CAPITALISM AND SOCIALISM

HL Deb 13 June 1973 vol 343 cc694-790

3.3 p.m.

LORD BROCKWAY

rose to call attention to the evidence of increasing contradictions and unacceptable immorality of the capitalist economic system and to the need for the democracies of the world to advance consciously and progressively towards Socialism, if their democracy is to be sustained; and to move, That this House urges Her Majesty's Government to give a lead in that direction. The noble Lord said: My Lords, in opening this debate one is tempted to illustrate the unacceptable immorality of the capitalist economic system by recent events. I do not propose to do so, though I shall be referring in principle to one of those matters later. I do not propose to do so because I do not look upon these as merely the unpleasant and unacceptable face of capitalism but I regard the whole body of the capitalist economic system as unacceptable and immoral. I shall seek to prove that, and I shall seek to prove it in fundamental terms. I have learnt since I have been in this House that Members can discuss important issues in depth, and it is my desire that this very basic issue should be discussed in that spirit this afternoon.

May I begin by concrete definitions? What do we mean by the capitalist economic system? It is surely a system in which the economy is owned by a section of the community and administered by managements for the profit of that section. Socialism on the other hand is a system where the economy is owned by the whole community and administered democratically for service to the community. [Interruption.] Perhaps noble Lords will allow me to develop my argument in the usual spirit of this House. In a system which is geared to the profit of sectional owners, gross inequalities in wealth are inevitable. I think it would now broadly be accepted that a wage of £25 a week is a minimum living wage in our society. Yet it is a fact that according to the latest figures for April, 1972, the number of adult male workers earning less than £25 a week was 2.9 million, a 41.4 percentage of the total male workers of this country. That is bad enough, but the number of adult male workers in our community earning less than £20 a week, which is beneath the living standard, was one million, or 14.3 per cent. of our working population. Those figures exclude women workers, and many women workers have to maintain not only themselves but also others.

With that illustration of the poverty of our present system on the one side, may I look at the other side of the picture? We have recently had a case where a consultant to an important industry was paid £50,000 a year for that service and when he was to become chairman of the company he was given £130,000 in compensation, because as chairman he would receive only £38.000 a year. I want to recognise at once that he returned £44,000 of that amount. But, my Lords, in a society which has the poverty population which I have described, can anyone suggest that those vast amounts are justifiable? I am not surprised that the Prime Minister has described them as unpleasant and unacceptable. In my view, when someone is receiving from society those vast amounts when he is not giving comparable service to society, he is guilty of legalistic theft. He is not a criminal, because our law expressing the system of capitalism permits that kind of extortion, but nevertheless it is an immoral conception of society. In view of recent events, I would add that while I abhor the commercialisation of sex, it is far more anti-social, and therefore immoral, for someone to be taking without essential service to the community sums of that character than it is to pay a visit to a call girl. This is not an isolated case of the unacceptable face of capitalism, of personal incomes which bear no relation to the service of people to the community. In a system geared to profit it is inevitable that at its peak there should be colossal salaries paid which are morally repugnant because of the poverty which exists in the same community.

My Lords, the Labour Research Department published last week a statement that 36 chairmen of large British companies are paid over £30,000 a year. One chairman, of Sedgwick Forbes Holdings, is paid £68,000 a year; three chairmen, of British Petroleum, I.C.I. and C. T. Bowring, are paid over £60,000 a year. Of the rest, five others are paid more than £50,000 a year and 11 are paid more than £40,000 a year. I say that to the sense of justice in this House it is utterly immoral that certain individuals should be receiving that personal income in a society which will not pay thousands—a million—of its workers even £20 a week for the service it is given.

LORD HARVEY OF PRESTBURY

My Lords, I am much obliged to the noble Lord for allowing me to intervene. With regard to the noble Lord's figures, which are undoubtedly accurate, would he say how much those individuals keep net out of those incomes?

LORD BROCKWAY

My Lords, I was going on to that very point. I would ask Members of the House to accept that I am trying to be fair in my statement. I accept at once that there is heavy taxation upon those incomes, but even after taxation we have to look at what is left; and what is left is not comparable with the wages which are paid to millions of workers in this country upon whose services we all depend for our food, our clothing, our housing and our necessities.

These are instances, and perhaps extreme, of the inequality of wealth distribution. I have been very interested in the figures given about wealth which is represented in this House. They were given by Mr. Andrew Roth in his book Lord on the Board, and so far as I know his figures have not been challenged. He estimates that in this House there are 60 millionaires and that Members of this House have an ownership of 5,655,096 acres of land. Is there any Member of this House who will say that we justify that by our service to the community? It is the consequence of our capitalist economic system, and that capitalist economic system is immoral in those results. When one takes a broader picture, 1 per cent. of the adults of this country own 31 per cent. of the personal incomes of this country; 10 per cent. of our population actually own 72 per cent. of the personal incomes of our society.

My Lords, I want to look at the case which is put for our present society by the Prime Minister. Addressing the Women's Conservative Conference on May 23, he said that every child born in Britain, of whatever background, sex or colour, should have the chance to travel as far towards the goal which they set themselves as their own talents and their own energy allow. That is a principle which I imagine we should all accept. But it assumes that we are still living in the old age of individual opportunity. That is not happening. Most opportunity now becomes for the mass of our people mere automata in vast economic machines. It is great combines now which dominate our economy. When we are thinking of individualism, the philosophy of laissez-faire of the last century, let us remember that 100 companies are now responsible for 50 per cent. of the total production of this country.

We then pass to the multi-national companies, and, quite honestly, they are now becoming more powerful in the world than Governments themselves. I have a list in my hand of 15 multi-national companies which are owned in the United Kingdom. Their total value is £85,000 million; their profits last year were £1,338 million. These multi-national companies situated in Britain have no loyalty to Britain. A quarter of our exports are covered by transactions between multi-national companies situated here with their partners abroad. The multi-national companies now—in America to a greater extent, and I have the list—in Western European countries, West Germany, and in Japan, are dominating the whole of the world. They are dominating world governments, peoples, all of us. We are now becoming the subjects not of governments but of these great capitalist international firms. This is the modern capitalist economic system.

I turn to socialism as the alternative. It is often represented as a centralised governmental power, tyrannical, crushing the individual within a great State monopoly. In essence it is exactly the opposite. Socialism is the application of democratic participation in every social, communal sphere of life, including economic democracy. Socialism is widely thought of in terms of nationalization. Nationalisation is not socialism, but it is a means towards socialism. Public ownership represents half of socialism. The other half is industrial democracy—participation by the workers, the staff, in running industry, not only with a voice controlling working conditions but in every aspect of its administration and development. Industry, under socialism, would become a co-operation between the public, the consumer, and the workers (themselves consumers); industrial self-government within the framework of the public need. Because of the absence of worker participation, or because of limited participation, workers in nationalised industry to-day have little sense of belonging to it. It is only by a conscious workers' share and voice that the feeling will be developed in publicly-owned industries, "This is ours".

It should be emphasised that we are not thinking of distant, centralised representation but of regional, local, and shop floor participation. We are not thinking only of nationalisation. Public ownership may take varied forms—sometimes cooperative societies, housing associations, which are often localised. Socialism means a democratic, participating economy by the public and by the workers alike. In such a society there would be a sense of identification, there would be pride, there would be eagerness to produce not only to gain a higher standard of life but because the people would know that the accruing wealth would be fairly distributed in the population.

I want to recognise that what is necessary is not only a new economy but a new ethic. The motive under socialism would not be self-aggrandisement, as it is to-day, but service to the community. One of the most distressing features of our existing society, reflecting its inherent motives, is personal aggrandisement. When I visited America 20 years ago I was shocked by the way in which personal success was measured in terms of dollars. We have now largely become Americanised. I think that this is inevitable in a society where the dynamism is that of money making.

I recognise that this has gone very deep into our society. It is not only a matter of company chairmen. Sportsmen, pop singers, T.V. prizes, even differentials among workers themselves, reflect this urge for personal wealth rather than service and, beyond, the value to society. It is argued that the motive of self-aggrandisement is inherent in human nature, that it preceded capitalism, and that it cannot be eradicated. It will certainly take a long time before personal aggrandisement is sublimated to service and egalitarianism. But I believe it call grow with the realisation that one is living in a fair society, and that cooperation brings greater happiness than competition. Human nature is not limited to selfishness; it includes compassion, a sense of justice, delight in companionship, the joys of human fellowship, a sense of belonging to the community, and satisfaction in service to the community. Our task is to establish a society which, because it is based on justice and democratic participation, encourages these human characteristics. My Lords, I beg to move.

LORD CONE SFORD

My Lords, before the noble Lord sits down, I wonder whether he can make one thing clear. He has been good enough to include some definitions, but would he make clear the meaning of his words in the Motion, "democracies of the world "? Do those words include Russia?

LORD BROCKWAY

My Lords, I do not think that they would include Russia by definition. I am seeking for the free democracies, where there is freedom of speech and movement, to advance towards socialism. I would only add to that that I would very much hope that, as there is education in the communist countries, they would advance also to libertarian ideas.

Moved, That in view of the evidence of increasing contradictions and unaccept- able immorality of the capitalist economic system and to the need for the democracies of the world to advance consciously and progressively towards socialism, if their democracy is to be sustained, this House urges Her Majesty's Government to give a lead in that direction.—(Lord Brockway.)

3.30 p.m.

THE EARL OF COWRIE

My Lords, I think it could only be in your Lordships' House that we would hear a Motion such as this one on the same day as a former Governor of the Bank of England is introduced: and your Lordships' House is surely all the more commendable for that. The noble Lord, Lord Brockway, is the leader of the Left—with a capital "L"—in your Lordships' House. This dignity by its nature allows him relatively few allies. It is—and I hope he will not take this as impertient from me—a very special tribute to him that commanding so few allies he has so very many friends. There is no more courteous Member of your Lordships' House, and, I would say, no more stubborn. I know about the few allies because in the distant days of the previous Administration the noble Lord and I once found ourselves in agreement about the iniquity and ill-advisedness respectively of a particular piece of foreign policy. As I remember it, the whole House was against us. The noble Lord was ticked off by his Leader—the present Leader of the Opposition—and I received that most feared chastisement of aspiring young Tories—what I must politely call "noises of dissent" from my noble friend Lord Carrington. So I have always looked upon the noble Lord, Lord Brockway, as a model of Parliamentary and political courage. In this context I must hope that he will think very carefully indeed before asking the House to divide on such a Motion.

My Lords, I believe that if the noble Lord will give capitalism another ten or twenty years. even if he persists in hounding it as vigorously and, I must say, misguidedly as he has this afternoon as well as over the last six or seven decades, I believe he will find that there is great life in the old capitalist dog yet, forced as it must be to wear its muzzle from time to time. I must say one other thing to the noble Lord directly. My noble friends on the Front and Back Benches of this side of the House have a lot of time for—indeed, they spend a lot of time on—social policies and the ways in which vigorous national and supranational economies can be harnessed to drive them. We have little time for Socialism—with a capital "S"—as well as for much else that hides its vacancy behind capital letters. Yet I believe that we also agree in finding that Socialism is wonderfully advertised by the noble Lord's person if not by his arguments. Ministers who have to answer Starred Questions may not exactly pray to be "given this day their daily Brockway", but I am sure that they would miss them if ever the noble Lord decides (and this is surely inconceivable) twenty years after the national average to retire. Of course the truth is that it is the noble Lord's general approach to life that provides the lesson, not his political philosophy. I do not suppose he has spent more than five minutes a day thinking about the subject of himself for many more years than I have lived. The theme of my short speech is that unselfishness—a "social" orientation if you like—is as necessary to the working of a modern capitalist economy in practice as it is to socialism in theory. Here at least the theme steals a leaf from the noble Lord's book.

Before I illustrate it, I must address myself to one or two points which the noble Lord made. It would, I think, be quite wrong for me, in this most Wednesdayish of all Wednesday debates, to comment on the specific warts on the face of our economic system to which the noble Lord, rather lovingly I thought, drew our attention. Noble Lords on this side of the House were not born yesterday. There exists, as I must say there also exists opposite, very great experience of contemporary politics, finance and industry. I am sure my noble friends could produce every bit as hair-raising an anthology of malpractice and greed as the noble Lord ever dreamed of. The difference is that we believe that the drive towards wealth is itself a fund of human energy and creativity, and that this energy is utterly necessary to a wellbeing of a society and to the fulfilment of social as well as individual potential. We believe that the bedrock egalitarianism of socialists—to which, like Prometheus, is bound Stansgate man—utterly stands in the way of individual psychology, which is to say the facts of life as we know them, and in the way of the individual will. And we believe that the individual will (and, my Lords, look at the noble Lord, Lord Brockway, as an exemplar of it!) is a kind of spiritual grace, the great asset, the capital if you like, of mankind generally.

My Lords, attendant on such a belief are two ideas, two qualifications. We are fallen angels—I am speaking of mankind, not Tories—and we know with Shakespeare that "lilies that fester smell far worse than weeds." Creativity can land one in jail as well as in the Institute of Directors or Millionaires' Row—or even, dare I say? in your Lordships' House. And, incidentally, on the subject of millionaires, the noble Lord singled out some recent examples of what he felt was disproportionate wealth, some of them quite close to home. He condemned in the same breath instances of great wealth associated with popular culture. I think he should do so up and down the country to his supporters. I do not think the performing, if not consulting, fees commanded by pop stars, sports and television performers and the like would be greatly condemned by his supporters. The individual will that I have mentioned and the ingenuity must be subject to constraint and to the system of checks and balances which is as flexible and shifting as the legal principle behind it is rock hard.

The second idea is this: poverty, deprivation, a polluted or a squalid environment are the great enemies of capitalism. To the socialists they offer a cause, a banner, but to the capitalist they are a sight of the three-headed Cerberus and Death. One, because of the great chorus of indignation and rightful, not righteous, indignation which they create and all the hostility and desire for vengeance; two, because they are the pit in which the individual creative energy which is so crucial to the system can lie still-born; and, three, because they deprive the entrepreneur of both his challenge and his discipline; that is to say a free, lively and intelligent market pursuing its liberty, making its choice.

My Lords, I do not believe that the noble Lord, Lord Brockway, is an enemy of creativity, but I do think his ideas are. At best they are highly conservative, which is to say fashioned and conditioned by a previous time. This is nothing to do with the noble Lord's years, as his activities in your Lordships' House demonstrate. After all, there are still many young members of the Old Left—even if most of them when I was at Oxford had, like the noble Lord, Lord Brockway, been connected with Eton. I can understand why this is so. In general terms, socialism was a response to the undeniable social evils and exploitations of the first phase of the Industrial Revolution; and in places in the world, in places even in this country, this phase, or something approximate to it, still obtains. As such, we can honour socialism and we can honour its functioning army, the trades unions of this country, even as we insist that they are in law, in interest and in responsibility, part of the great "us" of our industrial society and no longer part of the "them". In particular terms, the noble Lord, Lord Brockway, came to manhood at the turn of the century in the golden age of Edwardian materialism, where fantastic aristocratic and mercantile wealth walked hand in hand with prosperous middle class complacency. The noble Lord witnessed, as many others here have done, two attempts by the developed world to destroy itself, and one was almost successful. It is more than understandable that with such experience the noble Lord is radical; after such experience it is almost mandatory to be radical.

Western capitalism is itself at this very moment engaged in a root and branch reform of the ground rules, the assumptions on which it will continue to function. Yet this same system since 1945, when I was five years old and the noble Lord was nearly 60, has increased the life span all over the world, not only in the developed countries, by about 20 years; and has, in the words of the economist, Norman McCrae, approximately trebled the world's living standards, adding twice as much to daily production in this tiny instant of time as had been added in all the previous æons of mankind. That is what these great faceless capitalist firms have helped to do.

LORD BALOGH

My Lords, will the noble Earl forgive me for interrupting? This encomium on the capitalist system leaves out of account the fact that the population has also increased. Therefore the increase in wealth per capita was very slight indeed.

THE EARL or GOWRIE

My Lords, I must say to the noble Lord that I am not engaged in giving an encomium of the capitalist system. I am giving a small and personal speech in a Wednesday debate. I have said, and I say to him again, that this is what these great capitalist institutions have helped to do. Other factors have of course played a large part. I know that we do not live by living standards alone. But we cannot release all over the world the energies we need to solve problems, to share prosperities, without continuing such improvement. I think even the noble Lord, Lord Balogh, would agree with that. Capitalism must adapt, is adapting, to these social purposes for the, if you like, essentially self-interested reasons that I have given, and in ways which I shall end by attempting to show. In rough patches and on tricky ground the horse must be reined in, and it must be a well-trained and disciplined horse. No one who works in this country and for this Administration could fail to recognise that. But, unlike the Left, unlike noble Lords opposite generally even, we know that when the going is good the horse must be given its head. It is my conviction, as much as my hope, that in the next few years the going will be very good indeed.

I have used a metaphor of training and disciplining capitalism for the way ahead. I am not speaking to a Government brief but, as must be painfully obvious, to my own, but I wish to give chapter and verse and show that the metaphor is not simply a form of words, more matter for a May morning, or rather for a June Wednesday afternoon. That very model of a modern democratic capitalist, my right honourable friend Mr. Peter Walker, while riding the wave of our new prosperity, has yet devoted much time to the removal of some of those warts which we mentioned earlier. Already he has introduced the Fair Trading Bill—the most radical piece of legislation concerning consumer affairs that has ever been introduced in this country. Legislation for a Supply of Goods Act will ensure that the rights of the consumer cannot be undermined by "small print" techniques. A major Insurance Companies Bill, giving the maximum protection to the policy holder, is now before Parliament. A major Bill on Consumer Credit will be introduced in the next Session of Parliament. Legislative proposals are being announced to deal with pyramid selling. Above all, there is legislation ahead to reform company law because, as my right honourable friend has said, and I quote him: I cannot over-emphasise the importance for the working of capitalism that it should be open, free and based on integrity. If it is not open and free, wrong decisions will be made but, more important, it will forfeit public confidence. That is why I want to tighten up laws in a number of spheres or company legislation". My right honourable friend said that in January this year. Here, surely, is no opportunist or political response to Lonrho or whatever, but a considered part of a coherent programme.

My right honourable friend talked there about the importance of being open. My experience as an ex-teacher is that as a nation we are extremely ill-educated, not only in our democratic system, which is honoured throughout the world, but in our economic system as well. This is not only a pity; it is a great danger. More than two-thirds of the students whom I used to teach—in art subjects, admittedly —had hardly the most rudimentary knowledge of the workings of capitalism, not even enough to criticise, let alone defend it. The Opposition Parliamentary Party in another place is manned with teachers, which may have something to do with this. But, more seriously, it is of the first importance that the way we work at work is known about and discussed and, allowing of course for criticism, in the end justified for the amount it has done, and for the very great amount more it can do not only for our own people but for the world. I do not think noble Lords opposite will substantially disagree with me there. But I think that the ambivalence of the other great political Party in this country towards capitalism—and it is far from a fruitful ambivalence—helps to generate a vague hostility to the system; hostility which is neither creative, nor critical nor improving, just because it is so vague. Many trade unions of this country share this ambivalence.

Political apologists of a kind of monolithic socialism—if that is not tautological—which they have grounds to believe from experience does not work well, nevertheless, and rightly, know quite enough about the deployment of large investment funds to help instruct their members in reaping, as against claiming, greater rewards. I do not say this in any sour spirit. My departmental boss—since Whips in your Lordships' House are assigned to Departments my right honourable friend the Secretary of State for Employment, is the founder chairman of the Wider Share Ownership Movement. These are lines along which Europe is thinking, and I fervently hope that the trade unions, in conjunction with their useful current work in participation on boards, will give realistic thought to share ownership as well. A financial as well as a personal stake in industry is a vital part of the educational process that I have talked about. I must say that I sometimes think that as a nation we provide too few incentives towards putting money to work in the financial industrial market place, and too many incentives towards taking it in part out of the system and into real estate, real goods and the like. Finally, I believe that the same financial industrial market place has been sluggish in promoting information about itself. The Prime Minister told a group of key directors recently that trade union leaders are always ready and willing to state their case, but only one industrialist in a thousand will go on television—and half of those who do go on do it badly.

