HC Deb 20 March 1923 vol 161 cc2472-512

I beg to move, That, in view of the failure of the capitalist system to adequately utilise and organise natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, and believing that the cause of this failure lies in the private ownership and control of the means of production and distribution, this House declares that legislative effort should be directed to the gradual supersession of the capitalist system by an industrial and social order based on the public ownership and democratic control of the instruments of production and distribution. In moving this Resolution, may I say that we have put it down as a direct challenge to the holders and defenders of the capitalist system. We think it necessary that a subject which has been so much discussed on political platforms throughout the country, and has provided material for the members of other political parties to criticise the Labour party on their programme, should be a direct issue in this House. When I put down this Resolution I had no idea that it would excite the widespread interest that it has evoked. I desire to express my appreciation—I had almost said graticude—to those who do not accept this Resolution for the serious way in which they have received it. It is an evidence of the extraordinary progress which socialist opinion has made in this country during the last 20 or 30 years. During that time there have been socialist organisations in this country carrying on a widespread propaganda of the ideals which are embodied in this Resolution. For a long time our platform was confined to street corners and the market place. It is, indeed, an evidence of the progress in the public mind of the ideals which have been propagated, that to-day the Government of the country so much appreciates the importance of this issue that they are prepared to give Government time to its discussion. It should be so, for the ideas which are held with almost religious fervour by millions of people in 'the world, ideals economic and social, are those which are going to be the dividing line in the future between the different parties. They should be seriously, reasonably, and intelligently discussed.

If I might, at the outset I would say that I have always tried to give those who differ from us equal credit for their honesty, and for their sympathy for the condition of a large part of our population. Sympathy is not the monoply of the Socialist party. We differ, perhaps not much in regard to the defects of the existing industrial system. Those defects are too obvious to be either ignored or denied. We differ, and I shall proceed on that assumption in what I have to say this evening, as to the best means by which industrial conditions can be improved and social amelioration attained. We indict the capitalist system. It is capitalism, not socialism, which is on its trial. I think I shall carry general agreement when I say that the test of any economic system must be: "Does it deliver the goods? Does it fulfil its functions? "The most able, and almost the only defender of the capitalist system, Mr. Hartley Withers, in his book on the Case for Capitalism says, that an economic system must be judged by this test: "Does it give the people a good world in which to live? "I propose to apply that test to the capitalist system: "Does it give the people a good world in which to live? "I shall submit that the capitalist system certainly fails to give the people a good world in which to live, and as we state in our Resolution it has failed adequately to utilise natural resources and productive power.

We live perhaps in the most wonderful period of the world's history. Mechanical progress, man's command over natural forces, if fully utilised, could increase the productive power of labour, 50, 100, 1,000 times over. I wonder if hon. Members of this House are acquainted with Mr. Henry George's epoch-making work "Progress and Poverty." If so, they will remember the opening chapters in which he supposes that a scientist of the 17th Century could have foreseen in imagination the wonderful scientific and mechanical improvements of the 19th Century. What would he have thought would be the result of this industrial change on the life of the people? If he could have foreseen the picturesque and lumbering stage coach superseded by the railway train running at 60 miles an hour; if he could have foreseen our modern spinning machinery with its spindles revolving 10,000 times a minute, and spinning yarns as thin as a spider's web—if he could have foreseen this, what would he have thought it would mean in the way of material improvement and a better social system. He would have said the dream of Aristotle at last is realised, and man has become free by transferring his chains to machinery.

What has happened? Sixty years after the advent of industrialism, a nineteenth century economist said that he doubted if all our labour-saving machinery had lightened the day's toil of a single individual. At any rate, whether we accept that statement or not, we should agree that we have to-day, in spite of all these possibilities of wealth production, a very large mass of our people working hard, under unhealthy conditions, and for low wages, and a very considerable part of those who would work are unable to work; while, at the other end of the social scale, we have people so rich that even imagination cannot devise means for spending their superabundant wealth. After 150 years of this wonderful scientific and mechanical advancement, that sums up our industrial and social conditions. The capitalist system, therefore, has not given the people a good world in which to live. It has failed to utilise to the utmost those mechanical inventions and those possibilities of organisation. There was published, a year or two before the outbreak of war, a census of production, and I am sure that the results of that must have come as a great surprise even to those who flattered themselves that they were fairly intimately acquainted with industrial and commercial matters. It disclosed that the amount of wealth production, at the end of that century of wonderful advance, represented only £110 per head of the population engaged on productive work.

What is the explanation of that low output of material things? I submit that it is this: The capitalist system, by its method of wealth distribution, enables a very large rich, idle class to grow up, and their spending power is to a very great extent exercised, not in the support of the staple industries of the country but in the maintenance of unremunerative and unproductive labour. A great capitalist some years ago published a very remarkable book on that aspect of our social conditions, and he came to the conclusion that at that time, 30 years ago, four-elevenths of the population of this country, who were supposed to work, were unproductively employed, to a very large extent as the servants of rich people, or engaged in some way or other catering for the luxury of those who had money to spend. I am quite sure that the proportion must be considerably larger to-day. Not only has the capitalist system failed to provide a decent standard of living for those who at any particular time may be in work, but this House is painfully familiar with the fact that we have a fairly considerable proportion of would-be workers who are unable to obtain employment. The capitalist system has assumed the function of managing industry. It has failed to do that adequately or efficiently. We have to-day probably not less—some of my hon. Friends sitting behind me would say more—than 1,500,000 would-be workmen out of employment. How do you defend the system? How can anybody defend the system which, while claiming a monopoly of the function of finding employment, is unable to find employment for 1,500,000 would-be workers? I know that it is going to be urged in the course of this Debate that there are defects in the capitalist system, but that things are on the mend. I shall have something to say about that before I sit down, but what has capitalism been able to do? I know that the conditions are somewhat abnormal to-day, but they are abnormal as the result of capitalism, because the War, in its final analysis, was due to the international commercial and capitalist system.

Take the question of wages. We have at this moment a strike in what ought to be the greatest of our industries—the agricultural industry—where men are resisting the imposition of a wage of 23s. a week, worth about 14s. a week at pre-War values. I remember that, during a railway strike which occurred since the War, the Government, out of the taxpayers' money, placarded the hoardings of the country showing the improvement that had taken place in railwaymen's wages, and pointing to the fact that in 1913 there were 100,000 railwaymen earning less than £l a week. That is after a century of your boasted capitalist system. There you have represented those advantages which the capitalist system has given to the country, as stated in one of the suggested Amendments to this Motion. Again, in the mining industry, as the House has often been reminded during the last few months, you have rates of wages which do not enable the miners and their families to keep body and soul together, wages which have to be supplemented by Poor Law relief. Again, the capitalist system has failed, because it cannot keep harmony between employers and workers. There are constant disputes, to the extent of 2,000 or 3,000, in the course of a year. There is, however, no sphere in which the capitalist system has more lamentably failed than in providing what is a prime necessity of the people, namely, housing accommodation. You are having broadcasting: you listen to concerts held 3,000 miles away. Your intelligence and scientific knowledge can do that, but we have not brought our intelligence to the solution of the primary need of providing for every family a decent habitation.

There was published last night a Blue-book giving the housing statistics at the time of the last Census here in this great City of London. Let those who defend the capitalist system, let those who boast about the advantages it has conferred upon the people, read the facts there stated. One hundred and ten thousand families in this city living more than two persons to a room! On Census night there were found 616 families which had six people living and sleeping in one room. According to this Report 30 per cent. of the families in London are living in a condition which is described officially as a state of overcrowding. May I give one word of authority which I am sure will appeal to every Member opposite, for he is one of themselves? He was elected to the London County Council as a stern opponent of Socialism. The Chairman of the Housing Committee of the London County Council says there there are no fewer than 2,000 slum areas in London, and he says: The class of houses required by the working classes will not be built by private enterprise. Therefore in the provision of this prime necessity, housing accommodation, on the authority of those who disagree with us, private enterprise and your capitalist system has lamentably failed.

