evident. They raise a number of profoundly interesting questions. The
Conservative Party is the strongest of the three, but the Government
it supports can be and will be turned out of office by a vote of “no
confidence,” in which the Liberals, the smallest party of all, will
support the Labour motion. The King will then send for Mr. Ramsay
MacDonald, the leader of the Opposition, and ask him to form a
Government. This Mr. MacDonald says he intends to do. He will have the
qualified support of the Liberal Party. Almost immediately the Labour
Party will have to produce its Budget.
The prophets foretell two alternatives. The Labour Government will
produce a weak, individualistic Budget, an apologetic, compromising,
imitative affair; it will drop or reserve almost all its Socialistic
ideas, and it will be permitted to continue in office under the
distinguished patronage--gracefully and frequently reiterated--of Mr.
Asquith, so long as its good behaviour continues. Everyone will praise
Mr. Ramsay MacDonald’s statesmanlike moderation, and when at last the
Party has to face the constituencies----But it will have no face left
for the constituencies. A mass of votes will drift back to Liberalism,
which by that time will be seen to be just as good as Labour or
better, and the crowd of unemployed, the poor, the disinherited, and
all who are really weary and angry with the exploits and adventures
of the untrammelled rich, will turn their faces away from the Labour
Party and Parliamentary methods towards revolution. But the Liberal
politicians will take little heed of the latter drift because it is
outside the scope of Parliamentary procedure.
Or secondly, the prophets think that Labour may produce very bold and
far-reaching Socialist proposals. They may stick to the Capital Levy,
and so forth. They may put up their entire election programme. Then the
Liberal Party will withdraw its support. Mr. Ramsay MacDonald will be
obliged to resign, and the clever little, brave little Liberal group
will form a Government, and with the assistance of a large part of the
Conservatives carry on and--with large benevolent gestures--“save the
country” by doing nothing. So that on the second alternative also the
Liberal Party stands to win.
But then Mr. Ramsay MacDonald may advise the King to dissolve
Parliament; he may ask the country to decide upon his Budget and
legislative programme. And here comes the most delicate issue of all.
The Liberal prophets tell us the King will refuse a dissolution. Will
he in fact refuse to follow the advice of his Ministers, and become
active instead of passive in party affairs? When Mr. Baldwin asked
for a dissolution the King protested and granted it. Will he behave
differently towards Mr. MacDonald? The Liberal prophets have most
attractive arguments to show that such a course is constitutional.
No doubt it is. Mr. Baldwin had a majority; Mr. MacDonald has not.
Nevertheless, would such a refusal, from the point of view of the
Court, be a wise thing? The common man in the country is not going to
see the thing from the lawyer’s standpoint. He is going to conclude
that the King favours the Conservatives and Liberals against Labour.
From the point of view of the monarchy that is a very undesirable
conclusion, even if it is an unjust conclusion, to spread about the
country in a period of unemployment and social stress.
It is a polite convention in Great Britain that there is no Republican
feeling in the land. That convention is not in accordance with the
facts. There is much dormant Republicanism, but so long as the monarchy
remains “the golden link of empire,” so long as the conditions of a
“crowned republic” are observed, Republicanism sleeps. But it sleeps
much more lightly than many people suppose, and the crown cannot afford
to make mistakes.
When the other day the Duke of York allowed himself to be associated
with what appears to be a British imitation of the Ku Klux Klan, the
sleeping spirit stirred. It raised an eyebrow, even if it did not
open an eye. It may prove a great misfortune for the British crown if
presently it is led by the assurances of eager Liberals into even the
appearance of hostility to the party of the workers. The now latent
Republicanism of the British people, once roused to activity, may be
very difficult to lull again. The Labour Party may become a Republican
party. And since the British crown is manifestly wary and discreet, I
am not so certain as the Liberal lawyers that that dissolution will be
refused. I may be wrong, and so among other possibilities we may see a
“safety” Liberal Government sitting on the safety-valve in Britain for
some years.
But do these alternatives exhaust the possibilities of the case?
Suppose the coming Labour Government neither abandons nor carries out
its Capital Levy, but refers it to a delaying committee of inquiry, and
suppose it goes on in grim earnest to realise all of the fine promises
of the Liberal programme. Where will the Liberals be then? Suppose,
pending the decision of the committee upon the Capital Levy, it piles
up the super-tax on large incomes, puts an almost confiscatory tax
upon underdeveloped land and mineral resources, abolishes the game
laws and rids England of the fox, cuts expenditure upon armaments and
military and naval display ruthlessly--puts, for example, the Guards
into reasonable and comfortable inexpensive uniforms--replaces doles
by public employment, organises agricultural marketing, produces a
comprehensive housing scheme, and quadruples the estimate for education
and scientific research; what are the Liberals going to say to it?