I greatly look forward to the debate ahead, and in that spirit I must thank the noble Lord, Lord Brockway, for having introduced it. Your Lordships are always geiger counters of prevailing moods—I hestitate to call you trendy—as the debate last week on privacy indicated. I believe that the debate this week coincides with, is indeed a part of, a major and deliberate change in the capitalist sensibility. Events, inflation particularly, may have forced this change a little, but so has our greater knowledge—knowledge which must be propogated and shared—about the ways in which man responds to his individuality and to his society. As your Lordships have heard, a Tory faced with an "ism" is in deep, not to say hot, water. In spite of this, I am grateful to have been given the chance to take part in a debate which is, in its own way, a move towards the democratisation of capitalism. I do not believe that any other set of economic procedures offers the flexibility and choice which mankind's creative energy requires. Nor do I believe that there is any better set of political procedures than our kind of democracy offers for remedying, or putting limits to, the defects of that same creative nature. Hand in hand, imitated or abused, these two will continue to give shape to our world.

3.94 p.m.

BARONESS WOOTTON OF ABINGER

My Lords, I should like to put the very important theme which my noble friend Lord Brockway has chosen for this afternoon's debate into a rather wider, historical context. As the noble Earl who has just sat down said, a number of noble Lords were not born yesterday—and these include myself. Those of us who go back far enough can remember the time when discussions about a fully collectivised economy, about the nationalisation of the means of production, distribution and exchange (as we used then to say), were entirely theoretical because there was no example of that particular aspect of the socialist programme in existence. It is that part of socialism, which I agree with my noble friend is not the whole, to which I want in the first instance to direct my remarks.

Then came the Russian Revolution, and the reactions of the rest of the world were something like this. Those who were horrified said, as they always do, that it could not last; those who were enchanted regarded it as Utopia; and those doughty social investigators, the late Beatrice and Sidney Webb, took it as a sign that, thanks to what was then known as the inevitability of gradualness, the same thing might happen here after a considerable interval. Of course, my Lords, they were all wrong. It did last. As to the inevitability of gradualness, the one thing that we have established is that it has nothing to do with the destination to which it leads hut that it is simply an exhibition of its gradual nature.

In the years that have followed, collection has not only lasted but has increased and multiplied in a very remarkable degree; and I think we forget this. I should like to remind your Lordships that there are now about 1,000 million people, representing not very far short of a third of the world's population, who earn their living and get their living in a fully collectivised economy with only a very narrow margin of free private enterprise. I would for a moment pass forward into the future and say that if the spread of collectivism, either in the communist or the socialist version, is as rapid in the next half century as it has been in the last, then it is likely that the majority of the children of the present teenage generation will find themselves living in a fully collectivised economy. When we look at it in that way, it makes us think. We must make some kind of a balance between alternative ways of running the business of earning and getting a living—and it is only to that side of it that I want to look at the moment.

Obviously, the collectivist system as it now exists is viable. Obviously, it has some merits. It appears to escape some of the perils that afflict our capitalism. It appears to escape the current periods of widespread and devastating unemployment. Its Finance Ministers, perhaps because the communist societies are not very fully integrated into the international community as a whole, do not take to aeroplanes every few months in order to attend panic-stricken conferences about monetary crises, from which they invariably return with firm promises of a more stable system in future. It avoids—and this, I think, is fundamental—a number of the conflicts with which we are disturbed. No communist country has an Industrial Relations Act, and most Communist countries do not have industrial relations. They do not have prices and incomes policies, or discuss them with the Trades Union Congress or the C.B.I., because these organisations do not exist with which to discuss them.

THE EARL OF ONSLOW

My Lords, would the noble Baroness like to comment on the number of lives lost in the installation of these collective systems in Russia and China?

BARONESS WOOTTON of ABINGER

My Lords, I shall come to that point. I am taking the pro arguments first, and the anti are following. I know that many noble Lords will say that they avoid these conflicts because their populations are virtually slaves. I can only say that it is not I think true in all collectivised communities that a very high proportion of the population regard themselves as slaves. The difference—and this is the fundamental difference—is that in a collectivised economy the public authorities organise and run the whole business of production, distribution and exchange, and that they deal with matters of prices and incomes. In our kind of economy we have an autonomous system which does these things subject to such controls as the public authorities like to impose upon them. I find that, in principle, a system which does not keep going by imposing controls on an autonomous, alternative system has much to commend it; and I have thought for many years that if we could work out, as my noble friend Lord Brockway hopes we may, a collectivist system which is also politically and socially democratic and liberal, then we shall have a much better way of feeding, clothing and entertaining ourselves than we have under our system of capitalism. Viewed as a means simply of delivering the goods, I remain convinced that there is a great deal to be said for collectivism.

Now the collectivist countries of the world are also Communist, with a capital "C". They have, as the noble Earl opposite was about to say, all arrived at their present position by violent revolutions involving a great deal of bloodshed. This is not the road which I am proposing to advocate. It is a road from which I would recoil with horror, and so would my noble friend Lord Brockway. Let me say also that they do not allow wide freedom of speech or criticism of the public authorities. They do not allow you to blaspheme in a way in which you may blaspheme in this country. You may not blaspheme even the most liberal of them by saying that the late Karl Marx and the late Friedrich Engels have been dead a long time, and that although they must have been great men in their day many of their prophecies have not been fulfilled, and that they have not got any very important message for the communities of to-day. These collectivist countries have not produced, let me say, any average standard of living comparable to that which has come from the capitalist communities. I hope your Lordships will accept that that is, for a short period and in rather compressed terms, a balance of the pros and cons of the collectivist societies that we know. As to their lack of civil liberties and their low standard of living, it is fair to say that they have not lost much because they never had, any of them, a very high standard of either, with the possible exception of the East Germans.

When we turn to look at our own system it is, of course, blessed with the opposite virtues and vices. It has in the main evolved through riots, very often, and civil stresses, but it has evolved without formidable wholesale revolutions. It has produced for some people—for a very large number of people—the highest standard of living ever seen in the world; and it allows very considerable freedom (not absolute freedom, but very considerable freedom) of both speech and criticism. As my noble friend Lord Brockway has said, it also has its blemishes—recognised, I willingly accept, by many noble Lords opposite, and by their Government. It has its ugly face. It is disfigured by constant unemployment; by leaving its citizens without occupation and, in consequence, without a sense that they are of value to the community. Nearly everywhere—I think one should perhaps make some exceptions for the Scandinavian countries, which are endowed with smaller populations, but nearly everywhere—it has areas of appalling poverty. I myself find it terribly difficult to understand why very rich countries should contain millions of very poor people, and still contain them in spite of the efforts, in the case of this country, of Governments on both sides of this House. Our system has been unable recently to cope with its inflationary problems; and it is corrupted. as my noble friend Lord Brockway said with great eloquence, by an insatiable greed for money—a greed for money which seems to grow by what it feeds on and to be no less ravenous among those who already have a great deal (indeed, more ravenous, very often, among those who already have a great deal) than among those who, like many of our contemporary pensioners, have pathetically little.

The real question of the future is: can we civilise our system and can they civilise theirs? The one that does will win; there is not much doubt about that.

Let us look at our problems. What we have to do is to keep the capitalists and the workers happy, and to keep them in order; and I have no doubt that that is what the Government are trying to do. My growing fear, if I may depart from the equestrian metaphor and substitute a medical one, is that this is going to be another case where the surgical operation was successful but unfortunately the patient died. I fear increasingly that in our efforts to civilise capitalism we are going to strangle it. I say this when I myself am engaged in doing some work in an attempt to civilise it, particularly involving a prices and incomes policy which might commend itself in some respects even to noble Lords opposite. We are now having to impose an enormous number of restrictions which may keep the capitalists and the workers under control but do not make them happy; and if they are not happy they just do not let the thing run. We are now having to tell them that there are wages they must not have, that there are profits they must not make, prices they must not charge and places where they must not build their factories. It seems that these negative prohibitions amount to very many more than Ten Commandments.

We feel, rightly, that even in this economic world we still retain some vital freedoms. We still retain a limited freedom to say that we will work where we want to work or we will not work at all. It is a limited freedom, because great pressures are put on people who are out of work to take jobs that they may think unsuitable; but I sometimes wonder whether the freedom to sit at home without work, doing nothing, is better than sometimes being told by the authorities that there is a job in another part of the country and that you are expected to go to it. We regard that as slavery and direction of labour. But I wonder whether for the young people particularly, and in suitable cases, we are right to say that it is a worse loss of freedom than having no work at all.

So, my Lords, I come to it. It is very important that we should give our minds to finding a road—not the bloody road—towards a collectivised economic system which will be civilised, liberal and free.

This is what we are trying to do, and for this reason I welcome enthusiastically the signs that the political Party to which practically all my life I have had the honour to belong is now bringing to the front again the importance of public ownership of industry as a necessary means towards the kind of civilised community that I think many of us on both sides of the House wish to see realised. I think we have a chance of doing that. I should be prepared to say that this is the major task that faces us in the years to come in the race between these two alternative forms of economic and social organisation.

I also think there is some chance that some of the Communist countries might come a little way, perhaps even halfway, to meet us. I admit that I am greatly influenced by having spent a month last year in Mao's China where I think we have a comparatively liberal —and I say "comparatively" designedly—form of Communist organisation. I make this comparison with other Communist countries. Perhaps the very fact that China and Russia are such bitter enemies and that the Chinese so much dislike the Russians may be a strong inducement for them to keep the more liberal elements in their own system. But that is for the future to decide.

My Lords, half of what we used to talk about in the days before there were any collectivised economies — collective ownership of the means of production, distribution and exchange—has been realised. The other half, the liberal half, the democratic half, the participation of the community, has not been realised. I feel that in this competition between two forms of economic organisation the real challenge of the future is to show that we can get the benefits of the one half, the benefits of avoidng the bitter conflicts of capitalism, the benefits of avoiding the frictions that run capitalism into the ground; that we can get those benefits from a collectivised economy, without paying the price of loss of freedom. This has never been done. When I grew up and when many of your Lordships were growing up, it had never been done; but there are a great many cases when this country has blazed a trail. This is the trail that I earnestly hope this country will blaze, with all the fervour it can command, in the half-century ahead of us—and that I hope whatever Government may occupy the seat of power.

4.6 p.m.

LORD ORR-EWING

My Lords, may I first apologise for the fact that I shall not be able to remain throughout this debate. I had not appreciated until a few days ago—many of us had not—that an Unstarred Question was going to become a full-scale debate. We all owe the noble Lord, Lord Brockway, a debt of gratitude for raising this matter. I always look on him as a Left-Wing theorist—and I have known him for 25 years—mixed with a great sense of idealism. We had a bit of both in his opening speech to-day. I love his idealism —we all do—hut I am less enamoured of his theories. He has one great attribute—and fortunately to-day's debate did not fall yesterday: he is a great and sincere lover of cricket. That is why I invite him to accompany me to Lord's to see the second Test Match—since we both missed the first.

The first point that emerges in the opening speech was that he said that he believed that the capitalist system was totally unacceptable. He went on to ask what do we mean by capitalism and socialism? He then replied as follows —I quote: Socialism is a system where industry is owned by the whole community and administered democratically. We have had 25 years in which our basic industries have been nationalised; and certainly during this quarter-century there have been many instances where democracy has not worked strongly in our State-owned industries. The noble Lord then went on to cite the Lonrho case and particularly the unfairness of some of the rewards.

Despite the interjection of my noble friend Lord Harvey of Prestbury, the noble Lord, Lord Brockway, did not produce the figures of the extent to which taxation takes away the high rewards from executives in this country. We do not only tax the leading professional and industrial executives more highly than any of our competitor countries do, we continue to do this, in spite of the reductions in taxation in the last three years. The figures are most marked. Lord Brockway said that he was trying to be fair. He would have been fairer if he had quoted how much was taken away from the rewards that he mentioned. The average senior executive's rate of tax in the U.S.A., is 28.9 per cent.; in France it is 23.4 per cent; in Germany, 36.9 per cent. and in this country 51 per cent.—over twice the rate of tax obtaining in France. On earned income the marginal rates have equally marked differences. In Denmark it is 40.95 per cent.; in France it is 43 per cent.; in Belgium, 55 per cent.; in Germany, 59.9 per cent.; in the Netherlands, 71 per cent. and in the United Kingdom 75 per cent. If you combine unearned or savings income, the rate of tax in this country is as high as 88 per cent. No country in the world takes as much away from its leading men as we do. It would have been fairer if the facts had been put in the opening speech.

I think in honesty this debate is motivated by the Lonrho case. Although the noble Lord when introducing it said he was not motivated by the Lonrho case, he used quite a number of examples—and one cannot help feeling that the timing of the debate and some of the phraseology and the words used arise, if indirectly, out of Lonrho. I think this was the exceptional and "unacceptable face of capitalism". It is indeed the exceptional that I would have underlined had I been Prime Minister and had I thought of the phrase as quickly as he did. The point we need to remember is that there are 4,000 public companies and we are considering one. It is therefore very exceptional. I think it is ridiculous to say that capitalism is totally corrupt or wrong and should be replaced because of one black sheep. We do not condemn the medical profession because one doctor transgresses. We do not condemn our police as a whole if one police officer slips from grace. Nor the Church if one churchman does. Nor, incidentally, the trade union movement if one trade union —as the E.T.U. did—fiddles the funds and rigs an election. We did not seek to condemn the whole trade union movement because of one transgressor. So I think it a little unfair to hitch a criticism of capitalism on one incident which in any case is at this moment sub judice.

I think also that one should point out, as did my noble friend Lord Gowriein the masterly speech with which he opened the debate from the Government Front Bench that this Government have taken action and are continuing to take action to improve capitalism. We have already had a series of Acts and we are told that more are coming along. The C.B.I., equally, is taking action. In the Government's sphere we are to have a new Companies Bill which will seek to stop abuses where and if they exist. I like the phraseology which the Minister used of capitalism—" open, free and based on integrity". That is what we want of our capitalist system in this country. I commend to your Lordships who are concerned with a better, improving and more modern capitalism the report of the noble Lord, Lord Watkinson, who I know cannot be here to-day, published as, A new look at the responsibilities of the British public company. This is a C.B.I. interim report. The C.B.I. is seeking to find ways of up-dating capitalism and producing a Code of Conduct, because much of this cannot neatly or effectively be put into company law, which would set standards for those who sit on boards and who are concerned with private industry in this country.

I think, therefore, that one says that the action of Her Majesty's Government and of the C.B.I. in this area of improving capitalism, removing the warts from the face of capitalism, are somewhat more effective than the efforts of Her Majesty's Opposition and the T.U.C. in removing some of the difficulties in the trade union sphere, which is equally important to the well-being of our country and the growth of our economy. In this particular week we could not have had more instances of troubles in that area, where three out of our four motor car companies are hit by strikes, some of them deeply damaging to our economy and to our exports. Those of us who travel abroad know the reputation which our cars (this applies to other machinery as well) are earning as a result of strikes and disruption in our industries, and the late deliveries which result, and the failure to meet our commitments.

BARONESS WOOTTON or ABINGER

My Lords, can the noble Lord say at what point this country stands in the table of frequency of strikes and the number of days lost?

LORD ORR-EWING

Yes, my Lords, I can give the noble Baroness figures, though I have not the full table with me at this moment. From January to April, 922 stoppages; 724,000 people involved—

BARONESS WOOTTON OF ABINGER

My Lords, I think the noble Lord misunderstood me.

LORD ORR-EWING

My Lords, I said that I had not got the table with me, but I can give the facts about this country which is, after all, what we are concerned with.

BARONESS WOOTTON OF ABINGER

No.

LORD ORR-EWING

Noble Lords opposite are not concerned with this country? Well, my Lords, there are other people here who feel that the wellbeing of our country is of paramount importance, and perhaps therefore I may finish my answer and the point I was making. I am sorry that I cannot carry all the figures with me, but 2.7 million working days were lost in the first four months of this year, and by any standards that is a very damaging record. That is why I said I should hope that just as the Prime Minister condemns the wart on the face of capitalism we should have some condemnation of this other important side of our industry which is so germane to the well-being and expansion of our economy.

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, may I ask the noble Lord, Lord Orr-Ewing, whether that is entirely attributable to the trade union side? Is it not also a "wart on the face" indicating the way capitalism works?

LORD ORR-EWING

No, my Lords, I do not believe it is that kind of reflection. I had a debate on this issue. I think that really it is a reflection on the majority of people for not being able or willing to stand up to a militant cross-section of the trade union movement which is not representative.

BARONESS LLEWELYN-DAVIES OF HASTOE

No.

LORD ORR-EWING

My Lords, I am sorry, but Mr. Wilson, when he was Prime Minister, drew attention to this and there are many instances. I could quote the instance of the Ford pay strike, where the men did not want to come out on strike, but their shop stewards asked them to and they did in fact follow through. The Gallup Poll showed that they did not en masse wish to. This is why I say that I do not believe that this is representative of the whole of the trade union movement. I feel that some evil men have got into important positions of influence, and the sooner they are got out of them by democratic methods the better for our country.

LORD SHEPHERD

My Lords, would not the noble Lord, Lord Orr-Ewing, agree that there are other occasions when the trade union leadership has fought to get the men back to work and when the men felt that the circumstances were such that they ought to go on strike? It is two-sided.

LORD ORR-EWING

Yes, my Lords, I concede that. My whole theme has been on this issue. So often these people are striking against the wishes of the leadership of their union and following people who I do not think are dedicated to their well-being or to the well-being of the country. It is against trade union leadership that so many of these strikes take place. I am only saying that the Government of the day has reacted very quickly with its reference to a wart on the face, but we have not had any reaction or condemnation of the other side from another place or from the T.U.C. in trying to work out new systems so that this important section of industry could operate more efficiently.

Lastly, I turn to the second part of this Motion. We did not hear very much about that. It urges Her Majesty's Government to give a lead in advancing conscientiously and progressively towards socialism". I do not think that the noble Lord, Lord Brockway, has much hope of this particular Government giving a further lead in this direction, but he can be hopeful. I said that he was an idealist and perhaps a dreamer, but I do not think his dreams are likely to come true.

LORD BALOGH

My Lords, I quite accept what the noble Lord, Lord Orr-Ewing has said, but may I ask him whether it is not going too far to talk about what the Government will or will not accept, seeing that they have accepted almost every single one of their opponent's policies in the last year?

LORD ORR-EWING

My Lords, I acknowledge that some of the noble Lord's original ideas, while he had so much influence in the Treasury, have been accepted. Certainly the Regional Employment Premium was accepted, and I think it wholly admirable. I should have thought it was the growth in the economy and the reduction of taxation which have been the outstanding successes of this Government, and both these were firmly written large in the Government's Manifesto at the time of the General Election.