Again, what effect have the conditions of work and of life under the capitalist system upon the health of the people? Here I come to one of the most serious items. Every employer on that side of the House will agree that between the best and the least efficient workman, doing the same kind of work, using the same tools or machinery, there will be a difference in the output of at least 30 per cent. How do you explain that? Only by the physical and the mental condition, and the inefficient man is the victim of bad conditions. [HON. MEMBERS: "No!"] I am amazed that an obvious truth like that can be disputed and received apparently with hilarious shouts. Inefficiency not due to bad conditions in the worst sense of the word—bad housing, lack of education! Certainly. Take the health statistics. So bad had the health of the people become that about 10 years ago the Government of the day were compelled to give some attention to it and we had the National Health Insurance Act, and the last Report but one of the Chief Medical Officer of the Ministry of Health stated that in the year under review we lost in the aggre- gate 260,000 years of labour through ill-health annually amongst those who had insured under the National Health Insurance.


What has that to do with it?


I am not going to instruct a Member who is so ignorant as not to see the obvious. It proves that the conditions under which these people live, the conditions under which many of them were born, the conditions of their labour are such that it results in enervation, disease, ill-health and consequent loss of life. That is another outcome of your capitalist system. That is another illustration of the good world for the people to live in and of the advantages which the people have received from private enterprise and the capitalist system. It is the distribution of wealth which is the cause of these social evils and inequalities. Eighty-eight per cent. of the wealth of this country is owned by 2½ per cent. of the population, and five out of every six persons who die leave not a penny behind them. The capitalist system—and I include in the capitalist system our land system—has failed to utilise its resources. Need I say a word or two about the land? Would it not be sufficient if I referred you to the newspaper report of the interview which took place, recently between the Prime Minister and certain farmers. They came to the Prime Minister to tell him their industry was in a bankrupt condition. Private enterprise and private landlordism have failed and the only hope for this, which should be the greatest of our national industries, was in Protection, a crutch to inefficiency, or in a State subsidy. Lord Ernie, who is remembered by many Members of the House as Minister for Agriculture, recently stated that the only party in this country which has an agricultural policy is the Labour party, and nothing that I could say would be half so scathing in denunciation of the inefficiency of our agriculture and of our land policy as has been stated by Lord Ernie and Lord Bledisloe, who is also known to Members of this House. So much for the failure of the land system. So much for its claim to give the people a good world in which to live.

Now, is it possible, as one of the suggested Amendments appears to claim, without changing the basis of our economic system, to eliminate the admitted defects and evils of the existing order? That question is very often answered by the statement that conditions and wage-earning capacity are improving. That I deny. I am ready to admit that from 1850 to 1874, or thereabouts, there was a progressive, but not very great, improvement in the wages and hours of labour, and also a reduction in the cost of living, and there was an improvement in the social condition of the wage-earning classes, but for a decade before the outbreak of the War the condition of the wage-earning classes has not only been getting relatively, but actually, worse. The standard rate of piece wages in the greatest of our manufacturing industries, the Lancashire cotton trade, in 1908—the reason I give that year is that the Board of Trade issued a Report giving these facts—was exactly the same as in 1854. What about the increase of wealth during that period? In 1918 the amount assessed to Income Tax under Schedule D was 12 times more than in 1854. Twelve times more! Let hon. Members remember what I have just said, that there had been very little improvement in the wages of the wage-earning classes in that period. For ten years prior to the outbreak of War the wages had either remained stationary or had declined. Between 1874 and 1908 the mean increase of wages, that is, taking all the industries, had been under 10 per cent. Between the dates that I have mentioned, the amount taken very largely by incomes received by those who made no contribution to labour for those incomes, had increased by 12 times.

On these facts we are not justified in saying that under this system of capitalism we can expect an improvement in the condition of the masses of the people. There has been some improvement, I admit, and I specially wish to impress this fact upon the House, that we are not living to-day under a capitalist system which is wholly free and unrestrained. We had an unrestrained and free capitalist system in the early part of the 19th century with this result, that little children of from five to six years of age were set to work in factories, and tubs of water were kept handy in which to dip them when they fell asleep. [HON. MEMBERS: "Oh!"] Women were employed in the coal mines. All these facts have been proved in evidence given before Royal Commissions whose reports are to be found on the shelves of this House. That was the glorious time of unrestrained capitalism. The conscience of the nation was outraged, and capitalism was restrained. Any improvement that has taken place in the condition of the people since those days has not been due to what capitalism has done. Capitalism has done nothing to make a good world for the people to live in. The improvement has been brought about by the application, partially, of the principles of Socialism, which we are demanding to-night shall be more fully applied to the affairs of the nation.

I can remember that when I began my career as a Socialist agitator the subject about which we were always questioned was the value of competition. There were always people who were prepared to defend the virtues and advantages of competition. We do not hear so much of that to-day, because capitalism itself has confessed that competition is not a good thing for itself. What has been the result? The opportunities for private enterprise and private interests are passing away; they are being narrowed down by the creation of trusts. Competition contains within itself the germs of its own destruction. The creation of trusts shows the admitted failure of the capitalist system as we have known capitalism in the past. I have no time to deal at length with the evil and menace of these things. [An HON. MEMBER: "What is your remedy?" and Interruption.]


It is unfair for hon. Members to try to conduct the Debate by interruptions. The only possible form of debate is to listen to what the opposite side has to say.


I was speaking to-day to a very well-informed American, and he told me that there are 26 States in the American Union which are wholly under the domination of two or three great trusts, which control everything from the railways to the growing crops and the cattle on the ranches. The view used to be held that a trust was a thing that flourished only in the United States of America; but one cannot take up a newspaper in this country to day without seeing in the financial pages an announcement of some financial combination or other. These things are a confession of the failure of competition. It is no longer a question of whether we shall have trusts or not. There are, I admit, great economic advantages in trusts; but there are also dangers for the community. A trust, if it. be efficiently organised, well managed, and not over capitalised, as a great many of them are, can undoubtedly produce more cheaply. It eliminates all the waste of competition. When these trusts are privately owned the economic advantages go, not to the community, but to increase the profits of the people who own the capital invested in the trust.

What is the deep, big root of all these things? I was invited by a garrulous hon. Member sitting below the Gangway to tell him our remedy. I will tell him, but before you can prescribe a remedy you must know something of the nature of the disease. The cause of this disease, as is indicated in my Amendment, is to be found in the private ownership and monopoly by certain individuals of land and the instruments of production. May I quote an economist of the 19th century, who sat upon the Benches of this House, who said that the deep root of the evils and inequalities which fill the industrial world is the subjection of labour to monopoly. There seems to be an impression abroad that the capitalist system as we have known it since the industrial revolution is a thing that was ordained on the morning of creation and destined to last to the crack of doom. I would advise any hon. Members who entertain that idea to take a very elementary course in economics, and to buy some cheap primer dealing with the evolution of human society. By far the greatest time that man has been upon this globe he has lived not under a system of private enterprise, not under capitalism, but under a system of tribal communism, and it is well worth while to remember that most of the great inventions that have been the basis of our machinery and our modern discoveries were invented by men who lived together in tribes. The present industrial system is one stage in economic and social evolution; and just as previous social and economic systems have disappeared when they have fulfilled their functions and have been succeeded by a higher form, so the present capitalist system will pass away and is passing away, consciously passing away, before the eyes of every man who has sufficient intelligence to read the signs of the times.

How is this monopoly which I have described responsible for the evils which I have indicated? Take land. A man must have access to land, and land being owned by certain individuals they possess the power to say whether any other individuals—landless men—shall have access to the land or not, and they also have the power to say, and do so in effect, that these men shall have access to the land only on the terms which the landlord dictates, and the terms he dictates are that all the produce of the land shall go in rent to the owner above just sufficient to keep the cultivator of the land alive. In the same way under the capitalist system it is not possible in these days for each individual workman to own the tools with which he works. The amount of capital required to-day is so large as to be altogether beyond the power of any workman to produce it. It is suggested in one of these Amendments that every workman should become a capitalist. Suppose a worker succeeds in saving £200 or £300, let him start business as a chemical manufacturer in competition with Brunner Mond, and he will very soon get all the advantages of capitalism, and have opened to him the avenues of private enterprise.

