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Objectives
Key Issues
European Socialism
The Problem of Power
Syndicalism
Wage Price Mechanism
Monetary Policy
Taxation
Immigration |
European Socialism
I first used the phrase ‘European Socialism’ on May Day, 1950, in a speech
in East London. Some years later, after a discussion of the principles involved
in several countries I reduced the definition of the subject to the following
brief description: “European Socialism is the development by a fully united
Europe of all the resources in our own continent, for the benefit of all the peoples of Europe, with every energy and incentive that the action of European government
can give to private enterprise, workers’ ownership or any other method of progress
which science and a dynamic system of government find most effective for the
enrichment of all our people and the lifting of European civilisation to ever
higher forms of life.”
At once, I state a preference for the conduct and development of industries
already nationalised by syndicalist method rather than by the present state
bureaucracy. It is far healthier for industries which have already lost the
principle of private enterprise to be owned and conducted by the workers in
them than by the mandarins of state socialism. Either method would, of course,
under our system be subject to the wage-price mechanism. The wages of these
industries would also be determined by government, and, as they are monopolies,
the prices they charged would be determined by government. In these conditions
it would surely be far better that they should be worker-owned, and that the
workers in them should be told they would get the benefit of any increased
efficiency, which kept the prices they charged stable but enabled their own
wages to be raised. Such direct incentive to efficiency and workers’ co-operation
in new methods would bring far better results than leaving the matter to the
present functionaries have no direct personal interest in efficiency, or even
much concern whether the industry runs at profit or loss.
In this way could operate the collective individualism which is the supreme
merit of syndicalism because it restores the incentive which bureaucratic socialism
destroys. But the further question arises whether other industries should be
syndicalised as they became what is now termed ripe for nationalisation. The
basic idea of European Socialism in this respect was that industries should
become worker-owned instead of nationalised at the point when the original
individual initiative was entirely lost, and they became large, long-established
concerns which were in effect conducted by a bureaucracy, and often also acquired
a monopoly character.
European socialism envisaged a natural development of industry in due chronological
order. Worthwhile new things nearly always come from the initiative of the
individual, in economic matters from an industrial pioneer. This man is the
mainspring of any effective system and of all progress; he should in all conditions
above all be encouraged and cherished. But at the point when he dies, or becomes
old and retires, industry should not pass to the control of a bureaucrat employed
by the state, but should be owned by the workers who have been the comrades
of the industrial pioneer and are therefore his natural heirs and successors.
The founder of a business should draw his full reward and so should his family — who
could always conduct the business as long as they were able to do it — but
when the original character of the concern was entirely lost, and it became
too big for any individual management, it should be the workers and not the
state-paid mandarins who then conducted it. Such, in a very brief survey, was
the industrial structure suggested in the system of thinking which I described
as European socialism.
It was a synthesis between private enterprise and socialism, using each motive
force at the appropriate period of industrial development. That private enterprise
was to be in every sense a freer private enterprise than it is today — as always
in our thinking —while the socialism derived from the syndicalist and not from
the bureaucratic tradition of Europe thinking. The turning point toward disaster
in previous socialist thinking seemed to us always the rejection of guild socialism
in favour of state socialism; the natural movement of the workers then gave
way to bureaucracy, and the “inevitability of gradualism”; in short, to the
rule of the mandarin which has persisted ever since in the theory and practice
of the British Labour Party, and of other socialist parties in the second international.
This system of thinking, like Marxism itself — which was more thoroughly understood
on the Continent — was essentially oriental in inspiration, and the opposite
in every way to the live tradition of the true European movement which began
in the Guilds of the great cities in England and Germany during the middle
ages, and later found vigorous expression in France, Italy, and elsewhere as
the syndicalist movement.
State socialism brought the dead hand of the remote functionary, the bureaucrat,
the mandarin, the Chinese idol behind a Whitehall desk, which slowly stifled
the vitality from the live body of the natural and organic movement of the
English and European workers.