Now I 'turn to further steps towards socialism. I do not think that the noble Lord, Lord Brockway, would have the whole of the Labour Party with him in this connection. He certainly has not got the whole of the Labour Press with him in the proposals to nationalise a further 25 companies. This, I think, comes from the "Tony Benn-Judith Hart axis as it is called in our Press, and I know that those M.P.s are not representative. They are on the extreme Left Wing of their Party, as indeed I think the noble Lord would say he is, and probably they are not representative of Labour thinking. I commend to the noble Lord's reading the New Statesman's article on this issue. That is not a paper I read avidly every week, but this particular week it contains an article by Professor Beckerman, three pages long, which shows what absolute nonsense it is for the creation of wealth and the well-being of our country to proceed with this half-baked idea of further socialism. If the noble Lord does not like the New Statesman, in to-day's Guardian—this is always a popular paper—the policy is described as a "half baked red herring." If I may go on, it finishes up: If ever there was a recipe for slower growth, industrial mismanagement and poorer workers, the Labour Party has surely hit on it. That is referring to the "giant strides towards socialism", if I may borrow that phrase from Mr. Denis Healey.

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, is the noble Lord referring to the Guardian as the Labour Press?

LORD ORR-EWING

My Lords, I think I must stop giving way quite so often. I did not describe it as the Labour Press; I said that it was widely read. It has the same circulation as The Times. I think it would be equally right to say that it is probably left of centre in its general views—Liberalleft is, I think, a fair comment.

I hope that when this debate comes to be concluded we shall remember that this Government have progressively in their three years, through a series of measures, tried to improve the administration and the standards of capitalism. Because we have had one bad case, that is no reflection on the capitalist system. I am a Tory because I believe that capitalism does create wealth more rapidly than socialism; and from that greater wealth I wish to see our social services, our housing, our roads and all else, improved. I hope that my noble friends on this side of the House will therefore reject this unusual and exceptional Motion.

4.21 p.m.

LORD SOPER

My Lords, I, too, must ask the indulgence of your Lordships' House in that I have a previous engagement which I must keep, and therefore, much as I should like to do so, I cannot stay until the end of the debate. I should like to thank my noble friend Lord Brockway for initiating this exercise in what I hope is fundamental thinking and will not be too detailed in its examination of particular warts on the face of any system. It is an unusual kind of debate, because we are invited to think of the basic principles which activate a political Party and a system. I take some comfort from the recollection that it was the immortal Dr. Oman who, in giving valedictory advice to his students about to enter upon the Presbyterian ministry, said: Take large texts, gentlemen, and when they persecute you in one city, flee into the next. I do not anticipate persecution, I do not smell faggots; but at the same time I believe that one, particularly wearing the sort of collar that I do, should be very careful in a general debate to see that what he has to say has some precise reference and is not an encouragement to wild splashing about on large canvases with very large brushes.

But I would submit, my Lords, that there is a very reasonable case for regarding the capitalist system as unjust, unworkable, undemocratic and unfree—apart from that, I should think there is very little wrong with it. To begin with, it is surely unjust, as every system is: and it is perverse of people to think that of all the systems in which man has been involved this is one which has exceptional virtue. It has, I think, exceptional vice. Under circumstances of previous centuries, there were no possibilities of a truly just system. It is because there is evidence, however tentative, that a just system is within the means of modern man that the iniquities of the capitalist system stand out more clearly. Evidence has already been given this afternoon—and I will not add to it about the dis? proportionate way in which some people are advantaged and others disadvantaged through no fault of their own. Nobody, I think, who has any experience of social activity among those who are the less privileged or the under-privileged could doubt that the capitalist system is unjust, and that if it were possible to provide a better one, then we ought eagerly to seize that chance.

Secondly, my Lords, I am sure that capitalism is increasingly unworkable. The evidence of the way in which governmental participation in areas which before were reserved for a laissez-faire philosophy; the claims of an ordered society; the ever-increasing intervention of those in power because of the inefficiencies of those who exercise it; the increasing complexity of the modern systems under which we live—all these require modifications and, I would think, mutilations of the pure philosophy (if it can be called "pure") of capitalism. It becomes increasingly evident that the kind of changes that will be required in order to make it work will follow exactly the pattern of the most admirable illustration of my noble friend; that capitalism may indeed proceed to very efficient operations, but in the process the patients will die.

The capitalist system is also undemocratic, and increasingly so, because that which would be the guideline of its democratic principle is no longer confined within the area of the nation State. Once again it is unnecessary for me to repeat what has already been said, and is particularly illustrative in the motor industry, in the way in which the major decisions are not within the hands and the power of people in these islands, but are probably operable from Detroit. This is an increasing danger, and an increasing threat to the whole principle that a system can be democratically exercised within the (shall I say?) four walls of a nation State.

The capitalist system is certainly unfree. It is unfree increasingly because, in the absence of a simple or an understandable general principle, it becomes increasingly more complex and therefore less intelligible to people who are not idiots, but who have neither the necessary expertise nor the amount of time to spare in order to make judgments which are valid and consequential. If your Lordships will allow me a repetition of something I have said before in this House, for a Wednesday debate I come from a loud and large place where I try to talk to people in the open air, and the cynicism which prevails to-day, and the sense that the capitalist system is wrong in morals, is one that is exacerbated by the fact that in most cases what the politicians are talking about goes far beyond the competence and understanding of most ordinary people. It is true, of course, that in one way the capitalist system presides on the assumption of what is called selfishness, or, if you baptise it, enlightened self-interest. But that enlightened self-interest, though it is a simple thing to comprehend, becomes almost unintelligible within the framework and fabric of the complex society in which we live.

For these reasons, my Lords, I would submit that what we are seeing at the moment is illustrated by the particular report on the schoolboy, which went as follows: "This boy's handwriting has so improved that for the first time we can now see how really bad his work is." It is the increased opportunity of finding out what is going on (and this is the only reference that I will make to contemporary scandals of one sort or another) that brings to light an added sense of distrust and promotes a much increased sense of cynicism.

I believe that socialism is a system that, not having been tried, cannot yet in practice be evaluated, but yet rests upon certain foundations which I firmly accept and has the foundations of a family life. It is of interest that every one of us, whether we are socialists, capitalists or Liberals, practice socialism in our own family life, if that family life is worth calling a family life. If we do not, then we are breaking certain quite simple moral propositions which I believe are inbuilt into the habits and behaviour patterns of even the worst of people and find their expression at the moment in a sense of frustration. It is not without interest that part of the revolution of the youngsters—a revolution which we seek to understand, though I have no intention of endeavouring to delineate it or to claim that I understand it fully—is due to a widespread sense among many young people that the modern savage society in which we live is unworthy of their best endeavours and their hopes. Some of them contract out; some of them run away; some become the most ebullient revolutionaries. But to ignore their sense that the system under which we live basically affronts some of their most central ideas and ambitions, is, I think, a dangerous exercise.

My Lords, every Sitting of your Lordships' House is anticipated by a prayer meeting, and included in the prayers is one in which we refer to God as the only ruler of princes", and say that From Him alone comes all good counsel and just works. Your Lordships will not think it improper or irrelevant, I am sure, if I conclude by giving the evidence, as I see it, for saying that the Christian should become a socialist. It happens that we are meeting to-day in the octave of Pentecost, and the historical Feast of Pentecost is the record of the way in which a number of people were suddenly energised with the power to put into effect a Christian Gospel which they had heard and which they wanted to believe. If we read the second chapter of the Apostles—or the fourth chapter—we learn that what they did was to build a socialist society based on common ownership. There is no doubt about it. Traditionally, the official historians of the Church have said that this was a very admirable effort, but, of course, it was a mistake, and that sooner or later it had to be recognised as such. I find this theologically very difficult. If the first thing that the Christians did on the reception of the Holy Spirit of understanding and power was to make a mistake, then we had better review our theological attitude to the story of the Christian Church. I do not think they made a mistake: I think it is we who have been making the mistake ever since the mistake of failing to see that a search for a society is the best way in the end of securing the virtue of the individual.

THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE)

My Lords, the noble Lord will forgive me for interrupting, but if he had gone on to almost the next chapter he would have learnt that the Church in Jerusalem went bust and that they had to send the hat round to the Church in Antioch!

LORD SOPER

My Lords, if the noble and learned Lord the Lord Chancellor had taken the precaution of reading the intervening passage he would have remembered what happened to Ananias and Sapphira. I have every regard for the noble and learned Lord's competence in law but I think he is a very bad theologian. Whatever may have been the failure of that experiment, it was not because the experiment was ill-judged but because those who were expected to fulfil it failed in heart and mind to give sufficient substance and effort to its perpetuation. I think that the story of the Christian Church ever since has been a story of compromise with a principle which, having been abandoned, has led it into all kinds of difficulties.

I will conclude by saying this. If you provide a selfish man with an environment that promotes selfishness, then he is more likely to be more selfish. If you offer him an environment which encourages him to be less selfish, then I feel he is likely to be less selfish. Therefore it is futile, in my judgment, to assume that man's behaviour patterns are static. Whatever may be said for or against the experiments in Russia or in China, they have by political and collectivist means transformed many of the habits—some for good and some not for good. I believe that those things which are for bad have been prompted by their accession of violence, their continuation of violence and their limitation of freedom. I believe that if we were prepared to make an experiment in democratic socialism we should not only fulfil the hopes of millions of people who would be by no means reluctant to embrace such a system if it were offered to them, but we should also be riding high with the principles which belong to the nature of the world, and which we are increasingly beginning to discover. They are benevolent; but they are rigorous and demand a discipline of the community as a whole.

4.34 p.m.

LORD PLATT

My Lords, if all capitalists had the poetic persuasion of the noble Earl, Lord Gowrie, I think that the capitalist system would be very much better than it shows signs of being at the present time. It is not my particular wish either to attack or to defend the capitalist system; rather I want to draw your Lordships' attention to the fact, as I see it, that it is getting out of hand and that it is time for men and women of good faith, of all Parties, to be getting together to see what kind of system could replace the capitalist system, or, alternatively, if we are still trying to keep the best principles of private enterprise, then what curbs must be put on to human greed to make the capitalist system acceptable to ordinary people like myself, whose ethical code is really a quite simple and not particularly demanding one.

When a system of Government relationships or society reaches this stage of greed and corruption, we may be sure that it will net be tolerated indefinitely, but will fall into decay, either from inside or by attack from enemies without. I need not draw the attention of your Lordships to the numerous examples in history where opulence, greed and cruelty have led to the end of an era. You have only to look about you at the present time to see greed, opulence and corruption taking over. We see that vast fortunes can be made by landowners and property speculators by the simple antisocial act of doing nothing at all. The personal touch in ownership has gone from business and from housing, so that people do not know who their landlords are. When people go shopping they do not know to whom the shops belong. British engineering is put into American hands, and vast companies with impersonal names put their clutches on so many different businesses that they have little knowledge of the technology which is essential to those businesses, so that craftsmanship no longer counts and the so-called workers no longer care whether they work or not and will go on strike to get at least some share in the millions which they know are daily changing hands. They do not always know who their masters are; or, if they know to-day, they do not know who they will be tomorrow.

If we look at America we can already see well advanced, and with an already deadly hold, the next stage. That stage is the takeover by organised crime, with the spoils of crime being invested in legitimate businesses, so that the criminals get more and more of a hold on the direction in which the capitalist society will progress. I am certain that I do not exaggerate. The danger to society is very real. We are already seeing the American pattern repeated over here, where people dare not walk in the streets. I am sure that all of us, in all parts of your Lordships' House, know many examples of what is said to be the unacceptable and ugly face of capitalism.

For myself, I would take as my first example the enormous advertising campaign of cigarette manufacturers which is stepped up immediately there is any effort at health education. However, I will not bore your Lordships by talking further on that subject. I will take instead the example, alas! of my own profession in America as an instance of what happens when the aim becomes money and there is no curb on the system. We who visit American hospitals and medical schools see a different side. We mostly meet people like ourselves who very often are working full time for their university hospital; and these people will tell you that they would not join the rat-race of medical practice in America for anything. But we do not see the other side: the average American has no doctor who takes continued care of him or his family. Almost no doctors in American cities will visit patients' homes any longer: the mayor of one city was quite unable to get any doctor to come and see his son, who was seriously ill. So eventually an ambulance is sent for and the patient is brought—often unnecessarily—into hospital where he remains in the reception ward, unattended while the various clerks and people argue with the patient's relatives regarding the fees they can or cannot afford.

The American Medical Association has spent many millions of dollars in trying to prevent any kind of health service from coming into being and has, it is thought, spent millions of dollars in seeing that the right people get elected into the House of Representatives. Medical students in this country, when asked of their motivation, why they originally went in for medicine, will mostly tell you (we have evidence and figures for this) that they had some kind of sense of wishing to do good, and it was a profession in which they could do some good to their fellow men as well as being an extremely interesting occupation. Similar questions put to American medical students gave rise, in the majority, to the answer that they went in for medicine because the money was extremely good. Operations are carried out with a frequency which depends roughly on the financial state of the patient concerned. An enormous amount of unnecessary surgery is done—so much so that one gynaxologist says that it now costs him 2,000 dollars a year to insure against litigation. My own nephew was in New York recently and had been treated for a sort throat for several weeks. He is a young man of less than 30 years old and makes a living as an author. He was getting no better, so he telephoned me. I told him to come back to England straight away and he did so. I put him in the hands of a good general practitioner who immediately stopped all treatment, since when my nephew has never looked back. Not only were the antibiotics which he was being given unsuitable, and in my view dangerous, but they were the ones which were given by injection; and so of course my nephew had to go to his doctor for the injection, whereas if the doctor had given him a prescription I suppose the pharmacist would have received the profit.

These are the things which go on, even in the profession of medicine (which I always thought had fairly high ideals), in a society in which the capitalist system is allowed to go unchecked. I think it is urgently necessary that we should take this matter seriously and see what curbs we can put on this system, or what other system we can devise to take its place.

4.44 p.m.

LORD LINDSAY OF BIRKER

My Lords, I should like to begin by taking up a point made by the noble Lord, Lord Soper, when he said that this is the first time that it has become possible to save a just society. If one looks at the whole problem in historical perspective, one finds that was true up to some time within the past one hundred years; but before that, any society which wished to have a civilisation had to have a division between a privileged minority who could be active in civilisation, and an exploited majority, simply because the margin of productivity was not large enough to enable everyone to participate in civilisation. Previously, if you wanted a proletariat society you could only have a fairly primitive peasant economy.

We are now living in the middle of a period of change in human history when, for the first time, it has become technically possible to have a civilisation in which everyone can participate. The real difference between a Socialist outlook and a Conservative outlook is that people with a Socialist outlook are prepared lo face the extremely difficult challenge of trying to realise that the opportunities presented by this new situation are to try to get a society in which everyone will have the opportunity to participate to the full in society's civilisation and to have a good life. The Conservatives tend to be afraid of those difficulties and to go back to thinking in traditional terms.

One can see this in the case of American Conservatism; it is clearly a nostalgia for Jeffersonian democracy. In early 19th century America you could have rather a nice society consisting of independent small producers. People refuse to face the fact that that has now become impossible in the modern world. In some sense, whether we like it or not, we are living in a socialist society because the whole productivity of the modern industrial State depends on an extremely complicated co-ordination and division of labour. Everyone is independent, and to talk in terms of pure individualism is simply unrealistic. Life is an extremely complicated challenge. People are trying to do things which have never been done before. That will require basic changes in people's ways of thought and their whole habits of behaviour. It is unrealistic to expect that there will be any simple and obvious solution; you have to expect that you will make a good many experiments which will prove to be unsuccessful before you are able to progress in the right direction.

The traditional ideas of socialism have proved to be one of the experiments which have proved unsuccessful. If you go back—it is so in Marx and most of the Socialists of the 19th century —you find the assumption that it is going to be extremely difficult to make the revolution to take the means of production away from the capitalists. But there is also the assumption that once you have made the revolution it is going to be extremely easy to build a wonderful ideal socialist State. This is shown clearly in Lenin's The State and Revolution, where he says that capitalism has so much simplified the operations of business that management can be run by any worker who is literate and able to do arithmetic. Lenin realised the possiblty that the revolution might go wrong. He said that the only real guarantee against that was to have the kind of State envisaged in The State and Revolution where there are no permanent bureaucracy and managerial class, no permanent police force and no permanent army. That proved unworkable.

There is a good deal of evidence that in the last years of his life Lenin began to realise that things were going wrong only in a sense, because he thought of having a State in which there was no permanent bureaucracy. It is going to require big adjustment to face the problem of how to keep a bureaucracy in control when it proves to be necessary. My guess is that if Lenin had lived to the same age of Mao Tse-tung he probably would have led some equivalent of the great proletariat cultural revolution against the Soviet bureaucracy: that means that the traditional socialism—simply taking over the State. If you look at what has happened in the Soviet bloc, you will find that it has not produced an equality of income. There is strong evidence that the inequality ratio between the lower incomes and the higher incomes in the Soviet bloc is very much greater than it is in a number of countries where industry is primarily private enterprise—Australia, New Zealand or the Scandinavian countries. There is also a tremendous difference in status, and feelings of status. People in America told me of a visit by one party of Soviet astronomers where the regular astronomers simply refused to eat at the same table with the members of the party who were merely technicians. If you want a status consciousness, that goes pretty far. So it means you have to write this off. I think that what went wrong with early socialism was that, first, people vastly underestimated the difficulties of running an efficient economic system: it was far more difficult than anyone had thought. The other thing was that they exaggerated the importance of property and failed to look at the cases of societies where power did not depend on property but on status in the apparatus of Government.

Here I am thinking of traditional China, which is a beautiful case of this. There have been some good books by Chinese scholars and you will find that in traditional China a man could not get anywhere unless he had a degree from the Imperial examination system. Property without protection of Government power counted for almost nothing—certainly very little. The 2 per cent. of the population who had degrees got 25 per cent. of the national income. That included a great many people who worked in Government circles. In a unit about the size of a county, the so-called Government officials, roughly corresponding to the district officer in the British Colonial Service, received incomes about a thousand times as large as that of an unskilled labourer, and the income ratio was far greater when it came to the higher levels. So it is perfectly possible to have a society in which power based on property has very little importance, yet there is still a tremendous degree of exploitation and a tremendous degree of inequality. For all these reasons we have to say that the idea that it is possible to get any kind of socialism simply by transferring property rights is an idea which has proved to be a failure.

The other point that has to be brought out is the case for a competitive market system simply as an economic tool. I think one can make this case quite apart from capitalism. It is a question of the rules that are followed. Here again, I think that if you look at the economies of the Communist States you find that they devote an immense amount of effort to only very partially successful attempts to overcome problems which would simply disappear if they allowed a competitive market economy to operate. You find that some of the brighter Soviet economists—people such a Liberman and Cantorowicz—actually say that they ought to introduce a competitive market system as the only way of getting a reasonably efficient allocation of resources.

So I think, having said this, you say that, in so far as it operates a competitive market system, capitalism is an efficient means of getting production and of raising the general standard of living On the other hand, I think it can equally be said that capitalism tends to become distorted. One can draw a pretty clew distinction between desire for profits—getting profits by doing something which is socially useful—and attempts to get profits by trying to get a larger share of an existing national income. In so far as the one thing works, capitalism is effective and improves the standard of living. In so far as people simply try to grab larger shares, it is definitely restrictive and hinders production.

The tragedy, it seems to me, is that we have been developing towards the latter view. To take an obvious case, one might mention advertising. Here is definitely an attempt, not to produce what people want but to persuade people to want the particular product the advertiser produces. It seems to me that in any kind of reasonable society one should simply say that no useful purpose is served by persuading anyone to buy one commodity rather than another on any grounds except superior quality or lower price. If one went on that rule a great deal would be cut out. One might also cut right out the whole business of paying directors large expense allowances simply to maintain the prestige of their firms. It serves no socially useful purpose. If everyone were cut down the country would not lose at all. The whole question of advertising is a very large topic and I should have thought there was a case for very great restrictions, though I have not time to argue them here.