9.0 P.M.

Hon. Members ask what do we propose. We propose no revolution, and we do not propose, and I certainly always will resist any proposal of confiscation. It is the longest way of obtaining your object, and the certain way to disaster. There is no analogy between Socialism and Bolshevism. Socialism and Bolshevism are antitheses. I hope that hon. Members will forgive me when I tell them that Bolshevism, both in its political theories and its practice, and in its ideal of dictatorship and confiscation, is not Socialism, but die-hard Toryism. The die-hards in this country have always tried to obtain the fullest political dictatorship, and they have succeeded for many centuries. The records of English history show abundant instances in which the dominant class expropriated the poverty of others for their own advantage. There are three or four ways in which we have been dealing with the capitalist system, and all we suggest is that we should continue on these lines, but move much more rapidly. We are not advocates of confiscation or of resort to force, and though I am speaking for myself, I think I shall carry the approval of all members of my party when I say that we want no further step forward until the previous step which we took has been justified by its success. We have been moving forward in many directions. We have been restraining capital in a thousand ways. What are the two or three Bills which are now before the House but very moderate and inadequate ways to deal with the failure of the capitalist system? Again and again the representative of the Government is compelled to step in to do something to supplement that failure and supply what private enterprise cannot supply. The state of agriculture is compelling the consideration of the Government. Private enterprise and private landlords have failed. The whole of the business of this House is dealing with the failures of private enterprise. We move slowly and reluctantly, but we are compelled by necessity. We have been driven further and further.

We began by simply restraining private capital, giving franchises to private capitalists on certain conditions, but that was not sufficient, Then the community were compelled to take over big enterprises and hold them and work them. I do not know the exact figures, we have not had them recently—but the amount of capital invested in public enterprises in this country cannot, I think, be very far short of a £1,000,000,000. There is hardly an enterprise in which Government or municipalities are not engaged. I know that conditions have been abnormal during the last eight years, but take the facts as they were before the outbreak of war. Municipal enterprise stood head and shoulders everywhere above private companies and private enterprise engaged in similar work. [HON. MEMBERS: "Nonsense!" and "Yes!"] When Sir Eric Geddes, the business man of the Government, stood at that bench two years ago, introducing his Transport Bill, he said that the only bright spot in the transport system of the country was the municipal tramways.

Then housing was formerly regarded as sacrosanct, a specially protected privilege of private enterprise, but when the right hon. Gentleman the Member for West Swansea (Sir A, Mond) occupied the position which is now held by the right hon. Gentleman the Member for Lady-wood (Mr. N. Chamberlain) he carried out an innovation. I assure the right hon. Gentleman that when the Socialist State comes into being he need have no fear, because his great abilities, his wonderful mental capacities, and his great organising skill will find abundant scope for their activities in organising Socialist enterprises. Let us see what the right hon. Gentleman said. Speaking of the work of his Department in erecting State buildings, he stated that at Richmond the Department had built houses. His price was £1,000; the contractors' price was £1,400. In another case that he quoted, the cost was £900, including overhead charges, the lowest tender received was for £1,638. Then he went on to say that by direct labour he was saving from £300 to £600 on each house. Speaking of other State building, the right hon. Baronet added: It has been done at a lower rate than any private firm could be expected to do the work for, because they have to make a profit and we do not. Hitherto the Government's attempts to supersede capitalism and private enterprise have been made reluctantly and hesitatingly. What we ask is that it-should be the conscious policy of government, and that the Government's energies should be directed, by legislative and administrative acts, to bring about that result. I gather from some of the newspaper comments which I have seen upon this question that the impression appears to prevail in certain quarters that this is a new departure on the part of the Labour party. Some of the newspapers say of the Labour party that at last it appears in its true colours. May I tell hon. Members that it is 30 years since the Trade Unions Congress, usually regarded as a very conservative body, passed a resolution urging the socialisation of the means of production, distribution and exchange. If hon. Members opposite would only prepare their case before they criticise the Labour party, if, for instance, they had read the election manifesto which the Labour party issued at the last election, they would see that the first statement there was a declaration almost identical with the terms of this Motion. As a matter of fact it appears in the written constitution of the Labour party. Therefore we stand for this, and we do not apologise for it.

If hon. Members opposite think that they are going to make party, political capital out of this adventure of mine, they are grievously disappointed. They have done all the mischief they can by branding the Labour party as a Socialist and Bolshevist organisation, and the result is that I have seen the Labour party in this House grow from four to 144 Members. This, then, is our policy. It matters little from one point of view what is the fate of this Resolution. We shall continue our work, and we shall do it conscious that, as Mr. Gladstone once said, standing at that Box—he was speaking on a mere political issue—the great social forces which for ever move on in their might and majesty and which the tumult of our Debates cannot for more than a moment impede or disturb; those social forces are on our side, and we shall continue to work in harmonious co-operation with them, certain that some day there will be established an economic and social system where individual ambition and private enterprise will find their satistion, not in the amount of tribute they levy on their fellows, but in the greatness of the service they render to them.


I beg to second the Motion.

I trust that we shall have many opportunities in this House of debating the positive proposals which the Labour party makes for the supersession of the capitalist system by the co-operative commonwealth for which we stand. But to night, as the last speaker said, it is not Socialism that is on its trial. We are challenging the capitalist order of society. We challenge the capitalist system under which normally and inevitably, and not as the result of war, millions of our fellows are condemned to misery and hunger and starvation in the midst of plenty. The late Sir Henry Campbell-Bannerman, long before the War, declared that there were continually in this country about 12,000,000 people living on the verge of starvation. That figure has increased since Sir Henry Campbell-Bannerman made the statement. Probably to-day one-third part of our population is living on that verge of starvation, and fully one-half of the population is without the creature comforts, without guarantees of security, lacking which the full and adequate development of human personality is absolutely impossible.

What is the capitalist system about which we and hon. Members opposite talk? A comparatively small class of the community own and control the land and the industrial capital of the country. The great mass of the people hire out their labour, sell themselves by the week, by the month, or by the year, to the owners of the land and industrial capital. When workers by hand or by brain are not required, when they cannot find an owner, they are set adrift to starve or to live more or less precariously upon the doles supplied by charitable and State agencies. When they are at work their labour power is bought at competitive prices in a competitive market, for wages which are meagre and are insufficient to enable them to accumulate reserves for the periods of unemployment. It follows clearly, I think that the workers cannot buy back the full social value of the goods they produce. Markets are speedily glutted and when the markets are glutted the workers are sent out to starve and you continue to have periodically what you call "crises" in which you have the spectacle of people starving in the midst of a superabundance of wealth. You have that to-day; you have in this country a glut of potatoes. There are some parts of the country where the farmer runs his plough through the potatoes because it does not pay him to harvest them and a few miles away hundreds of people, colliers, perhaps, are starving for want of potatoes. We read in another day's newspapers of fishermen throwing overboard huge catches of fish in order to keep the scarcity market and at the same time you have hundreds of thousands of people in the country starving for want of fish. The result of all this was made patent by your Ministry of National Service during the War when it reported after a military examination of the adult males of military age in this country, that three out of every nine were physically unfit. The worker is divorced from the control of the machine. The creative impulse, the genius among workers for the devising of new processes is crushed by the capitalist system. The worker to- day regards labour-saving devices as being indeed labour-saving devices, because they mean speedy unemployment for him or his friends. I think it was John Stuart Mill already quoted by the lion. Member for Colne Valley (Mr. Snowden), who said: It is questionable if all the mechanical inventions yet made have lightened the day's toil of a single human being. No invention shortens the hours of labour, as it would do in a sane social order. Invention to-day but adds to the toll taken by the owners of land and industrial capital. Thomas Carlyle saw what the capitalist system meant to the working classes when he said: Our successful industry has been hitherto unsuccessful. In the midst of plethoric plenty the people perish. John Ruskin saw too when he said: Our cities are wildernesses of spinning wheels, yet our people have not clothes. Lord Leverhulme sees it When he puts his name to the statement, that if our society were properly organised as it could be organised now, one hour's labour per week would be sufficient to enable us to maintain our present standard of comfort. In his preface to Professor Spooner's book "Wealth and Waste" Lord Leverhulme writes: It is said—and articles by Professor Spooner in this book go to prove it is true— that owing to our waste of labour through bad organisation and our bad use of the forces that nature has placed within our reach, we can to-day by overwork and overstrain in workshop and factory for 48 or more hours per week, barely produce sufficient for our needs, whilst we might with the means science has already placed at our disposal and which are all within our knowledge, provide for all the wants of each of us in food, shelter and clothing by one hour's work per week for each of us from school age to dotage, thus clearly showing what can yet be accomplished simply by the avoidance of waste. The hon. Member for Colne Valley quoted words used in this House by the President of the Federation of British Industries. I have another quotation from him. His authority will surely be accepted by some hon. Gentlemen opposite Sir Eric Geddes says: In the past, private enterprise has made for development, but to-day, I think I may say, it makes for colossal waste. That is the testimony of the President of the Federation of British Industries that private industry stands for colossal waste. There is one other aspect of this private ownership of capital to which I should like briefly to draw the attention of the House. As long as the nation has no control over private investments of capital we shall have the spectacle of finance capital being exported from these shores abroad. Last year, according to the figures in the "Statist," there were exported from this country £147,000,000 of British capital for investment abroad. [HON. MEMBERS: "India!"] Yes, India. Cheap labour, to compete with the higher-paid British worker, to batter down the British worker, and to bring him to a level of the Indian coolie. In many cases it is the owner of the jute works in Dundee who owns the jute works in India. They are using that export of capital to India to create a new cheap labour reserve, to be used for breaking down further the standards of life of the common people of Great Britain. Is there any hon. Member who was in the last Parliament, or the War Parliament, at any rate, who will deny that it was frequently stated in this House, and frequently proved, that big blocks of British capital had been invested in enemy countries—at Fiume, for example, to build torpedoes? Those torpedoes were used in the Mediterranean, to sink British ships and to send British soldiers to their doom. Is it denied that British private capital fortified the Dardanelles against us, and caused the death of hundreds of thousands of Anzacs, and hundreds of thousands of British Tommies? Is it denied that during the War, while it was yet in progress—at least, it was frequently so stated in this House—pepper was exported, not to enemy countries. but to countries adjacent to enemy countries, whence it was carefully reshipped into the enemy countries for the manufacture of tear shells to break our soldiers on the battlefield? Is it denied that during the War our exports of tea to European lands adjacent to Germany more than doubled? Is it denied that that tea was shipped into Germany, and that our home price of tea against the soldier's wife and child, and against the British worker, was raised to 4s. per lb, because you let your tea market, your tea finance capital, be operated by private interests for private profit?

