The Bankruptcy of ‘Planning’

August 25, 1947

The British press regarded the recent economic proposals of Prime Minister Attlee as “inadequate” and “vague.” The Opposition called them “totalitarian.” But very few pointed out that, wholly apart from their effect on human liberties, the economic remedies put forward by the Prime Minister were precisely the opposite of those that the situation called for.

The fundamental trouble with the British economy today is governmental “planning” itself. The British Government has refused to let the free market work. And when the policy of government restriction breaks down, Mr. Attlee, far from recognizing that the past restrictions have brought about the present collapse, opines that “as things have turned out, we have perhaps moved too far and too fast” in the direction of restoring “freedom of individuals to undertake the kind of work that they prefer.”

Mr. Attlee thinks the trouble with England is “a world shortage of dollars.” The mistaken nature of this complaint was pointed out in this column last week. He is equally mistaken in complaining of the provisions in the American loan agreement for sterling convertibility and for non-discrimination against American goods. Both these provisions were sound in themselves. It is chiefly because of its own economic controls, particularly over sterling, that it has been difficult for the British Government to fulfill these provisions.

“Definite targets,” declares the Prime Minister reassuringly, “are being set for basic industries.” But definite targets were set long ago, and were simply not achieved. Mr. Attlee seems to think that if the targets previously set proved too high for achievement, the remedy is to set still higher targets. “For the year 1948, we must raise our sights.” But this is merely planning by exhortation and rhetoric; it is wish-planning. A nation cannot simply talk itself into higher production. Nor is it the function of government statisticians to decide precisely how great coal production, steel production, or particular exports ought to be. Neither government statisticians nor anyone else can know in advance precisely what steel production ought to be in relation to coal production, or the export of one commodity in relation to another. On the contrary, it is the function of individual consumers and producers, buyers and sellers, to establish the absolute and relative production of thousands of different commodities and services by expressing their decisions through a free market.

“We need,” declares Mr. Attlee, “faith in freedom.” Noble words. But in Mr. Attlee’s economic policy there is no faith in economic freedom, in freedom of the market, freedom of the consumer, or even in freedom for labor. Sir Stafford Cripps declared in the House of Commons on Feb. 26, 1946: “No country in the world, so far as I know, has yet succeeded in carrying through a planned economy without compulsion of labor. Our objective is to carry through a planned economy without compulsion of labor.”

But only eighteen months later Mr. Attlee is already admitting that his new program “will involve some sacrifice of individual liberty—by both employers and workers. . . . We shall have to take some measure of control over the employment of labor.”

In announcing his new plans Mr. Attlee repeatedly called for more “sacrifices” from the British public. But as Prof. John Jewkes of the University of Manchester pointed out last January: “Any plan which calls for ‘sacrifices’ should be subject to suspicion, since the purpose of a plan (except perhaps in case of war or threatened war) should be to lessen sacrifices and not increase them.”

Fanatics have been defined by Santayana as people who redouble their efforts after they have forgotten their aim. So the heads of the Labor government are forgetting their ideals of liberty, forgetting even the material purpose of their plan, and drive grimly ahead with a plan that has become an end in itself. Meanwhile their planned economy is running out of coal, running out of food, running out of dollars. And perhaps most serious of all, it is running out of alibis.