We sought to bring back the true tradition of the working-class movement and
at the same time to find a synthesis with the indispensable force of private
enterprise and individual initiative at a higher level, where the driving impulses
of both systems exercised in due time and on due occasion, could give forward
and harmonious urge to the whole. This attempt in new thinking was right and
necessary, but it may well now be surpassed by further thinking and by greater
possibilities. The plain fact, which must be recognised by all realists, is
that the workers have very little interest in questions of the ownership of
industry, or any other theoretical matters, when things are going really well.
Small blame to them, for they find better things to do with their spare time
and money than attending committee meetings; and as opportunity occurs for
real leisure, holidays, travel, and general culture arising from protracted
facilities of education, the use of spare time and money will find ever more
desirable outlets. If we can construct the economy of Europe-Africa and then
release within it the force of modern science, both to increase wealth production
and to reduce the hours of labour, the thoughts of the workers are likely to
turn increasingly to higher things than the old industrial dogfight which found
expression in acute questions of the ownership of industry. And this will not
necessarily mean a lessening of social consciousness, but rather an extension
and deepening of individual consciousness. Already the tendency is notable
whenever for a short time things go well; it is bound to gather force and momentum
directly an economic system which is both stable and expanding brings durable
hopes of a fuller life for the mass of the people.
In short, if we resolve the main economic problem through
the wage-price mechanism, syndicalism tomorrow may look as irrelevant
as nationalisation begins to look today. Very few of the workers may
want to be bothered at all with such things. But the people who will continue very much to be bothered with the
daily life and development of the great concerns which they administer, will
be the new class of managers and industrial technicians. For the next stage
of development we may have to look more to the managerial revolution than to
syndicalism. When the individual pioneer and his family pass away and the concern
becomes too big for any form of individual management, it is the new category
of highly trained managers and departmental experts who are ready to take over.
Not only does their life depend on the business, but their life is in the business.
They are a new and most desirable phenomenon; they should be encouraged and
cherished by the industrial system as much as the original pioneer to whose
first impulse all subsequent developments are due.
Again, the system of differential rewards must enter decisively and seriously.
These men are worth a lot, and they must get it. They must be paid more and
taxed less. A considerable share of the larger amount of distributable wealth — which
will come from scientific development, automation, and mass production for
a large and completely assured market —must go to them; they must rank next
to the scientists for the first cut at the bigger cake.
The new managers must be brought forward to play an ever more conscious role.
They must above all develop the leadership capacity which we envisaged for
the managers under syndicalism. Even generals in the field today have to lead
and to persuade as well as to command. Modern command is persuasion. The day
of the remote industrial tycoon is over. The modern industrial leaders must
really be able to lead; they must have personality as well as knowledge, charm
as well as drive. Naturally, not all managers will perform the same part; the
division of function is clearly necessary in proportion to the size of the
concern. But in principle the figure of chief manager must cease to be the
figure of the boss and become the figure of the leader. He will be the captain
of a team and not its driver.
At the point when the role of the new managers becomes decisive, the industrial
future may well rest between them and the Trade Union leadership which increasing
opportunity will evoke. Government, in exercising economic leadership through
the wage-price mechanism, as already noted, must seek not only the co-operation
of European Trade Unionism but must be ready to devolve upon it as “an estate
of the realm” many of the duties of the state. Trade Unionism, for instance,
should be asked to deal with all questions affecting conditions of work, unemployment
pay, welfare, sick pay, holidays, compensation claims, legal representation.
The administration of these matters should be entirely taken over by the Trades
Unions. This can be one of the ways in which the new system will avoid the
development of bureaucracy. To this end we must rely very largely on existing
trades unions and employers’ organisations to perform many vital services to
industry.
So far from a new system requiring a bigger bureaucracy, it will be possible
considerably to dismantle the present bureaucratic apparatus when we enter
a larger and healthier life. When it is possible for all men to live well,
it will not be necessary to support them in living badly. The unhealthy body
requires every kind of support, ranging from stays for holding it upright to
iron lungs. But the healthy body can support itself, and live better for so
doing. We must get away from the whole system of charity, national and international,
and develop self-help within a system of endless opportunity.