The private ownership of capital, the exploitation of British industry for private profit, has assisted, at any rate, in the paralysis of British agriculture. The Scottish farmers sent a Commission of Inquiry to Denmark in the years before the War. I wish my agricultural Friends on the opposite benches would study the Report of that Commission. There was not a Labour man on it, but the Commission came back and signed a Report declaring unanimously that the transit rates on the State railways of Denmark were less than one-half the rates on the private enterprise railways of Great-Britain. The late William Ewart Gladstone declared in this House that the Belgian State Railways ran goods at less than one-third of the cost on our private enterprise railways. Some hon. Members will have read the Report of the Coal Conservation Committee of this House. It is in the Library. What do we find there? We find that there are 4,000,000,000 tons of coal—barrier coal—in this country which cannot be mined because it is under private enterprise and dividing private property. Let us say that 3,000,000,000 tons of it could be mined. That is waste; colossal waste. In that Report the Commissioners declare that if, as a nation, we but built electricity stations in our coalfields; if we distributed our electricity in an economical and businesslike way, and smashed up the hundreds of silly, little, petty concerns, which are presently strangling our electricity supply, and are making huge profits in the course of it; if we organised our labour supply— again, there was not a. Labour man on that Commission—we could save £100,000,000 and 55,000,000 tons of coal per annum on our electricity supply alone

I should like to draw attention to a quotation from a well-known weekly financial review, the "Statist." In a leading article, on 25th January, 1919, —after the War—it says: Our whole system of production is bad from beginning to end. We require: A complete overhauling of our economic system. We want the whole land of the country to be used economically, not to be kept for the delectation of exceptionally rich persons. There were, at the time of the last Census, 600,000 adult males who could not give themselves an occupation, but declared that they were idlers and lived without working at all. Everyone "— says the "Statist "— should be compelled to work,"— [HON. MEMBERS: "Hear, hear!"]—I trust hon. Members opposite will cheer the conclusion of my sentence— Everyone should be compelled to work, and those who emigrate to escape work should have their property seized. There are no cheers now. Under capitalism our production is bad and our production is low, as the hon. Member for Colne Valley said, but our distribution is infinitely worse. Even as it is, we have learnt how to harness the tides; we can guide the lightning; we can send wireless messages across the heavens; we can plant one grain of wheat in the bosom of old Mother Earth, and she yields us 1,300 grains in return. All the knowledge, all the skill, all the technical processes of the past arc at our disposal to-day. We press a button or we turn a wheel, and commodities by the thousand and the hundred thousand pour forth at our feet; yet we cannot distribute them. There are people to-night starved in the midst of bulging warehouses. There have been unemployed in Leicester, and the children of the boot-workers going barefoot when the boot markets were glutted. In the cotton and wool towns the children go ragged where the warehouses are full, and to night you have got the spectacle of agricultural labourers starving in the midst of a glut of foodstuffs. That is the system you have to justify—starvation in the midst of plenty, hunger in the midst of a super-abundance—and that is the system that we on these benches challenge.


I beg to move to leave out from the word "That," to the end of the Question, and to add instead thereof the words this House, believing that the abolition of private interest in the means of production and distribution would impoverish the people and aggravate existing evils, is unalterably opposed to any scheme of legislation which would deprive the State of the benefits of individual initiative, and believing that far-reaching measures of social redress may be accomplished without overturning the present basis of society, is resolved to prosecute proposals which, by removing the evil effects of monopoly and waste, will conduce to the well-being of the people. The hon. Member for Colne Valley (Mr. Snowden), as I expected, delivered a carefully reasoned and very clever speech— moderate in tone, moderate in statement, oratorical in effect—which I cannot endeavour to rival. He presented a formidable indictment, not of the capitalist system, but of civilisation—I might almost say of the Creator of the world. It is extremely easy to blame ill-health, insufficient life, feebleness of constitution, inequality of human ability, on to the capitalist system. But will the hon. Member tell me that under a Socialist system there would be no syphilitic children in the world? Will he tell me that, under a Socialist system, there would be no drunkards in the world and no off-spring of drunkards? Will he tell me that, whatever system you adopt, you can produce that equality of ability, that equality of efficiency, and that equality of physical and mental standard which he presupposes, and for the failure of which he attacks, not the capitalist system, but the industrial system? The hon. Member, much to my astonishment, dates the capitalist system about 100 years ago. The capitalist system has been the system of the world since the world existed. [Laughter.] Certainly it has. What was the system in this country in the time of Queen Elizabeth? What was the system in this country in the time of William the Conqueror? What has been the system ever since we evolved from that tribal system to which the hon. Member referred? What has been the course of evolution? The course of human civilisation has been from the tribal to the individualist system, and what the hon. Member calls the great evolutionary force is the reaction, the return to a system from which the world has developed and evolved.

It was not machinery that developed the capitalist system. A bootmaker in the 15th century, with one machine or one hammer in his hand, was just as much a capitalist—and the hon. Member knows it very well—as is the owner of a great factory to-day. He really must not use economic language in this extraordinarily vague way. The hon. Member really ought to take a course of instruction from the hon. Member for Seaham (Mr. S. Webb) next to him. He knows as well as I do that the shovel of an agricultural labourer, the tools of a fitter, the tools of a carpenter are capital, just as much capital in the economic sense—and no economist can deny it, or ever has denied it—as the ownership or part-ownership of a loom. The man who had a hand loom in the old days was a capitalist. The man who has a steam loom may be a different form of capitalist—


Ah, ah!


The hon. Member for Silvertown (Mr. J. Jones) must not continually interrupt. I shall have to deal with him severely should he continue.


