HL Deb 20 March 1935 vol 96 cc177-260

LORD SANDERSON rose to move to resolve, That in view of the failure of the capitalist system adequately to utilise and organise natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, and believing that the cause of this failure lies in the private ownership and control of the means of production and distribution, this House declares that legislative effort should be directed to the gradual supersession of the capitalist system by an industrial and social order based on the public ownership and democratic control of the instruments of production and distribution.

The noble Lord said: My Lords, as far as I know there has never been a dis- cussion on Socialism pure and simple in your Lordships' House. On one occasion, on June 13, 1923, the late Lord Birkenhead did move a Motion on Socialism, but it was combined with another subject—namely, the question of the trade union political levy, and a great deal of the debate was on that second subject. I and my noble friends behind me thought that a discussion on Socialism would be useful both in your Lordships' House and in the country, because we think that our views are often very much misrepresented and often very much misunderstood. So we propose this afternoon to set before you as frankly and as clearly as we can the reasons why we object to the economic system under which we now live, and to put forward some of the steps we propose to take towards building up a new economic system and a new and better social order.

Twelve years ago to-day Viscount Snowden, who was then Mr. Philip Snowden, moved a Motion in another place on Socialism, and the Motion I have put down to-day is exactly the same Motion as that which Mr. Snowden moved minus a split infinitive. We consider that the Motion and the date, this being the twelfth anniversary, are both appropriate. The late Lord Melchett, then Sir Alfred Mond, in 1923 put down an Amendment to Mr. Snowden's Motion, and he argued very vigorously and very ably against Socialism; but he recognised that the present system was not perfect. In his Amendment he talked about the evil arising from waste and monopoly and talked of the necessity for social redress; I think these were the words that came into the Amendment. He thought the capitalist system could be improved and patched up. We believe that the capitalist system cannot be patched up, that it has broken down really beyond repair.

The noble Lord, Lord Mount Temple, has put down to my Motion a more optimistic Amendment than that proposed by Sir Alfred Mond. The noble Lord apparently thinks that the capitalist system has done very well in the past, and he thinks that it will serve us well in the future. We admit that during the 150 years since what is known as the industrial revolution or the age of machinery began, great advances have been made in human welfare, but that does not persuade us that the system is a good system. We think that people might have been much happier and greater advances might have been made under a different system. We do not think there is any future for Capitalism. We believe there is no hope of further advance under that system. Let us for a moment consider the twelve years that have passed since Mr. Snowdon moved his Motion. I do not think these twelve years are very hopeful with regard to the future of Capitalism. Unemployment has increased fifty per cent, since then. Our principal industries—mining, cotton, engineering, iron and steel—are all in a much worse condition than they were in 1923. Our foreign trade has fallen off enormously; and in that debate in another place in 1923 speaker after speaker maintained that the present system was essential for the maintenance of our foreign trade. There has been no improvement in our education, practically no improvement in the health services, the housing problem remains very far from solution, and the world under this system has gone through one of the worst slumps ever known. I may remind your Lordships that the supporters of the capitalist system have been in power most of the twelve years, so we do not think that the last twelve years hold out much promise for the future of the world under Capitalism.

Our first objection to the present system of Capitalism is that it brings about a very unequal distribution of wealth. All the means of production—the land, the raw material, and machinery—are owned by a small section of the population of the world, while the great mass of the people all over the world are poor people. The good things of life are preserved for the few and denied to the many. Take our own country. It is well known that the national income and the national wealth are very unequally distributed. A large part of it is in the hands of a very few people and the large majority of the working people have only a comparatively small amount. Very few members of the working class die leaving anything at all behind them. Some 75 to 80 per cent, of the population are weekly wage-earners. If a man can manage to earn £3 a week regularly all his life, working eight hours a day for it, with very few holidays and with an old age pension to look forward to when he is sixty-five or seventy, he is a very fortunate man among the working classes to-day. The great majority of that 75 per cent. are very much worse off than that. A few are no doubt better off, but they are very few. Why is it that these people have to live in that way? We believe that it is because they cannot get access to the means of production. They cannot get access to the land and capital, which is all owned and held by a comparatively few people. If the land and industrial capital were owned and controlled by the community it would be possible for the people to get access to them, and we could then solve the unemployment problem. The unemployment problem will never be solved under this system. The noble Earl, Lord Peel, has put down an Amendment in which he says that, even if our doctrines were partially adopted, unemployment would be greatly increased. I do not believe that. I believe it is only under Socialism that you can solve the unemployment problem.

