Labour policy—false and true

by Lynden Livingston Macassey

The Brussels International Financial Conference said: “Above all, to fill up the gap between the supply of, and the demand for, commodities, it is the duty of every patriotic citizen to practise the strictest possible economy, and so to contribute his maximum effort to the common weal. Such private action is the indispensable basis for the fixed measures required to restore public finances.”

The Duty of the Citizen

The principles of Labour policy which I have outlined are generally in the direction of freedom and in its best sense individualism, looking rather to the development in industry of co-operation than to struggle and the use of power to settle differences and express the balance of economic forces. But industrial freedom and individualism impose correlative responsibilities on all citizens, especially in regard to the maintenance of efficient social services. At first sight, any mention of social services may appear a contradiction of the argument developed so far. Social services to many minds are inevitably associated with relief in the narrow sense of the word, conceived as a concession to the clamour of Socialist theorists. In reality they are the growing expression of an increased social sensitiveness. No State can be healthy which is based on a foundation of hardship and suffering. Certain abuses must be removed, and certain conditions remedied. In any advanced economic society the State must take action, has taken action, and will in future extend its action. The social conscience, to anyone who reads history, is a real and growing force. But to be sound and effective it must of necessity be based upon voluntary individual co-operation.

As things are to-day, we must recognize that State activity in social services is in many branches ahead of the understanding of the ordinary man. It has, through the nature of our political machinery, developed in a specialized manner, which throws a heavy burden upon legislators and administrators whether voluntary or official. There is a consequent confusion, lack of co-ordination, and overlapping of effort which leads to waste, not merely of money, but of what is, in the long run, more important—human enthusiasm, effort and efficiency. In dealing with this problem, the individual is of vital importance. The average citizen must know more, take more interest, and render more service, if order and economy are to take the place of confusion and waste. The necessity for this individual interest is reinforced by the present financial situation.

We are, as a nation, recovering, in fact, becoming slowly convalescent, from the effects of war-time and post-war inflation of money and credit. We have realized that sound finance and the balancing of the Budget are the necessary foundations of prosperity. Other European nations are still enjoying the temporary delusive prosperity that can always be obtained by inflation and dishonest finance. To carry the economic argument one stage further, we must realize that the State can only carry non-producers to the extent to which industry can obtain a surplus, after providing for wages, interest, replacements, etc. The State cannot, by any arrangement of taxation, loans or administrative activity, provide an artificial standard of life, which is not earned by human individual activity. There is, therefore, urgent need for education in finance, in both its public and private aspects. Some of us are learning the lesson by the bitter experience of high rates and taxes, others by the hardships of unemployment. But out of this experience much good is coming. We are learning the true and permanent bases of national prosperity. The dangers of Great Britain to-day are not to be found in Red Revolution. Democracy will fail, if it fails at all, from a lack of understanding of economics and finance. Politicians without scruple or foresight may hold out bribes of immediate material advantages, trusting to some juggling of figures to enable them to redeem their promises. During the war, the National Savings Committee, by a steady education in economics—converting financial theories of currency, goods and services into the terms of men and munitions—educated the general public into the social consequences of spending and thrift. The control of national finances so established under the patriotic stimulus and urgency of war is no less necessary in peace.

