PLANNED ECONOMY

Evening Post, Volume CXXVIII, Issue 23, 27 July 1939, Page 22

PLANNED ECONOMY

UNDER DEMOCRACY

ADMINISTRATIVE ASPECT

VARIOUS PROBLEMS

The relationship between administra-

tive control and democratic government was the subject of an interesting Public Administration series lecture -it Victoria College by Mr. J. O. Shearer, \ recently appointed lecturer in economics at the college. It is interesting to compare Mr. Shearer's point of view , with that expressed by Professor B.! E. Murphy in an earlier lecture in this series.

"The attempt to combine planning and democracy still suggests to some critical minds an attempt to nvx the proverbial oil and water," said Mr. Shearer. "Combined into a frothy and unstable mixture und^r v'gorous shaking they tend to become mutually exclusive as soon as that disturbance ceases. Though the stress of economic <3et)ressson has mado planning acceptpbie t'y d°mocrats. there still reinai^s a strong susnlcfon of incompatibility, such that olanain? afte 1 * a tentative tr'al and uneasy reign will quietly d'sappear or that Pdmir.istration will ste?dily encroach, infringing r"icmocratic rights in the process, and finally leav'ng only a remnant of them."

Outlining the characteristics and merits of democracy, Mr, Sheai-er said that a more difficult question was whether democracy involved the retention of private enterpi'ise and the economic liberty associated with it. That must be so so long as a considerable minority of active citizens continued to value the opportunities of private capitalism, and provided the concentration of economic power in the hands of small groups was not allowed to infringe uoon the political equality of citizens. That might happen through the concentration of control over daily newsoaners because of the tremendous capital investment involved. Even with the hmbest standards of journalism it j I was difficult to avoid limiting the tj^wer °f expression of different groups. Tt might hitmen through great vested! int arpsts acting as political pressure j groups. I PRIVATE PROPERTY. The case for private property in production rpstpd "pon the efficiency with which private enternrisp :iincppdpcj in fni]v ut^i'int? +he available resources and in dMr^bu+ine fb<? results of that nroHurt'vity. Basically the case for nrivate pronorty f^ste*?. therefore, on the sener»l benefit. It cou^d not be ignored that much of the pressure towardl? r»lann'n«? came from bitter d's-wticf-T'^nn with some of the results pssoe?s>fced with the system of private enterprise. It was not enough to point out that tho«p results in the modern worM wpre nartlv the result"? of certain rigidities th"t hart bo<an to HpvpTod. in a that ess^ntiaVv be flpx'bJe. such as trpde unions and the fix;ns of rie'd wage rates, business monopol'Ps. branded and advertispd commodities and oih°x factors mpkinff for H^id prices nnd the increasing b^rJrxpr? to freedom of international trade arising in part as a delayed conseavence of the last war. Nor was it enough to blame Government intervention, though that might in some cases have h"d not altogether fortunate results. Planning after all was but Government intervention written large and written in systematic terms. It was convenient to isolate three aspects of planning First there was the dynamic aspect related to the full f*muT O yment of economically expioitl able_ resources and the fullest economic use of technical inventions. The second, the equilibrating or stabilising aspect, related to the evening out of fluctuations of production and employment that otherwise might arise as costs of progress. The third, the socioeconomic aspect, related to the progressive mitigption of the worst results of inequality, security, and with improving the standard of life. LABOUR AND CAPITAL. The keynote to economic progress was the continuous shifting of labour and capital from industries in which demand was contracting to those in which it was expanding, or from older and well-established industries into newer and more risky fields. Mr. Shearer referred to the increasing resistance to such transfer of resources today. "There is perhaps also a reluctance on the part of peoples and Governments to realise' that primary and secondary industries cannot expand indefinitely as fields of employment when they are at the same time increasing in efficiency," he said, "and that an increasing part of the social income and the individual income is devoted to services and luxuries which comprise tertiary products." The mere introduction of planning was not a solution to those problems. The planning programme had to cover markedly different sectors of the economy. One of the most obvious fields of action was that of extending j the range of Government industry -is ' contrasted with mere regulation. I t Granted that experience showed that ' a certain measure of caution was advis- j able in that field and that the best I method to use was that of semi-1 independent corporations yet the step' should be made wherever it offered ! advantage. j A more promising field was that of j attempting to make the policy of busi-' ness better co-ordinated by the assembly of more adequate informatioa. both by business organisations and by Government agencies, as to the plans of competitors, the existence of surplus stocks, the courses of expansion and of technical change in other industries, and the opportunities offer-, ed by technical innovations. Still more it might take action to assist the organisation of consumers and the provision of information to make their buying more informed. To meet the problem, quite obviously some reorganisation in the Public Service was required. Further, some change in the activities of party polii tics v/ould be required, or at least , some change in tradition. Since the I institutions involved vvere assumed to be those of representative democracy i nothing could be done to lessen the I power of Cabinet and of Ministers to i exercise the controlling nower and the ■ final voice in policy. What did seem | to be desirable was the drawing of a distinction between the planning >f pOicy and '.h» exercise of administrative authority within the various departments of the Government. THE CENTRAL UNIT. The central unit of policy formation in a planned democracy must be obviously some body responsible for the preparation of detailed plans to oe applied in policy. What was required was a bureau, council, or committee responsible for the assembly and cooi'dination of information, suggestion of measures, examination of the different segments of planned policy to eliminate inconsistency and conflict, and analysis of possible repercussions.

The aim to be kept in nrnd was firstly that of increasing productivity and secondly the increasing enjoyment of the advantages of leisure. The first