Our second objection to the capitalist system is that we object to the motive under which industry is carried on—the motive of profit or profit-seeking. I do not say that profit-seeking is the only motive of industry, because I realise that unless you produce things the people will buy there would be no profits and no industry. But profit is the main motive of industry. Industry is carried on not to produce the services and goods which the people most need, but in order to produce the largest amount of profit. The object of industry is dividends rather than the goods and services which the community most need. Profit-seeking, first of all, does not give us many of the things we most need. If an industry is found unprofitable it is abandoned, no matter how much its products are needed. If a new industry is unlikely to be profitable it will not be started, no matter how much its products may be needed by the community. Profits do not give us the houses we want. It is not profitable to build houses, and the National Government are now engaged in subsidising industry after industry because the industries subsidised are not profitable enough to carry on without help. Again, the search for profit gives us a lot of things that we do not need, and would be much better without. It gives us bad whisky, and it gives us shoddy of all kinds. It gives us all sorts of things we could do quite well without, things I might describe as futilities or superfluities which we ought not to have as long as there are people in need of the necessaries of life.

Moreover, profit is dependent on scarcity. Abundance means less profit; so you must have scarcity. You have wheat being left to rot, rubber and cotton and coffee crops destroyed and fish thrown back into the sea or left to rot on the shore, simply because there is not enough profit from their sale, quite regardless of the fact that millions of people all over the world would be glad to have those things. Lastly, we object to profit because it creates a class of people who take a great deal more out of industry than they have ever put in—shareholders. I am not blaming any-body; I am one of them myself. We cannot help it, we are all caught up in the machine, but the machine has got to be scrapped all the same. These people take far more out of the common pot than they have ever put in, and the services they render are not anything like the equivalent of the reward they obtain. I shall be told that shareholders render important service to industry by lending their capital to industry without which it could not be carried on. That, of course, is perfectly true. But we claim that the reward they obtain is altogether out of proportion to the services they render, and altogether out of proportion to the services rendered by labour and the reward obtained by labour. A man may invest £1,000 in a mine and get£100 a year. All he has to do is to decide whether he shall spend his £1,000 or invest it—not a very great sacrifice. A miner may get £100 a year, but he has to hew coal eight hours a day to get his £100 a year, and there is no comparison between the two sacrifices.

I have stated as shortly as I can our principal objections to the present system. We object to the unequal distribution that it brings about. We object to the motive of profit, because it does not give us the things we need. It gives us the things we do not require, it is dependent on scarcity, and it creates a class whose rewards from industry far outweigh the value of their services. I have tried to put our objections to Capitalism very shortly, and I think your Lordships must agree that it is far from being a perfect system. There are at any rate imperfections in the system.

Now I am going to say something about the steps we wish to take towards building up a better system, but I want first to refer to the Amendment put down by the noble Lord, Lord Allen of Hurtwood. The noble Lord, I think, agrees with our criticism of Capitalism and he seems to agree with our suggested remedy. But lie wants no appeal to class hatred, he wants no threat of a financial and constitutional crisis. He does want an appeal to good will and intelligence. Well, I think I can reassure him on all those points. We make no appeal whatever to class hatred. We want no financial or constitutional crisis. If there is a financial and constitutional crisis it will not be of our making. It will not be the Labour Party which will bring about a financial and constitutional crisis. Of course, we appeal to men of good will and intelligence all the time, although I am never quite clear myself as to what is meant by a man of good will. I sometimes think when people talk about a man of good will that very often they mean a man who agrees with them. I am not suggesting that that is the noble Lord's interpretation of the phrase, but it is the interpretation of many people.

Next I come to the steps that we want to take. As income is so unequally distributed we naturally want to have income more equally distributed, and in order that that may be done we must nationalise what are usually called the means of production and distribution—that is, we must nationalise the banks and the principal industries. We should gradually go on to nationalise all industrial capital. I say gradually, but I must remind your Lordships that the author of the phrase "the inevitability of gradualness" himself pointed out that "gradualness" does not necessarily mean "slowness." We should nationalise what I call industrial capital, but that does not mean that we propose to nationalise all private property.