All social services should be made contributory, with consequent saving both
to the state and individual. The economy to the state is obvious, but the individual
can also gain by not paying for benefits he does not require and by directing
his own contributions to the services he wants. The state will save an expensive
bureaucracy necessary to maintain the present system, and the individual will
no longer be made to pay for what he does not want.
Fear is the basis of the present system, fear of all the manifold mischances
of a system of chaos. Once we enter a stable system of unlimited opportunities
for all, men and women will be glad to insure themselves only against the misfortunes
they apprehend, and to avoid paying for a great paraphernalia of compulsory
solicitude in which they have not the slightest interest. Self-help must be
the basis of a healthy future, combined with every chance for economical insurance
against life’s misfortunes such as accident, illness, death or anything else
which the individual may freely choose to guard against. All the other expensive
props of the feeble structure of the modern state will be rendered unnecessary
by the policy already described.
Agriculture, for instance, will need no subsidies when it is clearly recognised
that primary producers must be paid more, and that a good proportion of the
increased production for the larger and assured market of Europe-Africa must
be set aside for the purpose. No man and no industry need live on charity,
when all can earn more in a life of larger opportunity than present limitations
permit. When we plunge into the water of that greater life, let us begin by
washing ourselves clean of all the slime of subsidy and charity with which
the body economic is enfeebled today.
Let us, also, in all things relate reward directly to effort. Already the introduction
of a really decisive system of differential reward has been discussed, which
will encourage all both to acquire skill and to accept responsibility. Incentive
can be extended with piecework in every form, not merely of the individual,
but also of the team. Reward, either individual or collective, should be directly
related to effort. All these strong motive forces have been largely inhibited
in the modern state by fear of unemployment, by the well-founded apprehension
that any higher rate of production in whole or in particular will lead to indisposable
surplus and consequent breakdown of the system. But once operation of the wage-price
mechanism has begun, clearly and successfully, to equate production and consumption,
the fear of surplus, breakdown and unemployment will vanish. All the restrictive
practices of today, which arise from old fears with real foundations in the
present system, will be swept away by the urge to produce and earn, once it
is proved that production means fairly distributed wealth and not another collapse
into unemployment and poverty.
Nearly all the evils of the present industrial system arise from fear, and
that fear in turn arises from the chaos of a system which must buy and sell
on international markets in conditions increasingly impossible for the European
governments. The firm grip of the wage-price mechanism within a viable area
which possesses its own supply and its own market, can assure every worker
that his increased effort will have no other effect than his increased reward.
The whole psychology of industry will change once the new system wins confidence
because its operation is observed.
The incentive of reward should be accompanied by an incentive to save. As every
Bonapartist soldier carried in his knapsack the Marshal’s baton, so should
everyone who works in any way in the new Europe carry with him the possibility
of founding a great industry or of rising in some other way to its summit.
Already certain means have been suggested by which the inventor and the industrial
pioneer can be assisted by finance which carries through a new process from
the crude experiment to the open market. But, in addition, far greater opportunities
should be open to the individual to save and to finance himself. The present
burden of taxation in many countries puts this possibility out of the question.
A man could not start with a small bicycle shop today and save enough at each
stage from his own profits to build the greatest automobile industry in the
country. We must restore the situation in which men of energy and talent could
lift themselves to the top without help from anyone.
The general level of taxation will, of course, be automatically reduced by
a greater output of wealth through mass production for a large and assured
market; a lesser tax on a greater turnover can yield the same return. In addition,
the pooling of overheads in a united Europe in every sphere of national life
will provide immense economies, quite apart from special measures we have considered
to reduce bureaucracy and create a healthier system. We can be stronger and
better organised in every sphere at less expense; all the economies of a great
merger will be present in addition to increased output and profit from an enlarged
market. So the crippling burden of present taxation will naturally be lifted
by entering into a larger system, and the creative individual will receive
proportionate relief from a load which today crushes him and inhibits new enterprise.