I know what the dinner parties will say about it, but the Liberal
Party, if it is to go on existing, must save its face with the country.
Perhaps a third of the Liberal Party might be genuinely disposed to
back such a Labour programme; another third might feel constrained to
do so. Mr. Lloyd George would move leftward, quite helpfully. And the
Labour Government might struggle along insecurely and valiantly for
much longer than most of the prophets suppose.
And the party managers, of all three parties, will be scheming some
new electoral law before the next election. None of them will hear of
honest proportional representation with large constituencies and a
smaller, more efficient House of Commons; but they will all be planning
something that will look fair and honest, leave the party system
intact, and advantage the Parliamentary party to which each belongs.
In this matter the Labour Party is no more honest than any other. Its
party organs discuss the question entirely from the party point of
view, and are quite disposed to consider “the alternative vote” or any
other shabby evasion of proper electoral methods. So that at the end of
our vista we must reckon with an election faked perhaps in some novel
way but just as absurd as the last one.
And so Great Britain muddles through the years of destiny.
XVIII
MODERN GOVERNMENT: PARLIAMENT AND REAL ELECTORAL REFORM
22.1.24
We are assured that a reform of the electoral system is now imminent
in Great Britain. The oldest and most respectable of the world’s
democratic governments is declared to be in need of repair and
reconstruction. It has produced three parties without a majority, and
it threatens to jam. Immediate legislation is promised. This must needs
be a matter of lively interest to every intelligent person from China
to Peru.
For the British Parliament is the Mother of Parliaments. This is
the proud boast of the conventional teacher of British history (as
distinguished from history), and--subject to a footnote by Mr.
Belloc--it is reasonably true. The prevalent type of governing body
in the world has been constructed more or less in imitation or as a
variation of the respected British pattern; there is an Upper House
whose members are supposed to be more select and genteel and important,
and a Lower House which, generally speaking, wrangles more, is more
representative of and more in the spirit of the common people, has
taxing power, and is more conspicuously and fussily elected by the
general population. The reasons commonly alleged for this double
chamber system are pedantic and ridiculous, but the States that have
been organised or modernised in the past three centuries have followed
one another in the matter with all that unquestioning readiness which
distinguishes man and the sheep and the processional caterpillar from
most other of God’s animated creatures.
The members of one or both of these chambers or houses are elected,
and the system of election remains so primitive and stupid as to
leave a large minority, or even a majority, of the electors not even
represented in the House. The procedure is infantile--in the British
Parliament the members vote by sprinting past a teller and through
a lobby and along passages and so forth back to their seats--and
generally these Parliaments, Congresses, and Legislative Chambers are
about as well fitted to serve the needs of our complicated modern
communities as a battleship of Queen Elizabeth’s navy is fitted to
encounter modern artillery.
But they are difficult to scrap and reconstruct because the only
people legally capable of scrapping and reconstructing them are the
politicians they have created, and who are completely adapted to their
necessities. You cannot expect “Old Parliamentary Hands” and such-like
gentry to modify or even to realise the disastrous inefficiency of
the political devices by which they live and move and have their
being. Most of the Latin communities, which are logical to the pitch
of violence, have solved the problem of Parliamentary incompetence
in their hasty way by accepting dictators who treat all elected
representatives with a scarcely veiled contempt; and even the English,
in the face of a supreme national crisis, acquiesced in Cromwell....
Of course, after I have written that last sentence nothing will prevent
the world-wide society of the muddle-headed from running away with
the idea that I advocate dictatorships, just as it was impossible
to prevent them from declaring that I had “embraced Protection”
after I had pointed out that tariffs, like war, follow naturally
upon nationalism, and just as they would certainly have it that I
want to promote typhoid fever if I were to write about the necessary
consequences of insanitary conditions. But that is a digression.
Dictatorships are evil consequences of democratic break-downs. They
are the rough remedy for intolerable democracy. And except in the
United States democracies are becoming very generally intolerable. The
people of the United States, for the time the spoilt children of the
human race, are so fortunate in their isolation and their vast unity
that the efficiency of their Government is a matter of no immediate
concern to them. They will perhaps get along with their unwieldy
Congress and their dear two historical parties for a long time yet. The
British behind their silver streak had something of the same immunity
before the war. They were still in a phase of financial and economic
good luck. It is over for them now. In Britain politics have become
serious and vital, and under existing conditions the overstrained and
impoverished community can no longer suffer the elaborate fooleries of
party government.
Great Britain is in urgent need of competent representative government,
and the extent to which the Mother of Parliaments proves herself to be
a recuperative phœnix or an incurable old goose in this affair is a
matter of vital importance not only to the British Empire, but to the
whole world.
Nowadays we have fairly clear ideas of the nature of the supreme
governing body that is needed for a great and various modern State.