In Lancashire and Yorkshire hundreds and thousands working in those mills are to-day part owners of the steam looms, as they were owners of the hand looms. What is the use of trying to confuse issues by confusing the rich man with the capitalist when there are millions of people in this country who are capitalists, but who are not rich at all? Every co-operator in your movement is a capitalist, for what is a share or a dividend in your co-operative movement but capital? If you wish to socialise capital, you must take the house of every working man who has saved up for it. If you mean that Socialism means robbing the rich, say so. That is a policy, but it is not Socialism. The hon. Member for Colne Valley repudiated confiscation. He said, "I would not confiscate; I would compensate." He will not take my shares, but he will pay for them. I do not mind. I would much sooner have State security than the uncertain security and anxiety of industrial work. But I should be extraordinarily sorry for the rest of the community who, for the services of men who understand industry, who have devoted their lives to it, and have an interest in it, are going to be left to a number of civil servants or theorists like the hon. Member for Stirling (Mr. T. Johnston), who seconded the Motion, to manage their business. [Interruption.] The hon. Member for East Rhondda (Lieut. - Colonel Watts - Morgan), who laughs, knows that as well as I do. He knows very well that he would rather have money in any business managed by me than in any business managed by a civil servant in Whitehall.

This is a very old controversy. I have been engaged in it now for very many years, and it always seems to me that our Socialist friends are very much like the vendors of patent medicines. They describe the horrors of the disease, they see a terrible picture, they darken the shadows, they obscure the lights in every direction, they heighten the horrors, they point out the miseries of our present system, and they forget everything about the amenities and improvements. They draw a lurid picture, and then, when it comes to the remedy, they say very little about it. It is no use indicting the capitalist system. If the hon. Member could persuade me that he had a system which would abolish these social sores and improve the lot of the people of this country, a system that I could honestly believe would do any good, I would to-morrow be his most earnest recruit and his most faithful follower. I would admit facts. The fact that a few men in this country who are now rich would be worse off would not weigh with me. It would be a trifle compared with the social welfare of the country.

The hon. Member who moved and the hon. Member who seconded the Motion have not addressed themselves to one single practical question, to one single practical issue in the great controversy which they have raised. And it is a great controversy, the controversy whether you are going to rely on the individual, on the individual freedom and the individual enterprise of the people of this country, or whether, card indexed, confined and crabbed, State-officialed and State-oppressed, we are to form part of a great machine by which the wings of enterprise would be clipped, the spur of private initiative would be taken away, and a bureaucratic, soulless machine would be substituted for the freedom of the people of the country. You may indict the capitalist system, but we are entitled to indict and challenge the remedy you have proposed. You are entitled to point out that the world is very imperfect. Some people are beautiful, and some are not. Some people are clever, and some people are stupid. [An HON. MEMBER: "Do not apologise!"] I am not apologising; I am pointing out that, as far as I can see, you want to level all your clever people to the level of the stupid. The whole theory of capitalism, as expounded by some hon. Members, is entirely out-of-date. It does not exist in our modern industrial system. What exists in our modern industrial system is the captain of industry, the man of enterprise and brains. He hires labour and he hires capital. He pays for one, and he pays for the other. He is the man who creates. [Interruption.] It is no good for the hon. Member to interrupt me. I know much more about this than he does.


We all consume. That is what makes work.


Obviously, if no one consumed, there would be no need of production. The real point of modern industrial enterprise is management, and that is really the key upon which the hon. Gentleman did not touch. I do not care whether you have privately-managed business or State-managed business. If it be badly-managed, it will be a failure. What is the reward of management, enterprise and industry? It is just that accumulation of wealth to which the hon. Member objects. If the hon. Member likes to go round the world to-day, he will find that the wealthy men are the men who started with very little, and by hard work, enormous energy and foresight, have built up great industries. The hon. Member made an observation which is perfectly true, that every workman should be made a capitalist. I quite agree. The hon. Member said—and I gladly accept his challenge—What is the use of a workman saving a few hundred pounds, and competing with a great firm like Brunner, Mond and Company? What they want to do is to become shareholders in the company. Certainly. I can tell the hon. Member that only a short time ago we discussed this question with men who have worked 30 or 40 years in our business, and who would be very astonished to recognise themselves as wage-slaves. They are proud of their record, and of their work, proud of their connection with the firm, and proud of its prosperity, and share in its prosperity

If the House will allow me, I will elaborate that very point of enterprise and management, that very point of infinite capacity to which hon. Members have referred. It seems to me that it is only possible under our present system, and I see no scope for it whatsoever under a system of socialism. It is now nearly 50 years since two young men got to know each other in business. With the very little money they had saved, they decided to start a new enterprise. Their capital was very insufficient; their optimism very great. They adopted a process entirely unknown in this country. They asked people who understood the industry to come into it, but they laughed at it. They fought and struggled, and they founded that very concern to which the hon. Member referred, which has given employment and looked after its workmen for something like 50 years. That was the result of an enterprise which could never have been commenced under any socialist system I have ever known. Who would have been prepared to take the risk, which all the most experienced men in the industry said was an absurd risk to take? Those are points I want the hon. Member to deal with if he is dealing seriously with this question. This is only one instance. Those two men were my father and the late Sir John Brunner. They did not work eight hours a day, but 36 hours on end without stopping. They created work for themselves; they created works where thousands of people have been employed.

One of the difficulties which I feel with regard to socialism is that I do not see how you can make any progress. Hon. Members always seem to assume that the condition of industry is static. It is not; it is dynamic. They talk of the division of the wealth of the world as if it were a fixed amount, which wants to be divided up. [HON. MEMBERS: "No!"] It is not a fixed amount. I was saying that the progress of industry is dynamic. That is to say, the wealth of the world is not a fixed sum which can be divided up. What you want to do is to increase wealth, and I contend that the capitalist system is more likely to increase wealth, and be of more benefit to the whole community than any other system which has ever been devised. The hon. Member has not explained whether he wants State socialism or guild socialism, or what form of socialism. It is very fundamental. The hon. Member was kind enough to refer to certain statements I made on housing when at the Office of Works. I do not for a moment go back on the statements I have made, but I have been something like 26 years in business, and six years in Government; and I can tell the hon. Member that I am convinced from my experience as Minister and business man, that it is impossible to carry on the industries of this country from a Government Department.

Then how is he going to carry them on? He has not detailed to us any scheme. I have heard schemes of "democratic control." That is a beautiful phrase, but the man who has to sell and buy and compete in the markets of the world, and meet the keenest competition of American, German and French manufacturers, does not get much guidance if told that in the future the industries he is conducting are to be conducted under democratic control. Presumably there would be a sort of Soviet every afternoon to decide whether to sell francs; whether the exchange is going up or down; whether we should take higher or lower prices for our products, or what advertising schemes we should adopt. These are practical, and not theoretical questions, and we are entitled to have an answer to them when we are asked to scrap a system which, after all, has brought the world somewhere, if not to the point we want. What is one of the real difficulties of this whole question of organising your industries nationally? One of your chief difficulties is magnitude.

I have come deliberately to the conclusion that it is quite impossible for human beings to control any industry beyond a certain magnitude, and I say that after very careful study. The very curious fact was told me by an American friend that when, under Mr. Roosevelt's administration, one of the American trusts was dissolved, the component parts of that trust made more money in competition with each other than when united, simply because it had outgrown proper economic management, and got so large that the company had got like a Government Department, so complicated and so full or red tape that paralysis set in. That is one of the difficulties which has to be faced, and it is a difficulty to which I have not found the solution. I have given a good deal of thought to the question of whether it would be possible to organise industry on a national basis. I have considered the matter very carefully, but I must confess, honestly that I did not see any method; and I do not believe it is possible to organise an industry on any system of a national character which would give a higher efficiency.

What is the experience of the world as far as it has gone? Let me take a few examples. I will not take Russia, because I do not think Russia is altogether a fair example. I will take Germany, a very highly-organised country with a very efficient Government service. What do, we find: German mines. It is a well-known fact that the coal mines managed and worked by the Government do not pay as well as those in private hands. That is Consul-General Koenig's Report, 1911. The State coal mines of the Saar, during a long period, have paid considerably lower wages, and charged substantially higher prices for coal than the Ruhr coal mines (in private hands).… The available statistics show considerable losses on all the State mines, whilst the private mines, apart from smaller individual pits, show satisfactory balance sheets. That is from the "Arbeitgeber-Zeitung," of 6th April, 1919. Gorman railways. Many of the railway workshops were closed by the Government which refused to conduct them at a loss any longer. According to Herr Oeser, Minister of Railways, the employés in the workshops have increased by 270 per cent., yet the output has steadily diminished. That is the Berlin correspondent of the "Times," 3rd February, 1920. I would say to my hon. Friends that after the War the Germans had a Socialistic Government, a Socialistic majority. Yet they have been careful not to introduce any of these schemes of Socialism, which they advocated with the same vehemence and for the same period and length of time as my hon. Friend. I would venture to say that if he and his party came into office, they would adopt exactly the same course.

