDonaldism is not the way to Socialism !
Fortunately for the Government with whose
policy this book is dealing there are two
industries in which much of the necessary
preliminary thinking and planning has been
done. Agriculture and building provide fields
132
CLAIM OF THE UNEMPLOYED
for immediate work of a permanent and
durable character.
Before, however, I deal with these two aspects
of national development as they affect imme-
diate employment, let me again emphasise that
my purpose is to put forward a minimum
“ short-term” emergency programme on unem-
ployment, to be carried through in conjunc-
tion with the Socialist reorganisation of econ-
omic life and international economic and
political relations envisaged by the Labour
movement. One must, for our present purpose,
accept as proven the belief that by complete
ownership and control of the financial
machinery, by the direction and control of
capital investment, by the socialisation of
main and key industries, by the control of
overseas trade and the establishment of planned
commercial relationships with other countries
— ^particularly with Russia — the foundations
can be laid of an economic structure of which
remunerated leisure and not unemployment
in the sense we know it will be one of the
supports.
Emergency action can find instant expression
in the building industry. A Labour Government
with the will can abolish existing unemploy-
ment here, stimulate employment in the
133
CLAIM OF THE UNEMPLOYED
ancillary trades, increase purchasing power
and thereby help remoter trades to lift up their
heads. What, is required is a determination
to regard the problem of housing not from the
point of view of private profit but from that
of social needs and social gains.
A Labour Government should put into
operation a Four Year Slum and Semi-slum
Clearance Scheme designed to secure the
building of at least one million additional houses
in that period. The scheme should be nation-
ally financed and nationally controlled and
directed, local authorities acting as the agents
of the central authority, responsible for seeing
that the assigned plan is, in fact, carried out
and, in the first instance, perhaps being given
the opportunity to formulate schemes.
There are to-day 200,000 builders of all
classes and grades scheduled as unemployed.
The building of an average of 250,000 houses
a year would bring the whole of this army into
employment and in addition would create
work in the immediate supply industries and
services for over 100,000 more. It is, of course,
a necessary part of the scheme that the demand
for labour should be met from the existing
personnel and not from any and every class of
workless. Moreover, under such a planned
134
CLAIM OF THE UNEMPLOYED
system as is suggested, the hours of work could
and should be reduced from the existing 44^
to 40 and the scandal of loss of payment for
“ wet-time ” ended, without adding materially
to that bugbear of economists “ production
costs.”
Such a programme is not in the least extrava-
gant, for it would meet probably not more
than half the real shortage of houses and cover
but half the extent of the slum evil. But it in-
volves the doubling of the speed of house con-
struction generally regarded as attainable and
the multiplication by twenty of the rate of
“ slum-clearance ” progress looked upon —
before the storm of criticism broke — as satis-
factory by the “ National Government.”
It seems to me essential that the control and
running of this scheme, and indeed of all build-
ing work, should be the business of the Govern-
ment and its Planning Department and not of
an independent National Housing and Build-
ing Corporation. Nor are we seeking to endow
Building Societies. Our purpose is to house
people. Over the widest possible area the
actual building should be done by “ direct
labour,” thus saving costs and increasing the
speed of encroachment on private industry.
Local authorities, where progressive — and the
135
CLAIM OF THE UNEMPLOYED
Government must decide this — should be given
a measure of administrative and executive
freedom.
The national machinery for carrying out the
plan should, however, be in charge of the
appropriate Minister, aided by a small council
on which, at the outset and as an emergency measure^
sit representatives of the municipalities, the
Building Trade Unions, the architects and
surveyors, the building trade employers and
the manufacturers of materials. Regionally
there should be replicas of this National
Council, in charge of the regional repre-
sentatives of the Government, whose business
it would be to speed up local and county
authorities and assess requirements. The in-
dustry, in short, should be mobilised under the
Government for public service.
In this idea of a planned slum clearance
scheme there is, of course, nothing new. It is
in these days a highly respectable project,
supported by men of no known Socialist views,
such as Maynard Keynes and Sir E. D. Simon.
What is perhaps novel is the idea of the Govern-
ment as the owning, financing, driving and
directing agent with local authorities doing
what the State deems suitable. What is novel
is the conception, involved of necessity in any
136
CLAIM OF THE UNEMPLOYED
real national effort to plan building, of State
control and direction of all building, whether
houses or schools, town halls or baths, factories
or art galleries.
As a necessary concomitant to its other
activities the National Council might act as
a pricing authority, required to advise the
Minister and put forward costings which would
prevent “ profiteering ” in materials.
The cost of building these million houses, at
present prices and on the assumption that the
general type was a parlour house with three
bedrooms and a bathroom, would probably be
in the region of ;;(^400, 000,000 — a yearly aver-
age capital charge of 00,000,000. To offset
this there would be a diminution in the annual
cost of unemployed maintenance under the
proposed new scale of at least £20,000,000.
In other words, for a new direct expenditme
of ^80,000,000 a year this country can give
really productive and useful employment at
Trade Union rates to over 300,000 of the
present army of workless and effectively attack
the slum menace.
The country, it is worth recalling, pays some
three times that amount in interest annually
on the National Debt !
Incidentally, it should be remembered that
137
CLAIM OF THE UNEMPLOYED
the present method, or lack of method, in fix-
ing prices and arranging contracts is chaotic
and uneconomic. There is, therefore, every
reason to believe that with a planned pro-
gramme such as I have outhned, with a co-
ordinated controlling and directing authority,
the capital cost of this Four Year Plan should
be considerably less than the £ 4 . 00 , 000,000
estimated here. But I have thought it wiser
and simpler to give this figure, so that a reason-
ably clear picture of the outlay under existing
conditions may be obtained.
There are, too, other material and real
financial offsets in addition to the “ saving ”
on unemployment maintenance. These houses
are assets which will, for instance, raise appreci-
ably the rateable value of the districts — and
here a Labour Government must take any
necessary measure to secure that private land-
owners do not reap the benefit of this com-
munal effort.
We must, however, face the fact that under
existing circumstances in a still predominantly
capitalist economy the “ economic ” rents for
the houses built under this scheme would be
larger than the workers for whom they are
intended can afford to pay. That fact must be
faced by new methods. I do not regard the
138
CLAIM OF THE UNEMPLOYED
method of loan and subsidy to local authori-
ties as being good in itself or applicable to the
Four Year Plan, where, in fact, the operative
body will be the State and ownership of the
houses will rest, not with the local authorities
— though to them will be given the responsibili-
ties of management — ^stiU less with the Building
Societies or private contractors, but with the
State.
Tentatively, I would put forward two sets of
suggestions regarding finance, in the hope that
they may be further investigated by the Build-
ing Trade Unions and the Party. The first
comes under four heads : No interest should
be charged by the State for the provision of
the capital required each year ; secondly, and
as a consequence, no interest charges will fall
to be added to the rents of the houses to their
tenants ; thirdly, the issue of capital should be
direct through the State Bank and the method
of raising a loan should not be employed —
indeed, the socialisation of the finance machine
is an essential preliminary to this project ;
fourthly, provision should be made for the
recoupment of the capital costs over an agreed
period of years through the rent receipts — the
rents being fixed at whatever figure is deemed
proper for the tenants.
139
CLAIM OF THE UNEMPLOYED
I would, however, suggest that considera-
tion be given to the question as to whether
these rent receipts might not be set aside for
the financing of futime housing and town plan-
ning schemes, of which the Four Year Plan
must be the forerunner, on the condition that
the capital outlay is recouped every yezir by
taxation.
The second suggestion for financing this
Four Year Housing and Planning Scheme
may be regarded as even more heterodox than
this four-fold scheme. Is there any reason why
the State Bank should not issue the capital as
required and that no provision whatsoever,
either budgetary or other, should be made for
the amortisation of the ;(^400, 000,000 ? This
would not preclude the fixation of rents at a
figiure that, while within the easy reach of the
workers’ budgets, would through revenue pro-
vide finance for social and other developments.
Definite national assets are being created by
the scheme, and I throw out the suggestion
that amortisation of capital issued for such a
purpose is not necessary under a nationally
owned and controlled financial machine.
In any event, I hold, the Gordian knot of
interest must be cut. But whatever be the
method of financing capital costs here and for
140
CLAIM OF THE UNEMPLOYED
Other projects, it is obvious that drastic changes
are needed in present budgetary charges, which
raise wide issues not confined to the finance of
building. I can only indicate two of them here,
for my primary purpose is not the detailed
solution of financial conundrums. A Labour
Government, in my view, must — quite apart
from the financial considerations raised by
a Housing Plan — ^reconsider in their entirety
the charges on national income involved in
payments on the National Debt and expendi-
ture on armaments. The latter, I believe, will
have to be drastically curtailed, whether there
be international agreement or not, and as for
the former the country ought to face the
economic necessity of reducing the burden on
production by bringing the capital value back
to real value as expressed in terms of purchas-
ing power, and then through the operation of
an Inheritance Tax of amortising progressively
all individual and corporate holdings in the
Debt, with provision for a “ compassionate ”
clause for the smaller holders and for the
widow and orphan. The problem of foreign
holders of stock will probably be simplified by
the precedents established for War Debts !
After this excursion into the much debated
realms of finance, let us return to the quieter
141
CLAIM OF THE UNEMPLOYED
regions of the planned development of agri-
culture, wherein lies immediate hope of lessen-
ing the appalling dimensions of the problem
we are discussing. I have indicated already
that, in my view, this country must embark
on a long-term policy designed to increase the
quantity of foodstuffs produced at home, to
bring back to the land at least 500,000 workers
and to establish a planned and controlled
relationship between industry and agriculture
in our economic life.
So tremendous a question calls for, and
receives elsewhere, extended treatment. Here I
shall attempt only to outline broadly the
possibilities latent in such a policy and indicate
in general terms the most important measures
required to implement it.
Experts of all shades of opinion seem unani-
mous in their belief that home production can
be increased, on present values, by some
^^200,000,000 a year. The fact that this increase
is contemplated in forms of agriculture that
require greater man-power than the cultiva-
tion of cereals holds out obvious promise.
To imagine, however, that this reorganisa-
tion could be fully achieved within four years
seems to me vain. It calls for a series of plans,
operating at once but attaining their maximum
142
CLAIM OF THE UNEMPLOYED
in, possibly, ten years. And, moreover, the
whole conception requires as its basis the
national ownership of land, the socialisation
of the financial machine and the State control
of overseas trade. Without these pre-requisites
I do not see how agriculture can be plaimed
and organised on Socialist lines, the producer
and consumer alike protected and the real
alternative to Free Trade and to a profiteering
tariff mechanism successfully operated.
Nor should we ignore the important consid-
eration that imemployed miners, steelworkers,
shop assistants, dockers, textile workers cannot
be pitchforked into the skilled occupation of
farming. A farming-sense is as important to this
country in its transition to Socieilism as a
machine-sense is proving in Russia. The “ let’s
put ’em on the land ” slogan is easier to shout
about than to put into effect !
Training and a measure of seasonal experi-
ence are essential, and the trainees must be
drawn, in the main, from the yoxmg imem-
ployed in general industry and the young
people in the country-side who to-day tend to
migrate to the towns. Moreover, life on the
land must be made much more attractive than
it is to-day — good houses, increasing wages,
amenities and amusements are but some of the
143
CLAIM OF THE UNEMPLOYED
needs. Lack of leisure, overwork and poverty
are no more to be tolerated in agriculture than
in industry.
The land will absorb workers and the
country-side again be populated and thriving
just in so far as well-thought-out projects
mature. To hurry the pace and to hope for the
best is to coiut disaster.
And so, though I regard the development of
agriculture as offering the second most profit-
able source for arresting and reducing unem-
ployment, I do not regard it as a “ quick cure.”
Indeed if a Labour Government could in its
first years put an end permanently to the
present drift from the country-side of 20,000
workers a year, put back into employment the
50,000 now without work, settle 50,000 on the
land and lay the groundwork firm for a progres-
sive rehabilitation of the whole industry on
Socialist lines, it would have achieved much.
I estimate for an immediate annual outlay of
some ,(^15,000,000.
To accomplish even this modest plan speedily
would require drastic administrative and legis-
lative action. Fortunately this present Govern-
ment, for its own purposes, is providing lessons
in administrative method, and as to legislation,
the resuscitation by decree and the complete
144
CLAIM OF THE UNEMPLOYED
operation of the Addison Agricultural Land
(Utilisation) proposals, before they were emas-
culated by the House of Lords, would provide
a useful start — but only a start.
I take for granted, however, the definite
formulation of a progressive plan for agricul-
ture in the first Reconstruction Plan of a Labour
Government’s first year. And on its financial
side I would urge that here, as with building,
the strangle-hold of interest be broken.
It is essential, also, to secure immediate and
drastic improvement in the wages of farm-
workers. Not only social conditions, but this
new scale of unemployment benefit will compel
action. The machinery of wage-fixation must
be strengthened and the Central Board given
real authority to fix national minima, and a
condition of supplying capital to the industry
must be the progressive raising of wages.
Incidental to the immediate emergency
plans for development on the land a Labour
Government must put into immediate and full
operation the Drainage Act of 1930. At a gross
cost of ;^30,ooo,ooo this country can be made
safe from river floodings, which cause such
havoc.
On the basis of a Four Year Plan some 40,000
men could be productively employed and the
Ko 145
CLAIM OF THE UNEMPLOYED
net cost, after allowing for the “ saving ” on
maintenance at the existing rate, would be in
the region of ,(^25,000,000, or £6,000,000 a
year. The needs have already been assessed
and the plans are waiting for a Government
prepared to apply them. They would require
reconsideration on the financial side, so fair as
methods of providing the capital cost are
concerned.
Apart from the development of housing and
land, a Labour Government could and should
arrange a Four Year Plan of what may perhaps
be called Public Amenities — sparks, playing-
fields, public buildings and so forth.
It should, also, immediately begin the work
of reconstructing the bridges in the country
which constitute a danger and whose existence
spells inefficiency. At least 7,000 bridges have
been condemned as inadequate for modem
purposes.
It should' be possible to implement a plan
for reconditioning at least 1,300 bridges a year
at an annual capital cost — on present prices —
of £10,000,000, with the consequent employ-
ment of some 50,000 men. This work should be
State-plaimed and State-financed.
These are, then, some of the emergency schemes
which a Labour Government should put into
146
CLAIM OF THE UNEMPLOYED
operation. They are not presented as “ cures ”
but as effective, though actuzilly temporary,
palliatives. They are no substitute for Socialism.
They would reduce the existing roll of unem-
ployed by about 1,250,000, without taking full
account, except in the Housing Scheme, of the
direct effect on unemployment in immediate
supply industries, of employment in industries
ancillary to those immediately affected, of the
results of shorter hours, or of the effects of
a rising demand for consumption goods. I as-
sume, however, that temporary unemployment
in reorganised industries and the additional
“ unemployed ” brought into the new main-
tenance scheme would, at first, offset any of
these additional results.
It seems to me better to work on the basis
that as a result of a Government pursuing a
policy of this kind 1,250,000 would speedily
be brought directly or in immediate supply
industries into productive employment and
not to allow for greater results in remoter
industries for some time than the cessation of
short-time.
It is difficult to estimate costs with any
pretence at close accuracy. The figures I give
here must be taken as broad estimates, and it
should be remembered that they do not cover
147
CLAIM OF THE UNEMPLOYED
fundamental reoi^anisation schemes, or any
estimate for “ amenities ” provision, and but
a very loose calculation of emergency land-
settlement costs. They are, however, a broad
indication of the bill to be met.
For the actual development schemes outlined
the annual capital costs, at present prices,
would be 000, 000 for school buil^ngs ;
1 00,000,000 for housing ; 000,000 for
land settlement, flood drainage and bridges.
The annual expenditure of a non-capital
character when the development plans, which
would absorb 1,250,000 unemployed, were in
operation would be 20,000,000 for main-
tenance ; £ 6 , 000,000 for children’s school
grants ; ^^200,000,000 for old age pensions.
Assuming that the required capital sums —
3(^140,000,000, it will be recalled, for houses,
schools, land — can be raised without burden-
ing the annual budget, the total amount that
would have to be found each year would be
some 3(^326,000,000, of which rather over
3(^200,000,000 is now in fact being raised each
year directly or indirectly for maintenance of
the unemployed and pensions.
And here it should be emphasised that the
transference of maintenance charges to the
State, the increase of pensions and the eflects
148
CLAIM OF THE UNEMPLOYED
of the development plans will mean a tremen-
dous lessening of charges that now fall on the
local rates, which will constitute an important
“ offset.”
The method of raising the annual non-
capital sum must, in my view, be that of direct
taxation, with the proviso previously made that
drastic reduction in armament expendi-
ture, averaging, I suggest, over four years
£30,000,000 a year, and even more drastic
scaling down of the National Debt must be
undertaken.
Regarding the capital costs, I would reiterate
my view that through a State-owned financial
machine it is possible and practicable without
untoward or uncontrollable results, to provide
the necessary “ money ” without burdening
the present or the future generations.
But even the total bill ought not be in the
least terrifying to a Socialist, however it may
appear to the rentier and capitalist. It presents
problems as well as opportunities for Socialist
experiments in finance, and in any event it is,
in my view, the minimum requirement of a
serious effort on a really national basis to trans-
late into immediate and effective action the
slogan “ Work or Maintenance.”
149
VI
SOCIALIST CONTROL OF
INDUSTRY
By
G. D. H. Cole
When we Socialists come to power, with
a definite intention of carrying through a deci-
sive Socialist programme, how do we mean to
tackle the problem of industry ? That is the
question with which this chapter sets out to
deal, not as a matter of long-term policy, to be
put into effect gradually over a considerable
number of yezirs, but as an immediate issue, of
what we propose to set on foot within a few
weeks or months — ^in some cases a few days
— of our coming to power. My concern here is
mainly with the immediate foundations of a
Socialist policy, to be laid at once by an in-
coming Government, though I shall have to
deal as well to some extent with the measures
by which these immediate first steps will need
to be followed up. Beyond that I do not propose
150
SOCIALIST CONTROL
to go. Nothing in this chapter has to do
with the working of industry under an estab-
lished system of Socialism. Nothing in it goes
beyond what one can reasonably expect a
Socialist Government to do within the life of
the first Parliament in which it holds power.