There are two kinds of property. There is property which enables a man to obtain an income from the labour of other people, and there is property which helps him in his own labour. To the second kind of property we have no objection. There is no reason why a man should not own his house and his garden and the tools he requires, so long as he does not exploit other people. But we do object to the kind of capital which enables a man to sit down and smoke his pipe all day while he watches another man dig in order to support him. I do not say that all property owners sit and smoke their pipes all day. I know many of them do very good voluntary work, and very good paid work too. What we do say is that as property owners they are overpaid for that work.

Another thing that nationalisation does not mean is this. It does not mean that industry would all be run from Whitehall like the Post Office. Not at all. There are all sorts of different methods of administration which could be adopted, all sorts of methods of decentralisation, and in the case of each industry we should adopt the form of decentralisation best suited to that industry, which would be carried on largely by the people who understand it—probably by the people who work it now—and carried on by people who know the locality in which it is carried on now. Private enterprises at the present time are not all carried on by the same methods of administration, and there are some semi-public enterprises which are being carried on by different administrative methods, such as the London Passenger Transport Board, the Central Electricity Board, the British Broadcasting Corporation and so on.

Then, too, a large number of municipalities carry on a great many industries with no connection with Whitehall. I think the noble and learned Viscount on the Woolsack brought in a scheme—I do not know whether he actually produced it himself or whether he adopted one produced by Sir Arthur Duckham—for the nationalisation of the mines which had no connection with Whitehall at all. It was conceived on quite different lines from the administration of the Post Office. It is perfectly possible to carry on industries in all sorts of different ways. No one need be afraid of Socialism for fear that it would become a stereotyped bureaucracy. There is no real danger of that. But we must get rid of the motive of profit, and you cannot do that until industry is nationalised. When industry is nationalised, industry must be carried on as a profession by salaried people. We hear talk about the fear of officialdom, but after all industry in the main is carried on now by officials—by managers and other people who really are officials paid by their directors and shareholders. There is nothing new in that. We want industry carried on as a profession and the only difference would be that the people carrying it on would be paid by the State instead of by capitalists.

I have no doubt I shall be told—I am sure the noble Lord, Lord Mount Temple, is going to tell me, and I think from reading his Amendment that the noble Marquess, Lord Lothian, also is going to tell me—that if we make industry a profession and do away with the economic or profit motive, we shall destroy all initiative and enterprise in industry. On that point I would ask your Lordships to consider the amount of good work that is being done at the present time quite apart from the profit motive. Think of the magnificent work clone by our civil servants, by the teaching profession, by men of science, by the Army and Navy, by ministers of religion, by the great nursing profession. They are all doing excellent work where there are really no great financial rewards at all. Why cannot that principle be extended to other callings? We believe it can. I will ask you again, my Lords, to consider this point: Do the people who show the initiative in industry get the rewards? I doubt it. It is a matter of common knowledge that inventors, to whom we owe so much of our industrial progress and progress of all kinds, almost invariably die poor. Probably a great deal of enterprise is due to the managers of industry, but they get no great financial rewards for their enterprise. The rewards of enterprise go in the main to the shareholders, who show no enterprise whatever; they know nothing about industry and take no part in its administration.

I now come to the question of compensation. When we take over the industrial capital we shall compensate the owners, but we shall not give them—at least according to my own view I do not know whether my noble friends will all quite follow me here—large capital sums from which they can draw the capital value of their shares or large incomes in perpetuity, indefinitely or for some long period, and hand them on to their descendants. We shall give them -what will be a reasonable expectation of income for life in the form of life annuities. As we cannot transfer industry to the State all at once, it would be unfair to give a certain number of people life annuities while leaving other people to hand on their money to their sons. We should therefore accompany the change-over with a drastic reform of the law of inheritance. The right of bequest would have to be very strictly limited.

