Essays in Liberalism Part 7

All these defects in the working of the Cabinet system have been much more marked since the war than at any earlier time. But the two chief among them--lessened coherence due to unwieldiness of size, and diminished responsibility to Parliament--were already becoming apparent during the generation before the war. On the question of responsibility to Parliament we shall have something to say later. But it is worth while to ask whether there is any means whereby the old coherence, intimacy and community of responsibility can be restored. If it cannot be restored, the Cabinet system, as we have known it, is doomed. I do not think that it can be restored unless the size of the Cabinet can be greatly reduced, without excluding from its deliberations a responsible spokesman for each department of government.

But this will only be possible if a considerable regrouping of the great departments can be effected. I do not think that such a regrouping is impracticable. Indeed, it is for many reasons desirable. If it were carried out, a Cabinet might consist of the following members, who would among them be in contact with the whole range of governmental activity.

There would be the Prime Minister; there would be the Chancellor of the Exchequer, responsible for national finance; there would be the Minister for Foreign Affairs; there would be a Minister for Imperial Affairs, speaking for a sub-Cabinet which would include Secretaries for the Dominions, for India, and for the Crown Colonies and Protectorates; there would be a Minister of Defence, with a sub-Cabinet including Ministers of the Navy, the Army, and the Air Force; there would be a Minister for Justice and Police, performing most of the functions both of the Home Office and of the Lord Chancellor, who would cease to be a political officer and be able to devote himself to his judicial functions; there would be a Minister of Agriculture, Industry, and Commerce, with a sub-Cabinet representing the Board of Trade, the Board of Agriculture, the Ministry of Mines, the Ministry of Labour, and perhaps other departments.

Ministers of Public Health and of Education would complete the list of active administrative chiefs; but one or two additional members, not burdened with the charge of a great department might be added, such as the Lord President of the Council, and one of these might very properly be a standing representative upon the Council of the League of Nations.

The heads of productive trading departments--the Post Office and the Public Works Department--should, I suggest, be excluded from the Cabinet, and their departments should be separately organised in such a way as not to involve a change of personnel when one party succeeded another in power. These departments have no direct concern with the determination of national policy.

On such a scheme we should have a Cabinet of nine or ten members, representing among them all the departments which are concerned with regulative or purely governmental work. And I suggest that a rearrangement of this kind would not only restore efficiency to the Cabinet, but would lead to very great administrative reforms, better co-ordination between closely related departments, and in many respects economy. But valuable as such changes may be, they would not in themselves be sufficient to restore complete health to our governmental system. In the last resort this depends upon the organisation of an efficient and unresting system of criticism and control.

THE HOUSE OF COMMONS

In any modern State the control of the action of Government is largely wielded by organs not formally recognised by law--by the general movement of public opinion; by the influence of what is vaguely called "the city"; by the resolutions of such powerful bodies as trade union congresses, federations of employers, religious organisations, and propagandist bodies of many kinds; and, above all, by the Press. No review of our system would be complete without some discussion of these extremely powerful and in some cases dangerous influences. We cannot, however, touch upon them here. We must confine ourselves to the formal, const.i.tutional machinery of national control over the actions of Government, that is, to Parliament, as the spokesman of the nation.

An essential part of any full discussion of this subject would be a treatment of the Second Chamber problem. But that would demand a whole hour to itself; and I propose to pa.s.s it over for the present, and to ask you to consider the perturbing fact that the House of Commons, which is the very heart of our system, has largely lost the confidence and belief which it once commanded.

Why has the House of Commons lost the confidence of the nation? There are two main reasons, which we must investigate in turn. In the first place, in spite of the now completely democratic character of the electorate, the House is felt to be very imperfectly representative of the national mind. And in the second place, it is believed to perform very inefficiently its primary function of criticising and controlling the action of Government.

First of all, why do men vaguely feel that the House of Commons is unrepresentative? I think there are three main reasons. The first is to be found in the method of election. Since 1885 the House has been elected by equal electoral districts, each represented by a single member. Now, if we suppose that every const.i.tuency was contested by two candidates only, about 45 per cent. of the voters must feel that they had not voted for anybody who sat at Westminster; while many of the remaining 55 per cent. must feel that they had been limited to a choice between two men, neither of whom truly represented them. But if in many const.i.tuencies there are no contests, and in many others there are three or more candidates, the number of electors who feel that they have not voted for any member of the House may rise to 60 per cent. or even 70 per cent. of the total.