That is the reason why many problems of
socialisation and Socialist control of industry
are left undiscussed. I have not, either, made
any attempt here to work out the problem of
democratic industrial control by the workers —
not because I think it unimportant, but be-
cause it is not the subject with which I have
been asked to deal here and now, and it is
being dealt with by another lecturer in this
series. This chapter is about the strategy of
getting industry out of the control of the capi-
talists, and into the hands of a determined
Socialist administration. That is a big enough
subject for one chapter.
I shall begin by laying down certain propo-
sitions from which I think no real Socialist
ought to dissent.
I. Socialism involves the complete trans-
ference of all major industries and industrial
operations to public ownership and Socialist
control.
SOCIALIST CONTROL
In other words, Socialism is not a question
of nationalising a few specially selected in-
dustries, but of changing the entire basis on
which industry as a whole is conducted at
present.
2. It is impossible to expect that capitalist
industries will carry on unaffected by the
return to power of a determined Socialist
Government, or by contact with those in-
dustries and services which are brought at
once under public ownership and control.
3. Unless we Socialists come to power as
the result of a revolution, or of a complete
prior collapse of capitalist industrialism, it
will not be practicable or desirable to attempt
to take over at once the direct and entire
control of all major industries.
4. On the other hand, if we are to make
any real and irrevocable advance towards
Socialism, we must at once go far enough to
lay well and truly the foundations of a
Socialist control applicable to all important
industries, and of such a character that we
can build rapidly and securely upon it.
5. The practicability of leaving some
important industries temporarily under capi-
talist ownership and management depends
on the ability and willingness of those who
152
OF INDUSTRY
are in charge of them to carry on success-
fully in an economic environment increas-
ingly Socialist, and therefore inimical to
capitalist ideas.
6. Any failure to do this on the part of
those in charge of any industry or service left
temporarily in capitalist hands will have to
be met by taking that industry at once
under direct Socialist control, and thus
speeding up the pace of socialisation.
7. It will be fatal, in face of capitalist re-
sistance or breakdown, for the Socialist
Government to retreat, or attempt to com-
promise. It will have to be ready to assume
without hesitation every responsibility that
the failure of capitalism puts upon it.
8. It is therefore necessary, at the very
outset, for the incoming Socialist Govern-
ment to assume very wide powers, not only
over the industries which it proposes at once
to take directly into its hands, but over all
industries which the subsequent march of
events may compel it to take over — ^that is
to say, over industry as a whole.
9. One obvious first step towards this as-
sumption of power over industry generally is
the complete socialisation of the banking
system, including not only the Bank of
153
SOCIALIST CONTROL
England but also the Joint Stock Banks
and any other financial institutions closely
concerned with the conduct of industry,
I mention this vital matter here ; but I do
not propose to discuss it further, as it is dealt
with in another chapter in this book. For the rest
of this chapter, I shall assume that the banks
have been taken over, and are being worked,
in matters of policy, under the direct orders of
the Government. For this is clearly indispen-
sable in order to put the Government in a
position both to ensure an adequate supply
of capital and credit, and to distribute that
supply to the various industries in accordance
with its general Socialist Economic Plan. Nor
is it less indispensable in order to guarantee the
Government the means of financing its own
needs during the difficult early stages of
transition, and of providing adequately for the
needs of the unemployed and the institution of
schemes of productive work. The socialisation
of banking is a necessary prelude to any suc-
cessful measures for bringing about the social-
isation of industry.
154
OF INDUSTRY
II
MEASURES FOR THE SOCIALIST
CONTROL OF INDUSTRY IN GENERAL
These are the fundamental postulates which
lie behind the policy outlined in this chapter.
Let us try to see now how they can best be
applied.
I have stressed the need for an assumption
of powers wide enough to include not only those
industries, or enterprises, which the Socialist
Government proposes to take over at once,
but all industries which it may desire, or be
compelled, to take over in consequence of their
breakdown under capitalist conditions, or of
the refusal of their capitalist owners to operate
them in accordance with the requirements of
the Socialist Plan.
These powers, I think, can best be taken by
a measure, similar to the Defence of the Realm
Acts passed during the war, authorising the
Government to take possession of, and to
operate, any undertaking, the control of which
by the State seems to it to be desirable or
necessary in the public interest. This measure
should enable possession of any such under-
taking to be assumed at once, leaving questions
such as compensation to be settled later, by a
155
SOCIALIST CONTROL
procedure to be laid dovra by subsequent
legislation.
This does not mean, of course, that the
Government would actually take over at once
all industrial enterprises. It is only an enabling
power, which could be used as much, or as
little, as in the circumstances turned out to be
required.
The measure I am suggesting should also
include authority to the Government to issue,
by regulation, orders to those responsible for
the conduct of any business as to the character,
quantity and prices of the products which
should be manufactured, the wages to be paid,
the conditions and hours of employment, and
any other matter relating to the conduct of
the business, including the authority to demand
production of all papers and accounts, and the
disclosure of all secret processes. It should also
empower the Government to use, or authorise
the use of, any patent on terms of payment to
be arranged subsequently. Finally, it should
include the authority to limit or regulate the
profits to be distributed by the undertaking,
and should provide for the confiscation of the
property, wholly or in part, as the penalty of
any serious breach of the regulations.
These powers, drastic as they may appear,
156
OF INDUSTRY
are hardly more comprehensive than the
powers actually taken by the Government
under the Defence of the Realm Acts during
the late war. They are put forward here in
the belief that the coming to power of a deter-
mined Socialist Government will constitute
an emergency fully as serious as the war and
calling for no less extensive governmental
powers.
The clauses outlined above might either
form a separate Act of Parliament, or be
included in a general Emergency Powers Act
to be put through as the first measure of the
incoming Government. The latter will prob-
ably prove to be the better way ; but the
difference between the two methods is not
important. In any event, it will be imperative
both to take the above powers with the least
possible delay, and to provide with at least
equal speed for the emergency control of the
financial machine in order to prevent a possible
“ flight from the pound,” or sabotage by the
financial interests. This question, however,
falls outside the scope of this chapter.
The measure conferring these necessary
powers upon the Government can, and should,
be short, in order to facilitate its rapid passage,
and also to allow of the utmost elasticity in
157
SOCIALIST CONTROL
carrying its provisions into effect. It is undesir-
able to include in it any details. These can be
filled in, and vjiried at need, by regulations
made under the Act, or where necessary by
Orders in Council, as was done in the case of
the Defence of the Realm Acts during the war.
The Act must of course be so drawn as to confer
the widest powers for the making of enforceable
regulations without the danger of interference
by the Courts. In this respect too the war-time
experience of D.O.R.A. is of value, in pre-
scribing both what to do and what to
avoid.
Among the regulations which it will certainly
be necessary to issue at an early stage will be :
(a) Regulations setting up machinery for
the control of prices, which will otherwise
tend to rise sharply in view of the emergency,
especially in the retail market. The experi-
ence of price-fixing during the war can be
drawn upon in devising the required
mechanism.
(A) Regulations setting up machinery for
prescribing minimum rates of wages and
conditions of labour, in order to prevent
employers, on plea that the return of a
Socialist Government has destroyed their
158
OF INDUSTRY
earning power, from starting a campaign
for lower wages.
In this matter, the most useful precedent is
that of the period immediately after the end
of the war. At that time, an Act was passed
forbidding for the time being all wage-
reductions, and also setting up a tribunal
before which application could be made for
advances, but not for reductions, in wages.
The establishment of such a tribunal, to con-
sist of course of Socialists, would not in any
way hamper the Trade Unions in pressing
directly for wage-advances by industrial means.
But the regulations would give them an abso-
lute safeguard against reductions ; and the
existence of the tribunal would enable them to
press for advances in suitable cases without
resorting to strikes which might interfere
dangerously with the working out of the
Socialist Economic Plan.
(c) Regulations giving the Trade Unions
a statutory right of negotiation, such as
Mussolini has given to the Fascist Unions in
Italy, and also a statutory right to insist in
all large factories on the setting up of a Works
Coimcil with authority to deal with all
159
SOCIALIST CONTROL
questions of dismissal or alleged victimisa-
tion. This should be not a joint council of
workers and employers, but a council of
workers only, meeting the management but
possessing statutory powers of its own, and
linked with the Trade Unions. Power should
also be taken to make Trade Unionism in
any industry compulsory ; and the Trade
Union Act of 1927 should be repealed by
a special clause in the Emergency Powers
Act.
I should further suggest the inclusion in the
Emergency Powers Act itself of a section giving
the Government power to establish, for any
industry or section of an industry, a Re-
organisation Commission similar to the body
already in existence for the coal mines, but
with wider and more summary authority.
These Commissions, consisting of Socialists
together with technicjil experts, would be
authorised to arrange for the compulsory
amalgamation of businesses, the setting up of
compulsory marketing boards for internal or
export trade, or of joint purchasing agencies
for supplies, the weeding out of redundant
directors, and the enforcement of schemes for
writing down capital and liquidating frozen
160
OF INDUSTRY
or excessive indebtedness. They would also be
empowered to lay before the State Planning
authority, described below, proposals either
for the complete taking over of any industry
or section of an industry, or for its reorganisa-
tion under a new Statutory Board or Com-
mission, the best form and structure for any
such bodies being suggested by them to the
State Planning authority, which would, if it
approved, authorise the Reorganisation Com-
mittee to carry its projects into effect. In all
these cases, the State and the bodies working
on its behalf would be empowered to carry
through the necessary changes without waiting
for any final arrangements about compensa-
tion to be made. They would be authorised
to conclude temporary arrangements on this
point, leaving final settlements to be reached
at a later stage.
With a view both to considering immediate
difficulties and to making these final arrange-
ments, I should suggest the inclusion in the
Emergency Powers Act, or in an early exten-
sion of it to be introduced by the Government,
of a clause establishing a specizd Property
Claims Tribunal, which would take the hear-
ing of all claims for compensation out of the
ordinary courts. This body, consisting of course
La i6i
SOCIALIST CONTROL
of Socialists, and not tal^g a narrow con-
tractual view of its functions, would be em-
powered to deal with every sort of claim from
citizens or business firms arising out of the
process of socialisation. On this body, as well
as on the various Reorganisation Commissions
and similar authorities proposed above, it
would be well to have among the members
“ back-bench ” Socialist Members of Parlia-
ment, who would thus find their due place in
the administration of the Socialist govern-
mental machine.
At this point, however, I am conscious of
a number of Socialists objecting. Why, they
ask, pay any compensation at all ? Surely our
object as Socialists is to expropriate the
property-owning classes, and not to give them
new forms of property, or new claims to a share
in the product of labour in place of the old.
Why not get on with it at once ?
In general, I agree. No Socialist can recog-
nise any claim by private owners to receive
back in some other form the value of their
property when the public takes it over. Our
object is expropriation, not a mere change in
the form of claims to ownership ; and this
object cannot be achieved by replacing private
ownership of industry by a huge volume of
162
OF INDUSTRY
new public debt. Even if we announce our
intention to tax the property-holders out of
existence by the abolition of inheritance beyond
quite small sums — ^as I hope we shall — this is
not enough ; for we cannot be prepared to go
on paying even for a generation the tribute at
present levied by the capitalist class. We must
therefore reject all idea of compensating
property-owners on the basis of the past value
of their property ; for this value was based on
the assumption, no longer valid, that the
capitalist system would remain in being. We
cannot recognise as subjects for compensation
values which 'are in reality simply capitalised
rights to exploit labour.
But in a country like Great Britain, with its
very large and influential middle-class, which
includes a great number of people — ^profes-
sionals, technicians and administrators — ^whose
collaboration will make all the difference
between efficiency and inefficiency in the run-
ning of the new Socialist system, we cannot
afford simply to wage war on all property-
owners in the same way as the Russians dealt
with their owning classes. For our middle class
is far more pervasive than theirs was, and
property-owning in Great Britain spreads
right down into the working class, and much
163
SOCIALIST CONTROL
property is held by Trade Unions, Friendly
Societies and other bodies for the benefit of
working-claiss members. It will be wise, there-
fore, to ease the transition to the new system
without weakening the intensity of the drive
towards Socialism. This means, I think, two
things — ^first, a sharp differentiation between
large and small property owners, and secondly
the need for temporary arrangements designed
to minimise dislocation.
I therefore suggest that, where an industry
or enterprise is taken over, the State, as part
of the reorganisation, should be prepared to
pay to its previous owners an allowance fixed,
say, for four or five years, at a proportion of
the income actuzilly received by these owners
on the average of the previous three years. Not
the full income, be it observed, but a propor-
tion, and not necessarily the same proportion
in all schemes. The payment of this allowance
would imply no recognition of the right to
compensation based on the capiteil value taken
over. Nor would it involve any continuing
property right in the industry.
Thereafter, the recipients of these temporary
allowances — ^who might be corporate bodies as
well as individuals — ^would be entitled to go
before the Property Claims Tribunal, or its
164
OF INDUSTRY
local subordinate tribunals, and ask for a
permanent adjustment of their claims. In the
case of a Friendly Society or a Hospital, or any
other body which could make out a good case
in the public interest, compensation would be
awarded in full, at the expense of a fund to be
created by a general levy on industry. Claims
from aged persons for a subsistence income,
and claims for the recognition of small savings
belonging to the poor, would be similarly
recognised in full, subject to taxation at death
in accordance with the new inheritance laws.
Claims from businesses {e.g. in the case of
capital invested by one business in another)
would be considered on their merits in each
case ; while large claims from individuals
would be drastically scaled down, and met in
any case by the grant of terminable annuities
and not of permanent property rights or claims
to income. Bank claims would be settled
by agreement with the socialised banking
system.
I have gone into this question of compensa-
tion at some length because, while it is vitally
necessary to ease the transition to a Socialist
system based on the complete abolition of
property rights in the means of production, it
is even more indispensable to avoid weighing
165
SOCIALIST CONTROL
down the new Socialist community with heavy
burdens of debt interest inherited from the old
order. It is, moreover, vital that the process of
socialisation should not be held up while this
difficult question is being settled. The Govern-
ment must have the immediate right to take
over and reorganise industries, leaving all
property claims for adjustment at a later
stage.
Ill
THE MACHINERY OF SOCIALIST
INDUSTRIAL PLANNING
This is obviously far too large a question for
me to be able to tackle it at all comprehen-
sively in this chapter. But something must be
said about it in order to make plain the general
idea behind the immediate measures of Socia-
list industrial control. Complete Socialist plan-
ning is only possible on the basis of the complete
socialisation of industry, and the complete
disappearance of existing class-divisions and
property claims. We shall not be in a position
to achieve this at a blow ; and therefore we
shall have to begin with an incomplete and
partial economic Plan. But it will be necessary
to bring at once into existence the general
i66
OF INDUSTRY
organs of administration needed for the
development of the Plan.
Socialist planning involves the direction of
the entire productive energy of the people into
the channels most useful from the standpoint
of the whole community. It means collective
decision, in accordance with the needs and
desires of the people, about what is to be pro-
duced, in what quantities, and under what
conditions, what part of the available pro-
ductive power is to be used for making goods
and services for immediate consumption, and
how much applied to building factories and
developing productive power for the future. It
means settling collectively how new capital is
to be applied, what new factories and houses
are to be built and where, what old ones
extended or re-equipped or shut down, what
pay is to be awarded to the various kinds and
grades of workers, and what prices are to be
put upon the various types of goods. Finally,
it involves deciding how much the community
is to spend on health, education, recreation
and other social services, and apportioning to
the various productive industries their shares
in the cost of these services.
It follows that the most vital organ of the
Socialist Government will be the body that
167
SOCIALIST CONTROL
passes final decision on all these matters.
Clearly, no one body can decide most of them ;
but there must be one body which in cases of
doubt or difficulty over serious questions of
policy has the final voice. This body must be
either the Cabinet, or a special body working
under the immediate authority of, and finally
responsible to, the Cabinet. I suggest that it
should be a National Economic Council,
including the Ministers at the heads of the
departments principally concerned, together
with Trade Union and other expert members,
but under a chairman — a Cabinet Minister —
who will devote his whole attention to the
co-ordination and planning of economic
affairs.
Working very closely with this Economic
Council must be an influential advisory body
of experts — a State Planning Commission, with
no executive powers, but with the supremely
important task of co-ordinating and laying
before the Economic Council all the projects
of the various bodies concerned with the various
aspects of economic control — the Treasury, the
socialised banks, the boards of socialised in-
dustries and services, the vtuious reorganisa-
tion commissions for particular industries, the
marketing boards, the authorities responsible
168
OF INDUSTRY
for agriculture, and many others. The Plan-
ning Commission will have also, or a separate
body closely in touch with it will have, the
task of regular audit, review and inspection of
the actual working of the bodies concerned
with the working of the Plan. It will have to
report faults and failures, as well as successes
and achievements, and constantly to propose
modifications in the Plan in the light of its
actual operation.
This Planning Commission, consisting of full-
time members, should have the direct assist-
ance of a number of back-bench members of
Parliament, who would act as liaison officers
between it and the Ministers in charge of the
various departments. It will keep in touch,
through its own local officers and inspectors,
with what is happening in the various in-
dustries and services falling within its scope,
and it will be entitled to send a representative
to sit, in an advisory capacity, on any board or
commission concerned with any aspect of
Socialist planning. It will keep in especially
close touch with the Regional Development
Councils mentioned below.
Through the Planning Commission the co-
ordinated Plan for all industries and services
will come up to the Economic Council and
169
SOCIALIST CONTROL
finally to the Cabinet, on the basis of the re-
ports and projects sent in by all the more
speciahsed authorities within the scope of the
Plan. At the outset, before these bodies have
been brought into existence, the Planning
Commission’s foremost duty will be to advise
the Economic Council about their creation,
and about all the immediate steps to be taken
in the field of industrial socialisation and con-
trol. It wiU have first to work out a plan of
organisation, then to get it approved by the
Government, and then to report upon its
working and progressive enlargement and
adaptation.
Planning, however, must not be unduly
centralised. Each industry and service that
possesses a unified organisation — at any rate
each socialised industry — ^will be left to prepare
its own plan for consideration and amendment
in the light of the available resources and the
relative urgencies of different needs. But, in
addition to the plans of the various industries,
there will have to be Regional Plans, for the
co-ordination of housing and town-planning
with the regional development of industry
and transport, for the working out of ideas of
economic development suitable for the needs
of each region and for pressing these upon the
170
OF INDUSTRY
national planning authorities (for example,
claims for the establishment of new industries
to replace those undergoing contraction in
Lancashire or South Wales), and for the super-
vision of purely localised or small-scale indus-
tries and services. These Regional Develop-
ment Councils will probably need to be execu-
tive, rather than purely advisory bodies, with
power to carry out schemes and to co-ordinate
their execution by the various authorities
concerned within the region — ^local authorities,
regional boards of industries, and so on.
