ICOLAS DAVENPORT, City correspondent for The Spectator, has written a book* which should be of great interest to socialists. The book has two central themes: (1) Over the last decades Government policy has altered, and indeed encouraged, “‘the interests of finance capitalism” to “dominate the industrial and trading livelihood of the working masses” (page 179). For example in the recent period of Conservative rule “the workers must have felt that they could not relax in their struggle to keep their wages ahead of the rise in prices. A gain in their real standard of living of only 50% in about 13 years does not stand up against the rise of 183% (in real terms) in the value of equity shares (225% with net dividends added) which the owners of capital enjoyed.” Davenport is equally critical of the Labour Government of 1945. Though himself no socialist he confesses that he can understand the “disillusionment” which befell the working class after a Labour Government had been in office nearly six years.” He writes: “They had been told to prepare for the dawn of the socialist millenium but nationalisation turned out to be a very different affair from the socialism which they expected. It appeared to them merely as an _ alternative system of management. Public ownership was so to speak downgraded from socialism to managerialism and the only difference between the old managers and the new was that the old were topped-hatted capitalists while the new were bowlerhatted bureaucrats. . . Nothing came of the old boast in one of the party memoranda that “Labour stands for democracy in industry and for the rights of the workers, both in thé public and private sectors, to full consultation on all vital decisions of management, especially those affecting conditions of work.” The new managers of the public boards were not disposed to have any nonsense of
BOOKS
democracy. To knock shop-floor this into the workers’ heads the Government invariably chose a retired Army General to fill the chairman’s seat.” (page 54). f (2) Davenport’s second theme is that “a class war monetary policy” has allowed “the moneyed ruling clique” to sacrifice domestic industrial capital to finance capital. It is his passionate opposition to this that partly explains why he allows himself the sort of reflections quoted above. - *“The Split Society,” Davenport, Gollancz.
Nicolas
R.B. Nicolas Kaldor's Essays
ICOLAS KALDOR, the Cam-
lbridge economist who has been appointed by the Labour Government to advise the Treasury, has just published a collection of essays on economic policy. The introduction to the first volumne of these essays tells a story which has a moral for all those who wish the Government to implement its programme. Over the last decade Kaldor has been invited by no less than six governments in the Third World to advise them on tax reform, he reports: “, . since I inevitably urged the adoption of reforms which put more of the burden of taxation on the privileged minority of the well-to-do, and not only on the broad masses of the population, it earned me (and the governments I advised) a lot of unpopularity, without, I fear, always succeeding in making the propertyowning classes contribute substantial amounts to the public purse. “The main reason for this . . . undoubtedly lay in the fact that the power, behind the scenes, of the wealthy property-owning classes and business interests, proved to be very much greater than the responsible political functionaries | (whether presidents, prime ministers or ministers of finance) suspected. Thus when the Finance Minister of India,
REVIEW
March 10, 1965 — THE WEEK
Mr. T. T. Krishnamachari, made an
honest and determined attempt, in
his April 1957 Budget, to bring the
tax system of India more in con-
formity with the “socialist pattern of
society,” which was so broadly pro-
claimed as the major political objec-
tive of the Congress Party, he faced
the most bitter opposition, first in
the Cabinet and then in Parliament
ae he failed, in the end, to carry
his scheme into law, except in a much
truncated and emasculated form.”
Kaldor describes the similar fate
that befell his schemes in Ceylon,
Turkey, Mexico, Ghana and British
Guiana and then comments: “These
events have shown that in under-
developed countries the moneyed
interest is capable of exercising its
influence in strange and unexpected
ways. . . My experience as a tax
advisor has thus brought me face to
face with the realities of power, in a
setting that is not normally within
the province of the economist. In
retrospect I do not think the advice
I gave was wrong. In most under-
developed countries, where extreme
poverty co-exists with great ine-
quality in wealth and consumption,
progressive taxation is, in the end,
the only alternative to complete
expropriation through violent revo-
lution,”
Now it is well known that Britain,
too, is not without inequalities in
wealth and income—in fact 5% of
the population own over 75% of
personal wealth while the ratio of
profits to wages in the national in-
come has been the same in the early
sixties as it was in the first decades
of this century. It is also known
that the Labour Government, with
Kaldor’s advice, is helping to intro-
duce an effective tax on capital and
profits. Further we may assume
that our own bourgeoisie is at least
as strong, and at least as capable of
“exercising its influence in strange
and unexpected ways,” as the youth-
ful capitalist class of India or Mexico,
From all of which it follows that
Kaldor’s foreign experience may find
some British echo.
Robin Blackburn
THE WEEK — March 10, 1965