The psychological effect of this state of things must be profound. And there is another consideration. The very name of the House of Commons (Communes, not common people) implies that it represents organised communities, with a character and personality and tradition of their own--boroughs or counties. So it did until 1885. Now it largely represents totally unreal units which exist only for the purpose of the election. The only possible means of overcoming these defects of the single member system is some mode of proportional representation--perhaps qualified by the retention of single members in those boroughs or counties which are just large enough to be ent.i.tled to one member.

The main objection taken to proportional representation is that it would probably involve small and composite majorities which would not give sufficient authority to ministries. But our chief complaint is that the authority of modern ministries is too great, their power too unchecked.

In the middle of the nineteenth century, when our system worked most smoothly, parties _were_ composite, and majorities were small--as they usually ought to be, if the real balance of opinion in the country is to be reflected. The result was that the control of Parliament over the Cabinet was far more effective than it is to-day; the Cabinet could not ride roughshod over the House; and debates really influenced votes, as they now scarcely ever do. The immense majorities which have been the rule since 1885 are not healthy. They are the chief cause of the growth of Cabinet autocracy. And they are due primarily to the working of the single-member const.i.tuency.

The second ground of distrust is the belief that Parliament is unduly dominated by party; that its members cannot speak and vote freely; that the Cabinet always gets its way because it is able to hold over members, _in terrorem_, the threat of a general election, which means a fine of 1000 a head; and that (what creates more suspicion than anything) the policy of parties is unduly influenced by the subscribers of large amounts to secret party funds. I am a profound believer in organised parties as essential to the working of our system. But I also believe that there is real substance in these complaints, though they are often exaggerated. What is the remedy? First, smaller majorities, and a greater independence of the individual member, which would follow from a change in the methods of election. And, secondly, publicity of accounts in regard to party funds. There is no reason why an honest party should be ashamed of receiving large gifts for the public ends it serves, and every reason why it should be proud of receiving a mult.i.tude of small gifts. I very strongly hold that in politics, as in industry, the best safeguard against dishonest dealings, and the surest means of restoring confidence, is to be found in the policy of "Cards on the table." Is there any reason why we Liberals should not begin by boldly adopting, in our own case, this plainly Liberal policy?

REPRESENTATION OF "INTERESTS"

There is a third reason for dissatisfaction with the composition of the House of Commons, which has become more prominent in recent years. It is that, increasingly, organised interests are making use of the deficiencies of our electoral system to secure representation for themselves. If I may take as instances two men whom, in themselves, everybody would recognise as desirable members of the House, Mr. J.H.

Thomas plainly is, and is bound to think of himself as, a representative of the railwaymen rather than of the great community of Derby, while Sir Allan Smith as plainly represents engineering employers rather than Croydon. There used to be a powerful trade which chose as its motto "Our trade is our politics." Most of us have regarded that as an unsocial doctrine, yet the growing representation of interests suggests that it is being widely adopted.

Indeed, there are some who contend that we ought frankly to accept this development and universalise it, basing our political organisation upon what they describe (in a blessed, Mesopotamic phrase) as "functional representation." The doctrine seems to have, for some minds, a strange plausibility. But is it not plain that it could not be justly carried out? Who could define or enumerate the "functions" that are to be represented? If you limit them to economic functions (as, in practice, the advocates of this doctrine do), will you provide separate representation, for example, for the average-adjusters--a mere handful of men, who nevertheless perform a highly important function? But you cannot thus limit functions to the economic sphere without distorting your representation of the national mind and will. If you represent miners merely as miners, you misrepresent them, for they are also Baptists or Anglicans, dog-fanciers, or lovers of Sh.e.l.ley, prize-fighters, or choral singers. The notion that you can represent the mind of the nation on a basis of functions is the merest moonshine. The most you can hope for is to get a body of 700 men and women who will form a sort of microcosm of the more intelligent mind of the nation, and trust to it to control your Government. Such a body will consist of men who follow various trades. But the conditions under which they are chosen ought to be such as to impress upon them the duty of thinking of the national interest as a whole in the first instance, and of their trade interests only as they are consistent with that. The fundamental danger of functional representation is that it reverses this principle, and impresses upon the representative the view that his trade is his politics.

But it is useless to deplore or condemn a tendency unless you see how it can be checked. Why has this representation of economic interests become so strong? Because Parliament is the arena in which important industrial problems are discussed and settled. It is not a very good body for that purpose. If we had a National Industrial Council charged, not with the final decision, but with the most serious and systematic discussion of such problems, they would be more wisely dealt with. And, what is quite as important, such a body would offer precisely the kind of sphere within which the representation of interests as such would be altogether wholesome and useful; and, once it became the main arena of discussion, it would satisfy the demand for interest-representation, which is undermining the character of Parliament. In other words, the true alternative to functional representation in Parliament is functional devolution under the supreme authority of Parliament.