I come now to the question of the distribution of income. Of course, with industry in the hands of the State and carried on as a profession the State could distribute income pretty much as it liked. I know the view of the orthodox economists is that industry is carried on now in such a way that each person who takes part in it obtains roughly the value of his product in money. I do not believe that; I am quite sure that this view is wrong. It is quite impossible for people to get the value of their products in money or in anything else, because nobody knows what the value of their products is. Where you have so many factors engaged in industry, it is impossible to discover how much value is contributed to the product by any one factor. How can you decide how much value is contributed to a packet of cigarettes by a girl who works a machine which puts the labels on; how much by the machine; how much by the manager of the factory, and so on? You cannot do it; you cannot justly distribute income on that method. You may say you can distribute it according to merit, but who is to be the judge of merit? You might distribute according to ability, but in that case the stupid man might starve, and why should the stupid man need less than the clever man?

The only just and proper way of distributing income is according to needs. I have never been able to see why one family needs more of the necessaries of life—that is food, clothing, shelter and warmth—than another family, apart from the size of the family. I do not know why one set of people needs more luxuries than another. I am sure, then, that the only proper method is according to needs. Tinder Socialism we, should gradually work towards distribution according to needs. As people's needs for the necessaries of life and the ordinary luxuries of life are quite equal, and as I cannot see why one family should require more than another, distribution according to needs would therefore mean equal distribution of income. What does a main need more than sufficient to enable him to do his work well?—given the necessary leisure, of course. There you get the difference: people require different apparatus for their work, so you would have to give everyone the apparatus, the tools, the implements and the surroundings necessary to enable him to do his work well. The apparatus of a doctor would be different from that required by a miner or a railway porter. What we should have to do would therefore be to give every family its equal share of the national income, and every worker should in addition have the use or ownership of his apparatus of work.

Under Socialism we should, of course, aim at other forms of equality. There would be equal opportunities for education, equal rights to the use of the health services, and equal rights to the good things of life generally. It is only with equality of income that you would get rid of class distinctions, which are really a glaring blot on the social system and which exist mainly owing to inequality of income. I believe that under Socialism, with industry properly organised on a definite reasonable plan, we could produce all we want in a very short working day. There would be employment for everybody; there must be plenty of employment for people until everybody's demand for everything is satiated, which seems to be a very long way off. You would have a great deal more leisure amongst the people, which would be a very good thing. Perhaps we might at last learn that work is not the only thing worth living for, and become a nation which is able to play.

I have tried to give your Lordships just an outline of the kind of steps we want to take and the kind of society we want to see. It is a very meagre outline, I know; I have stated it very inadequately and left many gaps. Those gaps, however, my noble friends behind me will, I am sure, be able to fill in the course of the debate. When everybody is working for the common good, everybody is contributing his share, and everybody has a right to the good things of life, I believe we shall have a much happier community than we have now. The comfort able classes might not be quite so comfortable as they are now; I do not think that would very much matter, because, although they might not be quite so comfortable, they would be very much happier. I am sure your Lordships will agree with me that our pleasure in and our enjoyment of the comfortable lives we live now are often marred by the thought that those lives are only made possible by the hard toil of men and women very much poorer than ourselves—men and women who can never enjoy the good things that we have in such abundance. We want the change to come peacefully. The present system will not be tolerated much longer. The change is bound to come, but we want it to come peacefully, and we believe that with a little forethought, a little give and take, and common sense on all sides, it can come peacefully and be to the benefit of mankind. I beg to move the Motion standing in my name.

Moved to resolve, That in view of the failure of the capitalist system adequately to utilise and organise natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, and believing that the cause of this failure lies in the private ownership and control of the means of production and distribution, this House declares that legislative effort should be directed to the gradual supersession of the capitalist system by an industrial and social order based on the public ownership and democratic control of the instruments of production and distribution.—(Lord Sanderson.)

LORD MOUNT TEMPLE had given Notice of an Amendment to leave out all the words after "That," and insert "this House, believing that the abolition of private enterprise in the means of production and distribution would impoverish the people and aggravate existing evils, is unalterably opposed to any scheme of legislation which would deprive the State of the benefits of individual initiative; and being convinced that Capitalism, which has proved itself capable of being adapted to the needs of the people, has immeasurably raised the standard of living of all classes, reduced hours of labour, increased wages, added to the amenities of life, raised the standard of education, declines to substitute for this well-tried system one which is purely speculative and would be found impracticable and oppressive in operation."