What I want to go on to argue is that what seems to me to have happened in this country is that we have developed what I call a "vested interest society. in which there is a large number of groups, each thinking primarily in terms of, "How can we get a larger share of the cake?" Even though they are squabbling for their share, it reduces the total size of the cake. It seems to me that if we really want to get rid of poverty in this country we must somehow have a Government which will take ruthless action against vested interests. It is only in that way that we shall be able to obtain the rise in productivity that will really remove poverty.

The other point which is important, and which I think no one has so far mentioned, is that one basic problem of modern society is the problem of bureaucracy. How do you control it and how do you keep it in order? As soon as you get really large-scale organisations you get a bureaucracy; you then get Parkinson's law working, and everything starts to go wrong. I know more about American bureaucracy than British, because many of my graduate students are connected with people in the American public service. I can give your Lordships an example. I was speaking about the Cultural Revolution in China and I quoted a case in which they claimed they had reduced the administrative staff of one province by 90 per cent. I said to my students, "How many organisations are there in Washington which could function effectively with 10 per cent. of their present numbers?" I was slightly shocked when a number of them laughed and said: "We can think of quite a number". It seems to me that unless some way can be found of keeping bureaucracy in order, it inevitably gets out of control and produces this highly undesirable bureaucratic State.

Simply having elected bodies does not solve the problem. I should like to quote from my own experience, even on a small-scale matter. The university where I teach, responding to student pressure a few years ago, went in for an elaborate scheme of having everything controlled by elected committees—representative undergraduates, graduates, students and so on. The result has been completely disastrous. First, in this kind of system power is put in the hands of the university people who are much more interested in playing university politics than in academic work. My students who are interested in academic work complain bitterly that they have to waste an appalling amount of time at meetings to prevent other people from wrecking their studies, and as a member of faculty I find that the results are far more arbitrary and tyrannical than anything we ever got from a theoretically despotic dean. You will suddenly be told that you have to teach a course even though you think the title complete nonsense. This is a basic problem. I do not know the answer, but it seems to me to be a problem that we have to face.

The other point which I think has not been brought out enough is that if you want a socialist society, or any kind of workable society, the institutions are really of importance only in so far as they produce attitudes and types of behaviour. What is needed for a good society is to have in it people with public spirit. It must have people who are to a fair extent prepared to identify their own personal interests with the interests of the community. Here is the point where China may really have something to teach us. I am going there next week. and I hope to have opportunities for more observation, but it seems to me that Mao Tse-tung and the Chinese leadership are among the few people in the world who have faced the problem. I do not know how good their answers have been so far, but they have really faced the problem, "How to keep a bureaucracy under control? How do you in fact inspire people with a desire to serve the community?" This is an absolutely essential part of any proper social development. An important point, which is probably extremely relevant, is that one great thing they have done is to decentralise. I agree that it is a bad mistake of all Governments to think that a large organisation is necessarily a good organisation—to identify size with efficiency. If you want to get a spirit of loyalty in an organisation the important thing is to let people feel that their personal interests are attended to. You are much more likely to get that in a small organisation. It is always the presumption that a small unit is better than a large one unless there are compelling technical reasons to the contrary.

One final point on democracy. The key point about it is to have discussion and criticism. Here I think we need a vital change, because a democracy can only really work on the basis of an informed public opinion. There is a remarkable book by the French historian Marc Bloch, in which, speaking of the modern world, he says that the masses no longer obey: they follow, either because they have been hypnotised or because they know. If we consider the proceedings of this House, I feel that there is still far too much the idea of the Government as a superior body of people who expect obedience from the people. This has ceased to work. I shall feel that there has been a real revolution in England when I find a member of the Government Front Bench, when answering a Question, saying "Yes,' on this one we really boobed," or saying, "The official in my Department who dealt with this showed a complete lack of imagination. I have rapped him over the knuckles and it will not happen again". When the Government are willing to admit mistakes instead of trying to keep up the pretence of being omniscient and wonderful I shall really think that there has been a revolution.

I should like to say a great deal more about this but there is not time. However, one final point which I might deal with is that quite a lot of evils which have been deplored do not come from economic institutions but from a breakdown in thought. Perhaps the simplest way of putting it is in something which I think I can quote very well from memory. It is a rather remarkable statement which came out in R. G. Collingwood's autobiography as far back as 1939, about the disastrous influence of the Oxford philosophy of his time, saying that formerly people abroad studied philosophy and other things in order that they could do things better. You then got the positivist development saying that you could describe moral action or you could describe politics, but only a bogus philosopher would pretend that it offered guidance. It goes on to say that the conclusion that any student can draw for himself was that for guidance in the problems of life you could not get from thinkers or thinking, from ideals or principles; you must turn to processes which are not thinking but action; our aims, which are not ideals but caprices, and the rules of conduct which are not principles but rules of expediency. Here I have a strong feeling that the intellectuals of this country have in fact betrayed the working class.

My first job after leaving college was to teach W.E.A. classes in South Wales. I had a high respect for my students. These were people who had a very real working class culture, who knew about modern philosophy. If one talked about Plato most of them had read it, and they had an almost pathetic eagerness to be taught by other people how to apply this knowledge to politics and how to get things done. The tragedy is that instead of encouraging it the professional philosophers and political theorists said, "I can give you a nice description of the Constitution, or an analysis of election results", or something of that kind, "but it is outside my competence to give you any reasonable analysis of how you should act to attain your aims".

This is far too large a subject to go into now, but I feel that many of the evils that we have been deploring are not matters of economic institutions but of a breakdown in philosophy.

5.5 p.m.

LORD BALOGH

My Lords, I have been asked to be brief, and therefore I shall leave the moral aspects of the problem, which are obviously the more important, to more competent hands, or, perhaps better hearts; and I shall concentrate on the economic problems which confront us. For 30 years Governments have fought and lost the battle against increasing prices and inflation. They have been completely unable to deal with it. The Government are now grappling with it in a way, and I must say that the noble Earl, Lord Gowrie, made an extraordinarily complacent speech, which I very much hope, for the sake of the country, will be justified by events.It was extraordinarily complacent because he really did not face up to the problems of here and now.

In the remarkable speech which we have just heard from the noble Lord, Lord Lindsay of Birker, there were also one or two points which went on to a horizon beyond mine, and I should like to ask him to consider, when he compares salaries in the Soviet system with ours, that the purchasing power of the Soviet system cannot be derived from property appreciation. One of the most interesting things in this country—

LORD LINDSAY OF BIRKER

My Lords, will the noble Lord forgive me for a moment? This in fact is not quite true. I recently met a Soviet official who was describing how he had bought an apartment in a co-operative in Moscow. Someone asked him whether he could resell it, and he said, "Oh yes, I can." He was then asked "Would you make a profit on it?" and he said, "Yes, almost certainly".

LORD BALOGH

My Lords, I do not think that is really very germane. We cannot say, for instance, that in this country house sales are not subject to capital gains tax because everybody's own house is not subject to capital gains tax. That would be an extraordinary travesty of truth. Property rights of course are extremely important, and I fear that in this country the whole endeavour of both Parties to mitigate poverty and increase equality has been frustrated by this extraordinary property boom, which I think is one of the more dangerous threats, as I shall explain in a moment, against us in trying to get an orderly economic life.

I should like to say one thing to my noble friend Lord Brockway. He predicted an enormously improved system of morals into a new socialist system. I beg of him to remember that we are not all saints, and I think that a reading of Freud beyond Marx is obligatory for any reformer who wants to promote democracy. Having said this—and I agree with the whole tenor of his speech —I only point out that there are these traps and pitfalls between us and Nirvana.

The Marxian case predicting the doom of capitalism was founded on two arguments: first, that there would be an increase in misery among the lower income classes driving them to revolt and, second, that the crises which had become very much more violent in the first part of the 19th century would increase in violence and ultimately would put an end to the system. Of course it must be said that no sooner had that appeared than he, as most scientific economists—and I am an unscientific economist—were immediately proven wrong. He wrote his Communist manifesto when this was laid down in 1846 or 1847.

THE LORD CHANCELLOR

1848.

LORD BALOGH

No, that was when it was published. I may be corrected, and I am willing to take any rebuke from the noble and learned Lord on the Woolsack. The crises had became very much worse; there were the hungry 'thirties and 'forties and no sooner was the climax passed—the '48 Revolution—than these crises and the misery were mitigated.

The second prediction was the increase in misery. That was also obviously falsified because wages, on the whole, increased; though poverty remained still enormous, it was decreasing and the steady pressure coming from the extension of the vote to the working class helped in the matter. Nevertheless, the crises stayed with us until the war. One of the great problems with which we have to reckon and come to terms now, is that the crises since the war have modified and abated. Together with this (and I fear that I must again contradict my noble friend Lord Lindsay of Birker) there has become manifest in industry a tendency towards large-scale production which in my humble opinion is not reversible. It cannot be reversed. It would be very nice to have handicraft work in our houses instead of the plastics which I understand are now indestructible; but we can afford plastic goods which can be made by the million and we could not afford to have handicraft work.

LORD LINDSAY OF BIRKER

My Lords, may I interrupt the noble Lord to say that I did not suggest that? I said, except where technically necessary, and I said that, for example, if you have a conglomerate which runs completely different industries the technical matter does not come into it.

LORD BALOGH

I fear that even for the conglomerates there is a good reason. Good management is very scarce and therefore I fear that one of the problems is that we cannot do without a certain amount of "conglomerateness"—perhaps that is a word. That concentration of power and the rise of mass unionism completely changed the nature of the economic system. Instead of having market-tested competition which there might have been under the conditions—and here I agree with what the noble Lord, Lord Lindsay of Birker said—of Augustian or Jeffersonian times, we have seen that competition in our day in the highly developed areas of the world is what is called "oligopolistic"; that is to say, competition between the few who take cognisance of what others are doing in order to avoid a clash.

This system is obviously making for very powerful combinations and makes it possible to manage prices. The testing of prices in the market does not mean what we have learnt in our own day, what Marshall meant by testing of the market. A market cannot be tested because people will take into account what their competitors will do. That, together with the political pressure for full employment, has created an extraordinarily disagreeable and very dangerous situation. It has created the situation in which the balancing mechanism, so far as prices and money of the capitalistic economy are concerned, is paralysed and has to be refurbished. In my humble view it is absolutely essential to go steadily towards the extension of the public sector, not so much because the public sector is efficient but because it is essential for restoring the orderly working of the system—though I must confess that the studies of our nationalised industries do not reflect the very adverse views we have heard expressed here. On the contrary, there are some very serious studies which show, on the whole, that the price increases in the nationalised sector were less and, given that price increases were less in a monopolistic situation because of Government pressure, both Tory and Labour, they did not do badly technically or physically speaking.

The great problem is how is this consensus needed for balance to be arrived at? It must be arrived at by what I would call a feeling of just participation by everybody. I may be wrong—I am not dogmatic—but I do not see how the feeling of participation, and of having to be moderate, reasonable, can be expected when the present system is left in its present state. Because it is not true nowadays that most of the wealth has been created by the people by their own saving, which was a very powerful argument in Jefferson's time for the capitalist accumulation. It is not true that it is created now in that way. Take Mr. Hyams's money—I do not like to go into these abuses, because it is not an abuse. He was behaving in a perfectly legitimate way. What he did was not forbidden; it was not a criminal offence. It was not even an act on which financial penalties were imposed. He behaved as anybody sensible would behave in a capitalist society. And if that is not a behaviour which commends itself to some noble Lords on the other side, then we have to change the rules of the game. It is no use telling us that these ugly and unacceptable features can be smoothed out, as a young lady smoothes out her acne by applying powder. This is not an acne and the powder has not yet been invented.

It seems to me that what one will have to have is certainly a very considerable extension of the nationalised or public sector with a certain dominance of it, so far as salaries are concerned, so that we shall not have a situation arising as it arose under the last Labour Government when the revision of the salaries of the Chairmen of the Nationalised Boards was so large that it was used as an excuse for increases in salaries in the private sector. It seems to me that this is inevitable so long as the private sector predominates. That sort of friction which is responsible for a great many of the failings of the nationalised industires in creating a new spirit, can be cured only by an extension of the public sector —which does not mean that I am in favour, for instance, of picking out one or two or even 25 industries—without due consideration of why we are doing it in any specific instance.

It seems to me that obviously one should have a very much more detailed study before proposing concrete steps. I should like to emphasise to your Lordships that if you do not wish to go back to Adam Smith's time—and Adam Smith, after all, was succeeded by the Combination Laws of Pitt, and I do not believe that even the Prime Minister, with his Pittite ambitions, would like to revive the Combination Laws; but maybe the noble and learned Lord on the Woolsack in his answer, which will be devastating, will correct me even on that—you cannot get the sort of harmonious balance for which, after ail, we on both sides of the House would like to strive. Therefore, I would commend this Motion to noble Lords on the other side of the House, not so much for their acceptance, which is I think quite impossible (I do not know whether my noble friend is going to withdraw it), but because it is a very timely warning about a very important problem, one that is not merely moral but essentially also a technical problem with which we must cope if England is to resume its due place in the world.

5.22 p.m.

BARONESS ELLES

My Lords, I must begin with an apology that I shall be unable to stay to the end of the debate; I have an important engagement which I cannot cancel. Having heard so many experts on the other side of the House, with so many diagnoses and so many different non-cures for our present system, I think I shall be happy to remain a capitalist on this side of the House, agreeing with those who have actually had to deal with men and management rather than theories. Nevertheless, the noble Lord, Lord Brockway, has done the House a great service by bringing to your Lordships' House the possibility of discussing what is really the most important problem facing the Western democracies to-day; that is, how to live with their prosperity, in dignity and with a clear conscience. This problem is facing all the developed industrial societies, who have acquired a material wealth and prosperity in the space of the last thirty years which would have been inconceivable some years ago. In the search for wellbeing, for a fairer distribution of economic wealth, have we in fact missed out, have we failed to fulfil the basic needs of man, and have we in finding this economic wealth failed to find that happiness which is the basic search of all mankind?

There are many who are ready to exploit this dissatisfaction to their own ends, to bring down the world of capitalism, both by word and by deed. I think it is not necessary to repeat what is known to all those who are interested in modern politics, that the long-term aim of the Soviet Union is to destroy capitalism by any means whatsoever. They start off, of course, with the great advantage that we in Western Europe are still a free world, and in the name of freedom we allow for discussion, as we have to-day, and publication of ideas and ideologies, even though they may be incompatible with our own way of life. This insinuation or open attack can be through the mass media, which arc of course now available to all, by deliberate manipulation within the trade unions—-and I emphasise that of course very few people are actually involved in this—to create unrest and cause economic failure, to create such conditions that make it intolerable for the public and ordinary human beings to fulfil their obligations and responsibilities. And it is also clear that they also, through strikes, encourage inflation and disrupt production. There is also weakening of the educational standards, the attack on the morals of the young, whether through easy access to drugs, encouragement to abortion, sale of pornographic literature, exploitation of racial problems, all in order to create a so-called Fascist reaction. These are some of the activities we can identify which we permit in our capitalist system. and, of course, there are others.

We must ask ourselves what are the alternatives to our present system which the noble Lord is offering to us. What do we know of the existing socialist democracies, and is that what he wishes us to have? I will not go into the economic details of socialist democracies, because nobody seems to be in agreement as to what these precise economic standards are, but nevertheless I think we can see some of the symptoms. The kind of scandal we are seeing in the United States would be difficult, since bugging is the order of the day. There are no strikes, but that is because they are illegal. Indeed, if you visit the factories you see lists of those workers who have failed to attend or done bad work, which would be quite unacceptable and intolerable in our Western World. Indeed the Soviet legal code on labour law prohibits strikes in Soviet countries but encourages them in capitalist countries. Of course they have free elections, because there are no Opposition Parties. There is freedom of speech, because those who oppose are silenced either by extermination, trial, deportation or by imprisonment in mental hospitals. They have freedom of movement, but if you try to cross the frontier from East Germany to the West you are shot in the back.

All this is accompanied by total failure to raise the standards of living of the vast majority of the population except for an elitist group. Indeed, Marxism has failed and has proved to have failed, even to the extent, as I understand it, of food rationing, though I have not had evidence of that myself. What I have had evidence of is that the claim for agreement to be reached with the European Economic Community is based on the fact that some of the countries in COMECON claim still to be developing countries and demand treatment as to general preference similar to new African States. That is, I think, an admission that so far the Marxist economy has not been a success. There has also been, of course, elimination of national characteristics and national traditions.

I hope I heard the noble Baroness, Lady Wootton, correctly when she said that very few of the Soviet countries had had freedom or a great deal of liberty, except possibly East Germany. Perhaps she had forgotten Latvia, Lithuania, Estonia, Poland, Czechoslovakia, Hungary, Rumania and Bulgaria. Indeed, one is inclined to think of Talleyrand's famous remark about liberteé eégalite fraterniteé: " Liberteé pour faire du mal; eégaliteé pour vivre dans la miseére; fraterniteé pour eétre comme Cain et Abel." The double standard which applies to all these factors was very clearly seen by Solzhenitsyn when he wrote in his famous speech, which was never delivered because he was not allowed out of Russia to collect the Nobel Prize in 1970: Everything which is further afield, which does not directly threaten to roll up to the threshold of the door of our own home today, will he recognised by us as being, in general, quite bearable and of tolerable dimensions—with all its groans, stifled screams and lost lives, even though there be millions of victims". While we support the capitalist system, there are of course still many things in that system which need correcting and rectifying, and nobody will disagree that our system is indeed far from perfect. But Solzhenitsyn goes on to say: The same old primitive urges rend and sunder our world—greed, envy, licence, mutual malevolence—though now they adopt euphemistic pseudonyms as they go, such as 'class struggle', 'racial struggle', 'the struggle of the masses', the struggle of organised labour '". We must not allow ourselves to be pushed into such a lack of tolerance that we eliminate the freedom of those who attack us, who wish to import their own form of tyranny into our national life.

When we consider some of the elements of capitalism, perhaps one of the words that has now become a dirty word in our language is that of "profits". We have to remember that company profits are now at about 12½ per cent. of the total national income, which is the lowest percentage ever, and more has gone to wages and salaries. Perhaps because I do neither of these things, I cannot see why it is immoral to invest in industry, which might provide work and which helps the nation, when it is considered completely moral to gain hundreds of per cent. on betting on horses and football pools, and even on premium bonds, regularly every week. Here again we have a double standard.

In order to stop the kind of tyranny which comes from the kind of socialist democracies of which we have seen the symptoms, and some of which I have outlined, we must be prepared to look at our own capitalist system in a new light to get better worker participation, to get better management in industry, better understanding of our general economic and industrial life, and more study for the elimination of poverty—which indeed, as many speakers on both sides of the House admit, is a cancer in our society, but is nevertheless a fact that we have to cope with and must be willing to take concrete and effective measures against —in order that we should not be landed with the sort of tyranny to which I would remind your Lordships Aristotle referred when he said: The last and worst forms of democracy are all to be found in tyranny. We shall continue to live with our capitalist system and make it a better world.

5.31 p.m.

LORD DAVIES OF LEEK

My Lords, I was delighted to hear the charming noble Baroness attack something that we are not talking about. It would be about as wrong and twisted if I were to attack noble Lords opposite, and to say that through their apotheosis of capitalism they were leading us to Fascism. I am sure that 99.99 per cent. of noble Lords opposite believe in the essential framework of democracy. The noble Baroness was speaking about something which is nothing to do with this Motion.

As the noble Baroness was speaking, the hope for capitalism was sinking lower and lower as the evening sun was shining and glittering on her beautiful buttons. Indeed they reflected like the sun off the lid of a coffin. Let us see what we are talking about. We are following my noble friend Lord Brockway in calling attention to the evidence of increasing contradictions and unacceptable immorality of the capitalist economic system. We all agree that there are contradictions, because speaking philosophically every human being is a contradiction. The Motion goes on: and to the need for the democracies of the world … We are talking about democracies, and not about Spanish fascism or German fascist tyranny, whatever side of the Curtain that may be.