The complete machinery of Socialist plan-
ning cannot be brought into being at once by
the incoming Socialist Government. But it will
be indispensable to create at once the Economic
Council of the Cabinet and the National
Planning Commission, and to follow this up
speedily by the creation of Regional Develop-
ment Councils, in the areas in which the
immediate economic problems will be most
urgent. It will be, moreover, essential to secure
that zdl these bodies are dominated by Socia-
lists, and that Socialists are in the key positions
among their staffs of officials. Regional
Development Councils can be recruited largely
from Socialists with experience of local gov-
ernment work ; and the National Planning
171
SOCIALIST CONTROL
Commission, while it must be chosen largely on
grounds of technical competence in particular
fields, must have as its leading officials well-
tried Socialists who possess the necessary
expert qualifications. Having no political ambi-
tions, I rather fancy myself for a place on the
National Planning Commission ; and I am
undeterred by the fact that The Times, in a
leading article, has chosen to regard this
ambition as a piece of impertinent arrogance
on my part. But as a humbler alternative, I
am prepared to consider editing The Times
instead.
IV
SOCIALIST CONTROL IN PARTICULAR
INDUSTRIES
Socialists have hitherto thought of the social-
isation of particular industries as a matter of
passing a special and complicated Act of
Parliament in each case. But in the circum-
stances envisaged in this chapter, this method
will be neither desirable nor even possible.
The new Socialist Government will have far
too much on its hands to find time in Parlia-
ment for the consideration of a number of
detailed measures dealing largely with secon-
dary points. Parliament, however hard it
172
OF INDUSTRY
worked, could not possibly cope with the stream
of activity that any such method would thrust
upon it. Moreover, the Socialist Government
will not be able to spare several hundreds of its
picked men to sit day after day in Parliament
listening to one another talk, when it will need
for vital administrative and pioneering work
every competent Socialist on whom it can lay
its hands. It will be best, as soon as Parliament
has conferred on the Gk>vemment the necessary
emergency powers, for it to meet only as often
as it is needed for some clearly practical
purpose, leaving the SociaUst administrators
to carry on with the minimum of day-to-day
interference. There will be no time for super-
fluous debating while we are busy building the
Socialist commonwealth.
I have suggested earUer that power should
be given, under the Emergency Powers Act,
to take over or reorganise any industry or
enterprise, without the need for a further
appeal to Parliament. The necessary schemes
can be apphed by order or regulation under
the authority so conferred. Later, but not till
much later, it may be desirable to sanction the
accomplished facts, zmd round off the new
system, by special legislative measures. But
that can in any event wait : the immediate
173
SOCIALIST CONTROL
necessity is to take powers wide enough to
cover everything that needs to be done.
The handling of each separate industry will
therefore be an administrative, and not a legis-
lative, matter. The banks may perhaps need
special treatment ; but, as I have explained,
they do not fall within the scope of this chapter.
The industries and services, apart from the
banks and insurance (which I also leave aside),
obviously requiring prompt and drastic treat-
ment are, I think, road and rail transport,
shipping, coal, iron and steel, and cotton.
At any rate these form a typical group, raising
most of the vital problems which are likely to
arise in other industries. I should perhaps add
that agriculture, as well as banking, is dealt
with in another chapter in this book and there-
fore falls outside my scope. Even about these
selected industries I have plainly no space for
more than a very few observations here.
LAND TRANSPORT. — ^Nationalise the railways
at once, by taking them over by Order in
Council. Take over the physical assets — land,
stations, rolling stock, etc. — not the companies
as such. Agree to pay the companies an annuity
for five years, leaving final terms of compensa-
tion to be settled later by the Property Claims
Tribunal. Leave to the companies the task of
174
OF INDUSTRY
distributing the temporary annuities paid them
among their various classes of creditors and
shareholders. Set up at once a General Rail-
way Board to co-ordinate the railway system,
but leave the existing systems under separate
management for the present, subject to the
overriding authority of the new board.
At the same time take over, on similar terms
as to compensation, the larger road transport
undertakings, for both goods and passengers,
except those municipally owned. Form for
their co-ordination, and for the supervision of
undertakings not taken over, a General Road
Transport Board, with power to create local
and regional boards under it. Let the General
Railway Board and the General Road Trans-
port Board, sitting together, form the Land
Transport authority, with power to create an
executive committee and to co-ordinate road
and rail services. Regard all road and rail
receipts as forming a single pool, for the
common maintenance and development of the
co-ordinated services. Regulate all road services
not taken over, by means of a licensing system.
SHIPPING. — Socialise all ocean-going and
coastwise vessels, except those belonging to
small owners. Adopt the same method as in
the case of the railways, taking over the actual
m
SOCIALIST CONTROL
vessels and not the shipping companies, with
similar provisions for temporary compensation
and reference of further claims to the Property
Claims Tribunal. Place coastwise shipping
under a separate administrative board, and
co-ordinate it with land transport, giving it
representation on the Land Transport Board.
Put ocean-going shipping under a board of its
own, with largely autonomous local boards
centred upon the main regions. Transfer the
management of docks and harbours to Port
Boards, with provision for the representation
of land transport and shipping. Create separate
subordinate authorities to deal with special
types of shipping — e.g. oil-tankers — ^in connec-
tion with the trades concerned. Give the
Shipping Board power to leave any particular
vessels, or types of vessels, temporarily in
private hands, and to deal with claims by
foreign owners, or refer these to the Property
Claims Tribunal ; but most such claims will
be removed from the purview of the board
by the method of taking over vessels, and not
companies. Give the Shipping Board authority
to participate in international conferences
and arrangements.
GOAL. — Socialise the entire coal-mining
industry, including by-product and other
176
OF INDUSTRY
pit-head plants. Again take over physical assets
and not companies or businesses as such, with
the same provisions as to compensation. Ex-
propriate royalty-owners without compensa-
tion. Re-group the socialised pits in regional
amalgamations, or trusts, each under a subord-
inate Board responsible to the National Mining
Board to be appointed directly by the Govern-
ment. Provide funds for extensive experiments,
on a commercial scale, in new methods of
coal utilisation. Eliminate middlemen — ^without
compensation — by establishment of selling de-
partments, including export agencies, under
the regional boards, with proper national co-
ordination. Empower and encourage municip-
alities to establish coal-selling depots, and in
default of municipal action, offer the co-
operative society a local monopoly. Reduce
hours of work in the coal mines at once to
seven and a half, and speedily to seven. Instruct
the National Planning Commission to work
out at once, in conjunction with the Mining
Board and the Regional Development Councils,
plans for the establishment of new industries in
the colliery districts, and for the transfer of re-
dimdant workers to other industries. Tighten the
restrictions on new entrants into the industry.
IRON AND STEEL. — Set up at once an Iron and
Mo 177
SOCIALIST CONTROL
Steel Reorganisation Commission, as an execu-
tive body. Authorise the Commission to take
over any works or section of the industry, and
conduct it as a national enterprise under a
subordinate board of its own. Authorise the
Commission further to draw up and enforce
schemes for the amalgamation or reconstruc-
tion of any enterprises which it does not at
once take over, subject to any writing down of
the capital or past debts that may be approved
by the National Investment Board (see below).
In generad, instruct the Commission to follow
the policy of sociahsation by regional groups
under public boards, with complete expropri-
ation of the existing owners. Place adequate
capital at the disposed of the Commission,
through the National Investment Board, for
thoroughly modernising the industry. Set up,
under the Commission, an Export Board, with
power to appoint regional export committees
in consultation with the regional boards.
Empower the Commission to negotiate with
the Mining Board an agreement for the bulk
purchase of coal, and to enter into other
agreements for bulk purchase or sale. Replace
the existing tariff on imports by a hcensing
system, operated in close conjunction with the
Commission.
178
OF INDUSTRY
COTTON. — ^This is by far the most difficult of
the industries which will have to be dealt with at
once. Action should begin with the immediate
establishment of a Cotton Trade Reorganisa-
tion Commission as an executive body ; but
this body will have to move more slowly than
the similar body for iron and steel. It will have
full power to enforce amalgamations and
arrangements for the writing down of capital
and the scaling-down, and conversion to other
forms, of existing debts. It will be authorised
to take over and operate itself, directly or
through a subordinate board, any section of
the trade, or any particular mill or factory, to
take over, when it thinks fit, the functions of the
Liverpool and Mzinchester cotton markets and
institute systems of bulk purchase, to establish
export agencies, and to close down, without
compensation, obsolete or redundant estab-
lishments. It will probably advance towards
socialisation more rapidly in the spinning and
finishing than in the weaving sections of the
industry, which present greater difficulty owing
to the number and variety of small firms. The
National Planning Commission will consult
with it, and with the Regional Development
Coimcil, in drawing up plans for the establish-
ment of new industries in the cotton districts ;
179
SOCIALIST CONTROL
and it will probably be desirable, with this
end in view, to socialise at once the making
of artificial silk. The Commission should
be authorised to enter into arrangements, in
consultation with the industries concerned, for
the direct barter of standard cotton goods for
necessary imports.
NATIONAL INVESTMENT BOARD. — ^In all the
industries taken over, or made subject to
reorganisation schemes in accordance with the
National Plan, the question of the provision of
new capital will arise. This should be organised
through a National Investment Board, oper-
ating in close conjxmction with the National
Planning Commission and the socialised banks.
This Board would obtain its capital in several
ways : (i) From resources already at the
disposal of the Government, such as balances
of the various departments and the funds now
administered by the Public Works Loans
Board ; (2) from bank advances authorised by
the Economic Committee of the Cabinet ;
(3) from appropriations included in the Budget,
and arising out of taxation ; (4) from the raising
of loans from the general public, pending the
disappearance of private investment. AH new
issues of capital will require its authorisation.
To what extent it will make use of the four
180
OF INDUSTRY
sources of capital supply mentioned above will
depend on circumstances. In the earliest
stages of the transition it will probably have to
rely considerably on advances from the social-
ised banks, similar in character to, but more
extensive than, the advances made by the Bank
of England in recent years to the Lancashire
Cotton Corporation and for the building of
new iron and steel plants. But as socialisation
proceeds, it should finance itself more and more
out of the profits of socialised industries, a
substantial proportion of which would be
placed at its disposal for this purpose.
V
WORKERS’ CONTROL
This is a vital matter ; but as it will be dis-
cussed later in a separate chapter I shall
make no attempt to deal with it here. I take
for granted that our conception of Socialism
includes the rapid devolution of a large
measure of actual control over working con-
ditions, including the actual direction of in-
dustry, upon the workers actually engaged in
industry. But this cannot be in the main a
matter for the first few months, or even the
first year or two, of Socialist administration.
i8i
SOCIALIST CONTROL
Our first task is to get industrial ownership
and control out of capitalist hands, and trans-
fer it to Socialists acting on behalf of the
workers. In setting up the new machinery of
socialised control, we shall have at the outset
to establish a system that can be relied upon
to work quickly in order to get the new
arrangements into working order at once,
without an intervening period of dislocation.
This will have to be done by putting socialised
industries under directing councils on which
the Trade Unions must, of course, receive
representation, and entrusting their day-to-day
conduct to managing boards consisting each
of a few men of undoubted personal drive and
technical competence, combined with Socialist
conviction.^ It will not be secured by establish-
ing at the outset complicated machinery de-
signed to represent various groups and in-
terests. When we have got our schemes of
socialisation into working order, we can begin
rapidly to devolve responsibility within them ;
but we cannot afford to risk failure and con-
fusion by trying to be too “ democratic ” at the
very start. In urging this, I modify nothing of
1 See further on this point my pamphlet on The Essentials of
Socialisation (New Fabian Research Bureau, 3 </.). Reprinted in my
volume, Economic Tracts for the Times (Macniillan), and also a pam-
phlet now in preparation on the problem of Workers* Control in
socialised industries.
182
OF INDUSTRY
my Guild Socialist conviction. I simply register
the no less deep convinction that, in a period
of acute class-warfare and rapid transition,
what matters is to get things working on an
emergency basis, and that it is a mistake, at
such times, to tie ourselves down by elaborate
constitution-making. Beyond saying that, I do
not deal here with “ workers’ control ” ; but
I hope to have a good deal to say about it on
another — and not a distant — occasion.
VI
CONCLUSION
Here, then, are my suggestions for the imme-
diate steps to be taken by an incoming Socialist
Government to set on foot the Socialist control
of industry. They are put forward in the belief
that, imperfect as they may be, the Socialist
movement has reached a point at which it
wants, not mere vague talk, but concrete pro-
posals which it czm discuss and improve upon.
Some people, who regard themselves as Socia-
lists, will regard what I have suggested as im-
possibly drastic ; and it is vastly different from
any programme to which the Labour Party
has been ready to commit itself in the past.
But I think most Socialists now recognise that
183
SOCIALIST CONTROL
a sharp break with the past is necessary, and
is indeed the condition of any successful at-
tempt to establish Socialism. To those who
hold my proposals too drastic, I put the ques-
tion — Is it not really Socialism you are afraid
of?
At the same time, I do not wish to hide at
all my conviction that the intrusion into the
economic system of the elements of Socialism
which I have outlined — combined with sim-
ilar intrusions in other fields outside the scope
of this book — ^will almost certainly complete
the paralysis which is already overtaking
British capitalism. The slackening stream of
“ private enterprise ” will dry up ; the much-
vaimted “ confidence ” of business men will
be rapidly undermined ; private saving by the
rich will fall off heavily ; and there will be
persistent efforts by the capitalist class to
remove their money to countries less imder the
influence of the spirit of social justice and pro-
letarian control. We shall for these reasons have
to move fast and determinedly towards com-
plete Socialism ; and the faster capitalism
crumbles under our hands, the more swift and
determined our advance towards Socialism
will have to be. We cannot put limits to the
pace at which we shall have to proceed, when
184
OF INDUSTRY
once we set our feet upon the way ; nor can
we put limits to the degree of administrative
power which, under stress of the emergency,
our Socialist Government may have to assume.
All we can say in advance is that, as Socialists
who put Socialism first, we do not mean
to put back, whatever storms and dangers
we may meet with in our voyage. Or rather,
we can add that, in proportion as our task is
difficult, and calls for high qualities of courage
and determination, we must prepare ourselves
for it now, in the brief respite that is ours
before the call comes to take our fate in our
hands, and adventure boldly into the Socialist
future.
185
VII
LOCAL GOVERNMENT AND THE
SOCIALIST PLAN
By
C. R. Attlee, M.P.
I N H I s chapter “ Can Socialism come by
Constitutional Methods ? ” Sir Stafford Cripps
has examined the conditions in which a
Socialist Government, returned with a majority
and a definite mandate from the electors to
transform the economic system, would have to
work.
I associate myself with his conclusions and,
in considering a more limited subject, the
machinery whereby a Socialist Government
will make effective locally its general economic
plan, make the following assumption.
(i) That a Socialist Government has been
returned with an effective majority to deal
with a critical situation where unemploy-
ment is as high as it is to-day.
186
THE SOCIALIST PLAN
(2) That the Government has successfully
challenged the House of Lords.
(3) That it has nationalised the banking
system and has taken such control of the
foreign trade of the country as will enable it
to consider Great Britain as an economic
unit amd to develop the wealth-production
of the country by bringing together idle
land, labour and capital.
(4) That it is overcoming the slowness
of the legislative machine by emergency
measures giving wide powers to the execu-
tive to take over land, buildings, etc., as and
when necessary, continuing to pay to the
owners their present incomes but deferring
for the time being the question of compensa-
tion.
(5) That the executive has been reorgan-
ised by separating the function of major
strategy from that of detziiled administra-
tion and that a central planning body has
been set up working under a small Cabinet
of superior direction.
On these assumptions the Government has
a double task. First, the immediate bhe of set-
ting the people to work. I do not intend to
develop this point. I consider that no Socialist
187
LOCAL GOVERNMENT AND
Government can possibly afford to wait for the
full elaboration of its economic plan before
taking emergency action to deal with the
immediate situation. It will be judged by its
ability to deliver the goods, by its practical
actions,-Dot by the theoretical perfection of its
"plans for the future.
Secondly, the Government must work out
in detail and apply a considered plan for the
future economic life of the country whereby
fhe best use will be made of natural resources,
of the skill and energy of the people, and of the
social capital embodied in the factories, houses,
schools, etc., in the various parts of the country
— ^the object of the plan being to produce the “
material basis for the fullest life for all the
people of the country. That is to say that the,
plan is based on an equalitarian conception of
society. Further, the plan must be worked out
with due regard to the fact that men and
women are not pawns in a game, but want to
live their lives to the full while the transition
is taking place.
The existence of these two problems, one
short-term and the other long-term, necessarily
complicates the task of the Socialist Govern-
ment. It affects the consideration of the kind
of machinery whereby the Government will
i88
THE SOCIALIST PLAN
cany out its plan. Just as it cannot wait for a
complete industrial plan before dealing with
unemployment, so it caimot stop to overhaul
the whole machinery of government, national
and local, before taking steps to see that what
must be done is done. Further, I am envisaging
the period of the first Socialist Government in
power as one of crisis. Indeed the whole
transitional period must be viewed from this
angle. The atmosphere will be comparable to
that existing in this country at the beginning
of the Great War. The important thing is not
to do things with the most scrupulous regard
to theories of democracy or exact constitutional
propriety, but to get on with the job. Adapta-
tions of existing institutions, compromises,
improvisations and maJceshifts of one kind and
another will be necessary. The problem with
which I am dealing is the double one of ex-
amining how in the transitional period the will
of the Central Government shall be made
effective locally and of considering what form
of local government is most suitable in the
Socialist State.
I will deal with the transitional problem
first.
Whatever other steps may be taken to get the
wheels of industry turning and to utilise the
189
LOCAL GOVERNMENT AND
labour power of the country it is certain that
much of the work must be found through the
agency of the local authorities. Here we are
at once brought up against the question of the
suitability of the existing local authorities for
the work which they will be called upon to do.