A single body seems to be all that is required; that a nation should
squint at its problems with two divergent bodies does not seem to
be imperative at all--though possibly a secondary body representing
function, and not locality, may be a desirable auxiliary to the supreme
assembly. About that supreme assembly we are now able to stipulate
certain necessary conditions. It must not be too large a body, because
that means an excess of inert and undistinguished members too numerous
and obscure to be properly watched, such as we find encumbering affairs
at Washington and Westminster, and at the same time it must be large
enough to staff all its necessary committees, and to represent the
chief varieties of opinion in the country. Something between two
hundred and three hundred members seems to be the proper assembly; less
may be unrepresentative, and more will develop crowd mentality. And the
members must be elected by the method of proportional representation,
and be sent up from twenty or thirty large constituencies--largely
to eliminate mere local leaders--each constituency returning a dozen
members or more. Only by this method of election can we kill that gag
upon honest democracy, the party system, and replace the professional
politician by a various gathering of typical and well-known men and
women. Such a body would change only slowly in its character from
election to election, and it would sustain a Government more real,
steadfast, representative, assured and consistent than any the world
has ever seen before.
Throughout the world a great and gathering body of opinion is moving
steadily towards such a conception of a modern Government. And because
of its present needs it is Great Britain which is likely to be for a
time the battleground between modern and eighteenth-century conceptions
of a legislative assembly.
It will be particularly interesting to watch the ingenuities of the
politicians in the new Parliament in producing schemes that will look
like electoral reform and yet leave the profession still active for
mischief. They will fight desperately against large constituencies
with numerous members. The one-member or two-member constituency is
absolutely necessary to their party system. In such constituencies even
proportional representation can be reduced to a farce. And also they
will offer cheap but attractive substitutes like the second ballot and
the alternative vote. And they will fake extraordinary arrangements by
which the voter will vote not for an individual but for a ticket or
bunch, and they will call these fakes this or that improved variety of
“proportional representation.” All the political parties in Britain are
at present trying to work out the probable effects of this or that fake
or cheap substitute for electoral honesty, upon the party prospects. In
this matter the Labour Party is as bad as any other party--or worse.
The discussion of electoral legislation in the Imperial Parliament
throughout the next session, though it may make the angels weep, is
certain to afford much entertainment to every mundane observer of human
disingenuousness.
XIX
SCRAPPING THE GOLD STANDARD
19.1.24
Among recent events of conspicuous importance is the publication of
a new book by Mr. J. M. Keynes, _A Tract on Monetary Reform_. Among
the large trivial happenings of the time, revolutions, movements of
crowned heads in and out of exile, new French alliances, and the antics
of eminent politicians, it is refreshing to have something of real
significance on which to make one’s weekly comments.
I incurred great odium a little while ago by saying that Mr. J. M.
Keynes could claim to have achieved success while at the same time I
excluded those popular heroes, Napoleon I and Mr. Lloyd George, from
the list of true successes. But here is a fresh book from Mr. Keynes,
simple, outspoken, well written, and making a definite step forward
in our understanding of the world’s problems. You might read all the
speeches and orations of Napoleon or Mr. Lloyd George through and
you will know no more about men and things than when you began; Mr.
Keynes will leave you different--enlightened. Mr. Keynes thinks with
scientific lucidity and says what he thinks exactly and skilfully.
What he says stands and will necessarily affect the history of money
in a real and permanent way. Did Napoleon ever say anything or has Mr.
Lloyd George ever said anything except what seemed likely to impress or
humbug people in general?
It is a peculiarity of the mind of Mr. Keynes that it is at once
penetrating and limited. He seems to think that the British Empire is
a permanent instead of a manifestly transitory arrangement and that
the United States of America and the Empire and the various States
of the European patchwork are always going to retain their sovereign
independence in financial and economic affairs. He assumes this much,
and never questions it. But within the limits of this assumption, he
writes with a lucidity and a frankness that are a liberal education for
the reader.
To write of currency is generally recognised as an objectionable, and
indeed almost as an indecent, practice. Editors will implore a writer
almost tearfully not to write about money. This is not because it is
an uninteresting subject, but because it is, and always has been, a
profoundly disturbing subject. The whole modern world has been brought
up on cash and on credit reckoned in terms of money. Four or five
generations of us have lived by the faith that a dollar was a dollar
and a pound a pound, and that if you left them about they grew at so
much per cent. per annum, and also increased in value. Most things
became cheaper and cheaper throughout our young lives. That cheapening
seemed in the nature of things. We worked for money; we saved the
stuff, we looked forward to a comfortable old age. Now we live in a
phase of fluctuating and on the whole mounting prices. Whosoever saveth
his money shall lose it. Even the dollar buys two things where ten
years ago it bought three. The pound sterling is in a worse case, and
many of the other currencies have sunken to levels beyond the wildest
fantasies of 1913.