This is dangerous talk for the noble Baroness. The noble Baroness quietly, in a beautiful sotto voce, said that we must beware of tolerance. Now that is the beginning of dictatorship. I have seen it through history. The Motion goes on: … the need for the democracies of the world to advance consciously and progressively towards Socialism, if their democracy is to be sustained; and then to move: That this House urges Her Majesty's Government to give a lead in that direction. We are not asking noble Lords opposite to be socialist; we are asking for a lead in the direction of democracy and morality in world affairs.

I was delighted to hear the noble Lord, Lord Lindsay of Birker, because I sat under the seat of a wonderful father, and I did 17 years extramural work in the W.E.A. It was a privilege to sit under that great man Temple, and listen to him speaking to all types (and I will use this horrible phrase that is being used for my people sometimes), miners and working class people in Wales, who struggled to buy their first dictionary or copy of philosophy.

BARONESS ELLES

My Lords, will the noble Lord allow me to interrupt him? I have just checked my speech, and what I said was, "into such a lack of tolerance", so would he kindly accept that?

LORD DAVIES OF LEEK

My Lords, the word "lack" may have dropped out. I would hate to quarrel with that lovely lady. I will accept the OFFICIAL REPORT to-morrow morning. It will ruin my speech if I accept it now.

Let me get back to this wonderful work done by great men and women of the stature of the great Master of Balliol among young students from all over Britain in encouraging them to believe in something noble, and teaching them the art of thinking and discussion. One of the great things about the charisma of "Britishness" was the development of this art as a result of non-vocational adult training. As one of the persons who, in a small way, had some contribution to make towards the establishment of Keele University with a number of people some thirty years ago when we were urging it. we were grateful when the Master of Balliol offered to be the first Principal of that university. We introduced a four-year course, and the first year was dealing with philosophy. We did not mind what men were thinking provided they allowed for democracy and learned the art of differing without wanting to shoot each other down. In the W.E.A. movement, and the N.C.O.C., too—but particularly the W.EA. in its day—these were non-Socialist lecturers as well. Unfortunately, the London School of Economics went the wrong way at a certain time. I had helped it, but never mind. They made a great contribution to Britain's greatness. We were a haven of toleration at the worst period of Hitlerism. Men and women could come and get the comfort, succour and peace they needed.

If I were to attack noble Lords opposite with suggestions such as the noble Baroness has made to-day because there was the Cliveden set and the others during the war, and a few of them who sneakingly regarded Hitler as the salvation of the world—and were to make the kind of speech that hinted at that to-night, it would be grossly unfair to them. But the noble Baroness's speech was grossly unfair in the sense that she was speaking of our democratic approach to socialism as hinting that we wanted an arid, dynastic Communist system of society and not democracy. I have made my point, and it is unanswerable. I will now leave it to the noble and learned Lord the Lord Chancellor. I remember him spending half-an-hour about thirty years ago speaking to some of my W.E.A. students when he came with the noble Earl, Lord Longford. They had just left Oxford together and they came up to North Staffordshire for a debate. It was a brilliant debate, and he argued why he should have a pub if he wanted it, but somebody in the audience said that some of them did not have enough money to feed the pub.

I shall be very naughty to-night; I have never done it before. If I go away to-night, my dear Lord Chancellor, it is not because I am afraid of the cut and thrust of your vigorous, logical argument that will ooze with intellectuality but will now and then drop in wisdom; it is because I have a job for which I will get paid, and I need the money.

THE LORD CHANCELLOR

My Lords, the noble Lord need not apologise. The last four speakers have explained that they are not going to wait until the end of the debate. I confidently expect to be speaking alone in this House.

LORD DAVIES OF LEEK

My Lords, I feel sad because I think that this is the first time that I have done this. How long have I been speaking now? About seven minutes. I have a pamphlet here, The Sickness of an Acquisitive Society, by R. H. Tawney. Your Lordships know it as well as I do. It cost only one shilling, but it would cost about 30 shillings these days. I turn to page 25 where it says: When a Cabinet Minister declares that the greatness of this country depends upon the volume of its exports, so that France, which exports comparatively little, and Elizabethan England, which exported next to nothing, are presumably to be pitied as altogether inferior civilisations. that is Industrialism. It is the confusion of one minor department of life with the whole of life. When manufacturers cry and cut themselves with knives because it is proposed that boys and girls of fourteen shall attend school for eight hours a week, and the President of the Board of Education is so gravely impressed by their apprehensions that he at once allows the hours to he reduced to seven, that is Industrialism. It is fetish worship. When the Government obtains money for a war which costs £7,000,000 a day, by closing the museums, which cost £20,000 a year, that is Industrialism. It is an old-fashioned word, mind you. It is a contempt for all interests which do not contribute obviously to economic activity. When the Press clamours that the one thing needed to make this island an Arcadia is productivity, more productivity, and yet more productivity, that is Industrialism. That argument is 50 years old and it is bounced out day after day and we have not progressed philosophically, socially, or morally since that period.

I am just beginning and shall have another five minutes I hope to speak of the disease that we are suffering. The entire debate I think has missed the tools with which the twentieth and twenty-first centuries are going to work. We are still talking about socialism, communism, fascism—all the 'isms or 'wasms—we have been talking about them in terms of the 19th and early 20th century. Now we have new tools, new weapons which we have never had before in the history of man. Nearly 400 million people sit at a little box; in medixval times if anybody had said he could see people walking on the moon, he would have been burnt by the Church and they would have been burnt by the non-Church. The stadia of Rome and the circuses had nothing like the effect of world television on the world to-day, and whatever direction man is steering, whatever the ultimate eclectic answer may be, this is the instrument—no matter how wonderful we think we are—that is going to have a dominating influence on the destiny of mankind.

My late friend, the honourable Member for Newcastle-under-Lyme, Swingler, whose uncle was Archbishop of Canterbury, Randall, and I used to get up in the morning—the noble Lord who shook his head and pointed ominously in front will know ultimately, if he looks it up, that I was right. We used to get up in the morning when the noble Lord, Lord Wigg, lived with us, and we both sang hymns—it did not do the noble Lord, Lord Wigg, much good—he was security-minded about the kingdom of Heaven as well in those days! He was not sure whether Swingler and myself had a passage there. But Swingler was brought up a devout churchman: his father was a great rector. I was just a local member of the Welsh choir which could sing Cwm Rhondda in seven parts all at once. We used to enjoy ourselves. I suddenly said to him one morning, "Do you know. Steve, more people sing hymns, more people are listening to religious services now than ever in the history of Britain since the Crucifixion?"—and that is correct.

I am talking of television and radio, and my 64-thousand dollar question is: what great effect has that had? I am sure that underneath somewhere it has had effect. The successes of capitalism have been due to the effect of the pressure of men like my noble friend Lord Brockway, the pressure of the trade union movement and the pressure of men inside the movements of the Conservatives, men like the Cecil family, or that famous book The Philosophy of Conservatism—a completely different concept from the arid concepts of today. The pressure of those movements, the socialist movement, had an effect in helping to build, under the 1945 Government, the Welfare State, and it is accepted now. I will not bore the House, but I took the trouble Ito make a list of nationalised industries before Labour got into power—the B.B.C., the airways, because it was recognised that these instruments of power were too big for any single company to own. In other words, public ownership is not merely a part of the philosophy of the Labour movement, it is part of the philosophy of all moral Governments that are trying to introduce morality into public affairs.

The assumptions of capitalism—Oscar Wilde's famous essay, "The Soul of Man under Socialism"—recognises (I have recognised, and so has the Lord Chancellor) that the emotions of man can be stirred more easily than his intelligence. One of the troubles about the speech we heard a moment or two ago was the emotional approach to the problem of the possibility that if we allow tolerance there might come up from underneath a revolutionary group that would drive us towards arid communism. I do not think that is the distinction. Wilde made the distinction. He said: The State has to make what is useful, the individual what is beautiful. That was my concept. What brought me into the movement was that I wanted equality of opportunity. I do not believe that men and women are equal—no intelligent socialist has ever said that; but what he is asking is equality of ability, mentally or in stature, especially known in Rugby. I am asking for equality of opportunity in the one place that makes a difference, and that is why morality can be achieved only when there can be equality of opportunity for education. Once that is given to a young man or woman, right to the university, if they can do it, then I think they must not be mollycoddled but out on their own. I think it is a concept of socialism that if a man does not work neither should he eat. It is a concept which an intelligent socialism has held for centuries.

The other thing that noble Lords opposite mix up is ochlochracy and democracy. Ochlochracy is government by the mob. When noble Lords are speaking about democracy they are sometimes figuring crowds yelling at a strike or shouting in the street outside the House of Commons. That is oehlochraey. We are thinking of democracy, something worked out by men and women fighting fairly to get representation and building up a framework of change in society. But what we have discovered to-day. since the Government have made a U-turn when we first came in, is that it would be unfair to pillory Ministers who failed. Ministers to-day deserve our sympathy, not justice. When the great Conservative Government came in, with trumpets blowing, and the walls of Labour's Jericho lay crumbling around Harold Wilson's socks, we had a wonderful conception of what society was going to do, what business was going to do. A great man was coming in from the C.B.I. Here was an explosive piece of human dynamite, and "lame ducks" would sink to the bottom of the pond. It was not long before he was making golden legs for them, and they are now all waddling to prosperity on golden crutches. We have discovered a complete new formula in the modern conglomerate society: socialise the losses and privatise the profits. That is the economic axiom of the system of society in which we live to-day.

I listened at a magnificent meeting last night about the Channel Tunnel, and one of the experts who came along said, "All the evidence has been put before the officials which will enable them to come to a conclusion." I nearly flew through the roof and I said, "Look, it is not 'them' "—I was not being ungrammatical—" it is Parliament and the people who must come to the conclusion." It is this danger of bureaucracy, which the noble Lord mentioned, which is represented by the new kind of thinking of very able men. The men who speak like that are not fools and they are not evil, but it is the way their subconscious minds are working. It may be the mercury in the atmosphere that is responsible, but I do not know. Great enterprises have become so big now that the Government have to put money into them. So let us get together and admit that there is a lot of common sense in the Motion which is on the Order Paper. Do not let us have cheap baby arguments. This is not a House full of lumpen back street Tories, and it is not a House full of lumpen back street Labour people. In this House I have been able to listen to some of the finest debates and, as a noble Lord who spoke from the Front Bench rightly said, I cannot imagine this kind of debate going on in any other debating chamber in any country in the world—

THE LORD CHANCELLOR

Or other debate.

LORD DAVIES OF LEEK

The trouble with the Lord Chancellor is that his sotto voce remarks reverberate around me. I am going to finish my speech—

A NOBLE LORD

What a bore!

LORD DAVIES OF LEEK

Have I bored noble Lords opposite?

SEVERAL NOBLE LORDS

No!

LORD DAVIES OF LEEK

My Lords. K. R. Popper, in his philosophy of the open society said: There is through history a perennial fight against totalitarianism. This is as old as society itself. What the constructive socialist looks for is democratic social engineering as opposed to Utopian engineering, because democracy is essential as it provides an institutional framework that permits reform without violence. Whether we believe that or not, I think that the initiation of this debate was worth while in order to reiterate a few of the points which have helped to make Britain great since the days of John Ball, the mad priest of Kent, who said: When Adam delved and Eve span, who was then the gentleman? I said "gentleman"; Adam was not quite a gentleman. I hope that when the noble and learned Lord the Lord Chancellor brings his very great ability to answering this debate he will pay the same respect to it as he would to any other.

5.54 p.m.

LORD HARVEY OF PRESTBURY

My Lords, having listened to the noble Lord, Lord Davies of Leek, whom I followed many times earlier when we represented adjacent constituences in another place, I am not sure whether or not he is in favour of the Motion. I thought he was less than fair to my noble friend Lady Elles, and I think if he reads the report of her speech to-morrow he may take a different view, because I thought it was a very fine speech, and was very much to the point. I have found very little enthusiasm indeed on the Benches opposite for the Motion. which is a rather strange one in itself. As the noble Lord, Lord Davies, said, perhaps only this House would debate such a Motion. The noble Lord, Lord Brockway, referred to the very large wages enjoyed by the chairmen of I.C.I., Courtaulds and the others, and he very courteously gave way to me when I interrupted him to ask whether he would say what was the net income received by those gentleman. He said that he would refer to that in the course of his speech, but he did not do so. It would be a very good thing if, in their annual returns, both large and small companies published against the gross incomes of their executive directors what they actually take home. It would be interesting for the workers to know. After all, the chairmen of the nationalised industries and others are earning very big incomes to-day, and they have all been increased.

I do not know what all the fuss is about. If you compare the top incomes of the leaders of industry in this country with those in other countries, you will see that ours are not very different. Certainly, we are far lower than America, lower than Japan, probably in line with the French, and rather below the Germans. This has been a progressive trend, and I do not find socialists throwing away their big incomes or handing them over to Transport House. They take their money when it comes, and they probably work hard far it and deserve it. The noble Lord, Lord Balogh, said that we have to change the rules of the game, but the rules of the game are always being changed. In the next Session, the Government are to amend the Companies Act, and so it goes on. Each Budget closes up loopholes, and in the autumn we shall probably see radical changes. On the radio on Sunday, Peter Walker talked about amendments to the Companies Act, and the rules are changed by all Governments.

The Conservative Government have gone through a rather difficult time in the last three weeks but, if The Times' opinion poll is any guide they are still doing rather well. Last week they were 2 per cent ahead of the Labour Party, and Mr. Heath's rating as Prime Minister is higher than it has ever been—considerably higher than that of Mr. Wilson. It is significant that on many matters the public take the opposite view to what we think they take. The Motion refers to socialism and, although we have very courteous discussions in this House, I should like to make one or two points about the Socialist Party as such. My experience, sitting on Benches opposite to the Labour Party for nearly 30 years in the two Houses, is that, invariably, they fail to learn from experience. The same mistakes happen every four or five years. We have now had a proposal to nationalise the top 25 leading industrial concerns in Britain, to which great publicity has been given. But the Labour Party tears itself apart—those for and those against—not at conference, not in private, but in letters to the Press, on the Floor of the House and so on.

Mr. Anthony Crosland, a very highly respected middle-of-the-road politician an the Labour Front Bench in another place, spoke at Rotherham last Saturday. I have always had a great regard for Mr. Crosland. He said that the nationalisation proposal had damaged the Labour Party in three ways. First, it had distracted public attention from a series of events which should have been disastrous to the Tory Government, secondly, it guaranteed an almost total neglect of the whole of the rest of Labour's new programme; and, thirdly, he said, "We are deceiving the public." He then went on to say that each proposal for public ownership has to be justified to the electors in terms of the actual positive benefits which such ownership would bring. Having spent most of my adult life in industry, and having worked both abroad and in this country, I know something about it. What do your Lordships think the answer would be if you asked the average worker in any of the top 25 companies in Britain, whether he would rather work for I.C.I. and Courtaulds or the Gas Board and the Coal Board? I know the answer perfectly well. He would want to stay as he was. The fringe benefits, the pay and the pensions are infinitely better at I.C.I. and Courtaulds than in any of the nationalised industries.

LORD SHEPHERD

My Lords, will the noble Lord agree that when a company is prosperous it can offer those benefits, but that when it falls—as Rolls-Royce did—the workers would prefer it to be nationalised?

LORD HARVEY OF PRESTBURY

My Lords, the nationalised industries have not performed too well over the years. Let us face it: they have not done nearly as well as those in private hands—I will give your Lordships one reason why I think this is the case. The leaders of the nationalised industries were for many years grossly underpaid, as were the leaders of the trade unions. It may be denied on the Benches opposite, but the fact is that you will not get the required quality of man unless you pay what is the right rate, whether it is at the top or at the medium level.

LORD SHEPHERD

My Lords, I am sorry to interrupt again, but the noble Lord is being slightly provocative—and I think he intends to be. Would the noble Lord not agree that as far as the mining industry is concerned the conditions which now prevail in there would not have been achieved under the capitalist free enterprise system which prevailed prior to the war?

LORD HARVEY OF PRESTBURY

My Lords, I am glad to assure the noble Lord that I am not wishing to be or trying to be provocative at all, but this is a rather provocative debate, and I think we are entitled to express our views as we see the position. I quite agree that much has been done for the miners, and very rightly so-and by this Government, even last year. Large sums of money have been put into the mining industry. It is the same with the shipping industry. The conditions in which crews slept in the fo'c'stle of cargo boats a few years ago are unthinkable to-day. This now goes right through the whole breadth of industry, and I welcome it. As for the railways, the railwaymen are very badly paid still to-day. They are probably the worst paid in the country, and I want to see the lowest level brought up considerably.

I think this Government have done a tremendous job of work in looking after the lower-paid people, the sick and the needy, and the Minister who has had very little credit for what has been achieved is Sir Keith Joseph. I think that in the last three years he has done remarkable things for the people who really need help. Much has been corrected in the capitalist system in the last 25 years, and it will go on being corrected. In industry to-day much more thought is being given to people. I know companies where they said at the end of the war, "We must have a public relations officer", and where they took on a retired squadron-leader or a man out of the Army, who went and saw the widow when the husband died and thought his job was done. But to-day that is all changing, fortunately. Industry now has qualified men who are an integral part of the management, looking after the workers. Furthermore, they even look after the welfare of the pensioners, which I think is equally important.

My Lords, in most countries the demand of workers for wage increases are far greater than can be met out of increased efficiency and productivity. I think that is generally accepted to-day. They have forced Governments, whether they like it or not, to intervene in the process of collective bargaining and price determination. It is usually easier for a Government to restrain prices than wages; that is the way it goes. But the cost inflation of recent years has brought some great companies very nearly to bankruptcy, not only in this country but in other countries overseas. They are working on long-term contracts, and frequently have to give fixed prices in advance. This is what happened, of course, in the Upper Clyde shipyard, where successive Governments have put in something like £56 million and have seen most of that money disappear. It appears to be getting right now; we hope it is.

We hear much these days about workers' participation in the boardroom. I have seen it at work on the Continent; and personally I think it will probably happen here in the next ten years. It may be quite a good thing; but I wonder whether Mr. Vic Feather really appreciates what its implications will be when it happens. If you are going to have two workers sitting round the boardroom table accepting their share of responsibility in taking decisions, it is not going to be easy for trade union policy to overrule them. I think there are many benefits to both sides that can come out of this arrangement if it happens—and it probably will. I should also like to see the two-tier system of boards of directors. I think there should be non-executive directors on the board of a company. They have no real axe to grind, they are usually men of considerable experience outside that particular business, and they can say exactly what they feel and what they think in coming to a decision. That is a good thing, and I hope that when the Companies Act is amended we shall see legislation introduced to bring this about.

No, my Lords: free enterprise does not claim to be perfect; it never has. Nobody is perfect. However, rightly used in conjunction with the ideals of the Welfare State, it does claim to make provision for all those who suffer from its imperfections. Being non-doctrinaire, it is accessible to improvement and the demands of changing times. In recent years—the last five years—one can say that industry has been really facing its responsibility in ecology, pollution and the environment generally. Why do we not have fogs now in London or Manchester? This movement is going on, and industry today is applying very large sums to these problems. Finally, my Lords, I have great confidence in competition in all walks of life; I think it is the right answer. But I shall be interested to see whether the noble Lord, Lord Brockway, divides the House on his Motion to-night. I shall be even more interested to see whether the Front Bench of the Party opposite vote with him if he does. If it does, we shall know where they stand in what is involved in the nationalisation of the 25 leading industrial companies.

6.6 p.m.