I have said that machinery is required to make
effective locally the will of the Central Govern-
ment. Our theory of local government, how-
ever, is based on a different principle, namely,
that the people of a locality should within
certain limits decide their local affairs, sub-
ject to the powers and limitations laid down by
Parliament and by the administrative control
vested by it in the departments of the Central
Government. This central control has only
been gradually developed, though at an in-
creasing rate in recent years. Even to-day it is
not too easy to deal with recalcitrant local
authorities. Hitherto the anti-Socialist councils
have been most successful in a passive resist-
ance to reforming Governments, while the will
of the centre has been enforced against Socialist
authorities like Poplar, West Ham, Durham
and Rotherham. It is clear that if a real effort
at dealing with unemployment and social re-
construction is to be made the Government
must see to it that its plans are not defeated
190
THE SOCIALIST PLAN
by hostile or indifferent local authorities. Al-
though for normal times I support the British
tradition of local government, I consider that
in a period of critical transition when society
is undergoing fundamental chamge, it is essen-
tial that there should be available in each
locality an administrative machine which will
be energised and controlled by the Central Gov-
ernment. It is useful at this point to consider
what is likely to be the emergency programme
of the Government, as it will reveal the possi-
bilities and defects of the existing system of
local government.
I have assumed that the Government will at
once set up a central planning body. Its task
will be to lay down the broad lines of the
future economic activities of this country. This
work involves decisions as to what forms of
activity it is desirable to continue or stimulate
and as to the location of industry. This latter
point is of importamce in considering the
emergency programme. It is obviously waste-
ful to build houses, schools and roads in
areas which are unlikely on economic and
social grounds ultimately to contain a large
population. There are parts of South Wales
and Dmrham in this condition. It may be
that interim decisions will have to be given
191
LOCAL GOVERNMENT AND
and a further discontinuous and more widely
meshed network of ad hoc authorities dealing
with electricity, drainage, road transport,
hospitals, etc. What is required, however, is an
authority which will be large enough to take
over big-scale services, to plan for a wide area
and to relieve the Central Government of much
detailed work of approval and co-ordination
which now clogs the wheels in Whitehall. In
fact what is required is a regional authority,
having jurisdiction over a number of existing
local government areas. The needs of large-
scale services have already led to the creation
of a number of special authorities, but the
deliberate replanning of the country into
regions remains to be done. The exact delimita-
tion of regions lends itself to much controversy
over detail. Some areas such as the north-east
coast almost delimit themselves, others such as
the West Midlands are less clearly defined.
The reader will find the whole matter very
fully discussed in The Future of Local Government,
by G. D. H. Cole. A Socialist Government with
an emergency policy to carry through could
not afford to wait for the final settlement of
boundary lines. It would make an experimental
decision which could be modified in the light
of experience.
194
THE SOCIALIST PLAN
I imagine that England and Wales would be
divided into some ten regions, based on a com-
promise between a number of considerations,
social, industrial and administrative. These
regions would become in the future, as is
pointed out later, permanent features in the
administrative geography of the country, but
for the period of transition they are to be
regarded as so many sectors of front within
which the general economic plan of the
Government is to be carried into action.
The emergency plans of the Government
must be translated into action in each region.
I am not envisaging the usual leisurely process
of dilatory action by numbers of small authori-
ties working disconnectedly, but an orderly
and well-directed campaign.
It is fortunate that for a large number of
areas plans of campaign exist. Regional plan-
ning committees have delimited areas and
mapped the future development with due
regard to the needs of industry, amenities and
recreation ; but hitherto industrial planning,
that is, the decision as to the expansion or
restriction of particular industries has been
left to individual initiative, while the plans
themselves have not been binding on local
authorities. They form, however, useful blue
195
LOCAL GOVERNMENT AND
prints for a regional authority desirous of
correlating the work of local councils.
What then should be the nature of the
regional authority? I will leave till later the
consideration of a permanent constitution. For
the emergency period I am concerned with
two things only, that the authority should be
able to act with speed and vigour, and that it
should be Socialist. You cannot carry through
a Socialist transformation if your principal
instruments are hostile or lethargic.
I conclude that for the initial stages, where
what is required is push and will-power rather
than the expression of local susceptibilities and
parochial interests, the regional authority
should be a commissioner.
I conceive of him as an instrument of the
Central Government sent down into a locality
to see that the will of the Central Government
is obeyed and its plans implemented. He is to
be the focal point at the same time of the
regional activities and the rallying point for
the forces of constructive Socialism. He must,
therefore, be first and foremost a Socialist. In
suggesting a commissioner of this kind I am
departing from British precedent, but this is,
I think, necessary in a crisis. The commissioner
for the region might well be a member of
196
THE SOCIALIST PLAN
Parliament, if the Socialist majority is large
enough to spare members from constant attend-
ance at Westminster. It is important that
Labour members should not be treated as
mere voting machines when the Party is in
power, but should be actively associated with
the constructive work going forward. If Con-
servatives can use their members on economy
committees, Socialists can use theirs as instru-
ments of Socialist policy.
The regional commissioner will work with
an expert staff of technicians and will have,
like the Cabinet, a planning committee to
work out the application of the national plan
to the region. He will also form a number of
advisory committees of local representatives.
From these committees will eventually be
evolved the new regional councils.
One may assume that most of the local
councils will be prepared in the initiail stages
to play their part in such work as housing and
slum clearance. There is much civic pride and
even latent Socialism in local councillors who
are anti-Labour. So long as they do not fear
that every activity will mean a rise in the local
rates, they will be prepared to co-operate, but
where they will not, and this may well happen
in backward and rural areas, the receJcitrant
197
LOCAL GOVERNMENT AND
authorities must be superseded ruthlessly on
the precedent of the Poor Law authorities
dealt with by Conservative Ministers of Health.
Let us now consider how the commissioner
will function. I have assumed an immediate
campaign of housing and slum clearance, every
authority being urged to get on at once with
the plans which it has ready. This involves the
approval of schemes which can be done by the
commissioner’s staff in personal contact with
the local authorities. The commissioner will
have to take in hand the question of labour
supply. A joint committee of union repre-
sentatives and members of the planning com-
mittee will survey the available labour supply
in relation to the programmes of work in hand
and come to an agreement for the recruitment
and training of any additional workers that
may be needed. There is further the question
of priority, the allocation of skilled labour
between housing and industrial construction,
and also as between locality and locality.
The planning committee will estimate the
requirements of the region in respect of
materials and organise the supply. The larger
firms of builders’ merchants will be taken over
to form the nucleus of a distributive agency,
and the demands of the region collated. I have
198
THE SOCIALIST PLAN
already stated that the supply of materials
must be dealt with on lines analogous to the
supply of munitions during the war. The aggre-
gate demand of the local authorities will re-
present a great demand for labour. It is
essential that instead of some plants being
extended, or even overtime being worked, the
work should be placed where the labour supply
is available, preference being given where
possible to areas which are suffering from lack
of employment. Most of the housing will be
done by local authorities. In my view the local
authority should forthwith take over the local
building firms, and form them into one co-
ordinated public service. The more efficient
builders will be employed by the local authori-
ties as salaried managers. Agreements with the
professional associations for their part in the
housing campaign will have been arrived at
centrally, but local arrangements will supple-
ment them. There should be no playing about
with contracts and no profiteering. The build-
ing trade workers will feel that they are work-
ing for the community, not to make a profit
for a contractor. Only so will the necessary
drive be obtained. While most of the housing
will be done by local authorities, it will prob-
ably be necessary for the regional commissioner
199
LOCAL GOVERNMENT AND
to organise building units. This is likely to be
necessary in the rural areas where coimcils
may be hostile or local building resources in-
sufficient. It may be desirable to organise the
younger men in the trade from urban areas
where there is a surplus to go to the rural areas
and to serve there in billets or even under
canvas in order to go forward with rural
reconstruction work.
In all work of this kind the fullest advantage
will be taken of local knowledge and experi-
ence, but the will-power and drive will come
from the Central Government acting through
the commissioner in the region.
The Minister of Agriculture will be engaged
in an intensive campaign embracing land
drainage, land settlement and the provision of
equipment of various kinds necessary to a
revived rural economy. He will work as far
as possible through the local councils, but here
again it is likely that recalcitrant authorities
will have to be superseded. The Minister will,
of course, be working out his plans in close co-
operation with other Ministers. There will be
much housing work to be done, and here he
will be co-operating with the Minister of
Health. The whole question of the migration
of labour both for temporary employment
200
THE SOCIALIST PLAN
such as drainage and for permanent settlement
on the land will involve joint working with the
Minister of Labour. The Minister of Education,
in his plans for extended education, will have to
work with other Ministries for the location of
the schools, the provision of buildings, etc.
The Ministry of Transport similarly will be
engaged on a big programme of road and
bridge construction. The point which I want to
emphasise is that all these activities must be
correlated. If rural England is to become again
populous and prosperous it is not enough to
stimulate the production of agricultural com-
modities, provision must be made for the
housing, education and transport of the rural
population. All must be carried out as part of a
general plan. Correlation must take place not
only at the centre but also in the localities.
Hence I consider that the regional commis-
sioners will not be the servaints of one Minister.
They will serve the Cabinet which is in control
of the whole strategy of the campaign.
A consideration of the problem of derelict
areas brings out this point. This problem is
particularly difficult when considered from the
point of view of emergency measures, because
just where there is most idle labour there is
least work to be done of a permanent nature
201
LOCAL GOVERNMENT AND
until the broad lines of the plan have been
laid down. For instance one may assume that
the reorganisation of the coal trade, the cotton
trade and the iron and steel industry will be
taken in hand as soon as possible. There will
be whole communities which will have to be
shifted or have found for them some new source
of employment in their locality. Take South
Wales with its districts such as Ebbw Vale,
Merthyr and Brynmawr. It is obviously no use
sinking social capital in areas which are subse-
quently found to be redundant from the point
of view of their present industries and unsuit-
able for any others. On the other hand there is
much work which can be done in other parts
of the region, the coast towns, the anthracite
region and the agricultural area. The com-
missioner will have to see that the work is
concentrated in those districts where it will
certainly be useful. The regional planning
committee, in close touch with the central
body, will have to take decisions on such points
and see that they are understood in the locality
and that the available work is not too rigidly
confined to persons resident in the districts
where it is put in hand.
The possibilities of the location of new
industries will have to be considered. The
202
THE SOCIALIST PLAN
important point is that the problem should be
dealt with regionally. The region is to have an
economic future. The future of the individuals
now resident there must be considered in
relation to it.
I conceive of the finance of this emergency
period being found by the Central Govern-
ment, which again is reason for giving a
considerable amount of power to the commis-
sioners as agents of the Central Government,
but I recommend this method more from the
point of view of machinery for rapid action
than from any abstract constitutional consider-
ations. I admit that the idea of commissioners
sounds at first very autocratic and almost
reminiscent of Cromwell’s major-generals ;
but in fact they are to act only under the orders
of a Government which derives its mandate
from the electors and its power from the House
of Commons.
The commissioner is not to be a solitary auto-
crat. His job essentially is to work with others,
with the local authorities, with the Trade
Unions, with the co-operative societies, and
last, but most important, with the local
Sociahsts. I want to stress that point. In a
period of transition and reconstruction it is no
use pretending that you are not changing the
203
LOCAL GOVERNMENT AND
whole basis of society. It is no use thinking
that you can carry on as in a time of no change
or that you can do the work required solely by
operating the existing institutions of the country
from Whitehall. A period of Socialist recon-
struction requires the active assistance of every
Socialist. There are the forces of inertia and
vested interest to be overcome. Unless we can
get our building operatives, our road workers
and others to realise that they are building the
foundations of the new Jerusalem we shall not
get the push and eneigy required. If town
councils work on a peace-time basis, if
members of Parliament and loyal Party mem-
bers think that their only job is voting, the
venture will fail. There must be a Five- Year-
Plan drive put into the work. This can only be
done by associating the Party in the actual
work at every stage. Thus I conceive the
district commissioner as something more than a
public servant. He is the local energiser and
interpreter of the will of the Government. He
is not impartizil. He is a Socialist, and therefore
in touch with the Socialists in the region, who
are his colleagues in his campaign. It may be
said that this is rather like the Russian plan of
commissars and Communist Party members.
I am not afraid of the comparison ! We have
204
THE SOCIALIST PLAN
to take the strong points of the Russian system
and apply them to this country. In doing so
we have got to remember that people in this
country dislike being driven. They are not
ignorant peasants.
A Socialist system will only be successfully
introduced with the goodwill of those who are
not yet converted to Socialism. There is a mass
of public spirit which can be enlisted in support
of a policy of well-thought-out action which
would be antagonised if plans were not
efficiently carried out.
I regard the commissioners as acting only
in the emergency period during which plans for
the future local government of the country will
be in process of formation. I consider that this
local administration should be built up on the
basis of the British theory of devolution, that is
to say that the will of the people of a locality
should operate in the sphere of local affairs
with only the minimum of direction necessary
from the Central Government to ensure a
reasonable degree of co-operation. Especially
should there be a very wide opportunity for
experiment and for local variation. It would
be a disaster if an endeavour was made to
reduce the whole of the country to a dull level
of uniformity.
205
LOCAL GOVERNMENT AND
Local organisation for the future should be
built up on the triple framework of the region,
the county borough or county district and the
township or wju-d.
The regional council would be responsible
for large-scale services such as water, light and
power, transport, higher education, specialised
institutions, and main roads. These services,
now partly under the larger local authorities
and partly under various ad hoc authorities, are
such as require a very large area. The regional
council would be elected either directly by
constituencies or indirectly from the inter-
mediate local authorities. In addition to
operating the services directly under its control,
it should, in my view, have wide powers of
planning and of supervision over the minor
authorities superseding to a considerable extent
the departments in Whitehall. A degree of
devolution is necessary to counteract the over-
concentration of direction in the capital and
to give scope to local variation. Space does not
allow of my working out in detail the relation-
ship of the regional council to the various
organisations, state and co-operative, which
will be in control of production and distribu-
tion. Membership of a regional authority
would of necessity be a whole-time job, and
206
THE SOGIALIST PLAN
paid for as such. Regional councillors might
sit as ex-qfficio aldermen on the councils, the
areas of which they represent on the regional
counciL
Within the region there would be a continuous
network of county boroughs and county
districts, the former being urban, the latter
mainly or partly rural. The county district
would correspond in many instances to the
present county, while in others it would be a
good deal smaller. Large counties to-day are
too small for the very large services, but too
big for the more intimate work of local admin-
istration, which requires for its successful
operation a community of interest not always
found in present circumstances. In particular,
areas such as Lancashire, where the county
consists of a fringe of thinly populated areas
surrounding county boroughs which are out-
side the county for administrative purposes,
are not satisfactory. It will be seen that the
new county boroughs will lose some services
to the region, on the other hand they should
be given wider freedom for experiment.
Within these areas there should be smaller
units, wards in the towns, smaU towns and
groups of villages in the county districts.
These wards or townships would have councils
207
LOCAL GOVERNMENT
which would be more in the nature of neigh-
bourhood associations for preserving and ex-
tending amenities and developing social life.
In the new era, when the unemployment of a
section has been converted into the leisure of
the many, there will be need for more thought
and endeavour in providing for leisure and the
enrichment of the life of the community than
at the present time. These smaller units also
will give the opportunity for training in civic
administration.
It will be seen, therefore, that though I may
seem to have strayed into autocracy to some
extent in the period of transition, I return to a
full exercise of democracy as soon as the
Socialist State is in being,
I have left out the consideration of local
finance under Socialism, as it cannot be dis-
cussed without reference to the whole subject
of the financi2il basis of the Socialist State,
which I have not space to discuss.
Similarly I have not dealt with the problem
of Scotland. While it must necessarily come into
the plan, the extent of devolution desirable
opens up questions beyond the scope of this
chapter.
2o8
VIII
WORKERS’ CONTROL
By
Harold Clay
Those who were privileged to attend the
Labour Party Conference at Leicester could
have no doubts regarding the spirit and inten-
tions of the Party. The delegates with astound-
ing unanimity declared that the next Labour
Government should not only be in possession
of schemes for socialisation but have the will
and determination to carry them into effect.
To ensure the requisite Parliamentary
majority, it is essential that the proposals of the
Party should be clearly understood by those
who have to do the work in the constituencies.
The Party are, therefore, to be congratulated
on the series of Study Guides which they have
issued and the conferences they have arranged
for the consideration of matters of Party policy,
including those questions upon which definite
decisions have not yet been reached.
The proposals of the Party are bound to
Oo 209
workers’ control
evoke keen criticism from outside. An ex-
President of the Board of Education in a recent
article suggested that Socialists were condemn-
ing “ the system which is mainly responsible
for the present high level of material comfort
enjoyed by the human race.”
It is true that under the changing forms
which capitalism has assumed the powers of
wealth production have increased enormously.
The development of science on the technical
and mechanical fields has been such that man
has been placed in a new relation to produc-
tion. He has brought into being forces which
answer to his will in such a way that if they
were properly organised and directed he could
be released from drudgery and at the same
time be able to satisfy all his material needs.
Changes have taken place in productive in-
dustry, in transport and the means of commu-
nication. Men living to-day have witnessed
a great part of this transformation which is so
graphically described by Rudyard ELipling in
M'Andrews’ Hymn :
/ started as a boiler-whelp when steam an’ I were
low,
I mind the time we used to mend a broken pipe zvi’
tow ;
210
workers’ control
Ten pounds was all the pressure then ; eh ! eh ! a
man wad drive
An' now / Our working gauges give one-hunder-
thirty-five.
We're creeping on wV each new rig, less waste ah'
greater power,
We'll ha' the loco-boiler next an' thirty knots an hour,
Thirty an' more ! The things Pve seen since steam
an' I began.
Leave me na' doot o' the machine, but what aboot the
man?
There has been progress in certain directions,
but the contradictions of capitalism are such
that it cannot deliver the goods. Under a
system where .wealth can be produced in
abundance and where human needs could be
satisfied on a scale which would have seemed
impossible up to a generation ago, poverty
is rampant. Poverty not because of scarcity,
but in the midst of plenty.
THE DEMAND FOR WORKERS’ CONTROL
Capitalism is, moreover, inconsistent with
the idea of economic democracy. Though under
that system political democracy, i.e., Victorian
2II
workers’ control
Parliamentarism, has developed, the utilisation
of land and capital is autocratic and the
worker has, apart, from the negative control
exercised by the Trade Unions, no effective
voice on questions of industrial policy or on the
matters relating to workshop administration
which vitally affect him.
Socialists must therefore be concerned not
only with the problem of poverty, but with the
claim for freedom, and the rules of life under
which we work must be those in the making
of which we all share.