Let me follow on with a few more examples of another kind. Let me take a very highly-civilised country like France. Let me refer to the nationalised French railways. In 1908 the deficit on the State managed railways rose from 35,000,000 francs in 1909 to 77,400,000 francs in 1911 Then take Italy. Italy had national railways, but they denationalised them, because they found they could not make them pay. Although theoretically on paper all this ought not to happen, it does happen. After all, hon. Members, although they like in this House, and sometimes on the platform, to be very theoretical, at bottom they are practical.

10.0 P.M.

I will tell them something on housing. When I was at the Ministry of Health, men engaged in the building industry would always work cheaper for a private contractor on a private job than they would ever work for a local authority. Until you can persuade everybody in this country, including the workmen, that they have got to work equally hard for the State or for a local authority as they do for a private individual or a private employer, you will have very little chance of improving the efficiency of a nationalised industry. I dare say that may come. It ought to come. People ought to work gladly and more willingly for loss money and longer hours for the common good. Hon. Members know that they do not.

A curious paralysing influence seems to come over everybody as soon as they begin to work for the State. One reason is that everybody has a cushy job. There is no profit and loss account, Nobody much cares how the money is being spent. What keeps this wretched private capitalistic system going? I will tell you. If a private capitalistic business is badly managed, it goes into the bankruptcy court. What does that mean? It means you have a method by which inefficiency is automatically weeded out of your industrial system. You have a method by which efficiency is automatically rewarded. It may be a crude system. It may be an unscientific system. It may seem a harsh system, but it is the only system in the world which has been devised up to the present.

Hon. Members have not found any system to take its place. Civil Service examinations, which is the only substitute under State socialism, are not going to replace the crude fact that people who cannot make profits in a business have to go tinder, and make way for the people who can. That is the whole basis of our free competitive system. The hon. Member says the competitive system has disappeared. That is not true. You can trustify your industries as much as you like; there is no trust powerful enough in the world to-day to ignore the danger and the risk of able and new competition in all parts of the world. Any business or industry to-day which neglects scientific progress, and which neglects sound methods—I do not care how large its capital or what its combinations are—in 20 years' time will be out of business as certain as I am speaking in this House to-day. The pace is too keen; competition is too swift. Nobody can afford to sit idly by, and draw dividends out of labour. The idea that you can make money out of labour is one of the greatest fallacies in the minds of a certain number of economists. Why does anybody want a capitalist? The capitalist system, as the hon. Member said, was not created with the beginning of the world. People pay for capital because it is required. Nobody takes the risk of investing capital unless he sees some reward. The hon. Member knows that as well as I do, and he ought to state it frankly. If I have to pay 10 per cent. for capital, it means I have a risky proposition. If I have to pay 2½ per cent. it means I have a safe proposition. The industrial capitalists are the people, the only people in this country, who, instead of putting money into their pocket, instead of spending it, or doing nothing with it, instead of investing their money in luxury, are investing it ill industry, and making either loss or profit out of it. Why should they be singled out as being responsible for all the social ills that have come down to us through the centuries? It is most unfair and unreasonable. If these people did not go in for private enterprise, would there be no unemployment? I say there would be more. The people of this country are not so foolish as to deny private enterprise the fruits of its labour. The hon. Member who seconded the Resolution postulated that socialism meant the end of all international capital. How does he think trade comes to this country, if you do not export capital?


I said that capital was exported for investment abroad. The question of the international exchange of commodities is obviously a different thing altogether.


Does the hon. Member not know that capital is a commodity and can only be paid for in commodities, and that for every pound of capital you invest abroad, you have to send some commodity? I wonder what he thinks capital is? Let me contrast that with what the hon. Member for Colne Valley said. He said he was to compensate the owners of private capital. He said he was to give the owners of industrial capital some form of State security, but he would not allow them to use it to develop industry in this country. Therefore the owners of that capital would have to take it abroad. The hon. Member said he would pay me a few thousand pounds for what I have, but he would not allow me to use it in industry here. Obviously I must take it to some country where I can use it. What advantage that is going to do to the British working man passes my comprehension. I can understand confiscation, but I cannot understand what benefit they are to gain under the scheme propounded by the hon. Member for Colne Valley. If he gives me gilt-edged securities, and I cannot use my capital in this country, I fail to see how the country and the working men would be better off.

The hon. Member who seconded the Motion said we could not distribute. I wonder who he means by "we." The best brains in the country are meantime engaged upon it. He does not tell us where abler brains are to be found. He did not tell us how transport and distribution is to be improved by calling it democratic or socialistic or anything else. You ask any man who is engaged in industrial concerns in this or any other country, and you find he is ready to pay almost any salary to anyone who is efficient, and we have to struggle along as best we can with our limitations. If hon. Members say the coalmining industry is badly organised, possibly it is, but where have you the men who can organise it better? It is not the gentlemen who write articles in the "Statist" or any other newspaper. People who have never managed any enterprise themselves are the most facile critics of other people. It is easy to sit down, and write down on a piece of paper and be colossally efficient. [HON. MEMBERS: "What about the co-operative societies?"] The co-operative societies are one of the finest capitalist schemes in the world. A co-operative society is a huge capitalist system, owned by a large number of small capitalists. Hon. Members talk as if our big industries to-day were owned by handfuls of rich people. That is not the case. They are owned by tens of thousands of people, most of whom have very small amounts invested in them. When you talk about private capital, you do not talk about the few rich people. They do not much matter any way. They can go, and make money anywhere else. Although you can nationalise capital, you cannot nationalise ability.


You can buy it, and that is what you are doing.


Hon. Members must get their minds clear. If they carried their proposals, they would abolish the co-operative societies. The Wholesale Co-operative Society is one of the biggest distributors in the world, and they are just as much privately managed as Selfridge's Store.


I really must protest against this.


There will be plenty of time to reply to this speech, and I must ask the hon. Member to restrain himself. Sir A. MOND: There is another point which I think is admitted by all Socialist writers. Socialism implies two necessary corollaries. One is that every consumer must consume a State-made article whether he likes it or not, because there will be nothing else to be got. Hon. Members will have to take a State-produced newspaper, because it is the only one that will be available. There will be no freedom of the Press. [HON. MEMBERS: "Why not?"] Of course, if freedom of the Press means nothing to hon. Members on the Labour benches, I have nothing more to say. Again, hon. Members' wives will have to take the State pattern, and dress after the State fashion. [HON. MEMBERS: "No!"] It will be so. Perhaps hon. Members will not object very much to it, but I should like the opinion on the subject of the wives of hon. Members. We have now got a larger number of women electors, and I will put it to the Socialist Members if the State can produce all commodities, obviously it will produce all the dresses in the country. You cannot get away from that, and we shall have to dress as the State tailor or as the State dressmaker directs. There will be no competition. Hon. Members perhaps may not be aware that in France tobacco is a State monopoly, and it is worse than you get anywhere else. [An HON. MEMBER: "What about the matches?"] The matches will not light, and all the eloquence of hon. Members will never get them to light a pipe for anybody.

But let us look at the thing in a more serious aspect. If, under a State system, you have no freedom in the State, obviously there must be conscription of labour, and that carries with it limitation of population.




Certainly. Have you thought it out?


Yes, I have thought it out. You are doing it now—many of your class; but you cannot suppress human nature.


As the hon. Member says, you cannot suppress human nature, and that is why Socialism must end in failure. It is up against the elementary instincts of human nature, the free, play of competition, freedom of the individual to develop if he wants to, without repression. The hon. Member for West Ham (Mr. W. Thorne) is quite right, and nobody will fight more bitterly than hon. Members on the Labour Benches for some of these things from the first day the Socaliet machine is instituted. I remember perfectly well a Debate on this point at the time the National Health Insurance Act was before the House. The hon. Member for Aberavon (Mr. Ramsay MacDonald) made a great speech against the panel system, and denounced the idea that British citizens should not have the right to go to any doctor they liked. And this was State doctoring. Yet you are going to socialise the whole world and everything. It is impossible. The whole thing is a delusion. Your ideal is to improve the world—so is ours! Your ideal is to give the people better conditions and better houses—so is ours! Your ideal is to make the conditions of life more humane—so is ours! It is one ideal. We do not differ in ideals, though we differ as to methods. If those methods can be improved—and they can be improved— we shall certainly join hands.