Now this, as Mr. Keynes points out, is a breach of the understanding
between society and the common individual. In this system in which we
and our predecessors have lived for a century and more, the system
which Socialists will call the “Capitalist” system but which Mr. Keynes
much more properly calls the “Private Capitalist” system, there has
always been an implicit guarantee that the money we worked for and
saved up and lent and invested in various ways was _good_. It was
good for our needs whenever we chose to spend it again. This was the
incentive to work; this was the driving force of the whole hundred
years of industrial production from Waterloo to the Marne. And to a
large extent the incentive has gone. Money is no longer good; it has
become treacherous. Unless it can be restored this system of ours must
break down and lead either to social chaos and human decadence or to a
new and different system.
Now Mr. Keynes is not a Socialist. He believes that the existing
system of individual competition is “in accordance with human nature
and has great advantages.” But it cannot go on unless money is made
trustworthy again. And his proposals to restore our confidence in money
are very bold and remarkable indeed.
The vice, the almost incurable vice, of cash and credit systems, since
first the methods of money became dominant in the Roman Republic,
has been its tendency to expand debt to impossible dimensions. Every
country at the end of the war found itself owing preposterous sums
to the creditor class or to foreign countries, and forced in various
measure to tax the productive classes, to tax its creditor class either
directly by income-tax and capital levy, or indirectly by currency
inflation, and to bilk its foreign creditors. Every sovereign State in
Europe had its own policy and set about the business on its own lines,
with the result that to-day Europe is a museum of methods of economic
collapse, from Britain, crushed by taxation and unemployment in an
attempt to deflate back to the gold standard, to Germany, smashed into
complete economic paralysis by extreme currency inflation. No country
remains now with its currency based on a gold standard, not even the
United States of America. True, you can exchange dollar bills for gold
at Washington, but then you lose by the transaction. The United States
has over-bought gold and is still accumulating and hoarding gold--at a
loss. If all America’s hoarded gold were minted and circulated, the
value of the dollar would fall. The American dollar is the extreme
case of deflation, as the exploded German mark was the extreme case of
inflation.
Now what Mr. Keynes wants the world to do is to scrap gold altogether
as a monetary standard and to substitute a “managed” currency. For the
present he would have two independent units in the world, the dollar
and the pound, because he is sceptical of the Americans and British
ever working together without friction--even in so vitally important
a matter. In both the United States and Britain he would have the
banks and Treasury co-operating to keep in circulation such an amount
of currency as would maintain internal prices at a steady level. They
would decrease currency if prices fell, and increase it if they rose.
He would take the price of a “standard, composite commodity”--so much
steel, so much wheat, so much rice, so much rubber, and so on--and he
would make that the new standard of value. He believes that the other
currencies in the world would finally steady down into fairly stable
relations with the “managed” dollar and the “managed” pound. And then
we would go on again with our “Private Capitalism,” buying, selling,
saving, investing, competing, as we did in the happy days before the
war.
But there are certain curious implications in this. Mr. Keynes seems to
recognise them and yet not give them their full value. The underlying
assumption of Private Capitalism is that human beings will work better
for gain, will show more enterprise and industry for profit, than for
any other motive. But here, at the heart of the system, Mr. Keynes
proposes to establish a disinterested group of managers, bankers, and
officials who are not to accumulate private fortunes, though they could
do so very easily by playing with the fluctuations of prices, but with
a single-hearted devotion are just to maintain them for the public
good. He seems to realise the difficulty here. He insists at several
points that a system of Private Capitalism cannot survive without
moderation; that if private enterprise will insist upon gambling
upon the exchanges and working for profits regardless of any other
consideration, the whole system must collapse. But if we are to rely
upon the spirit of service and not upon the incentive of gain in our
banks and Treasury officials, why should we not rely upon it generally?
If currency can be “managed” in the public interest by men working, not
for profit, but for service, why not also the production of staples and
land and sea transport? But a system of economics run on the motive of
service is not individualism at all; it is Socialism.
I think that in the long run Mr. Keynes will be forced to realise this.
A “managed” currency is a long step towards a deliberately organised
world. The gold standard was the standard of individual enterprise and
go-as-you-please. The gold standard has failed and passes. Unless human
society is to fail also, the age of scientific management is close at
hand.
XX
THE HUB OF EUROPE: CZECHO-SLOVAKIA AND FRANCE
26.1.24
Bohemia within its mountains is like a square citadel in the very
centre of Europe. Czecho-Slovakia, the old Bohemian kingdom revived and
extended, is the most orderly and successful of all the States created
by the Treaty of Versailles. The republic understands the modern need
of advertisement; the wandering writer finds a flattering welcome
there, and what is done in Prague is heard of in the world.