This applies to the industrial sphere no less
than to that which we call the political. It is
from this demand for freedom, for a right to
share in the making of the niles which govern
industrial policy and workshop administration,
that the claim for Workers’ Control or, as it
has been termed, self-government in industry
arises.
Though the organisations — ^the Syndicalist
Education League, the National Guilds’
League, and the Shop Stewards’ Movement —
which at an earlier stage stressed the import-
ance of Workers’ Control, no longer exist, many
of their ideas have become the warp and woof
of the movement and are woven into its
texture.
212
workers’ control
In looking back we realise that although the
schemes of 1919 may have been affected by
the economic blight which commenced in
1920, it would be a mistake to assume, as sub-
sequent events have proved, that the ideas for
checking industrial autocracy which found ex-
pression in those projects were nothing more
than a fleeting emotional disturbance. This
must be appreciated by om: friends who appear
to think that a change in the ownership of
industry without a substantial change in the
status of the workers will be accepted by the
Socialist movement.
The Labour movement demands the sub-
stitution of a planned economic and industrial
system on a definite Socialist basis for the
anarchy of capitalism. To effect the change it
is necesstiry to obtain political power and use
the machinery of government as an instrument
of Socialist policy.
The General Council of the T.U.C. have put
forward proposals in general terms for the
socialisation of industry. The Labour Party,
in detailed schemes embodying the same ideas,
have dealt with transport and electricity.
Schemes relating to other industries are under
consideration.
We are, therefore, considering Workers’
213
workers’ control
Control in relation to the schemes now before
the movement, not the ultimate form which
Workers’ Control would assume in a completely
socialised society.
THE LABOUR PARTY SCHEMES
Under the plans which the Labom Party
has put forward for dealing with transport and
electricity there is proposed a form of public
corporation of a non-political character free
from effective Parliamentary zind Govern-
mental control. The control is to be vested in
a small board to be appointed by the Minister
“ on appropriate grounds of ability, and it
should not be specifically representative of
particulzir interests.”
It would be “ generally responsible for the
efficient management and direction of the
industry, subject to such Ministerial and other
direction as may be laid down by statute.”
There is much to be said in support of a
relatively small board, but Parliament and the
Government should have greater powers of
control than appears to be envisaged in the
proposals of the Party. I am not visualising
vexatious interference, but it must be appre-
ciated that an industry or service which is
214
WORKERS* CONTROL
socialised miist not only be worked as a public
service, it must be co-ordinated with other
industries and services and be subject to the
general economic plan of a Socialist Govern-
ment.
No industry can be completely self-govern-
ing ; there must be some authority wider than
the industry to which those responsible for its
conduct and direction will, in the last resort,
be subject. A Socialist Government would no
doubt appoint as an instrument for carrying
out its economic policy a planning and co-
ordinating authority with wide powers, but
subject to the final control of Parliament. With
this aspect of the problem I do not deal, except
to say that I consider that the proposals of the
Party in so fax as they refer to the question of
political control should be re-examined. I
think the movement will demand that this
shall be done as the implications of the policy
outlined in the J^ational Planning of Transport
and the Reorganisation of the Electricity Supply
Industry are more clearly understood.
We, therefore, take the proposals of the
Party subject to the caveat entered above, and
assume that the drive will be to bring industries
which axe socialised each under the control
and direction of a smaiU board. How then
215
workers’ control
should the principle of Workers’ Control be
applied under those conditions ?
It is suggested by Mr. Herbert Morrison that
in discussing “ the position of the workers in
socialised undertakings we should beware lest
we start at the wrong end,” for “ the rank and
file of industrial workers are most directly
interested in their position at the point of pro-
duction where their daily industrial life is spent,
namely, in the workshop.”
This is true only in part, for the “ industrial
workers ” realise that the conditions in the
workshop are vitally affected, and in a large
measure conditioned, by the policy decided by
those in control of the industry. That being the
case, we approach the question from both
ends ; the board and the workshop.
The plans for socialisation as applied to
particular industries will no doubt vary in
detail but not in principle. So will the precise
form in which Workers’ Control will be ap-
plied. With a board appointed by the Minister
not less than one half should be chosen from
persons put forward by the Trade Unions
representing the workers engaged in that
industry or service. When that claim is
advanced we au-e told that if it were conceded
it would change the chairacter of the board,
2i6
workers’ control
throw open the door to interests, and in view
of the claim of other sectional interests the
Trade Unionists would be in a minority.
Moreover, if they claimed a majority position
that “ would not be tolerated by the general
body of citizen consumers.”
The character of the board would certainly
be changed and that to advantage.
THE WORKERS IN PARTNERSHIP
There is, however, something radically
wrong with the philosophy of those Socialists
who are placing the workers in the industry on
the same plane with the users, consumers,
bondholders, F.B.I. and Confederation of
Employers or other more or less interested
parties. To accept that view would be to accept
the permanence of the commodity status of
labour and deny the possibility of an effective
partnership of the workers in socialised
industry.
In this connection it is interesting to recall
that the Summary of the Reports of the Com-
mission of Inquiry into Industrial Unrest, 1917,
says, “ Labour should take part in the affairs
of the community as partners rather than as
servants.”
217
workers’ control
In the Labour Party publication, The
Workers' Status in Industry, by Mr. John CUfF
and Mr. Herbert Morrison, the latter writes
“ the issue between us is a fine one.” That is
not so. It is deep and fundamental. It arises
from two different conceptions of the meaning
and purpose of Socialism.
Workers in an industry are not an “ interest ”
in the sense in which the word has been used,
but an element in the industry whose know-
ledge, skill and experience have not been
utilised or appreciated in the past.
It is then stated that socialised industry ought
to be more efficient than capitalist industry ;
the inference being that the proposals we put
forward would lead to inefficiency. Our critics
cannot make that an issue, for we, too, believe
in efficiency, but not to the exclusion of other
considerations. We contend that a board, con-
stituted in the manner outlined above and with
provision made for the application of the same
principle in the works, garage or shop, would
be not less efficient than a board selected on
“ appropriate grounds of ability,” whatever
that may mean.
It is also suggested that the position of those
appointed from the Trade Unions would be
one of difiiculty ; that on occasions there would
2x8
workers’ control
be a conflict of loyalties and, in consequence,
they may on certain points be at issue with
their members. Perhaps the confusion would
be less if we thought of the board as one dealing
with policy and direction and not one of
management in the sense in which that term
is used to-day. I am not visualising a full-time
board for the purpose, but one which, within
prescribed limits, could deal with policy and
direction with the assistance which would be
forthcoming from the managerial side. Under
those circumstances the Trade Union element
would be able to render valuable service and
make a contribution from a quarter which has
been too seldom taken advantage of in the
past, even in municipal service.
There may be a conflict of loyalties on
certain matters, but I do not regard this as
producing an insurmountable difficulty. In
fact, such difficxilties as may arise I should
regard as being outweighed by the advantages
in other directions.
It must be appreciated that the proposals we
are considering are in relation to socialised
industry and not to industry under private
ownership. Under those changed conditions
we visualise a new motive pervading industry,
and from that we postulate a definite change
219
workers’ control
in the attitude of those who render service
within industry. If such is not the case, what
hope have we from Socialism ?
Trade Unions under industry as organised
to-day may be regarded as mere contestants
for a greater share in the product of industry ;
that position will change as the character of
society changes and new duties, functions and
responsibilities are placed upon them.
The workers will claim the right to repre-
sentation on the boards where policy is deter-
mined and where operative decisions are made.
They have the right to take part in the election
of members of Parliament, from whom Minis-
ters are chosen. Are they not competent to
take a part in the selection of a board the
duties of which would not be more onerous,
responsible or difficult than the work which
devolves upon certain Ministers ?
The question then arises as to the position in
the factory, workshop, garage or depot. That
is where the work is done. Here again the
details would vary, but the principles would
be the same.
In socialised industry small-scale operation
would have largely disappeared, and the
factory or works unit would be of substantial
size. Within the industry arrangements will be
220
workers’ control
made for the major questions to be dealt with
between the board and the Trade Union.
Within those general arrangements there will
be questions of local application and other
matters which are peculiar to the particular
establishment, works or depot. Some of these
matters should be regarded as being definitely
within the scope and function of the Trade
Unions, others might be dealt with by a com-
mittee of the Trade Unions in conjunction
with representatives from the managerizd side.
The powers of these committees should be
subject to the overriding consideration that
decisions made should not be ultra vires of any
agreements relating to the industry as a whole,
and that due regard should be paid to the effect
of their decisions upon other sections of the
industry. In this connection it would be an
advantage if the workers were all in one Union.
A body of this character or one covering a
wider radius should have responsibility for the
selection of foremen, supervisors, etc. In the
initial stages this may be a recommending
body. The essential thing is that there shall be
a measure of responsibility on the part of those
holding supervisory positions to those subject
to their orders and not alone to those in posi-
tions of greater authority.
221
workers’ control
The Unions should also be able to deal, on
a geographical basis suitable to the needs of
the case, with the entry into and transference
of workers from the industry. The general
question of the utilisation of labour, the prob-
lem of seasonal work, etc., should also be
within their scope and function.
The demand for Workers’ Control must be
a part of the Socialist claim, eind the bodies
through which it is applied must be the Trade
Unions. The Unions are the instrument which
the workers have fashioned for their service.
Changes in structure and method have taken
place from time to time to meet new condi-
tions. The acceptance of the ideas we are here
discussing will involve a further reconsidera-
tion both of the structure and functions of the
Trade Unions.
TRADE UNIONS AND WORKERS* CONTROL
In connection with this aspect of the ques-
tion, I can do no more here than submit four
points which might be considered by those
who are interested in Workers’ Control :
{a) Trade Unionism is not an end in itself,
but a means to an end. As economic and
222
workers’ control
social changes take place the work of the
Trade Unions will be increasingly import-
ant. Trade Unionism is not restricted to the
ends and aims which governed it during the
capitalist phase of industrial organisation. In
point of fact, it has already evolved wider
purposes and functions as the old industrial
autocracy has been modified.
Those who regard Workers’ Control as the
desideratum realise that Trade Unionism
built up under the limitations imposed by
capitalism may not be fully adapted either
in function or organisation for the new and
increasing tasks and responsibilities which
the new ideas we have been considering will
place upon it. The necessary changes both
in structure and function can, however, be
made.
{b) If the Trade Unions acting on behalf
of the community and under the general
direction of Parliament are to be responsible
for the conduct of industry or for a consider-
able share in its control, then the Unions
must be organised in such a way that the
problems of an industry can be dealt with
by a single Trade Union unit of organisation.
This end may be reached in several ways.
The drive should be towards industrial
223
WORKERS* CONTROL
Unionism, using that term in relation to the
boundary of a socialised industry or service.
There should be easy facilities for transfer
from one Union to another where circum-
stances made that desirable- Provision would
have to be made for dealing with small
groups whose labour was primarily ancillary
to the industry. Their position might be
met under an arrangement whereby they
could retain contact with the organisation
of their calling, but for industrial pmposes
be associated with and work through the
industrial Union. This practice operates
to-day without difficulty.
(c) The problem of extending organisa-
tion to the supervisory, technical and admin-
istrative workers is one of supreme import-
ance. They will have an important work to
do in socialised industry. Hitherto there has
been a tendency in certain quarters to regard
them as not being in too close a relationship
to those engaged in operative and manual
duties.
Under socialisation, that position, should
change. Their active co-operation will be
essential and, though later they may find
that basis of aifinity which would bring them
into an industrial Union for the industry in
224
workers’ control
which they were rendering service, the im-
mediate steps may be by some close working
arrangement between their organisation and
the Union for the industry.
The claim for Workers’ Control is put for-
ward in connection with industries which are
to be socialised. This claim must not be con-
fused with the proposals which have from time
to time been put forward for what has been
termed joint control or representation on the
board of directors of a private industry, nor has
it any relation to other methods of consultation
under private ownership. The attempt to draw
an analogy between the claim for Workers’
Control and the offer in 1921 to the railway
Unions of seats on the boards of directors, an
offer which was rejected in favour of the
machinery of the Wages Board, can only arise
out of a misunderstanding of the issue in-
volved. The Railways Act of 1921 left the rail-
ways under private enterprise, and our friends
in those Unions were well advised to reject
the proposals. Where industry remains under
private ownership, the Unions will continue
to press not only for the extension of the form
of negative control hitherto exercised, but for
positive control over conditions within the
Po 225
workers’ control
workshop, factory or depot. They will not,
however, be concerned with seats upon the
boards of directors of privately owned industry.
If they were, then the difficulty referred to by
Mr. Walkden, Mr. Morrison and others, would
no doubt arise. The Unions realise, however,
that power must accompany responsibility.
Some active trade unionists are dubious of
the claim to representation on the boards of
socialised industries. They see themselves com-
pelled to negotiate with such boards in the
same way as they negotiate with boards con-
trolling private industries, and they feel that
if the unions have their representatives on the
boards they may be placed in a difficulty when
questions relating to wage or other issues of
that kind arise.
There must be in socialised industry,
especially if the clzdm to representation is won,
a new technique of collective bargaining. It is
difficult to see at this stage the precise form
which this will tzike. This is one of the important
problems for the consideration of the move-
ment. In the reports of the Party and the dis-
cussions thereon this aspect of the problem has
not yet had the attention which its importance
demands.
The question of Workers’ Control and the
226
workers’ control
issues it raises will be to the forefront in the
discussions on Party policy. Though not dog-
matic with regard to details, which have to be
worked out in relation to each particular in-
dustry, I regard the claim for industrial self-
government as being fundamentally sovmd. It
meets, in a practical way, the claim of those
who stand for efficiency and also the desire of
those who place emphasis upon human con-
siderations.
We must create the will for change. We must
first have the vision, then the plan.
There is no need to be in doubt about the
Trade Unions. Their history, record, and work,
and the way in which they have met new and
changing conditions can be taken as an earnest
indication of the capacity of Trade Unions to
adapt themselves both in structure and organi-
sation to the new tasks which the acceptance
of the ideas we have been considering would
involve.
The question we are discussing is bound up
with the wider problem of citizenship. The
right to participate in making the rules imder
which he works not only gives to the indivi-
dual a new interest in the work he has to do ;
but he also sees that job as a part of the whole,
in its relation to the duties undertaken by his
227
WORKERS* CONTROL
colleagues, and the purpose of the industry in
which they are all engaged.
The knowledge gained and the responsi-
bility imdertaken will enable the worker to see
the part which his industry plays in the life
of the nation and the place and importance of
that industry in the general economic plan.
No longer will he be a mere cog in the wheel,
but a conscious partner in a social service, the
purpose of which he can clearly define. There
will be a real incentive to co-operative effort
for the values created will be for a socizd pur-
pose and life for all will be richer and fuller.
Politics will then assume a new meaning and
purpose. Democracy will become a reality
when in the industrial and politicad spheres men
have a full right to share in the making of the
rules under which they live and work.
228
IX
SOCIALIST POLICY AND THE
PROBLEM OF THE FOOD
SUPPLY
By
The Rt. Hon. Dr. C. Addison, M.P.
A Socialist Government when it comes
into power will be judged by the action it takes,
and on the success or failure of its action —
which must be prompt, sensible and thorough
— ^the fate of Socialism for a long time to come
in this country, and perhaps of personal liberty,
will depend ; for I am persuaded that unless
we can achieve deliverance from our present
diflEiculties and from the deep disgrace of unem-
ployment by peaceable constructive Socialism
the alternative will eventually be tyranny and
probably war.
The subject before us in this chapter is the
programme of action with regard to land and
food supply. In this, as in every other case,
our action must be conditioned by our ob-
jective.
229
SOCIALIST POLICY AND
Our objective clearly is two-fold ; to provide
as adequately and as economically as possible
for the food supplies of the people and to make
the best use of our own land and producing
capacity in doing so.
There is no department of national life
which presents a greater opportunity for expam-
sion than the better utilisation of the land. We
have millions of acres of wasted or insufficiently
used land — much of it very good land —
abundant supplies of labour, stores of well-
proved knowledge at our disposal, and the
best food-market in the world.
The action we should require to take might
have to be two-fold in character — ^immediate
or emergency action directed to overcoming
initial difficulties, and action necessary for the
long-term development of policy.
In order to apprehend properly these two
branches of action a little more should be said
as a preliminary about our objective and the
opportunities it offers.
There are 2^ million acres of land defined
as “ urgently in need of drainage,” and nearly
all of this is good land. There are millions of
acres of other land which caimot be sufficiently
used, because of the lack of proper equipment
which the present owners are unable to bear
230
PROBLEM OF FOOD SUPPLY
the expense of providing. There is also a
standing army of suitable would-be cultivators
who are unable to get any land to cultivate,
whilst for fifty years there has been an exodus
of labour from the land ; during the past ten
years the loss has been 150,000.
At the same time as these things are true, it
is beyond doubt that for many major food pro-
ducts oiu: land and climate are better adapted
for efficient production than those of almost
any other country. For generations past people
have come from all parts of the world to Britain
to recruit high-class livestock. Most of the best
meat that is now imported from the Argentine,
for example, is derived from pedigree stock
exported from this country. The Danish herds
which send us so much of our bacon supplies
are derived from British stock. Many kinds of
vegetables also could be produced here almost
more efficiently than anywhere else. There is
no apple in the world to beat a British Cox’s
Orange Pippin.
Indeed, in these and in many other direc-
tions there is so much to get on with that in
the eaurly years we could scarcely do more than
confine our objective to the development of a
Socialist land policy designed to foster the in-
creased production of those commodities which
231
SOCIALIST POLICY AND
this country is specially well able to produce.
If we take milk and milk products, poultry and
eggs, meat, bacon, vegetables and fruit, it is a
moderate estimate to say that a reasonable
plan in its early years would contemplate an
aggregate increased home production of these
food supplies of ^1(^200,000,000 worth a year. I
estimate that a plan, even so limited, would
ultimately provide employment on the land
for half a million additional workers, apart from
those who would be employed in food factories,
creameries and such like. It must not be for-
gotten, also, that the increase of employment
would not end here, because a prosperous
countryside would provide a great additional
market for the products of the industries of our
towns.