The noble Lord said: My Lords, I am sure I shall be voicing the feelings of everybody present when I congratulate the noble Lord on the clear statement which he has just delivered, especially as, unfortunately, he has to address your Lordships' House without the use of any notes, and therefore we are all the more impressed with his arguments. The speech of Lord Sanderson shows the difficulty there is in dealing with the advocates of Socialism. He comes here and coos gently as a turtle-dove. He says, in effect: "You have got your house, your land and your garden, and under a milk-and-water Socialism we will nationalise your land, your shipping and other things." But does he ever go on to Tower Hill, or into Hyde Park, on Sunday or Monday mornings, and listen to the Socialist orators there? Their programme is very different from that which he has presented this afternoon, and I would rather take what they say as representing the Labour Socialist policy, than what he may say, or what his friends who sit on the Benches in this House may say after him. If you go into another place the Socialism which is expounded there is a very different thing to that which he has expounded to us, and therefore I ask your Lordships, in this debate, not to be led away by the plausible statement which the noble Lord has made, but to keep firmly fixed in your minds what are the principles of Socialism, and what are the proposals of the Socialist Party.

To my mind the Socialist Party have never strayed away from the thesis of Karl Marx, which is that "under Capitalism the poor would grow poorer and the rich grow richer." That is a cardinal article of faith with the Socialist Party, and anything more ridiculously untrue I cannot imagine, as I will show to your Lordships later on in my remarks. At any rate, actuated by that thesis, they have adopted times out of number the comprehensive and all-embracing formula that as soon as possible nationalisation must be applied to production, distribution and exchange. I am not misrepresenting the Party when I say that, because that has been inscribed on their banners for some considerable time, and they have taken the trouble to underline that proposal, which is the fundamental principle of Socialism, at the Labour Party Conference at Hastings in 1933, and the Southport Conference in 1934. Therefore it is no good coming here and giving this milk-and-water exposition of Socialism. We have it that as soon as possible, without delay, you have to nationalise the means of production, distribution and exchange.

Lord Marley and others applaud those sentiments, and therefore that noble Lord does not agree with the noble Lord who moved this Motion. Tot homines, quot sententive. They have as many voices as there are members in their Party, and we must come to bed-rock facts, and not be led away by the speech of the mover of the Resolution.

LORD MARLEY

You will see that the words "means of production and distribution" are in the Motion.

LORD MOUNT TEMPLE

That means that as soon as possible, if you have a Labour majority in another place, you will nationalise the land, the mines, transport, the banks, shipping and railways.

LORD MARLEY

Hear, hear.

LORD MOUNT TEMPLE

I am not sure about the railways. The Labour Party were very hot about the nationalisation of the railways a short time ago, when the railways were prosperous, but as soon as the railways ceased to pay I noticed that they were not so anxious to push it, and it was put into the background. No doubt when the railways become more prosperous they will move it further forward in their programme. That means that all the great industries of this country, and the minor ones too, in time, will be taken from the people who own them and who work them, and will be handed over to the State to work, and of course own, too. And it must be by a Government Department and nobody else. I disagree with the mover of the Motion that you can work all the great industries by a board such as the London Transport Board, for instance; because where does their democratic control come in, which we hear so much about from the Labour Party? If you are going to hand over these great industries to some board or other, more or less independent, where is your democratic control? You have got to hand them over to a Government Department created specially for the purpose.

The next point which I would put to your Lordships is this: Is our property going to be stolen, or are we going to have full compensation paid to us, or partial compensation? Lord Sanderson comes down on partial compensation. Personally, I would much rather, if my property is going to be stolen, that it should be stolen out and out, than that I should be insulted by being offered 10 or 20 per cent. of the value of my property. If the State takes it over the State must pay full compensation, or if it is thought that we are robbers, or enjoy something which we or our ancestors have stolen, then, to be logical, the State should take it away, and pay us a dole, if any dole exists in those days. If you are going to take away without compensation, that is stealing. It is calculated that if all private property were taken over by the State a family of four, after the transfer was made, would have a net addition of 5s. a week to their income. That is a calculation which, of course, may be questioned, but several independent investigators have arrived at that conclusion. Thus the net increase of income to each individual in that family of four would be is. ad. a week. Is it worth while to break the Eighth Commandment for is. 3d. a week? If on the other hand you give full compensation, as many of the more enlightened members of the Socialist Party suggest, then where are you? You have not got a Socialist State. The money given to the people dispossessed of their land or mines, or whatever it is, would be there, and they would have to invest it in some enterprise or other. If it is lent to the State you have a new rentier class, and you are just where you were before. In short, you either have to have a rentier class or you simply have to steal.

