NO NEED TO BE IDLE

New Zealand Listener, Volume 12, Issue 287, 22 December 1944, Page 18

NO NEED TO BE IDLE

Sir William Beveridge Has A Plan For Full Employment

JN London the other day,

Richard

Bennett

Editor of the British Army Current

_ Affairs Bulletin, put some questions to Sir William Beveridge about his recent book, "Full Employment in a Free Society.’ Here is a condensation of that interview broadcast by: the BBC in a "Calling New Zealand" session:

Bennett: You say "Freedom from Want" is your aim in your earlier report. How do you describe your aim in this work which you have just published? Sir William: I take as the aim of this new report, "Freedom from idleness enforced by mass unemployment." I set out to show that it is possible and how it is possible to abolish unemployment completely, or nearly completely. Bennett: Well, Sir William, how have _ you tackled this problem in your re- _ port? Where do you start? Sir William: In the same way as we go about remedying disease. We start by a diagnosis. By discovering the nature of the disease and its causes, Bennett: And what are your findings? Sir William: Employment depends upon spending. If employment increases and unemployment decreases, that means that someone is spending more than before. If employment decreases and unemployment increases, that means that someone is spending less than before. Employment, demand for labour, means spending. The fact that in the past there was practically never enough demand for labour, to usé the whole of the men wanting to be used, meant that spending in total was insufficient, and the fact that the demand fluctuated, so that sometimes there was much more employment than at other times, meant that spending was unstable. Two Kinds of Spending Bennett: What reason do you give for this insufficient and unstable spending? Sir William: There are two kinds of spending-for consumption and for investment. Consumption spending means buying things for immediate enjoyment -food, clothes, furniture, bus rides, and so on. That kind of spending is on the whole fairly stable. Investment spending means adding to capital equipment, such as factories, machinery, ships, railways, houses, or adding to stocks of raw materials. That kind of spending is extraordinarily unstable. In the summary of my report I give some remarkable illustrations of the instability of investment spending. On ships, big arm factories, houses and so forth. Mass unemployment, the disease we are investigating, arises partly because investment is so unstable and partly because consumption and investment together are not high enough. Bennett: Is that the whole of your diagnosis of unemployment? Sir William: Oh, by no means. There are many other elements such as direc- . tion of the demand for labour to the wrong places. The insufficient and unguided movement of labour. The extreme irregularities in the production, marketing and prices of primary commodities. That means food and raw materials. But all these elements are secondary. The main point is that if we

want full employment we have somee how or other to increase spending, I call it outlay, and to make spending more steady. Bennett: And will spending of any kind do the trick? Sir William: Spending of any kind on things that have to be produced by current industry will give employment. But employment is not wanted for its own sake. It is wanted as a means for material progress, for what it can pros duce. Spending for full employment should be wise spending, directed by what I call social priorities, which means putting first things first. Bread and health and houses for all, before cake and sausages for anyone. "Jobs Exist for Men" Bennett: That seems a very sensible aim, And now, Sir William, you spoke twice just now of full employment and vou call

your book Full Employment in a. Free Society. Could you explain what you mean by those _two terms "Full Employment" and "Free Society"? Sir William: By "Full Employment" I mean a state of affairs in which there are more

vacant jobs than men and women looke ing for jobs. I mean that the labour market which hitherto has always been a buyers’ market with more men than jobs ought to be always a sellers’ market, with more jobs than men. Jobs, rather than men, should wait; because jobs exist for men, not men for jobs. Bennett: Yes, I think most people listening to you would agree with that. But now, what about the second term you use-‘"Free Society." Sir William: A "Free Society" is one in which all the essential human liberties are preserved. Those essential liberties include freedom of worship, speech, writing, study, and teaching; freedom of assembly and of association for industrial or political purposes, including the bringing about of a peaceful change of government; freedom in choice of occupation; and freedom in the mane agement of personal income. The essential liberties do not in my view include the liberty of a private citizen to own means of production and to employ other citizens in operating them at a. wage. That particular liberty cannot be described as an essential status of liberty in Britain, because it is not, and never has been, enjoyed by more than a very small proportion of people, Bennett: But your proposals are based on the view that full employment can be obtained under private ownership, aren’t they? (continued on next page)

(continued from previous page) Sir William: Oh, certainly, but not T think without a large extension of the responsibilities of the State. War Abolishes Unemployment Bennett: Well, is it possible for you to summarise your "full employment" policy briefly? Sir William: Not very easily, but I will try. I begin by pointing out how "full employment" is*in fact attained, as it is attained whenever we go to total war. In total war we abolish unemployment because we set ourselves to do something that will use all our powers. We have an economy planned and directed to the common purpose of defeating the enemy. Bennett: So that you would say that the planned economy of the war has lessons for us in peace? Sir William: Oh, certainly, it has the lesson that the way to destroy unemployment is not to attach unemployment direct by making work for the unemployed, but to pursue with determination objectives so important as to make a call on the whole of our energies. We abolish unemployment in war in the course of abolishing Hitler. We can and should abolish unemployment in peace by setting out to abolish or attack the giant social evils of want, of disease, ignorance and of squalor. Spending to Abolish Want Bennett: What does all that mean in practice? Sir William: It means setting up a long term programme of planned spending. Spending on full social security to abolish want. Spending on nutrition, public health, hospitals, doctors and so on to prevent and cure disease. Spending on schools, teachers and scholarships, to attack ignorance. Spending on town and country planning and on the revolutionary improvement of houses and their equipment. It means also a programme of steadily expanding investments, and that means spending on factories, machinery, and other capital equipment to raise our output, New Type of Budget Bennett: And how would such a programme be carried out? Sir William: Well, the instrument for influencing ‘spending, both public and private, is the Budget, which the Chancellor of the Exchequer brings in each year. My full employment policy involves a new type of budget-a national budget, designed to influence and guide the economic activities of the whole nation and bring ‘about total of spending, private and public together. It is enough to set up a demand for the whole of our manpower. That is something altogether from the Treasury budgets of the past, which were based on two ideas, that the State ought to spend as little as it possibly could, and that the budget must be balanced each year. I believe that we have to get right away from both those ideas. Bennett: But you don’t mean, do you, that a future Government need not cripple themselves and us in imposing taxes, but can just borrow freely when they want to spend? Sir William: Oh, by no means, It is better for the State to borrow than to have

unemployment, and there is very little sense in the horror with which most people regard a rise in the internal national debt. But so far as the State can pay its way by taxing without crushing enterprise, it is better for the State to tax than to borrow, because borrowing creates and enriches people entitled to live on interest without working, though they are of an age to work. But the whole question of how money is raised for spending is of minor importance. The essential thing for full employment is that, in one way or another, enough should be spent, and the essential thing for material progress is that it should be spent according to social priorities, meeting the most urgent needs first.