But should we not go further with means to encourage saving and to enable men
from their own savings to build new industries? Should not taxation be largely
shifted from income to expenditure, and become a tax on what a man spends and
not on what he earns? At present various devices for expenditure tax as such,
have considerable attraction. They have stood up to severe test, for one such
system was apparently approved by the American Treasury in the war but never
subsequently applied. But the main difficulty about expenditure tax is that
it hits directly the man we most desire to encourage, the man who by our standards
is most worthy.
The scientist, the inventor, who is also an entrepreneur, and sells on the
market at fairly regular intervals the product of his brains, may choose to
spend the proceeds and to do it in a big way if his creations are worth much.
And why shouldn’t he? If any man has a right to a big reward, it is this type.
Why should he not spend the reward, and live very well if he wishes? If we
discourage such men, we are drying up the very spring of progress. Everything
about them is what we want to encourage. They create, they enrich the community
as well as themselves; they even spend as they go, instead of trying to accumulate
some system of hereditary usury which, if it goes too far, can distort the
whole economy. They are in every way admirable people; yet they might be hit
and frustrated by an expenditure tax. Therefore they would have to be exempted,
and with them the whole large and worthy host of men who build businesses which
they subsequently sell with a desire to spend the proceeds. They range from
the scientific entrepreneur to the farmer and the shopkeeper. It is true that,
if they have saved, they keep what they have earned under the system of expenditure
tax. But it is not freedom to compel a man to save, and within an economy of
this kind which was really working, compulsory saving might very quickly become
over-saving.
All such men would in any case have to be exempted from an expenditure tax.
This fiscal weapon must not shoot them in a general broadside, which is primarily
aimed at the guinea-pig director with a fake expense account. This phenomenon,
which is rotting the present fiscal system, derives from a general system which
is dying, in fact decomposing. The level of taxation is so intolerably high
in the effort to support national burdens which are insupportable for the small
divided nations, that individuals will go to any length to avoid the burden
of tax which in turn is insupportable to them. That problem will no longer
arise when the general level of taxation is lower within the larger system
for reasons already given. When the general health is fully restored it will
no longer be necessary to fake the fever chart. Thus, expenditure tax, which
we have sometimes contemplated as a necessary expedient in Great Britain, is
likely to be unnecessary in the larger and freer system here recommended. In
any case the proposal for expenditure tax will have to be altered out of all
recognition to free from its operation men who create things most valuable
to the country, and thereby rightly earn a large reward, and have a most natural
desire to enjoy it.
What could be done most effectively, however, is to shift a large part of the
burden from direct to indirect taxation in order to assist the saver and let
the spender pay. In this region again we are faced with a legacy of fear from
the epoch of poverty economics. Such proposals were often designed to make
the poor carry the burden and let off the rich. On the contrary, I would propose
that every necessity of life be entirely free from tax; all the basic necessities
which today are often heavily taxed. Then a graduated luxury tax should be
introduced, which would increase in severity as the article passed from any
possible sphere of utility or necessity into the category of pure luxury. Naturally
the definition of a luxury would change and become ever more liberal as the
standard of life rose. Something which is a luxury in the siege-economy of
a beleaguered island (which Britain may become by persisting in present policies)
can be regarded as a near necessity in the standard of life which will be natural
in an expanding continental economy.
But in that case the whole burden of taxation would be relieved as total output
increased, and a lower tax secured a greater revenue. When the standard of
life in the new system rises, the problem of taxation will progressively diminish.
But as we pass from poverty to plenty economics, we should not miss the opportunity
to encourage the saver and the doer at the expense of the spendthrift and profligate.
It is wrong that a man who saves every penny in order to build his own business
should be taxed in the same way as the man who just wants to throw his money
about; but that is the effect of direct taxation, particularly at a very high
level. Let us set the doers free, and use the fiscal system also to that end.
Every incentive should encourage the natural tendency of most men and women
who work to make money for themselves and their family, in order to obtain
the things which money can buy. There is an elite of mankind to be found in
every section of life, which works as the creative artist works, for the joy
of work and creation in itself. Others work for honour and recognition by their
fellows rather than for reward. But the great majority work quite simply to
make money for themselves and their families, and any sensible system must
be organised to satisfy this most honourable desire in work which also serves
the whole community, by relating reward to effort.