VISCOUNT SAMUEL

My Lords, I rise definitely to support my noble friend Lord Brockway. I am a firm believer in democratic socialism. I do not believe in dogmatic socialism as practised in Russia and the Communist bloc, about which we have heard something to-day. I do not know enough about China to judge. Democratic socialism, in my definition, is a tolerant socialism. It has a place assured for capitalist enterprise side by side with enterprises under public control. Democratic socialist States are often welfare States. That has been said this afternoon. The first welfare State was actually New Zealand a century ago. Sweden and some of the Scandinavian countries were next, and Britain came later. Other welfare States are developing. For example, Israel has already gone a long way on the road to democratic socialism. I propose to devote most of my remarks to that country, where I have lived for the last 25 years, and before that I lived for another 25 years in its predecessor, Palestine—a total of over half a century. I find life under democratic socialism in Israel so good that I never want to come back and resettle here. I should like to inject a personal note. When I returned to London briefly after my father's death ten years ago to take my seat, everyone expected me to join the Liberal Party in your Lordships' House, but I just could not do it. One cannot live all one's life in a democratic socialist State like Israel and still be satisfied with Liberal programmes. No one who has seen the benefits that have accrued to the common man in Israel, both Jew and Arab, under democratic socialism could possibly think otherwise. That is why I joined the Labour Party in this House—I may say, rather to its surprise.

I know Israel's faults as well as anyone. That country is still the centre of furious controversy, but nothing can obscure certain basic facts. First of all, for the whole of its short existence as a State, 25 years, all its four Prime Ministers and the majority of every Cabinet have been democratic socialists, and that has given a continuity of Left-Wing policies hardly ever found outside the Communist bloc: in Sweden, perhaps, for some time, but never in Britain. Democratic socialism in Israel, as in other welfare States, rests solidly on a powerful trade union movement. Some of your Lordships may have heard its name—the Histadrut. That merely means "the organisation". It could be any organisation, but "the organisation" in Israel is the General Federation of Labour, much as the trade union movement in this country is the T.U.C. But, unlike the T.U.C., the Histadrut itself controls, or shares in the control of, several vast industrial enterprises, particularly in the metal industries. It might seem impossible for a trades union congress to protect the rights of working men and at the same time be a big employer, but in Israel somehow it works. That, I suggest, is democratic socialism at its best.

I should like now to say a few words about the co-operative movement. In Britain, consumer co-operatives no longer play an important role—perhaps they never did; but in Israel they influence the whole economy. For example, the national inter-city bus service is run as a co-operative. Drivers get wages plus a share of the profits. One of the major citrus-exporting firms which supplies you with Jaffa oranges and grapefruit is owned by the major private citrus growers. Even the Israel Philharmonic Orchestra which some of your Lordships may have seen on television last week is a co-operative. All the members receive an equal share of the profits, with large family allowances according to need. Above all, every one of the famous kibbutzim is run as a co-operative, and the co-operative movement in every country, including Britain, is in my opinion the essence of democratic socialism.

I should like to speak a little about the kibbutz, a word which merely means "a collective". The proceeds of all that the members produce and sell are paid into a common purse, and from it every member receives housing, clothes and food; and all the children go on to the local kibbutz high school free of charge. That, again, is real democratic socialism. It differs in several aspects from the Russian kolkhoz. That is compulsory. All peasants in Russia must belong to the kolkhoz unless they work on a State farm as direct Government employees. Private farming in Russia has almost entirely disappeared. In Israel you are free to choose. You can join a kibbutz —as 3 to 4 per cent. of the population do. If you do not like it, you can join a co-operative smallholders' village, with your own plot of land, cowshed and chicken run. But all your produce, all sales and all purchases are dealt with through the co-operative movement. If you do not like that but have some agricultural experience, and you can "rustle up" a little capital, then you can become a wholly independent farmer and buy and sell how you like, as in Britain. All is a matter of personal choice; but few kibbutz members would ever dream of leaving their little Gardens of Eden and going into capitalist farming.

Many of your Lordships have visited Israel and have seen its orange groves along the coast, the source of so much of the wealth. You have seen its booming cities, old and new. The citrus belt and the cities are largely developed by private initiative and private capital. Some cities have perhaps overdone their development, as The Times pointed out this morning. Another great dollar earner is the diamond polishing industry, also run by independent traders marketing the output of dozens of small factories all over the country. The Government and Labour Party in Israel do not oppose these capitalist enterprises; they cherish them and foster them. They have helped to raise literally hundreds of millions of dollars in the U.S.A. and elsewhere as investment capital, both public and private. In other words there is room for everyone—the essense of democratic socialism.

I should like now to say a little about land. Nearly all the land, that precious commodity, in Israel is under public ownership. It cannot be bought or sold for development or by speculators as so often happens in this country.

LORD SOMERS

My Lords, I am sorry to interrupt the noble Viscount. I wonder whether he would agree that "public ownership" is really a rather misleading designation; that it is really Government ownership.

VISCOUNT SAMUEL

My Lords, may I come to that point? Nearly 90 per cent. of the land is publicly owned. Some of it is owned by the Jewish National Fund itself, which was originally financed by the pennies of poor Jews all over the world; some of it is owned by the State. The State of Israel inherited vast desert areas from the British mandatory Administration which inherited them from the former Ottoman Government. That land was thought worthless as it was without water, but water has now been brought to it over long distances. This Government-owned land has become immensely valuable. I trust that that answers the point that was raised. It is leased for farming, but no speculation at all in land outside the cities or the citrus belt is possible. So 90 per cent. of the land is free of this curse. That, I suggest, should be the aim of democratic socialism in every country—even including Britain in the not too distance future.

I should like to go back now to the kibbutzim as a phenomena. Many young people from Britain and elsewhere, not necessarily Jewish, go out every summer to work in the kibbutzim. It is good for the young people and good for the kibbutzim which have a shortage of hands. Some of your Lordships may have children or grandchildren who have gone to Israel for this extraordinary experience. They could have got a healthy tan on the Riviera, playing tennis or sailing in the sun; but to get a healthy tan, and blisters, from productive work at the same time—that is something different. Only 3 per cent. to 4 per cent. of Israelis live in kibbutzim but the kibbutz members, when they do their national service—and all, without exception, do their national service—are so healthy, so self-disciplined and so enthusiastic that nearly all of them inevitably get to the N.C.O. training schools and many to the officers training schools. Although only 3 per cent. to 4 per cent. of the army come from the kibbutzim they provide a quarter of the officer corps. This is rather like the high percentage of -public school boys among the officers of the British Army in earlier generations.

Israel's officer corps is of great interest to the general staffs of Britain and many other countries because the Israeli Army is a rather rare creature—it actually wins wars; so a democratic socialist republic, with one quarter of the officer corps coming from the kibbutz, shows that it is not effete. One of its elite regiments, the Parachute Corps, is regarded in Israel rather as the Guards Division is regarded in Britain. In Israel even the rank and file of the Parachute Corps is largely composed of tall young men from the kibbutzim. Being too tall, I suppose they reach the ground earlier, and this gives them a military advantage. But if your Lordships think that the kibbutz has become militarist, you are wrong. I suggest that you read a paperback which has come out recently, The Seventh Day. It is a careful study of the forthright opinions of young kibbutz soldiers who fought in 1967. It gives their ideas on life and death, on Jews and Arabs, on the morality and the immorality of war. Your Lordships would be surprised at some of the conversations reported.

The kibbutz is the heart and soul of Israel and the pride of the whole country; hence the kibbutz may be taken as one of the factors that has made Israel into an outstanding example of democratic socialism in practice. But what has this to do with democratic socialism in Britain? Some people, not Israelis or even Jews, would like to see kibbutzim started in other countries. There have been collectives in the past: in the United States, in Canada and even, centuries ago, in Paraguay; but mostly they had a religious basis. Few, except perhaps for the Huttterites in Canada, have outlasted the second generation. Some of the kibbutzim in Israel are run by third generations. Their idealistic fervour is undiminished. I have always doubted whether idealistic fervour could be transplanted. I may be wrong. It may well be that some group of English or Danish young people, not Jews, who have worked in the kibbutz in Israel and returned to Britain or to Denmark—from which incidentally, some 7,000 young people go every year to Israel—may be imbued with an immense wave of enthusiasm for a better world based on principles of democratic socialism. And so far as Britain is concerned, perhaps one or two of these groups may be able to establish collectives of their own in the peaceful English countryside. Their neighbours would all be independent British farmers. But if such collectives in Britain did manage to take root and were happy in not having private property of their own, the idea might catch on. Then a further step will have been taken to develop a rare but practical example of democratic socialism in this country, in addition to all other existing forms of public ownership and control.

6.22 p.m.

TIIE EARL OF LYTTON

My Lords, it is with particular pleasure and surprise that I follow the noble Viscount, Lord Samuel. We do not know each other. There was a time, in the War Office, when with much distress Mr. Robert Waley-Cohen used to wander in hoping that I could find him some accommodation for Jewish refugees. So I have particularly enjoyed the way in which, 30 years later, a Member of this House of Peers declared his delight in being on the land in the land of his forefathers. My Lords, between November 9, 1965, and May 23. 1973, the noble Lord, Lord Brockway, has I believe addressed your Lordships 832 times. This includes Questions which, in the noble Lord's hands, or rather in his mouth, are speeches, preceded by the words, "Is the Minister aware … This marathon-like achievement so late in life should, I imagine, presently qualify for the Guinness Book of Records. We can all all admire it. Now that I am advised to wheel only half a wheelbarrow, to refrain from digging and using my axe, I have been wondering whether I too should come in and imitate the noble Lord. I await any intimation from your Lordships.

The capitalist system is a system craved for by all the peoples that I have had anything to do with. It has two forms. There is State capitalism, known as socialism, of which one of the pure examples is the U.S.S.R., and the mixed economy, which has a public sector and a private sector. The private sector sets the tone; the public sector does not display any capacity for solving the greater evils that one finds in the private sector. Therefore it seems to me. and to many others like me, that this argument about whether there should he more of the public sector or less is, at the present time, a very sterile argument. Because what matters is the evils in both forms, the public sector and the private sector. People are becoming disgusted with the dogfight which is taking place in the country and which, in part, has been recapitulated this afternoon.

The craving for capitalism is so all-pervading that I must mention how it develops. Take Africans, in the circumstances in which I have had to look after them, whose only diet is milk and blood, and who have no clothes. Their expectation of life is about 25 years. Their way of life is fascinating and one likes it. They are a kind of living museum of an ideal past. But, on the average, they live only for 25 years. They want capitalism to rescue them; they are clamouring for it. Take the case of the Bahamas that we are "liberating" or whatever it is called—giving them their independence. We debated the matter yesterday. To the best of my belief, they are waiting breathlessly for the arrival of international capitalism on their doorstep as soon as they are independent. Is it not a fact that the oil companies of the Gulf are prepared to construct tanker terminals for super tankers which will supply the Eastern seaboard of the United States, at a moment when America is exceedingly short of fuel and when their projects for Alaska have been thwarted by their own environment enthusiasts? All are thirsting for capitalism whether of the socialist brand or the non-socialist brand. Capitalism is here; it is the character of our age. Socialism and capitalism are not an antithesis, one is a form of the other.

My Lords, there are evils crying out for reform. I join with the noble Lord, Lord Brockway, and others in deploring them and wishing to tackle them. I think we delay and divert our attention by assuming that, without many other things, further public ownership can make the smallest difference to these evils. What about the soul-destroying character of much of the human labour? Mere automatons in the vast economic machine is what the noble Lord, Lord Brockway, said. Are these automatons not to be found in Eastern Europe; in the Soviet Union; wherever industrialism exists? Of course they are. It is that that one wants to humanise—that among other things. Many years ago I was often shocked at the monotony of the conveyor belt in Morris Oxford; the noise, the awful din of those pneumatic drills, and the stink of the stuff they spray on motor cars. In my own walk of life I am a farmer. I have to decide whether to go in for factory farming or not. I am not sure that factory farming is harmful to the animals. It could be. but I am not sure that a lot of it is. What I am certain about is that it is an utterly soul-destroying way to employ a farm labourer, and neither I nor my bailiff will have it. My bailiff would walk out accompanied by his seven sons if I were to take on such a thing, because it is inhuman for the man, the attendant.

There are of course many of these things. There is the unexpected redundancy; soul-destroying employment, followed by soul-destroying unemployment. and many others. Naturally, the State has a great part in this, but I must say that I fail to see that these elaborate systems of taking over an industry make any decisive difference. I wish that attention were diverted to the real evils, whether in public enterprises or not, because I believe that all men are unequal that you must treat them as unequal: and that differentials are natural to society. All my experience of life in teaching and in training people is that they are unequal, that no two are alike. It is one of the great errors of our time that we assume that people are equal, and attempts to force them into artificial equality which is contrary to their nature produce other evils.

Another error of our times, a principle which I have tried to correct in the little departments of life with which I have been concerned, is that all power corrupts. That is what I think Lord Brockway believes of everybody in a position of power, unless he is a State official. It has been my lot to train people to exercise power—a little power of course. I have never been a very big man, but I have had to train people to exercise authority. It is my belief that young men are the better for being entrusted with authority over others when they have the capacity to exercise it. There is a natural striving to excel. If you thwart it, you frustrate people and they do violence and unpleasant things to society. Therefore I think that one has to tackle the industrial situation and see how power can better be distributed. What I feel now is that the harm done by a few people with too much power is nothing like the harm done by a vast number of people with absolutely none. That, I feel, among other things, is the matter to which attention should be given. Therefore I must say I am rather depressed at the recapitulation of the old and sterile antithesis between one form of capitalism and another.

I must conclude by saying that recently I was talking with the Polish Ambassador, and I mentioned to him all the Poles with whom I was at school, most of whom were of aristocratic stock. I said to him:" Are any of them with you now? "He said:" Yes. We have some who work with the regime, and we call them red aristocrats '."I said:" I am blue, and I give my love to my friends the red aristocrats. "He said: "Ah, you are blue." He must have thought that I was a Conservative, because he said: "But Mr. Heath's Government, surely, has the reputation of being the reddest Government that Britain has ever had." I said: "Yes; I dare say you are right. But you will forgive me for saying that I am much too blue for Mr. Heath. I assume that you take great pleasure in him? "To that he was entirely silent.

6.33 p.m.

LORD COLERAINE

My Lords, I do not find myself in agreement with Lord Brockway's Motion, and least of all am I in agreement with the final part: That this House urges Her Majesty's Government to give a lead progressively towards socialism. I am inclined to agree with the noble Earl, Lord Lytton, that Her Majesty's Government are doing that without any help from the noble Lord, Lord Brockway—or, at any rate, I agree with the Polish Ambassador. Where I really differ from the noble Lord, Lord Brockway—and I would not for one moment question his sincerity—is in the proposition which underlies his Motion, that economic systems are themselves either immoral or moral. I do not think that is true. I think they are either effective or ineffective. Whichever they are, they may be open to abuse. However, the abuse does not arise from the system; it arises from sin or the weakness of human beings.

What do I mean by "effective or ineffective" in terms of an economic system? What I mean by "effective" is that an effective economic system should treat human beings as ends and not as means; it should protect them, so far as possible, from outside disasters and from their own evil impulses; it should give them freedom, and, in particular, freedom to choose between good and evil, without which there can be neither good nor evil, but only a moral vacuum. It seems to me that by this test the capitalist system is self-evidently superior to the Socialist system which the noble Lord, Lord Brockway, advocates.

My noble friend Lord Gowrie, in what I thought, if he will allow me to say so, was a magnificent speech (he said that he could make such a speech only because it was a Wednesday, and I wish that there were more Wednesdays in the week so that we could hear more speeches like it) made an irrefutable case, as I think, for the capitalist system. But I thought that he was perhaps a little apologetic about the past and was looking forward to a revivified capitalist system which would come to its full fruition in 10 or 20 years' time.

My Lords, I think if we look to the past we realise what a tremendous achievement the capitalist system has produced in the 200 or 250 years in which it has been in existence. In these Islands 150 years ago there were 8 million people living for the most part in abject poverty. To-day there are 56 million, of whom only a minority, and a relatively small minority, live in poverty. That is a consequence of the capitalist system. One hundred and fifty years ago, I do not know how many offences there were (possibly 300) which carried capital punishment. There was abominable ill-treatment of children, little chimney sweeps being perhaps one of the worst examples. There was something not very different from slavery. All that is behind us, and it is behind us because the capitalist system has produced an environment in which people have become sensitive to evil and are able to do something about it.

If, on the other hand, we look at the Socialist system, there is nowhere, with one possible exception to which the noble Viscount, Lord Samuel, referred—the State of Israel—where it has not produced very great evils indeed. I do not know whether your Lordships read yesterday an article in The Times by Mr. Bernard Levin. I do not know what it means—probably I should go to see a psycho-analyst. But I find myself agreeing more and more with what he says. In the article he described the novel technique adopted by which socialism in Russia manages to suppress dissenting opinions—this they do by sending critics of the system to lunatic asylums. You can have socialism, but invariably I feel it creates tyranny and it does not even achieve material wellbeing. I do not think anyone would pretend for a moment that, except in very specialised fields, Russian socialism is not far and away behind Western capitalism in its achievements.

In support of what I am saying, I should like to quote one short paragraph: The housewife whose domestic gadgets provide the equivalent of four maids' work and the husband whose car puts him on the level of the owner of a coach and four, not to mention the coachman, already feel in their own lives that general living standards which were once the privilege of the small property-owning class are being transformed into the legitimate expectations of every reasonably industrious citizen. That is surely a very remarkable tribute to the capitalist system. It was made in Fabian Tract No. 399, and the author was Mr. Richard Crossman. I do not think he could have said anything that more abundantly justified the achievements of capitalism in the past.

Even though the noble Viscount, Lord Samuel, is not here, I should like to say that I thought he made a most remarkable speech. He said that from his own experience socialism worked in Israel, and he produced what I thought was very convincing evidence in support of that statement. But as he spoke there passed through my mind the reflection that there were three considerations which applied in Israel and in no other country in the world. The first is that they were operat ing from an absolutely clean slate. The second is that, as a result of the experience through which their race has passed over the centuries, and particularly in our own lifetime, they are capable of a devotion and a tenacity of which our people no longer seem to be capable. But there is a third consideration, too; that is, that the State of Israel, as I see it, is very largely supported by subventions from Jews all over the world. That does not take away at all from my admiration of the State of Israel, but it is relevant to this argument. I do not believe it could have achieved these results under socialism if it were not for these subventions.

My Lords, I said a few moments ago that the troubles of our economic system did not arise from capitalism. The noble Earl, Lord Lytton, instanced the deadening effect of conveyor belt production in a motor car factory—and it is appalling. I have no doubt that it is responsible in a very great measure for the troubles in that industry to-day. But if you are going to produce motor cars cheaply and competitively to sell all over the world, then whatever system under which you operate, whether it be socialism or capitalism, you are going to have that evil. I sometimes wonder whether the spiritual malaise from which we suffer is not perhaps that we attach too much importance, whether we are Socialists or believers in capitalism, to economic growth per se. That applies not only in this country but all over the Western World.

I wonder also whether we would not do better to consider, as we are beginning to do, the qualitative aspects of life rather than the quantitative ones. I was very much interested by the altercation that took place between my noble and learned friend on the Woolsack and the noble Lord, Lord Soper. Lord Soper, of course, is not here—he never is after he has spoken—but I was interested in particular by something which he said when he was told that at Pentecost the early Church failed after its first impulse and its first enthusiastic joy. He said—and I took down his words— … it was not that the experiment was ill-judged but that those who conducted it failed in heart and mind. That seems to me, if he will allow me to say so, to be what the noble Lord, Lord Brockway, forgets in putting this Motion. We all of us fail in heart and mind, and the question is: does his solution (or ours, on this side of the House) make that failure more likely or less likely and does it make it more disastrous or less disastrous if it happens? I believe that, judged by that test, the capitalist system with all its imperfections—and there are many—survives triumphantly compared with the solution of the noble Lord, Lord Brockway.