It has sometimes been objected to this
policy of increased home food production that
we live by our exports ; that our exports pay
for our food supplies ; and that a policy of this
kind would upset the country’s industrial bal-
ance. In reply to this I would ask, what are the
three million unemployed producing now for
export? What greater reason could there be
for inspiring us to make a full use of good land
and for providing useful employment upon it
than the existence of this vast army of potential
232
PROBLEM OF FOOD SUPPLY
producers ? Surely the Socialist Party will not
commit the criminal folly of paying court
to that attribute of an outgrown capitalist
system which depends for its continuance
upon the co-existence of a great army of
unemployed. There is an opportunity for
new employment here greater than is pre-
sented in any other department of national
life.
How then are we to achive its development ?
EMERGENCY POLICY
First a word as to any immediate or emer-
gency action that might be required. I have
heard it said that if a Socialist Government
came into power and meant business, it would
be held up by “ high finance ” or by some
united action amongst importers which would
arrest the import of food supplies and starve
us out in a few weeks or months.
It is perfectly true that the days of any Gov-
ernment whose action resulted in people being
unable to get bread would soon be numbered ;
but I would urge you not to be intimidated by
this bogey. Do people sell us meat from the
Argentine or bacon from Denmark because they
233
SOCIALIST POLICY AND
like our politics? Do we get sugar from the
West Indies, or palm kernels from West Afnca
because we have never attempted Socialism?
The people who sell us these things do so
because we are able to pay for them, and
in many cases because we are the only out-
side market in the world of any size which
takes or can take, their exports. You may be
assured that they would be just as willing to
sell their produce to the British Government
as they would be to a group of private
persons.
Moreover, if, say, the exporters of the Argen-
tine wanted to hold us up, would they get the
willing support of the producers ? If you have
any doubt on this point I advise you to read
the report of the Royal Commission on Food
Supplies, under Sir Auckland Geddes. The
Commission tells us how the producers revolted
against the meat trusts, who, having a
monopoly as buyers, forced down the price
of calves to as. a head. We can deal with the
producers easily enough if we set about doing
it and had to do so ; and they would be glad
of the chance of selling to us. In this connection
we may recall the history of the Las Palmas
meat factory that was started during the war
because the Ministry of Food had difficulties
234
PROBLEM OF FOOD SUPPLY
with the importers. This factory was so accept-
able both to the producers and to this country
that as late as 1920 its continuance as a national
factory was recommended by two different
Government committees, one of them presided
over by that life-long Conservative, Viscount
Bridgeman. Also the profits of this factory were
stated by the accountant and auditor-general,
in his report for 1921, to have amoimted to
£617,695.
The only circumstances under which those
concerned might try to starve us out would be
if they thought we did not mean business, and
it would be necessary to provide against this
by taking emergency powers.
The powers that would require to be taken
would be these ;
(1) Power to conduct purchases and control
supply and distribution on national
account, as far as necessary.
(2) Power to control the prices and the
charges of distribution.
(3) Power to ascertain costs and to fix fair
prices.
We have in the chairman of this League
(E. F. Wise) a man who formerly, as Secretary
235
SOCIALIST POLICY AND
of the Ministry of Food, was a principal official
in a department which actually did the work,
and which is reported in the National Trading
Account for 1920-21 to have done its business
with administrative charges of all kinds for
less than 10s. per £100, and to have made a
profit of more than £6,000,000 . 1 do not myself
imagine for a moment that the hard-headed
men of business who are concerned in food
importation would try for a minute to starve
us out because we had a Socialist Government.
Certainly they would never embark on that
perilous enterprise if they knew they were
dealing with a Government that meant busi-
ness.
LONG-TERM POLICY
Let us leave these emergency questions for
the more important constructive business of
making a good and proper use of our native
land. The powers that would be required are :
(1) Power to plan land development.
(2) Power to give effect to the Plan by
possessing
(fl) Power to make the best and wisest
use of the land.
236
PROBLEM OF FOOD SUPPLY
(i) Power over prices, including mar-
keting, distribution and costs right
down to the consumer, and
(c) Ability to create the machinery for
securing the progressive develop-
ment of the plan.
Take these separately.
(1) Power to Plan
In the official programme of Labour and
Socialist Land Policy the planning body is
described as the Agricultural Development
Commission. We must, that is to say, have a
body of men of real capacity and experience,
capable of devising and prosecuting a develop-
ment of the different parts of the plan. It must
be a body also which can plan for a long term
ahead, because here we are dealing with the
processes of natmre, which require time, and
many most obvious parts of a plan of develop-
ment — ^for example, increased bacon produc-
tion — ^necessitate developments over a series of
years before they can come into full operation.
(2) Powers Required for the Execution of the Plan
The three groups of powers required to
secure the execution of the plan ; (a) power to
237
SOCIALIST POLICY AND
make the best use of the land ; {b) power over
prices ; and (c) power to secure development ;
must be discussed separately.
(a) the use of land
There could be no greater condemnation of
the happy-go-lucky methods of the past and
of the absence of any long-term plan of rural
development than the existence of those
millions of acres of good land out of full use
already referred to. You will never get this
land brought into use under the existing system.
In the majority of cases, the present owners
have not the means, even if they have the
disposition, to equip it. Moreover, in many
districts the units of use for the land are alto-
gether uneconomic. This circumstance also has
recurred everywhere : when land cultivation has
been profitable it has resulted either in in-
creased rents or in forced sales at high prices,
both of which are standing handicaps to good
producers and perpetuate the payment of low
wages. In my Land Utilisation Act of 1931 the
State has, if it cares to exercise it, power to
provide small holdings for agricultural workers,
for suitable men who are unemployed, to
provide them with training, equipment, and
if need be, to loan them capital ; it has power
238
PROBLEM OF FOOD SUPPLY
to acquire and carry on demonstration farms,
provide allotments, and do many other things
either directly or in place of a reluctant local
authority.
But nothing has happened or will happen
under the present Government. The powers of
hostile interests are too great, and the Treasury
veto is over all.
There is no way out of the present impasse
except by national ownership and the accept-
ance of national responsibility. The details of
this subject have been discussed for years, and
it will suffice if we remind ourselves of the
chief essentials. Transfer of management and
such changes in the use of land that wise advice
might recommend must necessarily be gradual ;
but there is no reason why the transfer of
ownership should not take place promptly, and
I think this should be provided for in the neces-
sary legislation to take place on “ an appointed
day.”
On the appointed day the title of all agricul-
tural land would pass to the State. Various
methods of purchase are suggested by our
financial authorities. Terminable annuities for
a limited term of yean! might be provided on
the present basis of rents. The issue to the
owner of State bonds is another suggestion. I
839
SOCIALIST POLICY AND
do not propose to discuss either of them in
detail here.
One condition must attach in any case.
Purchase must not involve a long-term burden
on the community. There is no better asset
in the world than the land of Britain. It is
certainly a much better asset than the ingots
of gold in the cellars of the Bank of England ;
and personally I can see no reason why this
security is not good enough to back currency
issued to the owners. In saying this, of course,
I am only expressing my personal view, but
I refuse to be disturbed by the outcries about
inflation which would certainly be put up by
the present leaders of finance, who have
brought about the existing world mess. No
nation could have worse advisers than they
have proved to be, and if the ingots of gold in
the cellars of the Bank of England are said to
be good backing for currency, why should not
the land of Middlesex ? It is certainly less
likely to run away, nor can you melt it down
or ship it to Paris. On this question of purchase,
I think that two conditions emerge as essen-
tial :
(i) The transfer of title must be prompt, and
(2), whatever provisional arrangements may
be made as to payments to previous owners,
240
PROBLEM OF FOOD SUPPLY
there must be no long-term addition to the
National Debt.
The real test of Socialist policy would begin
when the land has been obtained. How are
we going to use it ?
On this let me say that every variety of use
must be contemplated which, on the best advice
we can get, the character of the land and the
climate of the district indicate to be the most
svutable. There is much land in this country
which can only be farmed advantageously on
a large scale with up-to-date mechanical equip-
ment. On the other hand there are vast tracts
of land better suited than almost any other in
the world to intensive cultivation. Those re-
sponsible for developing the policy must be
able to turn the land to the best use in the light
of up-to-date knowledge. The Agricultural
Development Commission also must in a
position to raise loans to finance development. >
In the long run, our policy can only be
accounted successful if it provides a wholesome,
decent, secure life on the land for an increased
number of our fellow citizens, and this brings
us to that group of powers which in the
end will govern all the rest — control over
prices.
SOCIALIST POLICY AND
(b) powers over prices
Two sets of prices require to be considered
— ^Producers’ Prices and Consumers’ Prices.
producers’ prices. — Whatever system of
society we have, we cannot get away from
prices as the means whereby the land-worker
will be provided with a decent and encourag-
ing standard of life. Unless our policy can
provide that, whatever its other merits it will
ultimately be a failure. Under any sensible
system of price management the claim of the
worker for a decent and secure standard must
be a first charge. We have no right to buy bread
or coals or any other product at the price of
the starvation of the children of the workers
who produce them. The application of this
principle however need not limit the oppor-
tunities for trial of new methods, or for initia-
tive and experiment in new methods of cultiva-
tion and production.
But we cannot control prices unless we are
in control of mzu-keting right through ; nor can
we secure the long-term development of the
best use of land unless we are able to stabilise
or secure fair prices over a sufficient length of
time.
242
PROBLEM OF FOOD SUPPLY
But when the community is prepared to
undertake by special machinery (which can
only be made possible through Socialist
agencies) to provide these securities of price for
the products of an industry, it must attach
three conditions.
Price stabilisation should
[a) be an intrinsic part of the plan of
development and necessary for its
furtherance ;
{b) be accompanied by machinery which
will secure that the producer, who is
intended to benefit by it, really does
get the benefit, and not somebody else ;
and
(c) the consumer must be safeguarded
against any increase of the difference
between wholesale and retail prices
beyond that which an efficient and
well-managed marketing system would
require.
There are various ways through which we
can work a system of price-stabilisation, with
the conditions mentioned, but it cannot be
done at all unless there is complete power
ultimately over the marketing of both the
243
SOCIALIST POLICY AND
imported and the home-produced product. The
joint operations of the import and home pro-
ducers’ boards could give the result we require
in various ways. Different methods would be
appropriate for different commodities, and I
may say that the machinery for working such
a system has already been sufficiently elab-
orated in some important cases.
It is, however, as already suggested, un-
thinkable that we should take special means
to assist a branch of home production unless
at the same time we effectively safeguard the
consumer, because, after all, the ultimate pur-
pose of food production is to supply the needs
of the people.
The vice of the Marketing Bill of the present
Government is the complete absence of any
means for securing that the ends it purports
to promote will in fact be achieved. It seeks to
raise prices by imposing a scarcity when there
is in fact plenty, and the people need more food
and not less. The aim of the Bill is to force up
wholesale prices by limiting imports in the
expectation that the farmer will benefit by the
higher prices, but there is no machinery what-
ever for ensuring that he will get the benefit —
less still that the agricultural labourer will get
better wages. The increase of price will in fact
244
PROBLEM OF FOOD SUPPLY
be pocketed by the importing agencies — ^as has
already been the case in connection with the
restriction of supplies from the Argentine
which was effected some time ago. Within the
first fortnight of its operation the importers
benefited by more than half a million on their
existing stocks, and after three months of
operation the price of prime home-produced
beef was nearly the lowest on record.
The explanation is not far to seek ; when the
average price of meat is thus artificially in-
creased, and the purchasing power of the
people remains the same, they are more in-
clined to buy the cheaper joints than before —
not less inclined — and seeing that home-pro-
duced beef averages 2d. or 3^. a pound above
imported, the result of the restriction of im-
portation has not been to increase the price
of the home-produced article, but to prejudice
its sales. We cannot, in fact, make sure that
the producer really does get the benefit of the
stabilised price unless we establish machinery
for securing that this happens.
The people, however, will never tolerate a
system of this kind unless they themselves are
safeguarded against exploitation. At the present
time there is a great and unjustifiable gap
between wholesale and retail prices. We have
245
SOCIALIST POLICY AND
had a crop of Government Commissions on
this subject, the Food Commission, the Lin-
lithgow Committee, etc., but the retaiil price
of milk is still lOO per cent more than the pro-
ducers’ price — ^indeed, even more. The same
applies to much of the meat and many other
commodities.
Just think of the absurdity this result
represents, say, in the case of milk. From the
time that the cow bears the calf to the time the
calf itself becomes a mother and is in full
bearing of milk, it takes three years or more.
The producer and his workers do all the work
during these years, take all the risk, and at the
end of it their milk is sold, say, at i irf. a gallon.
(Millions of gallons were sold last year at 6rf.
or less.) And then, during the next twenty-four
hours, the same milk, to your wife and mine,
has had an increase of price added on to it
equivalent to that which is presumed to have
paid for the previous years of effort. It is a
price difference condemned by its own inherent
absurdity, and has been so condemned by every
body of persons that has investigated it, and
as lately as the present year, in the report of the
Milk Reorganisation Commission.
I am not blaming the milk distributing
agencies : they are simply using the existing
246
PROBLEM OF FOOD SUPPLY
system. Some of them, to their credit, have
greatly improved the methods of cleaning milk,
and have done much to improve its produc-
tion and its distribution, and it would be a
mistake to fail to recognise their services. The
proper solution is to make marketing and
distribution a public service, just as transport
will have to be, instead of one that aims at
beating the producer down at one end, and
getting the utmost out of the consumer at the
other. In the long run it will be to the country’s
interest that the gap between wholesale and
retail prices should be reduced as far as is
possible consistent with the development of
economical collection, transport, supply, grad-
ing and distribution.
It can be done, right enough, if we have the
will to do it. In the present gap between whole-
sale and retail prices, there is, I believe, room
enough to provide the producers in this country
with a secure living without any increase of
consumers’ prices — ^indeed in some cases there
might be reductions. Moreover, if we mean
business and set about it properly, there is no
reason whatever to suppose that we should
fail to obtain the services of those who are
skilled and experienced in these matters.
247
SOCIALIST POLICY AND
(c) MACHINERY FOR SECURING
DEVELOPMENT
The last group of powers that I mentioned
relate to those necessary for securing the
development of our plan. The possibilities of
expansion are so immense that some of them
might warrant a whole chapter for their exposi-
tion ; some, indeed, individually, are as great
as what we often describe as “ major indus-
tries.” For example, the sales of liquid milk
off farms at the present prices amount to
;(^55,ooo,ooo a year. At the same time our
population, especially the children, consume
only about half as much milk as they ought to
do. There are two things which limit expan-
sion of the sale of milk. First and foremost its
price, and the ability of mothers to pay for it.
They would buy more milk for their children
if they could afford to do so. And second, the
insufficient confidence which often prevails in
the quality and reliability of the milk itself.
We can only remove or minimise these disa-
bilities by the operations of a National Milk
Board capable of minimising distribution costs,
improving methods of production, collecting
and handling of milk, and the rest, and also
engaging in the necessary propaganda of
248
PROBLEM OF FOOD SUPPLY
information and instruction. A glimpse of what
the financial possibilities open to a Milk Board
is obtained when we realise that a levy on the
producers of \d. a gallon would provide the
Board with an annual revenue of ;i(^650,ooo.
Before very long, no doubt, there will be a
National Milk Board established as a result of
the Producers’ Marketing Act that I passed
through Pzirliament, and it is probably within
the mark to say that the possibihties of expan-
sion in the liquid milk market represent a
value of not less than an additional ;;(^40,ooo,ooo
to ;{^50,ooo,ooo per annum. A Milk Board, too,
should be able to finzuice the provision of
creameries and the manufacture of milk pro-
ducts, in which the possibilities of expansion
are nearly as great as they are with liquid milk
itself. Indeed the possibilities of expansion in
milk industries alone are greater than the total
of some of our major industries. What applies
to milk applies almost in an equal degree to
the possible expansion of bacon production and
of meat production. But in none of these things
can we secure any ordered and reliable de-
velopment unless we equip ourselves with the
powers I have been describing, and exercise
them with persistent resolution.
Similar considerations apply, though not in
249
SOCIALIST POLICY AND
SO great a degree financially, to the increased
production of eggs, vegetables, fruit, and other
products.
We have a splendid country and an un-
equalled opportunity for adding to the volume
of wholesome, permanent employment under
conditions of life, which I, as a countryman,
think cannot be bettered anywhere. But we
shall not achieve anything unless we have
sufficient unity of purpose. Neither shall we
achieve anything if we spend our time dis-
paraging one another, if we are afraid of
criticism, or are impervious to it when it is
reasonable ; or, on the other hand, if we are
afraid or unwilling to learn by experience ; and,
above all, if we are subject to cold feet and are
fiightened of our job.
In due time that collection of individuals,
mainly nonentities, that constitutes the present
Government, will pass away, and with them
will pass the vain hypochondriac whom they
are content to accept as their leader. They will
be judged at the bar of public opinion, and will
be found wanting. Then will come a testing
time for democracy, dangerous and critical.
Either we shall be guilty of the capital folly
of indulging in makeshifts and tempoiisings
250
PROBLEM OF FOOD SUPPLY
with an accompaniment of wranglings and
disputes that will inevitably end in the estab-
lishment of some form of tyranny, and perhaps
in war — or we shall have unity and resolution
in attacking the turmoil of powerful interests
from which we suffer and which involves the
existence of millions of decent people either
unemployed or with no better secvurity in life
than a week at a time offers. If we are steadfast
and of good courage, we can, if we will, make
posterity our debtors, and redeem the neglect-
fiil past by making a full and fruitful use for the
common good of our common heritage.
251
X
A SOCIALIST FOREIGN POLICY
By
H. N. Brailsford
To CONCEIVE and demand a Socialist
foreign policy is to make a daring step in
advance. We have never had such a thing, nor
have we yet tried, even in theory, to sketch its
outlines. To say this is not to undervalue the
work of the Foreign Office under the two
Labour Governments, which stands out as
markedly more successful than their domestic
administration and legislation. Something was
done by furthering the evacuation of the Ruhr
and the Rhineland for the appeasement of
Europe ; something was achieved for the archi-
tecture and organisation of peace : Russia was
twice recognised, and happier relations were
opened with the United States : an attempt,
creditable in spite of its failure, was made to
solve the Egyptian problem : one has less
satisfaction in recalling the London Naval
Conference. It was a good record, but its aim
252
A SOCIALIST FOREIGN POLICY
and inspiration was not consciously rooted in
Socialist thinking. It moved in the Liberal
tradition, and while it sincerely and construc-
tively aimed at peace, it did this by expedients
that had their origin in a view of life and history
that is not ours.