The interest of family in any cases is a stronger factor than personal interest.
That is why we must tread carefully in dealing with the impulse which heredity
gives to the whole social system. It is true that great accumulations of hereditary
wealth tend to deform the whole body economic with a wasteful and lop-sided
form of demand, but the desire to accumulate wealth for their families after
their own death is the urge which keeps many of the creative people working,
and making new enterprises long after they would otherwise have ceased to exert
themselves. It is true also that a hereditary class whose members may themselves
have contributed nothing to the good of the community, tends to undermine the
best social values of duty and service. Yet the desire to give his children
a better start in life is one of the motives which inspire many who contribute
most to those values. It is also, surely, clear that a farmer who bequeathed
his farm to his son, or a man who leaves a family business to his family should
be able to do so without the family continuance of the business being stopped
by death duties. In such concerns the hereditary principle in work and service
is as desirable as the creation of a hereditary burden is undesirable.
In this difficult sphere of contradictory national interests, we have already
in these pages noted that once again the wage-price mechanism can deal effectively
with yet another evil of the day. It will be impossible to accumulate such
great wealth through profit and to transmit it to descendants (at the expense
of the purchasing power of the mass of the people, who provide the general
market) that demand becomes distorted in undesirable directions to an extent
which jeopardises the whole economy. Long before any such event occurred, the
wage-price mechanism in responsible and capable hands would have pushed up
wages at the expense of profit to check any such dangerous tendencies. A government
exercising economic leadership by these means would be able immediately to
correct any development of the kind before it became dangerous, as a skilful
driver corrects a skid. But in addition to these inherent safeguards of an
organised and consciously directed system, a scientific method of death duties
could, if necessary, be devised both to preserve incentive for a creative individual
to the end of his days, and yet to prevent great accumulations of invested
wealth being handed down from one generation to another as a charge on those
who work and create. Here again it should be emphasised that, when we pass
from the present system of poverty economics in a small island to the system
of plenty economics in two continents, it is improbable that we shall require
any such system of severe death duties. But it is worth mentioning this subject
in brief to show how easy it is with new methods like the wage-price mechanism
to meet the old Marxian dilemmas of the Left.
We can answer all the Marxian arguments with the wage-price mechanism alone,
if we strip them of their jargon and reduce them to their practical application,
but a little ingenuity can, also, easily fashion other devices to reinforce
that answer, if it were ever necessary.
In fact, Marx observed certain natural laws of the capitalist economy in its
very early stages, which will operate if nothing is done to check or to alter
them. In the same way Newton observed a natural law which in practical application
meant a man would break his neck if he jumped over a high cliff with nothing
to support him. Later men invented the balloon, the parachute, the aeroplane
and finally the rocket to suspend the operation of that natural law and to
enable men to defy its consequences in the same way there are many effective
ways of preventing the fatal operation of the Marxian laws, without adopting
the rigid and brutal despotism of communism. I believe the economic leadership
of government by means of the wage-price mechanism can provide a complete answer
to Marx at every point, and I am always ready to sustain that contention in
public debate.
If, in conclusion of this subject, I may be permitted an element of fantasy
by present standards, a truly civilised community might give a number of gifted
people the means to show how beautiful life could be; a process which is exactly
the opposite to the present system of giving a number of ungifted people the
means to show how silly life can be. Once we have solved the basic problem
of providing the means to live well, by organising a market for the new production
of which science is capable - a market which will simply be the fair reward
of all who work according to their effort, assured by a conscious, deliberate
and organised mechanism of the state - we can use some portion of future increases
in production as a surplus, which may legitimately be used for elevating our
way of life and enhancing the beauty of human existence.
We must always put first things first, and the first charge on any surplus
must certainly be the pure research of science which is responsible for most
of the extraordinary advance of humanity, but we should also use some of the
new resources for purposes which make life worth living when that progress
has been achieved.
Oswald Mosley - June 1958
Europe: Faith and Plan
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