The history of social legislation in the twentieth century is the expression not merely of democratic pressure, but of the increased social sensitiveness to the national conscience, awakened by individuals of outstanding merit protesting that certain evils should no longer exist. As the industrial revolution worked itself out, it was possible to ascertain, by patient investigation, its weaknesses and evils, and to provide certain remedies. Based on a steadily growing prosperity, its record is worth reciting; a wide extension of education providing in increasing degree an opportunity to the able men and women in all ranks of society to develop their individuality; a general standard of education which proved its value in increasing temperance, diminished crime, and growing sense of public spirit, culminating in attention to the physical condition of school-children, that in normal times would have given every child a happy healthy childhood. In public health, the elimination of the most dangerous infectious diseases, a steady improvement of sanitary conditions, and an education in preventive medicine, that can be proved by statistics to have been directly remunerative. On the positive side, an extension of infant welfare work, which, relying on the natural affection of mothers, and calling upon them to develop their own individuality, has for a small expenditure reduced the infant death rate by half. Health Insurance on a contributory basis has lessened the sham of sickness in the wage-earner’s family, and as the results of the quinquennial valuations of Approved Societies are more widely known and understood, will overcome any remaining adverse criticism. Old age pensions have removed the fear of an old age spent in dependence on grudging relatives, or on the Poor Law, with its deterrent associations. The treatment of unemployment has gained in efficiency and thoroughness by the steady gaining of experience—the Labour Bureaux, Unemployment Insurance, the use of State credits to finance international trade and guarantee extensions of industry at home are laying foundations of a new order—the irregular activities of voluntary organizations and local authorities in emigration have developed into an Imperial Scheme for Overseas Settlement. Under the existing conditions of financial stringency, we have to consider how this burden can, in the future, be borne. How much of the national income can, in the years immediately to come, be devoted to services admittedly admirable in their objects? One fact becomes clear: at all costs we must hold on to the main essentials in the public services and keep the machinery in working order so that it will be ready for expansion when financial conditions make it possible. The fall in prices, resulting in a reduced cost of living, lower war bonuses, lower cost of materials, is bringing, and will bring, even further relief to the taxpayer and ratepayer. The adjustment, however, lags behind the change in individual circumstances, and is the cause of much criticism of those in authority. If, however, this policy of holding on to essentials is to be carried out, there will have to be an increased measure of economy—economy, not merely of money, but, in its original Aristotelian sense, of management of a household. This can only be done by attention to details, by a higher standard of public spirit, by which the services in health, education, etc., are looked upon by those who benefit as something for which they pay, and for which, in the long run, they are responsible. If the desire for education were widespread, there would be an immediate economy in school attendance officers, rota committees, and all the machinery devised to block the holes in the educational net. If the individual standard of care for health were raised as it can be raised by such movements as health weeks, baby weeks, etc., there would be a consequent reduction in the expenditure on Public Health. But the largest measure of economy of the household management type would come through a co-ordination of the activities of national departments, local authorities and voluntary organizations. Attention has recently been called to the advance of expenditure due to the system of grants-in-aid to local authorities, by which local authorities are led to spend money on the false assumption that the ratepayer will gain something to be paid for by the taxpayer. The discrepancy between the rating system and the tax-paying system is the root cause of many difficulties, but a wider understanding of finance would obviate the grosser evils.

Under our English system of government, all recent legislation has been of specialized character dealing with specified classes, or a particular evil. As each need was recognized, a special administration was set up to deal with it, and we now have innumerable inquiry officers, inspectors, officials of various grades administering Acts of Parliament and regulations in varying ways. The whole relationship of national departments and local authorities requires revision and reorganization. Owing to the burden of rates on the ratepayer driving the local authorities to rely more and more upon subsidies from the National Exchequer, and to their refusing to undertake new burdens, social services have been identified with departmental activity, red tape and bureaucracy. Local government has suffered from a gradual atrophy.

Now, under pressure of financial stringency, is the time to overhaul our social machinery. It needs the services of the best brains that the country can produce. The problem has two aspects. First comes financial policy. Owing to the complexity of administration, no local check can exist on the total expenditure in any area. Inquiry is urgently needed, on the lines of the national return known as the Drage return, setting out for each local government area the sums paid by the local authority, Health and Education, etc., the Poor Law, and the National Ministries of Pensions, Labour, etc. At present the facts are not known, and, indeed, are not available. Secondly, in administration, we need a co-ordination of investigation and inquiry, and some measure of co-ordination in the payment of relief; at the very least, a register of assistance by which overlapping in payments and machinery could be avoided. The extent to which either of these movements could be successful depends almost entirely upon local interest. Any scheme set up by Government would but add to the general confusion. Economy in this sense is a strict inquiry and attention to detail, and is a service which can only be rendered by those of business experience and ability. Finally would come a reorganization of the Poor Law, not in any spirit of hostility to those who have done such admirable work in spite of abuse and misrepresentation, but a reorganization on to new areas coinciding with the other areas of local government, and more nearly adjusted to the present industrial conditions.

As a social policy, the insistence on economy will seem dull, but the comment of the old lady about husbands that the good ones are dull applies equally to social policy. The future development of social services must depend upon the economic and financial future. No one under present conditions can advocate fresh channels of expenditure, or the widening of existing channels. This is not a confession of failure, or an admission of social stagnation. We can no longer measure social reform by the gradually increasing sums of money spent in particular specialized services. We must, for a future as long as we can foresee, measure social progress in the terms of the social service that the individual is prepared to render. As a preparation we need two elements: (1) wider economic education; (2) wider knowledge of social conditions, and the provision for dealing with social evils. For the first the development of the Savings Movement is a guide. Started in 1916, with the twofold function of economic education and the provision of facilities for the small investor, it has grown into a financial instrument of unlimited possibilities.