But still more important than the dissatisfaction aroused by the composition of the House is the dissatisfaction which is due to the belief that its functions are very inefficiently performed. It is widely believed that, instead of controlling Government, Parliament is in fact controlled by it. The truth is that the functions imposed upon Parliament by increased legislative activity and the growth of the sphere of Government are so vast and multifarious that no part of them _can_ be adequately performed in the course of sessions of reasonable length; and if the sessions are not of reasonable length--already they are too long--we shall be deprived of the services of many types of men without whom the House would cease to be genuinely representative of the mind of the nation.

Consider how the three main functions of Parliament are performed--legislation, finance, and the control of administration. The discussion of legislation by the whole House has been made to seem futile by the crack of the party whip, by obstruction, and by the weapons designed to deal with obstruction--the closure, the guillotine, the kangaroo. A real amendment has been brought about in this sphere by the establishment of a system of committees to which legislative proposals of various kinds are referred, and this is one of the most hopeful features of recent development. But there is still one important sphere of legislation in which drastic reform is necessary: the costly and c.u.mbrous methods of dealing with private bills promoted by munic.i.p.alities or by railways and other public companies. It is surely necessary that the bulk of this work should be devolved upon subordinate bodies.

When we pa.s.s to finance, the inefficiency of parliamentary control becomes painfully clear. It is true that a good deal of parliamentary time is devoted to the discussion of the estimates. But how much of this time is given to motions to reduce the salary of the Foreign Secretary by 100 in order to call attention to what is happening in China?

Parliament never, in fact, attempts any searching a.n.a.lysis of the expenditure in this department or that. It cannot do so, because the national accounts are presented in a form which makes such discussion very difficult. The establishment of an Estimates Committee is an advance. But even an Estimates Committee cannot do such work without the aid of a whole series of special bodies intimately acquainted with the working of various departments. In short, the House of Commons has largely lost control over national expenditure. As for the control of administration, we have already seen how inadequate that is, and why it is inadequate.

These deficiencies must be corrected if Parliament is to regain its prestige, and if our system of government is to attain real efficiency.

For this purpose two things are necessary: in the first place, substantial changes in the procedure of Parliament; in the second place, the delegation to subordinate bodies of such powers as can be appropriately exercised by them without impairing the supreme authority of Parliament as the mouthpiece of the nation. I cannot here attempt to discuss these highly important matters in any detail. In regard to procedure, I can only suggest that the most valuable reform would be the inst.i.tution of a series of committees each concerned with a different department of Government. The function of these committees would be to investigate and criticise the organisation and normal working of the departments, not to deal with questions of broad policy; for these ought to be dealt with in relation to national policy as a whole, and they must, therefore, be the concern of the minister and of the Cabinet, subject to the overriding authority of Parliament as a whole. In order to secure that this distinction is maintained, and in order to avoid the defects of the French committee system under which independent _rapporteurs_ disregard and override the authority of the ministers, and thus gravely undermine their responsibility, it would be necessary not only that each committee should include a majority of supporters of Government, but that the chair should be occupied by the minister or his deputy.

DEVOLUTION

Nor can I stop to dwell upon the very important subject of the delegation or devolution of powers by Parliament to subordinate bodies.

I will only say that devolution may be, and I think ought to be, of two kinds, which we may define as regional and functional. To regional bodies for large areas (which might either be directly elected or const.i.tuted by indirect election from the local government authorities within each area) might be allotted much of the legislative power of Parliament in regard to private Bills, together with general control over those public functions, such as Education and Public Health, which are now mainly in the hands of local authorities. Of functional devolution the most important expression would be the establishment of a National Industrial Council and of a series of councils or boards for various industries endowed with quasi-legislative authority; by which I mean that they should be empowered by statute to draft proposals for legislation of a defined kind, which would ultimately receive their validity from Parliament, perhaps without necessarily pa.s.sing through the whole of the elaborate process by which ordinary legislation is enacted. I believe there are many who share my conviction that a development in this direction represents the healthiest method of introducing a real element of industrial self-government. But for the moment we are concerned with it as a means of relieving Parliament from some very difficult functions which Parliament does not perform conspicuously well, without qualifying its supreme and final authority.

