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Political Commentary

27th July 1956, Page 53
27th July 1956
Page 53
Page 53, 27th July 1956 — Political Commentary
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Which of the following most accurately describes the problem?

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Devil's Advocate

By JANUS

QUOTATIONS are sometimes difficult to pin to their authors. For example, who wrote the following? "The case for nationalization is weakest where there are a very large number of small firms competing with each other, where there is a strong speculative element in the business, where personal contacts and knowledge count for a lot, and where there are no very obvious advantages of large-scale production."

The first name likely to come to mind is that of the chairman of the Road Haulage Association, from whom the statement would seem almost too much a piece of special pleading. Nationalize whom you like, it seems to say, but leave the hauliers alone. Other possible, but, less probable, choices of author are the present Minister' of Transport trying to see both sides of the case, and the Prime Minister in an ironical vein. In fact, the extract is from a pamphlet, "Socialism and Nationalization," written by Mr. Hugh Gaitskell, leader of the

. Parliamentary Labour Party, and recently-published by the Fabian Society.

Accidental Support In a few words, Mr. Gaitskell has established the complete case for leaving road haulage under private enterprise. He makes plain elsewhere in the pamphlet that this was not, his intention. Nationalization of the railways and of road haulage was carried out, he says, partly to secure greater efficiency, and partly because co-ordination between them was essential, "and because this could only be secured through public ownership.

He claims also that, once nationalization of road haulage was carried out, there were large economies in manpower. The " index of administrative personnel per 100 tons carried" had, he says, been reduced by a quarter, and that of "operating personnel " by a fifth before denationalization broke up the new organization. 'A Ministry of Transport survey has shown how British Road Services has a much higher operating efficiency than private hauliers."

Mr. Gaitskell does not give his references, so that it is not possible to check the accuracy of his rather odd selection of information. What is beyond doubt is that, whenever he may think an industry ought to be nationalized, he will always find sufficient reasons for overriding the criteria set out in the quotation with which I began.

The pamphlet, however, shows no great enthusiasm for nationalization. One might almost suppose that the Labour Party, having talked themselves into it, have called upon Mr. Gaitskell to talk them out of it. His chain of thought is clear and logical, but it seems to have nothing attached to the other end.

Less than 10 'years ago the supporters of nationalization looked upon it as the crowning point of their endeavours. Such an idea, says Mr. Gaitskell, was no more than a myth. Nationalization could only be the gateway to the promised Socialist land, where there. is equal opportunity, no social classes, a high degree of economic equality, full employment, rapidly rising productivity, democracy in industry and a general spirit of co-operation between members of society. Assuming that all these things are desirable, Mr. Gaitskell is now in some.doubt whether nationalization will provide them any more quickly or certainly than other methods, such

as social services and taxation, Perhaps even the gateway is little better than a myth.

Mr. Gaitskell makes some interesting admissions. Nationalization, he says, does not abolish private income from capital, because interest has to be paid on the compensation. He firmly rejects the argument that compensation should be abolished or curtailed. Confiscation would be a tax or levy arbitrarily imposed upon only one section of the community. Compensation must be fair. Mr. Gaitskell adds that "the interest income, though guaranteed, is smaller than the profit income would have been," but at this point in his argument he evidently did not have the railways in mind.

Even on the subject of the transfer of power from capitalists to managers or bureaucrats Mr. Gaitskell has his qualms. "I doubt if there is any escape," he says, "from the dilemma that the more independent the nationalized boards are allowed to be, the more the' will exercise power without responsibility, and the less independent they become, the greater the risk of over centralization and lack Of enterprise."

The problem of size is one to which Mr. Gaitskell finds no convincing solution. He admits that the defects of large-scale management have been evident in the nationalized industries. Other associated weaknesses are that fewer final decisions can be taken at "lower level," and that the larger organization does not so easily generate staff loyalty or esprit de corps. This last difficulty is aggravated where there is a monopoly. "ft may be regrettable," says Mr. Gaitskell frankly, "hut it seems to be a fact that people's enthusiasm about almost any groups to which they belong is enhanced by competition."

No Room for " Character " "The odd man out" is given a brief and not very flattering character sketch towards the end of Mr. Gaitskell's pamphlet. It is admitted that there is not much room for such a character in a nationalized industry, or in any large-scale undertaking. He is usually aggressive, egotistical and restless, although he is sometimes shrewd, hard-working and dynamic. Mr. Gaitskell agrees that some of the most enterprising industrialists in our history have had such a character. He is cautious enough not to suggest that. there are plenty of examples in the House of Commons, but he appears to be of the opinion that on balance the. elimination of the individualist is a loss.

"To some extent these extreme individualists have already disappeared from the private sector in Britain, driven out by the growth of monopoly. In road haulage anything their temperament might have contributed was easily outweighed by the great technical advantages of large-scale operation." Mr. Gaitskell has weighed the hauliers in the balance and found them wanting.

As the devil's advocate against nationalization, he has had to make sure of not winning his case. Of all industries, road transport is the least suitable for State ownership. Mr. Gaitskell admits this in principle, but refuses to admit it in fact. His inconsistency on this point is the one flaw in a well-marshalled argument leading inexorably to the conclusion that further plans for nationalization may be left on the shelf without any departure from basic Socialist principles.


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