6.49 p.m.

LORD MILFORD

My Lords, there has been quite a ripple at Westminster because this House is to discuss socialism. Some might think it would be incongruous; I would not agree. As the noble Baroness, Lady Wootton, has reminded us, over a third of the people in the world today live under socialism. It is a subject which has been discussed and written about by the great thinkers all over the world in the last 100 or 150 years. Therefore, I admit that I was shocked when I saw people giggling and sneering at the noble Lord, Lord Brockway, from the other side of the House when he began his speech this afternoon; and I thought that the noble Earl, Lord Gowrie, was far too flippant on such a subject as this. It may have been amusing for him and other people, but this is a very serious subject indeed.

THE EARL OF LYTTON

My Lords, perhaps I might interrupt for just a moment, to say that surely, for flippancy and joy of heart the noble Lord, Lord Davies of Leek, took the prize.

LORD MILFORD

My Lords, to-day millions of people are coming to think that the present state of affairs is frustrating and sterile, and that something has to change. Those who work for change are considered by the Establishment as dangerous, subversive and to be suppressed. Societies have changed. In the past there was slavery, which changed into feudalism when slavery became outdated. Feudalism gave way to capitalism, and now there are many all over the world who think that society is so outdated that we have to move forward to another.

In this country we have respected political philosophers and writers, members of the Establishment who have broken away, criticising society, showing how society must be drastically changed or else stagnate and decay. During the last century we have had Robert Owen, Marx, Shaw, Wells, William Morris, to mention a few, who specifically put forward socialism in one form or another as the next step forward. Who would defend slavery to-day? Who among the most nostalgic of your Lordships, dreaming of the absolute power of your families in the past, would seriously advocate going from capitalism to feudalism? I am absolutely certain that none of the people in the socialist countries want to return to capitalism. Of course, in the upheaval when the old society broke down and the new was struggling to be born, there was confusion, mistakes and violence.

But examine how the violence started in nearly all the big revolutions. Who started the civil war in Britain? Who raised the standard first? Who started it in France? Who started in the civil wars in the Soviet Union and China—the wars of intervention? In Britain we had our civil war; we could not have broken through into capitalism without it, as things turned out. France had her great revolution and Russia hers. In each case a new society had to be won. The difficulties and contradictions of capitalism are coming to a head; there is colossal pressure from all walks of life for a change—youth, women, coloured people and wage earners. The seams are bursting; something has to happen, and it will. As these contradictions are inherent in capitalism itself, if capitalism is being found wanting, is it not inevitable that society must finally move forward into something new, which I hope will be socialism? I am sure all of us in this House would reject the other solution which has been tried—fascism.

I suggest that to-day capitalism is found wanting on three major fronts: economic, democratic and moral. Let us take the economic front. The days of the old flourishing family business have gone; the original capitalism has inevitably developed into monopoly capitalism. We now have the appalling concentration of huge wealth and power in the hands of a few gigantic concerns, so powerful that they influence Government policy at home and abroad and, through their propaganda, aim to control the minds and values of the people. Their interests are not British but stretch across all frontiers; they are international. They can hold up nations to ransom. What is happening to our North Sea oil? Under socialism it could be a completely national asset for Britain.

A large part of the car industry in this country is now foreign; and foreign management is trying to impose foreign discipline on British trade unionists. Small firms are being swallowed up every day without consultation with the workers, who are immediately made redundant. Jobs are hard to find. Highly educated boys and girls cannot find employment in what they have been trained to be qualified for. The Labour Party's new document recognises this nightmarish trend and pledges to do something about it, mentioning more nationalisation. But immediately the Labour Party does this the national Press—itself another monster engrossed in devouring all competition and always on the side of the monopoly millionaires—screams in fury, shouting, "Freedom!". The Times, in a leading article on June 8, pontificated that plans to extend nationalisation were based on class hatred and listed 11 reasons why they would never deliver the goods to the workers and the public as well as to private enterprise. We do not want nationalisation for nationalisation's sake, but for democracy's sake and for efficient national planning. Nationalisation is not in the hands of the people in our present nationalised industries.

To-day we have a form of State capitalism. The fundamental contradiction of capitalism—one which is getting sharper and sharper—is the two opposing classes: employers and workers, profits and wages. One side is interested in production only if good profits are assured, the other has to work in order that he and his family can live. This confrontation can only be resolved when the factories and the means of production are publicly owned, where the workers have a share in planning discussions at all levels and are taken into complete confidence by their management, and when production is not in order to make as fat a profit as possible for a handful, but to benefit the needs of the people. This is the nationalisation that we Socialists want.

Under public ownership the economy can be planned for the national good in place of the present anarchy which has been caused because of the profit motive. Shortage of houses and land means great hardship for the homeless and overcrowding, but it also means huge profits for the big landlords and speculators. Land for development should be publicly owned and given to the local authorities as they need it.

Those are some of the black sides of I capitalism, economically. Regarding democracy, the state of democracy that we have reached to-day—and it is a considerable one—has been won by the people struggling through hundreds of years, but it is no longer spreading; on the contrary, it is diminishing. To-day, Parliament can and does talk and talk. But actual decision-making has been taken more and more away from it to the Cabinet, where Ministers have connections with big business. And Parliament can argue and discuss without taking the will of the people into consideration. For example, whatever one may think personally, the people of Britain were never consulted about entry into the Common Market. Local government is more and more side-tracked; parish councils and rural district councils are being pushed aside by bigger organisations more remote from the grass roots.

he Press, which used to represent many different shades of opinion, now consists of one or two huge concerns producing for profit and more profit. Our huge Labour Party has no national Press at all. On the mass media, who decides what radio and television are going to feed into the families of Britain? Concerning reading matter, every year more and more small publishing firms go bankrupt. The Civil Service, the top military personnel, the heads of police, are completely out of touch with the people. Democracy is being stifled by huge monopoly power which brainwashes us into accepting all the Establishment wants us to believe.

THE EARL OF GOWRIE

My Lords, will the noble Lord give way for a minute? He mentioned the police. I do not know whether he saw Sir Robert Marks on television recently, but I do not think he could be described as being out of touch with the people.

LORD MILFORD

To increase democracy, my Lords, surely we ought to draw into activity and planning the people themselves; reverse this increasing concentration of monopoly power. Many of us think it will be done only through socialism. There are vast latent talents in the people of Britain. The crime of modern society is that millions never have the chance to exercise them and die without knowing what they are capable of. To millions of people the great question is: "Hell! What is life about? "

On the morality of capitalism, what has capitalist morality become? Morality is preached to us at school. We who are lucky enough to have a higher education, gone to a university, read the philosophers, the liberal thinkers of the past, histories and literature, and have had a chance to study the highest thoughts of man—what are we doing to live up to that moral knowledge? In the lives around us that morality is not practised. It is just used for the "rat race" that is going on around us, or to gain or maintain power. All the morality we have learnt is absolutely useless today if we want to get on. Everything is for money, more money, profit. What morality has money? My Lords, youth is disgusted to find on leaving school or college that the moral values it has been taught are not practised but scorned cynically. Youth searches for real love, friendship, comradeship, hut finds the "rat race" and racialism.

Art is now a money racket, and the chief concern of the theatre is, "Will it pay?" What is not bought or sold for profit? Profit is extracted from the worker's labour; profit is extracted from the worker's recreation; profit is extracted from the worker's sleep. Society is trapped in the cash nexus. Vast fortunes are made by speculators on necessities of human life: land needed for building houses and houses to sell. But council houses, schools, hospitals, transport, do not bring in profit and are therefore starved of funds. My Lords, all social services should be free. Yet there have been 18 new millionaires from pure speculation in the last 18 months.

Man is not born good or bad, clever or foolish, moral or immoral; he is moulded by society. A rotten, cash, "rat race" society will produce a large crop of unscrupulous, immoral men: Poulson, Lonrho, Bloom, Maxwell, Savundra, are examples. And think of the remarks of Mr. Edward Du Cann, who held office in the Tory Party machine, when he said at the Lonrho meeting, sitting alongside Mr. Duncan Sandys, "I bitterly regret that anyone should have thought it necessary to drag all these matters out into public daylight." What cynicism! What lack of any decency! No shame whatever; no feeling of guilt. And that is what we Socialists want: we want public scrutiny. We see ex-Ministers picking up vast salaries and "perks". We even see new Ministers drawn from ex-tycoons. Increasing crises have exposed the true values of capitalist society. Naturally we now live in a world of violence, fear, insecurity, escapism and cynicism. And the chief of police blames the youth! I am thankful that the new Labour Party document recognises that the seat of power must be changed, and I want it implemented as quickly as possible.

Past thinkers have dreamed of Utopias, of a world of no hunger, no wars, freedom, equality. Must all this always be just a dream? In the past such a world was unobtainable because of lack of technology and science, but today we have sufficient of both and such a world could be grasped. Why do we not try to do it? Because of vested interests in power and profits. Slavery could not do it, neither feudalism; neither will monopoly capitalism. Treatment of monopoly advance in the Labour Party document will be the first step in breaking the stranglehold and will be a big step forward.

While on this question of morality and some of the discussions which arise in this House, I would say there is a small group in this House whose sympathies are obviously with the apartheid Government in South Africa. The same people seem to object to Her Majesty's Government's policy on Rhodesia. Why are we embracing Fascist Portugal and doing nothing in fact to help the Spanish or Greek people in their struggle for democracy? Is not one fundamental reason fear of losing good profits made from cheap labour; to defend capitalism everywhere, when it might be threatened by people of those countries wanting a more just society? One sees the capitalist world hindering President Allende in Chile in all that he is trying to do in his nationalisation programme of foreign firms, which were formerly bleeding the Chilean economy to death. In a socialist world we could have a true internationalism, a true Brotherhood of Man, which would be very different from the supra-nationalist, monopolistic world of the Common Market today. Capitalism is worried when the socialist countries appear to be spreading their influences to the developing world. But socialist countries actually help those countries, while monopoly capitalist countries go on planning to extract more huge profits from them.

In Britain socialism would be built as a continuation of what we have alteady won. In other words, socialism must not only defend all we have won but must also extend it. As a discussion document on suggested ways in which this might be done we Communists have produced The British Road to Socialism. Of course the owners of industry in Britain will not want to renounce their power and position willingly, but pressure for a change is building up in mass struggles every day—trade union rights, wages, rents—and through these struggles the people are becoming aware who the enemy really is and are gaining confidence in their power to change things. Until now successive Tory and Labour Governments have been trying to patch up capitalist societies, but we in this House, whether industrialists, politicians or from other walks of life, if we are really honest with ourselves and look purely objectively at society in Britain today, surely must admit that something has gone very wrong. Is not the very basis of it outdated and uninspiring for the majority of people? Is not the real answer that we have to change things? For me, that change is to socialism.

LORD COLERAINE

My Lords, before the noble Lord sits down, could he perhaps say something that is not in his brief?

7.12 p.m.

LORD SHACKLETON

My Lords, think perhaps I should have got up more quickly. I was not proposing to follow the noble Lord, Lord Milford, very closely, although I must admit that with certain aspects of his final remarks I found myself in agreement. The purpose of this debate, and the purpose of my noble friend Lord Brockway, was to enable us, not to have a Party political wrestling match but to have a discussion in this very crowded and worrying world, to look at some of the fundamental principles, some of which clearly, even though coming from this side of the House have not been wholly unacceptable to many noble Lords on the other side of the House.

First, in addition to thanking my young noble friend Lord Brockway, I should like to express appreciation to Members opposite. I was at one time afraid that this was going to be a teach-in on socialism that we should be debating among ourselves on this side of the House—and let me hasten to add that Members of the Labour Party are well accustomed to debating among themselves. Indeed, it is because we have principles that we have to talk a great deal to decide how to apply them. But I am grateful because we have had a number of good speeches. Indeed, I am not sure that the noble Lord, Lord Harvey of Prestbury—except where he suddenly went off on to the 25 public, or private, enterprises, which I certainly do not propose to discuss tonight because I happen to believe in a mixed economy—was not very nearly in the category of what the noble Earl, Lord Lytton, (and I am always glad to hear from him) called either "Socialist Conservatives"—or was it "Socialist free enterprise"? There was a non-Socialist free enterprise and a Socialist free enterprise, and I think the noble Lord came in the latter category.

Of course, we had a very intelligent speech from the noble Earl, Lord Gowrie, and one which, if I may say so, helped to set the tone. It was followed by a series of speeches which make me feel very inadequate when it comes to winding up. I have seldom heard a debate in which there has been such high intellectual calibre from all my noble friends, including, of course, the noble Baroness, Lady Wootton of Abinger. There has been a considerable academic quality about the debate. We have had a number of ex-Dons, and I think we shall have a Fellow of All Souls to wind up; and even my noble friend Lord Davies of Leek, who always gives us such joy, was of course a very distinguished teacher in the W.E.A. I lay no claim to fame in this field.

It has been an interesting debate, and whether or not we vote tonight—and I honestly do not know whether we are going to vote—there has been a degree of exchange of views which have been of interest to all noble Lords. There were times when some noble Lords were a little uncertain as to what we were debating. I do not say this to the noble Lord, Lord Harvey of Prestbury, but certainly the noble Baroness, Lady Elles, thought she was having a debate which would have been relevant in relation to the noble Lord, Lord Milford, but not to the rest of us who were taking part in this debate. I slightly resented it when she said that she preferred to remain with management and practical people, because quite a lot of us on this side of the House have been in management and practice. If I may say so, for many years of my life I have worked for some of the most successful capitalist enterprises in this country and I do not feel ashamed because I do not happen to live in a Socialist society. Therefore I have to earn my living under capitalism and I am not ashamed of the companies for which I have worked. I have met many fine men with many great qualities, but this does not mean—and this is not inconsistent—that I do not wish to see a development in society and a change ultimately to a Socialist society. I believe in some respects we are already progressing in that direction.

At this stage I shall not attempt a definition of socialism. It is unfortunate that in these debates words take on an emotional touch. You say the word "socialism" to certain noble Lords opposite (but not all); you then use the word "Marx" and they feel somehow that you are almost getting into the call-girl racket. They feel that this is something wrong, and I hope that we can be objective about this. Although it is not my intention to enter into a long exposition on Marx, I find, as one who has waded through one of the most boring hooks of al!, Das Kapital, that he is one of the most misunderstood and underrated thinkers, even though his conclusions, like those of Aristotle (who has also caused a certain amount of trouble in the world) are no longer relevant. If the noble and learned Lord wishes to interrupt me in order to make an observation I shall be happy to give way.

THE LORD CHANCELLOR

My Lords, I only said that Aristotle had not caused much trouble recently.

LORD SHACKLETON

My Lords, I am bound to say that the amount of trouble that Aristotle has caused in this world is probably, as with Marx, proportionate to the size of his world. Of course Marx suffered from the disadvantage of being largely nurtured on the capitalist economists of the 19th century. It was from this that he got his gloomy and pessimistic creed and came up with a solution which at that time might reasonably have been the outcome. But in fact capitalism has been ameliorated. I do not know whether I would say, as I think the noble Earl, Lord Lytton, said he had been told, that Mr. Heath was "that Red Prime Minister". I certainly know that when I go to the City I hear people talking about that Socialist, Heath". It is rather worrying why they should say that to me. Perhaps I have been corrupted by the capitalist system! But none the less we have recognised that there has been a great deal wrong with our society and that the market economy was not, as others earlier thought, some natural God-given device which certainly had the great advantage that somehow, whatever one did naturally. was all right in economics. We find that that is not so, and in the last 50 years under successive Governments, particularly Liberal Governments, but certainly under Conservative and Labour Governments also, capitalism has been changed to a point when some 19th century capitalists—I doubt whether Adam Smith, who was much more concerned generally with the functioning of the market and was an intelligent man, even if he lived rather a long while ago—would not call the present state of affairs "capitalism" at all. But that is not to say that, even though it has been modified and to some extent tamed, we have yet reached the millenium.

I should like to make one further observation about socialism. Noble Lords have been extremely kind, and I would not accept what the noble Lord, Lord Milford said, that for the most part the Party opposite have not listened. Except for an occasional flutter from the noble and learned Lord Chancellor on the Woolsack—he has been in very good form all day—noble Lords opposite have listened with great courtesy and interest; and I should like to say to those who believe, however wisely or misguidedly, that socialism is not the opposite of capitalism, capitalism is based on an economic theory. And whereas I fully agree— and indeed so would Karl Marx for those who have read him—that capitalism led to the great expansion in production and wealth, I happen to think that socialism is not just an economic creed. To me it is not even a question of just grabbing from the "haves" and giving to the "have nots", though when one sees something of what is going on in the property world today, which I am sure is equally deplored by most noble Lords opposite, we may think there could be something in trying to find a way to take it back. Governments have tried to do so, not always successfully.

Socialism is not a self-regarding approach, and I do not believe that there are many people who arc so cynical in this House as not to regard the basic ideals of socialism as worthwhile. The question is, and the argument all along has been, which approach is most likely to add to the sum total of happiness in the world. On that matter it is perfectly possible to take different views. I personally do not take a pessimistic view of mankind. On the contrary, I believe that great improvements have been made. gut when people talk about the improvement in some of the appalling conditions of life of even 50 years ago, the fact is that poverty is a relative term and there is no absolute minimum for poverty. What is essential for people who are more well-to-do and who are able to afford it? Even those who are above the subsistence level still suffer relatively from deprivation. It is important to realise that there are moving standards.

The fact remains that we are in a world which is still exceedingly dangerous; where there are fundamental threats: where there is competition with other types of society—even though I believe that coexistence is becoming more possible; and where, on the whole, in this country I happen to believe that there has been something of a decline, despite my optimism, in the approach of individuals to their neighbours in society. At the end of the war, when we had been fighting together, there existed a great community spirit; people were prepared to make sacrifices. Gradually we have begun to find ourselves corrupted by the opportunities of making money.

I disagree with the noble Earl, Lord Gowrie, when he said that the pursuit of wealth is fundamental to the welfare of society. I should say that there are noble Lords opposite who in their lives show this not to be true. I am sure that the noble Earl, Lord Gowrie, will have read H. G. Wells' The Work, Wealth and Happiness of Mankind where there is a great tribute to those who have served, particularly those in the Armed Forces; people who have gone into the Armed Forces as officers and who have not sought wealth, but have sought to do their duty. That is the concept which we believe is fundamental and without which the type of socialist society, which must be a free one we believe, cannot work. One can take the view that this is not attainable; but the danger is that if we do not consciously pursue that then other people will go in more violent directions. It is a fact that some of the most energetic and idealistic young are either alienated or drop out. Despite the higher living standards now, there has never been a time when more young people have been dropping out or have moved into violence to pursue aims which may seem to them ideal but which we regard as totally destroyed by the means that they incline to use. That is why they look at us here: they look at the Conservative Party and the Labour Party and see us playing political games; making our splendid institution of Parliament which we all think is so good—and it is—work, and the House of Lords is a very civilised and pleasant place. They do not see either the urgency or the ideal. When they look at the suffering abroad and see the challenge of other systems, then they say that the system is immoral. It is not just part of the capitalist system; it is part of the motivation in society.