To aim self-consciously at originality would
be one of the gravest mistakes we could com-
mit. At the head of the Foreign Office a
Socialist Minister must act in continual contact
with capitalist and even Fascist Governments,
and he will fail unless he can secure their co-
operation. Much of his work will be the oppor-
tunist fitting of means to ends, to avert some
imminent danger that threatens our own
country or the world’s peace. He may have to
use all the conventional arts of diplomacy to
buy off the instinctive hostility of capitalist
Powers towards a Government bent on hasten-
ing the transition to a Socialist society. His
adroitness in his own field may ease the task
of colleagues who will have to adapt our foreign
trade to the demands of a Socialist plan of
reconstruction, and to maintain our credit
and currency in a critical and suspicious world.
One cannot, in detail, foresee the nature of
these tasks, which call rather for adaptability
and inventiveness in devising short-range,
253
A SOCIALIST
day-to-day expedients, than for bold long-range
creative planning based upon Socialist think-
ing. For that the opportunity may not arrive
until a large part of the world is ready to co-
operate with us.
Our fault, however, as a nation and as a
party is not an excessive devotion to theory.
The danger is rather that we may lose our way
amid the practical problems of the hour for
lack of a clear perception of our Socialist
objective. It is even easier in the foreign field
to succumb to the temptations of reformism
than it is in the domestic sphere. To keep the
peace £md avert war seems an end so laudable
and urgent that one may readily devote all
one’s energies to its service, though in one’s
cailmer hovus of reflection one may perceive
the futility of any devices that leave the
capitalist roots of imperialism still cumbering
the ground. The first question that calls for
decision is, indeed, how far one proposes to
follow both these objectives. To put the ques-
tion concretely : Do we expect a Socialist
Foreign Minister to devote his days and nights
to the task of averting war, by whatever oppor-
tunist dodges and compromises may be
254
FOREIGN POLICY
available, if it should threaten to break out, shall
we say, between two equally unsympathetic
Fascist and militarist States ? Or do we wish him
to wash his hands of responsibility for the crimes
of capitalism, let history take its course, and
devote himself entirely to the protection of our
own local experiment in Socialism, and to the
uprooting of imperialism throughout the world ?
I can imagine quandaries over which he well
might hesitate. Nazi Germany and militarist
Poland, for example, zire on the brink of wau:.
It might be possible by the use of all his
authority to prevent it, yet there is reason to
hope that war might be followed by a successful
proletarian revolution in one or both of these
countries. To avert this war may be to per-
petuate two peculiarly ugly forms of capitalism.
Or Japan goes marching on into the heart of
China : if you let her exhaust herself and at the
same time discredit the weak bourgeois Nan-
king Government, there may be a promising
chance for a Communist revolution in one
country or both. Short-range pacifism, seeking
always, at any cost, to prevent or to stop war,
may be opposed to the interests of World-
Socialism, which are also, as we believe, in the
long run, the interests of peace. One may, if
one wishes to be logical, sharpen this dilemma.
255
A SOCIALIST
If you decide that in such cases a Socialist
Minister will sometimes let history take its
course and will not be over-zealous in stopping
every war which capitalism may breed, why
not go further? An adroit Machiavellian
touch might sometimes precipitate a useful
war.
To state the answer in this latter way is, I
think, to answer it conclusively — at least for
our British Socialist movement. We will not
contemplate a catastrophic policy, either at
home or abroad. Is that a relic in us of a
puritan conscience, or is it the utterance of
nothing more respectable than convenience or
irresolution ? I do not think so. The most
realistic of us may very well doubt the capacity
of any Minister, or Government, or Party, to
make these delicate and difficult predictions,
and to decide when it might be to the advan-
tage of Socialism to let a war take its course.
The biggest men are often fallible optimists in
such cases, as Lenin was, for example, in the
latter phases of the Russo-Polish War of 1920,
when he decided “ to test Poland with
bayonets.” Again, there are values in life
superior even to the interests, or the supposed
interests, of Socialism. A party sufficiently cold-
blooded and insensitive to let a war take its
256
FOREIGN POLICY
course, vvithout an honest effort to stop it,
would make, when it got the chance, a very
crude and undesirable type of Socialist com-
monwealth. If capitalist society be so rotten-
ripe, so near its end, that revolution, in this
region or the other, offers the best hope of
salvation, then it is probable that all our efforts
to keep the peace, however sincere and well-
conceived, will fail. But even when we expect
a possible gain to our cause from war, I assume
that we shall make the attempt to avert it.
This is a frankly empirical attitude which any
reader who still has a firm trust in the Marxist
interpretation of history will find unsatisfactory.
One may value it as a clue to the past, and yet
doubt how far it can be used as a practical
guide for policy in the present and the future.
What Marxist foresaw the power of Fascism
— ^until it overwhelmed the oldest and solidest
party in our movement ? Which of us predicted
that at the phase of history through which we
are passing, the lower middle class and not the
proletariat would become the revolutionary
force — ^albeit in a reactionary sense ? Are we
sure that classical Marxism understood the
effect of the automatic machinery of to-day in
lessening the importance of the manual worker
in society, so that his skill becomes each year
Ro 257
A SOCIALIST
less valuable and less marketable, and his
numbers are constantly in excess of the de-
mand ? Can this happen without depressing
his pride and sapping his consciousness of his
historic r61e ? It is rather the engineers and the
organisers who seem destined to become the
makers of history, with a high sense of their
creative significance in society. The answer to
Fascism, or part of it, ought to be a revolt of
this section of the workers, since by their
functions they are against the reactionary petti-
ness of the small trader who is the backbone
of Fascism, at least in its Nazi variety. Until
we can bring about an alliance of the techni-
cians with the manual workers, I doubt whether
Socialism can move forward, and I think it
will err if it continues to stress, in an orthodox
Marxist sense, the exclusive significance of the
proletariat as the maker of history. Until oim
vision of the trend of the history, obscured as
it is (and ought to be) by recent events on the
Continent, is surer, one need not apologise for
empiricism.
It is not, then, in our attitude to w'ar that
we reach the dividing line between a Liberal
and a Socialist conception of foreign policy.
That emerges when we consider the economic
aims of a capitalist empire. Such an empire,
258
FOREIGN POLICY
even if it is satiated and desires no further
territorial expansion, regards diplomacy, based
in the last resort upon power and armaments,
as a means of furthering the interests of its
possessing class. It stands behind the members
of this class with arms in its hands, to protect
them in their enterprises beyond its frontiers,
and to further their profit-making designs, with
the ziid of its prestige or its force. It will defend
them in the spirit of Palmerston’s Civis Romanus
sum, prepaured, in its extremer bouts of arro-
gance, to maintain (as in effect Sir John Simon
did in the affair of the British engineers in
Moscow) that a British subject on foreign soil
can do no wrong. Its diplomacy will endeavour
to secure for them concessions and similar
opportunities for profit and to back them (as
in the recent Persian oil dispute) in any con-
troversy with a foreign Government. To say
(as is usually said) that British foreign policy
must promote British trade is an inadequate
simplification. The type of “ trade ” that
modem imperialism especially favours, and the
type which most often requires the support of
diplomacy, is that which rests upon the per-
manent investment of capital abroad. This kind
of “ trading ” is more than an exchange of
goods and services ; it involves a tribute to the
259
A SOCIALIST
owning class at home. That debt or investment
is the real nexus of empire one may see clearly
enough in the policy of colonial preference. If
one enquires why it is desirable that we should
eat Australian rather than Danish butter, the
honest answer is, I think, that the City draws a
moneylender’s profit in the former case but not
in the latter, for Australia is the City’s mort-
gaged estate. The Empire is the City’s securest
and most valued field of investment, for over
most of it it holds a virtual monopoly of usury.
Argentina comes next, a far from negligible
fiinge. How conscious the ruling class is of
the central core of empire is revealed clearly
enough in the financial provisions of the Draft
Round Table Constitution for India. Currency
is withdrawn altogether from the field of self-
government and confided to a Reserve Bank.
The Viceroy is provided with a financial expert,
who will advise him over the head of the
nominally “ responsible ” Indian Minister. He
may veto any of the latter’s measures, if they
seem designed to injure India’s credit or to
disturb the confidence of investors. India is
still a dependency of the City, though long
ago its Company lost its charter.
On this economic basis, not so much of trade
as of moneylending, the permanent lines of
260
FOREIGN POLICY
capitalist foreign policy are built. Its principles
defy exact definition, for they rest on instinct
and long experience, (i) The promotion of
empire, regarded chiefly as a field for invest-
ment comes first. (2) Second comes the main-
tenance of its naval supremacy — qualified of
late by the acceptance of parity with the United
States. (3) Thirdly, it is probable that the old
principle of the balance of power in Europe
is not yet obsolete. It was assuredly the motive
that led our rulers (if not the average citizen)
into the World War, and it is enshrined in the
armament clauses of the Versailles Treaty.
On all these fundamentals. Socialist foreign
policy is necessarily opposed to capitalist
policy. It may wish to assist in the develop-
ment of backward parts of the earth, by
railway-building and the provision of
machinery. I do not know what arrange-
ments an ideal Socialist international society
would make for this purpose. Perhaps its
central authority would build up a reserve of
capital, fed from the surpluses of its members.
From this it would draw to foster, for the
general good, the development of backward
regions. It would exact neither interest nor
repayment of the principal. But as the back-
ward region, thanks to the equipment it had
261
A SOCIALIST
received, in its turn, produced a surplus, it
would begin to contribute to the international
reserve. This may be fantasy ; it is enough to
say that our international Socialist society
would not tolerate the exploitation by an idle
investing class that characterises debt to-day.
I will not discuss the transitional arrangements
that might be made for the disinterested inter-
national control by such a body as the League
of Nations of foreign lending. It is enough to
say that one rejects the creditors’ claim to
sovereignty over the debtor and all his resources
which found expression, for example, in the
British occupation of Egypt, and lives on in the
Draft Indian Constitution.
Secondly, a claim of any one Power to naval
or military supremacy is a threat to any inter-
national society, even to a loose structure like
the League of Nations. The League, as the
Sino-Japanese conflict suggests, has renounced
the ambition of controlling the doings of a
great Power. If it dare not coerce Japan, can
we conceive it, should the need arise, making
the attempt to check or coerce Great Britain
or France? Until the power of the whole
society is visibly and indisputably greater than
the power of any unit, we are not within
sight of the creation of a true international
262
FOREIGN POLICY
commonweal. Disannament, which stereotypes
the relative strengths of armies and fleets in the
world of to-day by proportional scaling down,
may be desirable because it stops economic
waste and lessens the stake in war of certain
interests and classes. But it brings us no nearer
to the conditions required for the creation of
a true international society. The French plan
for a League army was, I think, in principle
sound. It was objectionable (i) because it still
left enormously powerful national forces
standing and (2) because it was designed to
preserve an intolerable status quo. A League
army to-day would be the picked police force
of allied capitalism. A Socialist policy of peace
and disarmament cannot respect these claims
to national supremacy in any element. As little
can it allow itself to be influenced by the tradi-
tional doctrine of a balance of power, by which
(under one’s breath) one always means a balance
favourable to one’s own country. But on this, one
need not enlarge. The doctrine in our day enlists
rather secret practitioners than open advocates.
It follows even from this hasty survey that to
all the fundamentals of any capitalist foreign
policy that is true to type. Socialists are neces-
sarily opposed. They dare forget the reality
of a class struggle as little in the international
263
A SOCIALIST
as in the domestic field. It follows that we reject,
in principle, any obligation of continuity in
aim or direction. A Socialist Minister, on the
contrary, will welcome every chance of proving
that the aims and the values have changed. He
may have to “ denounce ” and terminate
treaties concluded by his predecessors, but he
will do this, save under some overwhelming
necessity, according to the recognised forms.
Good faith between nations and Governments
is the foundation of international life, and we
should be the last to undermine it.
The duty of a Socialist Party under a
capitalist and imperialist Government is, in
two words, to oppose and expose. With frank
realism it must recognise the capitalist motive
which inspires policies that drape themselves
in specious disguises. One may doubt whether
it ought ever to share responsibility for imperial
measures. There will always be Liberals to
promote reformist ameliorations. Certainly the
Labour Party ought not to be involved at
any stage in the Round Table procedure
for India. It ought, on the other hand, to
share in the persons of its ablest members in
fact-finding commissions, where even a possi-
bility exists of reaching the truth about the
exploitation of native labour in the Empire.
264
FOREIGN POLICY
No scruple of patriotism, no fear of being mis-
quoted, no reluctance to put an intellectual
weapon into the hands of the foreign critics
ought to soften our ruthless statement of the
facts. The specific duty of each national party
in the Socialist International is to expose and
oppose exploitation by the capitalists of its own
country. That is the rule that governs the inter-
national division of work among us. The task,
however, must be performed with objectivity.
German pacifists who, against the evidence,
threw the whole blame for the World War on
the Kaiser; English pacifists who overloaded
the case against Sir Edward Grey, neutralised
each other and played into the hands of the
ultra-nationalists on the other side. The
supreme law is scientific truth.
II
It is impossible to foresee the concrete
problems which will confront a Socialist
Foreign Secretary eight, or even three, years
hence. In what sort of a world will he have
to get his positive Socialist policy in motion ?
The utmost that one can do is to indicate some
of the general aims which we should wish him
to pursue, in so far as he is free to take an un-
trammelled initiative.
265
A SOCIALIST
I, A few years ago everyone would have
assented if I had included among these aims
the revision of the framework forged for Europe
at Versailles. As a basis for the economic life
of the Continent it was a negation of all in-
telligent planning. In its political aspect, it was
designed to foster on the one side radical
nationalist unrest, and on the other to create
an ultra-conservative resistance to all change
from a group of victor Powers, great and small,
who saw in any hint of change a threat to their
ill-gotten gains. It made a fantastically arti-
ficial balance of power, weighted against the
more advanced industrial civilisation.
To-day one covild not repeat the familiar
case against the Versailles settlement without
encountering the objection that any process of
revision must strengthen the Nazi-Fascist block
in Evnope. That is, however, to accept a wholly
fallacious opposition between the democratic
and the Nazi-Fascist groups. The difference in
form between their types of government is
wholly irrelevant to this issue. In the first place,
the democratic Western Allies are linked with
two despotisms, Poland and Yugo-Slavia, as
barbarous as the leading Powers of the rival
combination. In the second place it was not
the democracy of the allied victors that made
266
FOREIGN POLICY
this antagonism but rather their militarism,
their imperialism, and their n^ve greed for
tribute. Revision would belatedly undo some
of the mischief wrought by these tendencies ;
it could not weaken democracy.
If, however, by “ revision ” is meant pri-
marily another attempt to redraw the map of
Europe on ethnographic lines, we should
answer, I think, that as Socialists we are not
interested in this fruitless undertaking. Rather
do we wish to break down the whole obsolete
conception of national sovereignty. Any in-
telligent economic planning for Europe would
begin by studying the possibility of an organised
division of labour and an exchzinge of produce
between the industrial West, regarded as a
whole, and the agrarian East. From this point
of view, frontiers that marched accurately
with distribution of the various races (if that
were possible) would be a nuisance and an
irrelevance as troublesome as the frontiers of
to-day, drawn though they sometimes were
vindictively, or to serve the ends of strategy.
We are more concerned to render frontiers
unimportant than to redraw them. If {a) we
could enforce all over Europe a charter of
culttural and civic rights for racial minorities,
including Jews ; if we could {b) banish the fear
267
A SOCIALIST
and hope of war and (c) equalise the status of
the workers in neighbouring lands, it would no
longer matter very gravely to any man, or to the
State which claimed his allegiance, whether he
lived on one side of the frontier or the other.
When that happens, it will be easy to redraw
frontiers, but equally it will hardly be worth the
trouble.
To say this is, I think, to declare that the
problem will be soluble when all Europe turns
Socialist, but I will not pause to dash the hopes
of anyone who thinks that we can reach this
happy condition by gradual reformist stages.
The conclusion is, however, that a Socialist
foreign policy will not seek territorial revision
as an end in itself. Rather will it aim at the
indispensable organic changes — the sapping of
national sovereignty, a liberal recognition of
cultural autonomy, economic planning on a
continental scale, and the surrender of the
national military machines.
2. A second general tendency emerges from
what has been said already about imperialism
and foreign investment. It must be one of the
purposes of a Socialist foreign policy to lighten
the world’s burden of international debt, both
public and private, and where it cannot be
ended, to devise ways of escape from the political
268
FOREIGN POLICY
servitude it commonly entails. Evidently its
policy could not march too closely in step with
that of France and the United States, the great
creditor Powers. It would, I think, view with
the utmost scepticism the proposals of Liberal
economists like Sir Arthur S^ter, who talk of
restoring the world’s prosperity by an immense
extension of international lending, which ought,
they think, to total 5(^2,000,000,000 annually,
(at the old parity) of new loans.
3. How a Socialist Government in London
might assist the liberation of weak States from
imperialist pressure should rank high among
its pre-occupations. Its first and central duty
is to satisfy India, but this subject falls within
the chapter of this book that deals with the
Empire. India, in its turn, is the key to a whole
system of strategical safeguards, ranging from
Gibraltar through Malta, Cyprus and Egypt
to Irak, all of which involve, in varying degrees,
an infringement of national rights. Over this
Eastern region there weighs the qualification
made by Sir Austen Chamberlain to the
Kellogg Pact, which exempts “certain regions”
from its operation — meaning that in them the
Empire is free to levy war for its own aggran-
disement. Here, too, according to the draft of
Mr. MacDonald’s Disarmament Plan, it may
269
A SOCIALIST
continue the practice of bombing from the air
“ for police purposes.” Clearly these reserva-
tions must go. The Treaty concluded with Irak,
and the similar arrangement offered unsuccess-
fully to Egypt, marked an advance, but still
imposed on these countries a form of tutelage
disguised as an alliance. The problem is to
define the legal situation of the Suez Canal as
an intemationzil waterway, and to provide a
guardian and a police force capable of con-
trolling it in peace and war. If the League were
a stronger organisation than it is, the solution
would be easy. No other seems desirable or
possible. The same doubt about the League
may lead some to hesitate, I think needlessly,
over the suggestion that it might help back-
ward States at their request, where they require
expert help in ordering their finances or re-
forming their administration, or if for construc-
tive purposes they desire to borrow abroad. If the
League cannot be used for such services as these,
it might as well disappear. Over one at least of
these stations on the road to India it is inexcus-
able that we should hesitate. We ought without
delay to satisfy the demand of the Cypriotes for
union with the Hellenic Motherland. One such
spontaneous act as this would do more than
reams of literary virtue to establish the honesty
270
FOREIGN POLICY
of our party as an opponent of imperialism.^
One cannot speak of the East without facing
the immense problem of China, though it is
useless to guess how it will look some years
hence. Will Japan then have satisfied her
appetite ? Can the Nanking Government,
efficient only in its persecution of Labour, sur-
vive for so long ? Will the Communists still
hold an immense area with the support of the
peasants ? China, as a nation, has grievances
that we ought to redress, and stands in need of
help of all kinds which in part we might
(perhaps through the League) share in supply-
ing. But ought we to prop up this unsatisfac-
tory Government ? Certainly we shall not allow
British gunboats to be used, as was done in
1930, to defeat the Communists in a civil war.