The hon. Member quite rightly said that it was "uncontrolled industrialism" —I do not use the word "capitalism," because it is not the right word—it was uncontrolled industrialism which in the early Victorian era produced a capitalist anarchy, an inhuman anarchy. It had to be controlled by the State, and I quite agree that it may have to be controlled further. What the hon. Member has achieved in his 30 years of effort is not a small matter, although I do not agree with his economic theories any more than I did 30 years ago. I do not think that they would carry out what he wishes; but he has certainly helped to quicken our human conscience. The hon. Member takes a gloomy view of the world, but let him look back a century, and ask himself what are the conditions under which people live to-day, and what were the conditions under which they lived then. [An HON. MEMBER: "They are worse to-day."] No, they are not. Look at what has been done even during the last 20 years. Was there a hundred years ago a single sanatorium in this country for persons suffering from tubercular disease? [An HON. MEMBER: "There was no need for it."] Yes, there was. I have been Minister of Health, and I can say with authority that the improvement in the health of the people, has been continuous, and is growing day by day.


By collective enterprise.


Of course, national life is a collective enterprise, and I want to see it developed. But it is a different thing to say that the export and import trade in cotton, coal, wool, and so. on, is a collective enterprise, and can be managed as well nationally as individually. How can a Government deal with export trade? It is a very difficult problem. We know that in the ease of international contracts, which are not a question of private enterprise but of high State enterprise, diplomatic Notes have to pass, and whenever a contract is altered, questions are put in this House and feelings are aroused. The idea that one is considering in this system is one which has never yet been found adumbrated in any work that I have read, and I think I have read every one, from Karl Marx downwards, on this subject.

The hon. Member has raised a large fundamental issue, and it is a challenge that we gladly accept. We arc not frightened or alarmed by his indictment. We know the imperfections, and have made speeches like his ourselves. We know the imperfections of the system under which we work, and we also know its advantages. It is not enough for him and other hon. Members to wax eloquent on the sore spots of our civilisation—a civilisation which has existed in this country now for many hundred years. What they have to prove is that they have something very much better, and that they can deliver the goods. You cannot ask an ancient nation, which has grown up on the basis of individual enterprise, of freedom of capacity for self-development, a nation which is the most individualistic nation in the world—it is more difficult to get our people to co-operate than any others in the world—where every man is proud and glad to strive, whether in the field of business, in the field of politics, or in the field of sport—you cannot ask these people to put their heads under a yoke, to go into a state of slavery—for socialism to my mind is no better—and lead a dull, monotonous existence in which there is no sparkle and no life. That is what we are being invited to do. Show us, at any rate, what we are going to be given in return for this sacrifice before we surrender our liberties so hardly won to a tyranny no better than any tyranny we have passed through in the past. Show us, at any rate, that happiness will be greater. I say you cannot do it. I say it cannot be done, and I invite you to abandon an illusion that is stopping fruitful progress.

This discussion has now been proceeding for 50 years. Wherever this policy has been adopted, it has been abandoned again. [HON. MEMBERS: "Where?"] After the French Revolution, you had socialism. In China you had socialism for 150 years. [HON. MEMBERS: "No!"] Does the hon. Member know anything about the history of China? Has he ever studied the extraordinary socialistic experiment made many centuries ago? I do not suppose he ever heard of it. He had better study the question before he interrupts me. I have studied it. Apparently he has not. Let us give up chasing this will o' the wisp. The word "gradual" which the hon. Member cleverly introduced will not delude us. "Gradual" sounds very pacifying. The hon. Member made a speech of a pacifying character. He knows as well as I do that at the last election nothing was resented more by most Labour candidates than to be accused of being not Labour but Socialist. Hon. Members did not say it was a Socialist party.


We did.

Lieut. - Colonel WATTS - MORGAN

Name a single place.


I must ask hon. Members to allow the right hon. Baronet to continue.


I know of my own knowledge in my own constituency and other constituencies around. [HON. MEMBERS: "Name them!"] I will take my own constituency and others around me. The hon. Member knows the constituencies around mine as well as I do. I have said the Labour party had no right to be called a Labour party. They were a Socialist party. That was always repudiated. [Interruption.] The hon. Member at the next Election can call himself a Socialist candidate. [Interruption.] I am stating what is common knowledge. Hon. Members are not called a Socialist party. They are called a Labour party. [HON. MEMBERS: "We are the Labour party. It is the same thing!"] It is not the same thing. The hon. Member for Colne Valley knows it perfectly well, and so do other hon. Members, or they would not get so excited.

I am extremely glad the mask is off at last. It is a clean issue between Individualism and Socialism, a clean issue of private ownership against national ownership, a clean issue as to the right of the individual to the reward of his labour and his enterprise. I understand now there is no doubt that this Motion will go to division. [An HON. MEMBER: "We are not afraid of it!"] Neither are we, if there is only time enough to debate it. We welcome a division on all sides. We have a clean issue, and I invite all those who believe in the future order of this country, all those who believe in the freedom of people to develop along their own lines and in their own way, I invite all who do not wish to see us reduced into a machine-made product, and to a dead level of mediocrity; I invite all who do not wish to see the future progress of this country arrested, but who wish to see co-operation between labour and capital, co-operation and partnership between those who produce, and not between people who do not care, and who do not know anything about industry, to support my Amendment. That is the programme to which I invite their support. I hope that, when the division comes, there will be even some hon. Members on the benches above the Gangway on this side of the House who will reconsider their position. [Interruption.] I am speaking in all seriousness. There are friends of mine on those benches who are no more Socialists than I am, who are no more believers in Socialism than I am, and I invite them to think twice or three times before they commit themselves to a policy which is as fatal to the best interests of the class which they represent as it is to the interests of the community as a whole.

The PRESIDENT of the BOARD of TRADE (Sir Philip Lloyd-Greame)

The hon. Member for Colne Valley (Mr. Snowden) in a speech of great interest and great moderation informed us as to the effect of the Resolution which stands in his name. That Resolution raises in a perfectly plain way the whole economic issue as between Socialism and private enterprise. That is an issue which we shall be glad to meet in this House or on any platform on which the hon. Member likes to raise it. His proposal is impossible on two grounds. First of all, on economic grounds and, secondly, on psychological grounds. The hon. Member has put to the House this proposition: Has the capitalist system given us a good world? That is not the issue which he is entitled to put to the House. In order to persuade us to vote for this Motion, he has to convince the House and the country on this point, whether the system which he proposes will give a better world than the capitalist system has given. In making such a proposition he has to have regard to the peculiar situation in which this country finds itself.

The industrial situation in Great Britain is unique. It is a vast industrial community drawing from resources overseas a large part of its food and of its raw material, and paying for that food and raw material in one way only. That is by selling its products in competing markets throughout the world, the sale of which it has to make in face of the keenest competition in every market, and which can only be made effectively if the industry of this country is conducted on a scientific basis with the most economical methods of production possible and the most efficient methods of sale. Unless you have got those conditions it is impossible for the workers to maintain a decent standard of life. State control, which in one form or another—and I am not very sure as to what is the precise form the hon. Member advocates—in every ease is unimaginative, inelastic, and absolutely checks all initiative, and, above all, under State control you get utter inability to take those risks which are the whole essence of successful trading and successful business. [HON. MEMBERS: "Why?"] Because nobody in a great State machine could ever have the courage to take a risk which involves a loss, and that is why it never works. [HON. MEMBERS: "Why?" and "What about the War?"] Those are the qualities, initiative, enterprise, imagination, with willingness to take risks, which are absolutely vital if you are to win back world trade and to hold it.