One final point. If it is true, as I have argued, that the decay of the prestige and efficiency of Parliament is due to the fact that it is already overloaded with functions and responsibilities, it must be obvious that to add to this burden the responsibility for controlling the conduct of great industries, such as the railways and the mines, would be to ensure the breakdown of our system of government, already on the verge of dislocation. In so far as it may be necessary to undertake on behalf of the community the ownership and conduct of any great industrial or commercial concern, I submit that it is essential that it should not be brought under the direct control of a ministerial department responsible to Parliament. Yet the ultimate responsibility for the right conduct of any such undertaking (_e.g._ the telephones, electric supply, or forests) must, when it is a.s.sumed by the State, rest upon Parliament. How is this ultimate responsibility to be met? Surely in the way in which it is already met in the case of the Ecclesiastical Commissioners or the Port of London Authority--by setting up, under an Act of Parliament, an appropriate body in each case, and by leaving to it a large degree of freedom of action, subject to the terms of the Act and to the inalienable power of Parliament to alter the Act. In such a case the Act could define how the authority should be const.i.tuted, on what principles its functions should be performed, and how its profits, if it made profits, should be distributed. And I suggest that there is no reason why the Post Office itself should not be dealt with in this way.

It is only a fleeting and superficial survey which I have been able to give of the vast and complex themes on which I have touched; and there is no single one of them with which I have been able to deal fully. My purpose has been to show that in the political sphere as well as in the social and economic spheres vast tasks lie before Liberalism, and, indeed, that our social and economic tasks are not likely to be efficiently performed unless we give very serious thought to the political problem. Among the heavy responsibilities which lie upon our country in the troubled time upon which we are entering, there is none more heavy than the responsibility which rests upon her as the pioneer of parliamentary government--the responsibility of finding the means whereby this system may be made a respected and a trustworthy instrument for the labours of reconstruction that lie before us.

THE STATE AND INDUSTRY

BY W.T. LAYTON

M.A., C.H., C.B.E.; Editor of the _Economist_, 1922; formerly Member of Munitions Council, and Director of Economic and Financial Section of the League of Nations; Director of Welwyn Garden City; Fellow of Gonville and Caius College, Cambridge, 1910.

Mr. Layton said:--The existing system of private enterprise has been seriously attacked on many grounds. For my present purpose I shall deal with four: (1) The critic points to the extreme differences of wealth and poverty which have emerged from this system of private enterprise; (2) it has produced and is producing to-day recurrent periods of depression which result in insecurity and unemployment for the worker; (3) the critics say the system is producing great aggregations of capital and monopolies, and that by throwing social power into the hands of those controlling the capital of the country, it leads to exploitation of the many by industrial and financial magnates; (4) it produces a chronic state of internal war which saps industrial activity and the economic life of the community.

I shall not attempt to minimise the force of these objections; but in order to get our ideas into correct perspective it should be observed that the first two of these features are not new phenomena arising out of our industrial system. You find extreme inequalities of distribution in practically all forms of society--in the slave state, the feudal state, in India and in China to-day. Nor is this the first period of history in which there has been insecurity. If you look at any primitive community, and note the effect of harvest fluctuations and the inevitable famine following upon them, you will recognise that the variations of fortune which affect such communities are more disastrous in their effect than the trade variations of the modern world.

But after all qualifications have been made these four indictments are sufficiently serious and must be met, for it is these and similar considerations which have driven many to desire the complete abolition of the system. Some wish to abolish private property, and desire a Communist solution. Others practically attack the system of private enterprise, and wish to subst.i.tute either the community in some form or another (_e.g._ state socialism), or some corporate form of industry (_e.g._ guild socialism).

THE LIBERAL BIAS

Liberals, on the other hand, reject these solutions, and desire not to end the present system but to mend it. The grounds for this conclusion need to be clearly expressed, for after all it is the fundamental point of doctrine which distinguishes them from the Labour party. In the first place, there is the fact that Liberals attach a special importance to the liberty of the individual. The general relation of the individual to the State is rather outside my subject, but we start from the fact that the bias of Liberals is towards liberty in every sphere, on the ground that spiritual and intellectual progress is greatest where individuality is least restricted by authority or convention. Variety, originality in thought and action, are the vital virtues for the Liberal. It is still true that "in this age the mere example of Nonconformity, the mere refusal to bow the knee to custom, is itself a service." The Liberal who no longer feels at the bottom of his heart a sympathy with the rebel who chafes against the inst.i.tutions of society, whether religious, political, social or economic, is well on the road to the other camp. But the dynamic force of Liberty, that great motive power of progress, though a good servant, may be a bad master; and the perennial problem of society is to harmonise its aims with those of the common good.