With them it may be, so long as they can keep
the confidence of the peasantry, lies the best
hope for China’s future — though if they can
win the interior, a bitter struggle for the coast
provinces and the ports is inevitable, for these
1 The reader may remind me that France claimed and received
in the war settlement a veto over the disposal of this island. She
had been alarmed by the Italian seizure of Rhodes. It is doubtless
convenient for the Imperial Spenlow to have this handy Jorkins to
whom he can refer an importunate client. But would France really
veto the union of Cyprus with Greece ? It is inconceivable that any
French Government — or at least any Government of the Left — ^would
« assume that responsibility, provided the British Government
publicly declared its willingness to cede Cyprus.
271
A SOCIALIST
they cannot touch without a final challenge
to Western imperialism in China. The entire
destiny of the Far East may turn one day on
the issue whether Russia and a British Socialist
Government can agree on a common policy
of liberation in China.
What then will be our relations with Russia ?
— assuming, as we all expect, that she will,
within two or three years, surmount the present
agrarian crisis. Instinctively every honest
Socialist believes and desires that the closest
collaboration, political and economic, should
unite us for mutual aid. Here, and here alone
— unless there should be Socialist administra-
tions in Scandinavia or Australia — ^is our natural
ally. On the eve of the formation of the first
Labour Government M. Rakowsky was author-
ised to propose close collaboration. The various
outstanding causes of tension should be rapidly
removed, he suggested — ^by friendly negotia-
tions in London — and then the two Socialist
Governments should jointly propose to the
world a radical plan of disarmament. This, as
I gathered at the time, was in the sanguine
imagination of Moscow only a first suggestion
for joint action which would have led to others.
It did not commend itself to the head of the
Labom* Government.
272
FOREIGN POLICY
Since these days, the relations of the two
Parties have worsened, and Moscow is probably
less disposed to count on sympathy from
London. It is hard to believe in the possibility
of fruitful collaboration between a Socialist and
a Communist Government, while the two Inter-
nationals remain at feud. It is equally difficult
to hope for a victorious revolt of the German
workers against the Nazi despotism, while their
energies are spent in recrimination. The ques-
tion of the “ Common Front ” may seem to be
unimportauit in our country. But on the Con-
tinent it is crucial. To this fatal division of
forces history will certainly point as a condi-
tion that made possible the triumph of Fascism,
first in Italy, and then in Germany.
What bearing, the reader may ask, has this
upon foreign policy ? It means, for its success
or failure, nearly everything. If Socialist unity
existed, and the International were healthy
and vigorous, a Socialist Government, whether
in London or in Moscow, would work in close
collaboration with it. It could not regard itself
merely as a British or Russian national Govern-
ment. It would think of itself as an organ and
expression of a world-wide movement, incar-
nated and vested with power at a fortunate
point on the earth’s surface, which ought to act
So 273
A SOCIALIST
for the good of the world’s workers, and have
in turn a right to their support. At once leader
and servant, it would wield, if it knew how to
use it, boldly and with imagination, an in-
fluence such as no Government since history
began has ever enjoyed. Its diplomacy would
work habitually on two planes. It must deal
correctly and loyally with the capitalist Govern-
ments around it. But equally, through suitable
and authorised channels, it would keep up a
constant interchange of thought with Socialist
Parties and the Socialist Press abroad.
This flattering picture is a mockery in the
present state of the international Socialist
movement, and one may doubt whether we in
this country yet realise that the future of our
enterprise may depend upon solving this prob-
lem of the “ Common Front.” A Socialist
Government that attacks its task in earnest
in England will soon discover that it has a
battle to fight in Europe and Asia, as well as
in the City. It may be, if it chooses, for half the
world’s population, its standard bearer, its
embodied ideal. But this will not happen unless
it plays consciously and sincerely for the support
of the world’s workers ; and above all it will
not happen unless we can restore Socialist
unity. The first step is to will it, to perceive its
274
FOREIGN POLICY
importance. The mischief is that we have in
view only the small embittered groups in our
country, too feeble to affect our fortunes. We
forget the 5,000,000 voters in Germany, the
immense human reserves of Russia, and the
far from negligible armies of China. A Socialist
foreign policy must be thought out in terms of
this ill-led but incomparable human force.
What may be done in Geneva, or said in Rome
or Berlin, is doubtless important, but it is a
minor matter compared with the possibility of
winning the active support of workers beyond
our shores.
The difficulty of affecting any reconciliation
is formidable. The attachment of our Western
movement, German as well as British, to de-
mocracy grows the stronger as democracy itself
goes down in defeat. Its dislike of the method
of dictatorship in Russia is confirmed as it
watches the Nazi caricature. There is no
hope save in an attitude of tolerance which will
conceive that history may require very different
tactics in the West and in the East. But a
Marxist training rarely makes for tolerance. It
may be that neither we nor the Communists are
big enough for this effort, and that we shall
go on frustrating each other to the bitter end.
In that case Socialism, as world history runs
275
A SOCIALIST
on, can effect only local successes, and what
we hope to achieve will be merely an episode
in the eccentric chronicles of the British Isles.
The objective which Moscow proposed in
1924 for its first essay in collaboration with a
Labour Government will certainly not have
been attained, three or eight years hence.
There will still, if I am not mistaken, be battle-
ships to scrap. The real purpose of the Russian
proposals for total disarmament was a little
too obvious for success. It meant the disarm-
ing of the ruling class. Literally executed, it
would have dissolved empires and obliterated
frontiers. Wronged nationalities would have
walked across these ill-drawn and now un-
guarded boundaries, much as a crowd of
villagers will break down the fence when the
squire encloses common land. India, facing a
disarmed Empire, would have drafted her own
constitution without asking leave of West-
minster. A revolt of the masses armed with the
traditional scythes and sticks wotild again
become possible. These proposals lit up our
world with a revealing flash, for they taught
us to realise the part of force in shaping
it. Whatever steps the capitalist world may
take to disarm, it will not be on this model ;
it will retain adequate armies for “ police
276
FOREIGN POLICY
purposes ” — meaning the repression of the mass
of the population, white and coloured. Nor is
Moscow itself prepared to abandon force ; it
stiU needs an armed police. Even with this
restriction, however, radical disarmament is a
Socialist purpose, since armed power is the
incarnation of the national Sovereign State.
One demands it, not necessarily on pacifist
grounds, but because against great national
armaments the authority of an international
society cannot hope to prevail. Without disarm-
ament, in short, the League can have no reality.
With any hopeful or respectful mention of
the League, we are out of the climate of
Moscow, and we may have encountered an
obstacle to collaboration as formidable as the
rivalry of the two Internationals. Moscow
believes in world-government, but not on the
Genevan model. It believes in a federation of
Socialist Soviet republics — ^in the indefinite
extension, that is to say, of the Union which
has its centre in the Kremlin. It would require
all its member-republics to constitute them-
selves on the same pattern, and it would ensure
an identity of aim and policy by providing in
each of them for the dictatorship of a Com-
munist Party, subject in its turn to the disci-
pline of the Third International, which tolerates
877
A SOCIALIST
no heretics. Assuredly this is very far from
the conception that we cherish of zm inter-
national society or a world-federation. It
seems to us intolerably centralised and authori-
tarian.
Then are we satisfied with the Genevan
model ? Few of us were, even in the enthusiasm
of the first hour. It was tied up with the
Versailles settlement and lamed by the absence
of Russia and the United States. Worse still, its
constitution was based throughout on the
absolute sovereignty of its member-States.
That meant that while it might, by some
arbitral procedure, compose disputes, it could
not impose the organic changes which alone
can remove the causes of war. Whether one
has in mind the oppression of some race or
class, the pressure of population within a
limited territory, or the monopolist’s abuse of
ownership for economic gain, the remedy will
always be found to involve some invasion of the
domestic jurisdiction of a member-State. The
League may, if it cares to exert its power,
prevent war or stop it, but it cannot cure the
political or economic maladjustment that drives
nations to war. This some of us saw sharply
enough, but one hoped for the gradual sapping
of sovereignty, for the djecay of the claim of the
278
FOREIGN POLICY
national State to exercise the right of ownership
of its territory, immune from all interference.
But now the Manchurian affair has taught
us that the League cannot be trusted to exert
its authority to stop a war, even after it has
condemned the aggressor. This event, to say
nothing of the sorry performances of the
Disarmament Conference, has shattered all
confidence in the League. Nor is it an adequate
explanation to say that Sir John Simon is an
unsatisfactory Foreign Secretary, or even that
his personal sympathies were notoriously with
Japan. With the frailties of statesmen, now in
London and again in Paris, the League will
always have to reckon. The crude fact, one
supposes, is that the Great Powers felt that no
compelling interest was involved in the un-
pleasant task of coercing a well-armed Great
Power, even to “vindicate the sanctity of
treaties.” When they did this in 1914, there
were secret treaties to assure them of ample
rewards. If the operation were likely to resvdt
in a distribution of Japan’s outlying satrapies,
say Korea and Formosa, among the champions
of right, it might evoke some moral enthusiasm.
If this be the explanation of the inaction of the
Great Powers, it is hard to retain belief in
the practical value of the League. This is
279
A SOCIALIST
not to say that it ■will never work. When the
national interest of the chief partners in the
League demands it, sanctions will doubtless be
applied — as Lord Hailsham threatened to
apply them. That, however, is small consola-
tion. It means that the League is a reality
when its system of impartial justice happens
to be in line with the self-regarding calculations
of certain Powers — Great Britain and France,
to be plain.
That, it may be argued, is worse than noth-
ing, for it obscures our perception that we still
inhabit a jungle. The existence of the League
may be a positive mischief if it blinds the mass
of mankind to the fact that the real work for the
banishment of war has yet to be done. And that
may be our case to-day. Even after the break-
down of the League in the Far East, a liberal
speech by President Roosevelt, which changes
none of the realities, can induce some of us to
mobilise once more our routed illusions.
This discovery raises a more fundamental
question. Perhaps the Russians have good
reason to insist (though they may be pedantic
over details) that every member of the inter-
national society should be a Socialist Republic.
Can a League function which includes Gov-
ernments of almost every conceivable shade of
280
FOREIGN POLICY
political opinion ? We did not at die start pose
this question pointedly, since the composition
of the League was at that time predominantly
“ democratic.” That was doubtless less im-
portant than President Wilson and his school
of thought supposed. To-day, however, de-
mocracy is not widely professed among the
League’s members. Among seven Great
Powers, two are Fascist, and three are outside
the League. Within it Democracy and Fascism
cancel out, two against two, though Democracy
has the heavier armaments. There is no longer
much excuse for deluding oneself with the
belief that a constructive international policy
can be worked out by a council, bound by the
rule of unanimity, in which half the permanent
members deride the very idea of internation-
alism and persecute those who profess it. Any
positive advance is plaiinly impossible. One
need not, however, conclude that the four
pillars of the League have nothing in common.
On the contrary, they have their capitalism in
common. What, then, can this League do, if
it does anything at all, save legislate and ad-
minister in the capitalist interest? Were we
ever so simple, a Russian might ask, as to sup-
pose that it could do anything else? Foreign
policy, international statesmanship, cannot be
281
A SOCIALIST
colourless and neutral. At its base there will
always be one of the two antagonistic concep-
tions of property that divide mankind. It must
be either Socialist or imperialist.
The conclusion from this argument, if it
satisfies us, is clear enough. We ought to quit
the League and smash it by our departure —
smash it as a dangerous delusion, and an organ
(if it is anything positive at all) of imperialism.
We must reaUse, on this view, that systematic
collaboration in the international field with
capitalist States is as dangerous, even (if one
likes angry words) as treasonable, as coalition
at home with capitalist Parties. The germ of
the international society lies within the Socia-
list International (if we could but reconstruct
it) and nowhere else.
To this argument, it is, however, easy to make
at least a partial answer. Let us see how it runs :
1. The League, with all its dangers and
defects does, after all, embody an inter-
national ideal. It stands as a fact, though it
be a lonely and contradictory fact. It is at
least a clearing in the jungle, and a con-
spicuous one. Clearings may be enlarged.
2. It has done an immense amount of ex-
cellent non-political work, by humanitarian
282
FOREIGN POLICY
efforts : the standardising of health services ;
investigation and enquiry, especially in the
economic field.
3. It has consolidated the procedure for the
pacific settlement of disputes, and several have
been settled (not always well) under its
auspices. Even if it cannot always prevent
war, it can sometimes do so. The proba-
bility that it will do so is, moreover, brightest
in Europe, which is still, we flatter ourselves,
the focus of our imperilled civilisation.
4. The League, inadequate as it is, is after
all some check upon ultra-nationalist and
ultra-imperialist Powers and parties. We do
nowadays arbitrate a dispute with Persia,
instead of sending gunboats to the Gulf. It
is, among ourselves, the ultra-imperialists who
wish to be rid of the League.
5. At the lowest it does provide at Geneva
a centre where statesmen must meet and
talk, and at its Assembly and Conferences
a platform for the public discussion of com-
mon affairs. It makes for publicity. It
focuses public opinion. It embodies the ideal of
conference. Statesmen may enter it ultra-na-
tionalists, but its atmosphere broadens them.
6. While it may be true that policy in any
creative sense of the word cannot be neutral,
283
A SOCIALIST
and must be either imperialist or Socialist,
there are numerous day-to-day problems
that admit of a neutral and harmless solu-
tion. It is perhaps a merit of the League, in
present conditions, that its ambitions are
limited. It does not do much harm.
7. Finally its worst defect — if we look for a
world-government — ^is in present circum-
stances a safeguard. Its rule of imanimity
protects us. A British Socialist Government
need not fear that it will be hurried against
its will into dangerous imperialist policies.
It has its vote on the Council, and a single
vote can obstruct action.
This is not an enthusiastic defence to mtike
for the League. It amounts to saying that it
does some modest good, that it can do little
harm, and that our case would be appreciably
more perilous without it. The objection that
we ought not to enter into any permanent col-
laboration with capitalist Governments is, I
think, a fallacious one. Into regular diplomatic
relations with them we must enter — as Russia
herself does — and deal with them in a friendly
way on a basis of give and take. Geneva pro-
vides a new diplomatic technique very much
less dangerous than the old, because it is
284
FOREIGN POLICY
public and still more because all interests are
represented and can make themselves heard.
In this way some view of the general good
does emerge, as it rarely did in the secret
bargainings between single States.
The balance of these arguments inclines, in
my mind, though not emphatically, to the
conclusion that we should remain in the
League. So long as we are in it, we must
utihse it as fully as its inherent defects permit.
But to propagandist exaggerations and delu-
sions we are not committed. We ought to make
it plain to ourselves and to our adherents that
it cannot be the vehicle of a Socialist foreign
policy. It cannot even serve as a workshop in
which a creative peace may be built, though it
may avail us to stave off some disastrous wars.
That it might be used for some further reduc-
tion of armaments is conceivable, but not, I
think, in any significant degree probable. To
spend further time in elaborating the League’s
charter of paper safeguards against war would
be to show a lack of realism.
The other conclusion to which this groping
survey has led us is more important, and one
may state it with less hesitation. The major
work of a Socialist foreign policy lies outside
the League and beyond the embassies. It is not
285
A SOCIALIST FOREIGN POLICY
concerned with Governments, save with that
of Russia. It aims at welding the working mass
of humanity, including its technicians and its
scientists, into a force conscious across frontiers
of its unity. It wages, with constructive mili-
tancy, an incessant struggle against imperi-
alism. Its main task is one of liberation within
the British Empire itself. But it will rejoice if
it can find an appropriate means to aid the
Chinese masses. If it can by any action, official
or unofficial, further the liberation of the Ger-
man masses from Nazi tyranny, it will think
that a bigger achievement than any success
at Geneva. This wider foreign policy it can
conduct, alike in opposition and in office. The
first need for the health of its soul (and the
efficacy of its work) is that it should see clearly
the relative importJince of these two worlds.
It tends at present to overestimate the oppor-
tunities that come to Downing Street.
A complete study of Socialist foreign policy
would include a chapter on the organisation,
political and economic, of the international
Socialist Federal Commonwealth. That, with-
out grave loss, may be postponed. International
Socialism is passing through an hour of defeat
and retreat. We have tasks more urgent than
the mapping of Utopia.
286
NOTE ON THE SOCIALIST LEAGUE
The Socialist League is an organisation com-
posed of members of the Labour Party who believe in
Socialism as the only remedy for the economic and
social ills from which the world is suffering, and who are
prepared to work actively to secure that the Labour
Party is not only Socialist in policy, but in fact ready to
apply Socialism in practice.
The League was founded in October 19312 ; and in
the succeeding months it has established branches
throughout England and Wales now numbering approxi-
mately a hundred, and steadily increasing in number
and membership. It is engaged nationally and locally
in working out the details and implications of the
accepted policy of the Labour Party. It endeavours
also to assist the education of the rank and file of the
movement and of the general electorate on these
matters by the publication and circulation of pamph-
lets, by lectures, meetings, and similar activities. The
lectures published in this book are examples of its work
on the national side. Locally, the immediate work of
its branches is to enlist the services of all Socialists,
including those with experience in the Trade Union
and Co-operative Movements, in the professions or in
industry or trade.
The League is not a separate Party. It works in and
through the Labour Party, and its members are expected
to be active in the local Labour Parties, Trade Unions,
and Co-operative Societies. It needs membership, and
welcomes assistance. It invites all Socialists, who believe
in its objects and sire prepared to work for them, to join.
Full information may be obtained on application to
The Secretary, Socialist League, Westminster Chambers,
3 Victoria Street, London, S.W.i.
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