I do not propose myself in the few remarks I am going to make to go into the present day scandals. I prefer to look at this matter in a broader framework. It is essential for those of us who are democratic socialists to acknowledge that we cannot hope, in the short run, to achieve the type of society which we envisage, and at the same time in the short run to preserve the freedom of the spirit and avoid the oppression by State institutions which I know have been very much in the minds of noble Lords opposite. Once you accept the ballot box you accept a brake on progress. That is why it is more important than ever that there should be a greater appreciation in society of these ideas, which have net been confined to the Labour Party. The early socialists, even when the Labour Representation Committee was set up, believed that they ought to operate through all Parties. I seem to remember that Bernard Shaw was very reluctant to resign from the Liberal Party at that time. Therefore, we do not think it amiss to seek to put views which we believe to be important.

It might well be, as my noble friend Lady Wootton said, that the Chinese experiment, this tremendous development in China, may succeed in solving one of the great basic weaknesses of communist societies, namely, the bureaucracy; and it is possible that we shall find a degree of advance which may in fact damage our Western pride if we are left behind. I think we would welcome peaceful competition; but noble Lords opposite ought not to accept, because they do not yet see a socialist society to their liking—except Israel, to which we have referred—that this is not attainable. Nor should they dismiss the experiment going on in Chile at the moment. I know very little about it except that they still retain the democratic forms there.

I hope, therefore, that we may from time to time have an opportunity to discuss this sort of matter. It follows typically after some earlier debates, and I believe the House of Lords may have a particular contribution to make in any discussion of these matters. It is the last place where many people would think it possible to do so. Therefore, I believe that we are indebted to my noble friend Lord Brockway for producing a debate which I believe has been of real value and of great interest.

LORD FERRIER

My Lords, would the noble Lord not agree that the disillusionment of young people to which he referred stems in great measure from the fact that news of Parliamentary proceedings does not reach them either through the Press or the broadcasting media?

7.32 p.m.

THE LORD CHANCELLOR

My Lords, this has been a debate about general ideas, and as such I must commend it, because it certainly is my opinion that the people of these islands, and perhaps specifically the English, rather tend to underrate the influence of general ideas upon practical matters. Therefore, I do not complain at all—although I am going to criticise this Motion—that the noble Lord, Lord Brockway, has put forward a subject of general ideas for discussion in this Wednesday debate. It has certainly given rise to a number of very interesting and some excellent speeches. I may be forgiven for partiality if I mention particularly those of my noble friend Lord Gowrie, of my noble friend Lady Elles and of my noble friend Lord Orr-Ewing; but there have been splendid speeches from other parts of the House as well. It does not, of course, mean that a debate which gives rise to excellent speeches does so because the Motion is in content of equal quality to the speeches to which it gives rise.

It is because I want to analyse this Motion a little, I hope not unkindly, that I wish to spend some time examining the concepts upon which it is based. One concept is quite clearly socialism. According to Lord Brockway, socialism means the ownership of the whole economy by the whole of society—I do not think I am departing very far from this definition. According to Lord Soper, it has never been tried at all except by apostolic zeal in the early but unsuccessful experiment of the Church of Jerusalem immediately after the reception of the Holy Ghost. On the contrary, Lord Milford and the noble Baroness, Lady Wootton, say that not only has it been tried but that one thousand million people, a third of the world's population, are actually living under some system of this kind.

BARONESS WOOTTON OF ABINGER

My Lords, the noble and learned Lord on the Woolsack will forgive me if I remind him that I was very careful to say" a fully collectivised economy", and I did not say it was socialist.

THE LORD CHANCELLOR

My Lords, I accept the correction of the noble Baroness that she said a fully collectivised economy. I thought she was in fact equating it with socialism; but whether or not she was, the noble Lord, Lord Milford, certainly was. And with all the enthusiasm of Rio-Tinto-Zinc behind him the Leader of the Opposition urges socialism as something quite different. The noble Viscount, Lord Samuel, finds it in Israel, where a considerable place is found for capitalism. The only thing which is settled about this subject is that among all those I have named the various conceptions of socialism which they have are totally different and quite incompatible. Therefore it would be an odd thing if they all went into the same Lobby and voted for their inconsistent conceptions side by side, against those or us on this side of the House.

Speaking for myself, I should just like to say this to the noble Lord, Lord Brockway. If, when I was at Eton, he had come to address the Eton College Political Society, when I was about 17, I should have thought this a roughly contemporary Motion. But by the time I had become an undergraduate of Oxford, somewhere between 1926 and 1930, I think a large number of us would have begun to think it was rather "old hat". The reason we should have thought so was because we had come to realise that what we are faced with in this country is neither socialism nor capitalism but a mixed society in which there are quite different elements which are likely to prove, if not permanent, at least enduring, and which can be ascribed either to one or the other of these alleged alternatives but very largely to neither. We recognise that there are a large number of things which are at the moment being done by the State, some of which at least can as well be done by the State as by any other; there are a large number of things which are being organised for profit, and it may be that a great number of those are best done independently of the State and for profit than in any other way; there are a large number of things which are done voluntarily and not for profit and not by the State, some of which are State aided and some of which are wholly independent. And it seems to me that as long as we are, any one of us, even the youngest of us, likely to be alive, this is a situation that is likely to continue.

Moreover, speaking for myself, I want it to continue. I do not believe in these "-isms", this alleged contrast between capitalism and socialism, as if all we had to do was to apply a fixed set of political ideas and rules to society in order to achieve the nearest approach to Utopia that man can do on earth. I regard that as fundamentally false to the nature of human society. Although a great deal of reference has been made, for instance, to Karl Marx, some to Aristotle—and on one occasion the noble Lord, Lord Balogh, told us that Freud was the essential political reading for all who wished to achieve reforms—no one, I think, has referred to the absolutely revolutionary effect of Darwin's thinking upon political and social philosophy. Because the truth about human society is that there is not going to be a terminus ad quem; there is not going to be a Utopia. The frontiers of human knowledge have advanced, are advancing and are going to continue to advance, and an attempt consciously to break the body of a living society on a fixed set of political, economic or social ideas is certain to lead to tryranny, and far more immorality, in my opinion, than any system which it seeks to supplant. The real contrast, at least in my judgment, is not between the Socialist and the capitalist, each of which, in his turn, believes in a kind of Utopia, but between the open and evolving theory of society and the closed society. whether it be of the Left or of the Right.

LORD GLADWYN

Karl Popper.

THE LORD CHANCELLOR

My Lords, I am glad that the noble Lord, Lord Gladwyn, reminds us that the noble Lord. Lord Davies of Leek, took the case of Karl Popper, who has given rise to this theory in recent times, but if you compare this kind of thinking with the kind of thinking which seeks to impose on society a fixed series of ideas, I think you see that the influence of the evolutionary theory of Darwin, who wrote at about the same time as Marx, really has implications for the social and political philosophies on which we work which have not yet been fully absorbed by society.

If one turns now from theory to practice, I think that the most startling fact about the modern world—and by the modern world I mean the world which has developed since the 16th century—has been the unique and enormous advance, on a whole wide range of fronts, from a relatively poor society to one which is rich not merely in wealth but in all kinds of ideas. The development of Western European society is something which is quite unique in the history of mankind. It has developed spiritually in religion; it has developed in the fine arts; it has developed in knowledge; it has developed in mathematical science and in applied science. In the end, up to and including the present, it has developed in the production of wealth to a scale which has hitherto been unknown, largely as a result of the application of mechanical power to the processes of production, distribution, exchange and the dissemination of ideas.

I do not wish to speak disrespectfully of Marx. I shall return to Marx in a moment, when one discusses his theory that the poor inevitably grow poorer and the rich richer. I think he made a considerable contribution to 19th century thought by pointing out the close connection between political forms and methods of production. This clearly is an undeniable truth which, in contrast to the romanticism of the time, was something that very badly needed saying. He also said, to the disgust of those who claimed to be more idealistic than they are, that when people start talking about their idealisms it may be time to start counting your spoons; and I think that there is a great deal of truth in that too, so I am far from being disrespectful about him. The fact of the matter is that over this period of 500 years there has been an accelerating process of change in which the human race has consciously developed on a scale, and in a way, that it has never developed before in the history of the species on this planet.

Of course one can develop reasons why that may be so, and obviously different diagnoses may be made, but one part of the diagnosis that I would make is the development of freedom as a conscious political ethic; freedom in thought, freedom in expression, freedom of association, and freedom to trade and to undertake economic activity. I would claim that, whatever else has emerged from this debate, those who have spoken from the Benches on my right have established beyond doubt that, in the total production of wealth, the system if it be a system, and I am going to argue in a sense that it is not—which has been called throughout the debate "capitalism" has in fact done something as an intrinsic part of the movement to freedom which has never been done in the world before.

What it has never claimed—and here I round on the noble Lord, Lord Brockway—is to be able to exist otherwise than in the framework of law; a concept which has hardly been mentioned in this debate but which seems to be to be essential to a discussion of the subject. What is more, this increase in material wealth, be it good or bad, has gone on at an accelerating pace throughout my lifetime no less than in the past five centuries. Therefore, a great deal of the material wealth which has spread across the world today has acutally been created within the lifetime of a flying person. That is something that I think the noble Lord, Lord Milford, ought to take into account in his assessment of capitalism, because since I was a boy the massive unemployment which existed in this island has virtually disappeared, and there has been the enormous development in housing (public and privately owned houses by the worker), the possession by the worker of consumer durables like motor cars, refrigerators and fine furniture, the spreading of culture through the media, the health of the population, the development of education—and even when I was Minister of Education 13 years ago I was considered to be somewhat of an idealist when I said that 5 per cent. of the nation's wealth should be devoted to education, because when I started it was only 3 per cent.—all these things have been going on throughout my lifetime. We are asked to condemn the system which produced this and disseminated it through the population of this island as something which is inherently bad, and something which is progressively getting worse.

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, would not the noble and learned Lord agree that a great deal of the progress in which we all delight is due to the teaching of the Liberal and Socialist people who have helped to educate the noble and learned Lard and his Party opposite?

TIM LORD CHANCELLOR

My Lords, I am sure that I shall always be delighted to be educated by the noble Baroness. In fact, I was not seeking to make a Party point of this at all. I was saying that there had been a great number of prophets of gloom on my left throughout the debate, and although I recognise that there is a great deal wrong with human nature and human society, I cannot take the gloomy view that capitalism is getting worse and worse, that something has to be done about it, and we have to change.

The next thing I wanted to say is that Marx made one cardinal error which, it seems to me, has been repeated by the noble Lord, Lord Brockway, in a slightly more sophisticated form this afternoon. That was that under capitalism the poor grow poorer and the rich grow richer, and "it cannot go on", as I think the noble Lord, Lord Milford, said. The fact is that the rich do grow richer and the poor get richer too. That is not altogether a bad thing, because when Marx wrote he wrote in a period of time when not only were the workers not in receipt of a living wage, but there was nothing of the public housing or public education, or the public ownership which I have been seeking to describe. There was no effective co-operative movement, no effective banking and insurance or life insurance, there was no effective public social security, and the fact is that the world has been growing steadily and improving ever since that period of time, especially when there has been neither war nor revolution to retard it. The gloomy picture is not one that I am prepared to accept.

Several prophets of gloom—I think the noble Lords, Lord Brockway and Lord Soper were among them—spoke on the international character of capitalism. To my mind this is an asset. It does not follow of course that the international character of capitalism is devoid of abuse. I will, if I may, return to this in a moment. What is clear is that the nation State itself is something which society and humanity is beginning to outgrow, and the moral about the international character of capitalism is that the social organisations and the political organisations, like the nation State, ought to outgrow the national cell too, and that is why it was particularly disappointing that socialists in the Labour Party should not have supported us in our entry into the Common Market. The fact is that if capitalism is going to move on an international scale and create wealth on an international scale, law on an international scale must surely follow in the wake. As it is, because of the organisation of humanity into national States, all socialism is national socialism; it cannot be anything else. It cannot be anything else because the only organ of society is the nation State. Some Socialists on the Continent are wise enough to regret the fact and to try and create international organisations. Apparently the Labour Party here wants to wallow in its parochialism, but that is something which I can only regret.

The next thing that I want to say is this: we on this side of the House recognise that no form of freedom can exist except in a framework of law. May I conclude what I have to say—and I am afraid I have been speaking longer than I intended—by talking a little about law and a little about freedom, because these seem to me to be much more fundamental to the state of human society devolving on this fact than the subjects which have been proposed for debate this evening. What is freedom? What is this thing which has made this change, as I believe, in the last 500 years? I am not going to attempt an elaborate definition; I am only going to say that in my opinion—and I say it in the presence of one right reverend Prelate—the only freedom which is worth while is the freedom to do wrong. I immediately hasten to correct myself and to say instead that the only freedom which is worth while is the freedom to do something which other people think wrong. I hasten to recorrect myself again and say that because other people are not always wrong about what is wrong, I was right originally when I said that the only freedom of any kind which is worth while is the freedom to do wrong if wish to do so.

LORD GL ADWYN

My Lords, surely the noble and learned Lord agrees that it is not the freedom to do wrong, but the freedom to be wrong.

THE LORD CHANCELLOR

If you are wrong you are likely to act in accordance with what you are or what you believe, because the truth is that if you are going to have freedom you are always going to have a certain measure of abuse. That is what freedom is about. And because abuse often becomes intolerable to other people, you then have to set up a framework of law; but if in fact you cannot, by your framework of law, impose on the individual a state of perfection in accordance with the objective values of the lawgiver, you will in effect create something far more evil than the evil that you are trying to constrain, and you will in fact in the process destroy freedom. Freedom does involve a certain measure of abuse. Of course I recognise that freedom of thought involves a certain measure of error; freedom of association involves a certain measure of associating for bad, immoral and evil purposes; freedom to trade will involve frequent examples of exploitation and economic wrongdoing. The purpose of law is to control freedom within the limits which are tolerable when one comes to look at its social effects. I am not at all afraid of this.

Of course capitalism has its defects. Over two centuries now, as my noble friend Lord Coleraine pointed out, we have been constantly attacking the abuses as and when the abuses became intolerable. We have been supplying the defects of the system with forms of collective enterprise with voluntary enterprise, which are necessary to complement it. No one would pretend, for instance, that modern investment in the Channel Tunnel —I think someone mentioned it—could be done without State enterprise of a kind; but equally it does not follow from that that you have to abolish trading for profit.

My Lords, what I have been seeking to convey by this speech is that the series of conceptions mentioned in the Motion really do not correspond to society as we know it today. What we want is an open, evolutionary society, not aiming at some imaginary Utopia, because we have not yet reached the bounds of human knowledge and because society itself, with changes in the methods of production, with changes in types of social and economic organisation, will constantly have to adjust itself to change; and, by a paradox, the only form of society which will prove stable is the society which is perpetually reforming itself and not devoting itself to imaginary ideologies.

7.56 p.m.

LORD BROCKWAY

My Lords, I think we have had a quite historic debate today. My own experience, supported by some research, indicates that only twice in the last 70 years has either House of Parliament discussed the fundamental issue of the basis of capitalism and the basis of socialism. Philip Snowdon did it in the 1920s in another place. It is a little extraordinary that it should be the House of Lords that should be doing it today. My Lords, I do not propose to use this opportunity to speak at any length. I should just love to reply to the noble and learned Lord the Lord Chancellor. I have never heard a speech which was so unconvincing in philosophy and politics and said in such an impressive way as the speech to which we have just listened.

My Lords, we have had two speeches during this debate which have given us great amusement. One was the speech by the noble Lord, Lord Davies of Leek. If the Lord Chancellor will forgive my saying so the other speech which has not fallen under the magic of his words and of his demeanour has been the speech which the noble and learned Lord the Lord Chancellor has given us tonight. I hope that there may be another occasion when I may be able to comment upon it, because from the time when he was 17 years old at Eton College—and I was the Member of Parliament for Eton and went there often—to the present time I have never heard such an absolute association of contradictory ideas as was uttered in that speech. I take just one example— the suggestion that it has been capitalism which has contributed to liberal ideas and liberal thought. Right through the last century, right through this century, it has been the Chartists, the rebels in society, those who have been martyred, those who have stood for freedoms against the establishment representing the capitalist system of society, who have made all the advances which he now attaches to capitalism. I am astonished.

I want to express one regret about this debate. Though I emphasised very strongly that we were standing for democratic socialism, too often it has been assumed that the system in Communist countries has been the system which we have been urging. Even the noble and learned Lord the Lord Chancellor, showing an extraordinary absence of knowledge of economic terms—

THE LORD CHANCELLOR

My Lords, I never suggested it. I suggested that five or six noble Lords were suggesting five or six incompatible systems.

LORD BROCKWAY

My Lords, that intervention was quite irrelevant to the remark which I was going to make. What I was going to say was that the noble and learned Lord the Lord Chancellor showed himself so ignorant of even economic terms that when my noble friend Lady Wootton mentioned that in the Soviet Union there is collectivism, he identified that with the socialism which

both my noble friend and I have been urging today.

LORD GLADWYN

My Lords, will the noble Lord allow me to interrupt?

LORD BROCKWAY

No, my Lords. The noble Lord and the Liberal Party have absolutely boycotted this debate. He has just come in at the last moment and I am not going to give way to him. I just want to say this to the House, that in view of this debate, and particularly in view of the provocative and absolutely unrepresentative speech which has been made by the noble and learned Lord the Lord Chancellor, I shall press this Motion to a Division.

8.2 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 28: Not-Contents, 72.

CONTENTS
Bacon, B.	Henderson, L.	Phillips, B.
Beswick, L.	Hereford, Bp.	Platt, I..
Blyton, L.	Hoy, L.	Rhodes, L.
Brockway, L. [Teller.]	Janner, L.	Shackleton, L.
Champion, L.	Lindsay of Birker, L.	Shephered, L.
Donaldson of Kingsbridee. L.	Llewelyn-Davies of Hastoe, B. [Teller].	Strabolgi, L.
Energlyn, L.		White, B.
Garnsworthy, L.	Maelor, L.	Wootton of Abinger, B.
Greenwood of Rossendale, L.	Milford, L.	Wynne-Jones, L.
Hale, L.	Milner of Leeds, L.

NOT-CONTENTS
Aberdare, L.	Falkland, V.	Mowbray and Stourton, L.[Teller.]
Amherst of Hackney, L.	Ferrers, E.
Arbuthnott, V.	Ferrier, L.	Northchurch, B.
Atholl, D.	Furness, V.	Orr-Ewing, L.
Auckland, L.	Gainford, L.	Reading, M.
Balfour, E.	Gladwyn, L.	Reigate, L.
Berkeley, B.	Gowrie, L.	Rochdale, V.
Bethell, L.	Greenway, L.	Rockley, L.
Bledisloe, V.	Grenfell, L.	St. Aldwyn, E.
Brabazon of Tara, L.	Hail,ham of Saint Marylebone,L.(L. Chancellor.)	Sandford, L.
Bradford, E.		Selborne, E.
Brecon, L.	Harvey of Prestbury, L.	Sempill, Ly.
Brooke of Cumnor, L.	Harvey of Tasburgh, L.	Somers, L.
Brooke of Ystradfellte, B.	Hawke, L.	Stamp, L.
Coleraine, I.	Kemsley, V.	Strathcarron, L.
Colville of Culross, V.	Killearn, L.	Strathclyde, L.
Cork and Orrey, E.	Kinnoull, E.	Sudeley, L.
Cottesloe, L.	Lauderdale, E.	Tenby, V.
Craigavon, V.	Limerick, E.	Vivian, L.
Cullen of Ashbourne, L.	Lothian, M.	Wakehurst, L.
Denham, L. [Teller.]	Lytton, E.	Windlesham, L. (L. Privy Seal.)
Derwent, I,.	Macleod of Borve, B.	Wolverton, L.
Drumalbyn, L.	Masham of Ilton, B.	Wynford, L.
Eccles, V.	Merrivale, L.	Young, B.
Emmet of Amberley, B.	Monck, V.

Resolved in the negative, and Motion disagreed to accordingly.