When we come to the more specific problem of industry, which is our immediate concern, a glance at history shows that the era of most rapid economic progress the world has ever seen has been the era of the greatest freedom of the individual from statutory control in economic affairs. The features of the last hundred years have been the rapidity of development in industrial technique, and constant change in the form of industrial organisation and in the direction of the world's trade.

Could any one suppose that in these respects industry, under the complete control of the State or of corporations representing large groups of wage earners and persons engaged in trade, could have produced a sufficiently elastic system to have permitted that progress to be made? In reply to this it may be said that though this was true during the industrial revolution, it does not apply to-day; that our industries have become organised; that methods of production, population, and economic conditions generally are stabilised, and that we can now settle down to a new and standard form of industrial organisation. But this agreement is based on false premises. The industrial revolution is far from complete. We are to-day in the full flood of it. Look at the changes in the last four decades--the evolution of electricity, the development of motor transport, or the discoveries in the chemical and metallurgical industries. Consider what lies ahead; the conquest of the air, the possible evolution of new sources of power, and a hundred other phases which are opening up in man's conquest of nature, and you will agree that we are still at the threshold of industrial revolution.

I may mention here a consideration which applies practically to Great Britain. We are a great exporting country, living by international trade, the world's greatest retail shopkeeper whose business is constantly changing in character and direction. The great structure of international commerce on which our national life depends is essentially a sphere in which elasticity is of the utmost importance, and in which standardised or stereotyped methods of control of production or exchange would be highly disastrous. Liberal policy, therefore, aims at keeping the field of private enterprise in business as wide as possible. But in the general discussion of political or personal liberty in economic affairs, we have to consider how far and in what way the freedom of private enterprise needs to be limited or curtailed for the common good.

We must solve that problem. For Liberals there is no inherent sanct.i.ty in the conceptions of private property, or of private enterprise. They will survive, and we can support them only so long as they appear to work better in the public interest than any possible alternatives.

RETROSPECT AND PROSPECT

My object, then, is to show how a system which embodies a large amount of private enterprise can be made tolerable and acceptable to modern ideas of equity. For this purpose we need to consider (1) what have we done in that direction in the past? (2) what is the setting of the economic problem to-day, and (3) what is to be our policy for the future?

Dealing first with wealth and wages, the whole field of social legislation has a bearing upon them, including particularly education, elementary and technical, the Factory Acts, and a great ma.s.s of legislation which has affected the earning powers of the worker and the conditions under which he labours. Just before the war we had come to the point of fixing a minimum wage in the mines, but an even more important factor was that we had introduced the Trade Board system, which had begun to impose a minimum wage in certain trades where wages were particularly low. But the most important direct attack upon the unequal distribution of wealth was by taxation in accordance with the Liberal policy of a graduated and differential income-tax, and still more important by taxes upon inheritance; for it has long been recognised that though it may be desirable to allow men to acc.u.mulate great wealth during their lifetime, it by no means follows that they should be ent.i.tled to control the distribution of wealth in the next generation and launch their children on the world with a great advantage over their fellows of which they may be quite unworthy. On the question of insecurity it cannot be said that any serious attack has been made on the problem of how to diminish fluctuations of trade, but again the Liberal solution for dealing with that difficulty was to remedy not the cause but its effects by insurance.

On the question of monopolies and exploitation, though we hear a great deal of the growth of capitalistic organisation, in fact we find that, of the three greatest industrial countries in the world, Great Britain is the least trust-ridden, mainly because of its free trade system. In the case of enterprises not subject to foreign compet.i.tion, we had begun to develop a fairly satisfactory system of control of public utility services which were of a monopolistic character.

Finally, there had been growing up a complete system of collective bargaining and conciliation, and though we always heard of it whenever there was dispute and strife, the ordinary public did not know that this machinery was working and developing in many great and important industries a feeling of co-operation or at all events of conciliation between the two sides. I only mention these points very briefly in pa.s.sing in order to show that with the evolution of modern industry we were already feeling our way, haltingly and far too slowly, it is true, towards a solution of its most serious defects.

Turning to the present situation, we have to face the fact that Great Britain is to-day faced with one of the most serious positions in its economic history. We must make allowances for the readily understood pessimism of a miners' leader, but it should arrest attention that Mr.

Frank Hodges has recently described the present situation as the coming of the great famine in England. For nearly two decades before the war there was occurring a slight fall in the real wages of British workpeople. Food was becoming dearer, as the world's food supply was not increasing as fast as the world's industrial population, and the industrial workers of the world had, therefore, to offer more of their product to secure the food they needed. Hence the cost of living was rising faster than wages, except in trades where great technical advances were being made. There is some reason to fear that the war may have accentuated this tendency.