The foreign trade which this country does depends absolutely on sheer efficient production, skill in buying your raw materials, skill in manufacturing, skill in selling, skill in finance, skill in the whole machinery of credit. That can only be got by the enterprise, initiative and experience of every class of person who for generations has been engaged in business of this kind. Take credit alone. The chance of whether you win a profit or have a loss on a financial transaction depends upon the knowledge of the credit of your customer, a knowledge which you only get through years of experience, as this country has got it. Another thing, if you are to get progressively the most effective and the cheapest production, you must be prepared to take advantage of every new invention that comes forward, and you must have the opportunity to get every invention. Are you likely to get that under a Socialist system? The hon. Member, in a rather delightful passage in his speech, referred to the inventions of value which had taken place when we were in a state of tribal communism. There may have been some primitive inventiveness in those days, but I challenge the hon. Member—and I think he will agree with me—as to where invention in these days is most likely to come. Is it likely to come to the Socialist State or is the inventor with his genius likely to go to the country which will give him the best opportunities and price for his invention, to the country which will take the greatest risks in order to see that the invention is a success?

With this dead level of State control, you are bound to get a greater cost of production and greater inefficiency, and you are less able, therefore, to sell in the competing markets of the world. That means that there is less to go into the common pool, and it is only out of the common pool that you can divide the proceeds, whether as interest on capital or as the wages that labour is to receive. Socialism, in whatever guise you dress it, may be a very effective way of making rich men poorer, but it is a singularly ineffective way of making poor men richer. The matter does not end there. As I have said, in this country we pay for what we import for the needs of our industry and life by our foreign sales; but we never make enough money out of our foreign sales to pay for the whole of those imports. How are they paid for? They are paid for entirely by what are known as our invisible exports, by the very interest on those foreign investments which were challenged by the hon. Member who seconded the Motion. Something like £100,000,000 a year is the return on the foreign investments of this country. If capital did not exist, if capital had not been saved, if capital had not been invested in different countries overseas, you would be £100,000,000 short to-day of the money which is necessary to pay for the bread that we eat and the raw material of every industry. You get these imports paid for by shipping, and, as to tens of millions of pounds, by finance, banking, insurance, and a hundred and one services which arc rendered by this country to other countries, for which other countries pay, and which we use to pay for the imports which we must have. Why does that business come here? It comes here partly because we have great experience. Other countries have experience and are anxious to do the business, but from generation to generation it has come to this country because people in foreign countries regard England as safe, regard capital which is invested here as safe, and business done here as secure. Give one shock to that security, destroy capital and the capi- talist system, and very little will be needed to send the whole of that business, worth tens of millions of pounds, away from this country to other countries which try less fantastic experiments. It will then be a poor consolation to us, if we find that we have not the wherewithal to pay for food and raw material, to say that we have made a mistake in our economics.

So much for the economic fallacy of the Motion. The psychological fallacy is, I think, equally great. We are asked to assume that every man or woman who works for the State, as distinct from working for private enterprise, is filled with a sense of well-being which is going to lead to more efficient work. I cannot quite follow that process of thought. Apparently, what is to happen is that the industries of this country are to be nationalised. The hon. Member rejected the idea of confiscation and very rightly, but be said that we must nationalise these industries one by one. What does that mean? It means, presumably, that where men to-day arc shareholders in a company, they will become shareholders in some form of Government stock and the workman who is working for a limited liability company, the profits of which go to the shareholders, will merely be in this different position, that the profits— if there be profits, and profits are much less likely to result—will go to pay some form of Government stock to which the former shareholders of the company are entitled. It requires a very fine conscience to recognise the moral difference between these two forms of labour. Is not the whole position, as presented to us, utterly and hopelessly unreal? In fact to-day you have a large number of men and women who are working for the State or for municipal enterprises as well as for private enterprise. Can it be said, with any shadow of truth that any one of these people feels that because he or she is working for a municipality or a Government Department, therefore he or she is animated by a feeling which gives greater joy in work or greater efficiency?


Yes, you feel it.


Is it really suggested, for instance, that a girl in a telephone exchange—


I am suggesting that you feel it


The hon. Member will have an opportunity. Is it suggested, I ask, that a girl in a telephone exchange, the moment she ceased to work for the National Telephone Company, felt a moral uplift because she was working for the Postmaster-General? That kind of thing bears absolutely no relation to the facts. There is one difference, and one difference which is all to the bad. I do not believe that a workman working for the State is likely to be more willing and more anxious to work—we all work according to our capacity—than he is when working for a private employer. But there is this difference. The moment you nationalise industry you get direct employment of a large number of people by the State, and you get pressure by those persons upon the State as their employer, and that is the worst possible condition into which a country can get You have the State, put in the position of a direct employer of labour, instead of being in a position it should be in, as a general arbitrator and general guardian of the interests of the community. The whole policy of Socialism is utterly contrary to the instinct and the general sense of the British people.

What is the thing you work for? At any time and on any platform I am perfectly willing that this should be made an issue, and put fairly and squarely to the people. What is the thing you work for? Is it for socialism or for the State; or for yourselves, for your family, and for your individual interests? That is a natural instinct of people; it is a right instinct of people. It is the basis on which industry has been built up, and on which initiative and enterprise have been developed.


We are not allowed to work for ourselves. You work for yourself.


It is the basis of national and family life, and it has made more for the greatness of the country than any socialism we have ever seen. Hon. Members opposite always resent any allusion to Russia in relation to this—[HON. MEMBERS: "No!"] They misunderstand the criticism which is directed to their policy. It is not that hon. Members on this side of the House believe that this country is ever likely, or that they arc likely to go in for the sanguinary forms of revolution which took place in Russia. The criticism which we apply to the policy of hon. Members opposite is that, in Russia, economically and psychologically, that policy has been a complete failure. If it could have succeeded at all, it ought to have succeeded there. The hon. Member who moved this Motion proposed nationalisation with full compensation, or, at any rate, with some measure of compensation. That puts a capital charge on the industry. In Russia there was no such liability. The Communist started with the industry as a free gift, with no capital liabilities to take over, and with all the assets, to run, if he could. What has been the result? Absolute economic disaster in every industry in the country, in every means of transportation in the country, in every means of distribution in the country, and an absolute cessation of any known means of credit or of exchange.


Is that quite true?


Absolutely true. So true is it that the people of Russia themselves are now, by one means and another, seeking in every way in their power to escape from that tyrannous and hopeless form of State control. As recently as 22nd December there was a Soviet of the People's Economy, and it passed a resolution to be submitted to the People's Commissaries — That all nationalised industrial enterprise should be denationalised and returned, on a rent basis,"— that terrible thing— or by way of concession, either to the former owners or to foreign applicants. They asked for it in order to put an end to the entire lack of turnover on capital and the entire lack of credit. That is the opinion of these people of the experiment that has been tried. In the greatest of all Russian industries the failure has been the most fantastic of all. After all, 90 per cent.—I suppose 95 per cent.—of the people of Russia are on the land. The great thing to do was to communise, to nationalise the land. What has been the result? It is quite true they have turned the former owners out, but by doing that they have established on the land a class of peasant ownership which is the most Conservative set of' capitalists which exist in the whole world to-day. The Communist Government dare not take one ell of that land from the people who are the present proprietors, and they are nor. even overtaxed. It may be a process of revolution, but the result which has been obtained is anything but Socialism; it is the most extreme form of capitalism that has ever been seen.


Why do you not defend it? It is your life.


The hon. Member asks why we do not adopt it. I do not think it would be very good for the security of this country, but that may be one policy, the policy of substituting a peasant proprietorship for any other form of land tenure, but whatever that system is, it is not Socialism, it is not national control. The more capitalists there are, whether on the land or in industry, the. better we shall be pleased, and the more capitalists there are, in either the one or the other, the more certain it is that the capitalist system would be firmly established and the system advocated by the hon. Members opposite would find less and less support. No one in this country, I think, believes that we are likely to be overturned by any form of violent revolution: but a great industrial country like this may as easily be ruined by false economies as by any form of extreme revolution, and it is because instinct and experience have convinced us that the plan which the hon. Member proposes, the plan of nationalisation, with its cumbrous machinery of State control, is disastrous to the whole economic life of this country, it is because we are convinced that, so far from establishing a decent standard of life by any such system, you would reduce the standard of life, you would jeopardise the very means of livelihood of a great industrial people such as ours, that we shall oppose this policy whole-heartedly, consistently, and constructively whenever and where-ever it may be put forward.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Sir J. Simon.]

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.