The best example of Socialism in practice is, of course, Russia. I do not wish to turn this into a Russian debate, of which your Lordships no doubt have had enough for the time being, hut at any rate there you have the pure milk of Socialism being imbibed, willingly or unwillingly, by all classes. You have want and misery, and you have State bankruptcy existing in the only completely Socialist country in the world. And if noble Lords opposite think that Socialism there is such a success I suggest that they should cease attending this House, lay their titles aside, and go and live in Moscow or Leningrad. They would then see how they like Socialism in full practice. What better proof can there be of the failure of Socialism than Russia?—Russia with its enormous mineral and other resources, which spends its time now coming to this effete old country, this country ruled by individualism, and imploring us to grant it a loan. If Socialism is such a success there, why do they come here and offer to pay 7½ per cent. for loans?—although they might just as well say 10 per cent. or 20 per cent., because we know that they would not carry out their promise to pay 7½ per cent., as we know very well from our experience of the debts already owed?

The noble Lord, Lord Sanderson, mentioned the Post Office, and said we must not imagine that Socialism would mean having a large number of industries managed as the Post Office is managed. I disagree. It seems to me that you must have State Departments to run these things in order to secure democratic control by Parliament in the interests of the electors. Many people would say: "Well, I do not mind so much; the Post Office is not badly run." It depends, of course, upon the angle from which you approach the question. If you approach it from the departmental point of view I admit that the Post Office, especially as regards the sending of letters, carries on its work fairly efficiently. But can you look at this matter only from the departmental point of view? The person who is really concerned is the consumer, and from the consumer's point of view our Post Office is not at all a success. We all know that the consumer pays three halfpence to send a letter, whereas the cost to the Post Office is less than one penny. But what I object to in the Post Office—and this would be characteristic of these Government Departments—is the autocratic way in which the public is treated. If any noble Lord queries his telephone bill, what happens? You are told: "There is the bill, there are the items: you have got to pay up." They will not allow any question as to the accuracy or inaccuracy of the number of calls set down. "And what is more, if you do not pay up," they say, "we will cut you off and deny you any further service." There is a small foretaste of what Socialism would be. And, mind you, when people say that the Post Office pays, I would undertake to run any Government trading department at a profit if two conditions were present—namely, that one had a monopoly, as the Post Office has, and that it dealt in a necessity of life, as the Post Office does. If you have a monopoly of a necessity of life, obviously you can make it a success—but at the expense of the consumer.

May I put this to your Lordships, and I do not think I am overdrawing the picture: under Socialism we shall be compelled to eat, to drink, to read and to wear only what is supplied to us by the State. There would be no competition—the essence of Socialism is not to allow any private competition—and no attempt to meet individual tastes. Come down to realities and take the Post Office as an example of what Socialism would be if applied to all industries. Take a town of 6,000 or 7,000 inhabitants. At present such a town has one post office. Naturally, the Post Office is not going to have more than the absolute minimum necessary to carry on the business, so they would not have three or four post offices in the town. But if you were dealing with the boot trade, would you have under Socialism three or four boot shops in the town as there are at the present time, where people can go and have a choice of footgear, and, if they do not like the price, go from one shop to another? The Boot Department of the Socialist Government would have one shop in that town, as we have one post office now, and people would have to walk a mile or two miles to that shop, and they would not be able to choose exactly what they like. They would not be able to order the boots they wanted, they would have to take the boots supplied by the Government and at the price settled by the Government.

Take another point of view—and I would like noble Lords opposite (say the noble Lord, Lord Marley) to deal with it. What about the working man, what about the man employed by the Post Office? At present if an employee of the Post Office, for a good or bad reason, loses his job, he cannot go anywhere else in this country and get employment in the Post Office. His name is on the black list, and he has to go and seek employment from some private firm. Well, what would happen when you have nationalised all the industries? Suppose this wretched man, from no fault whatever of his own, got dismissed from the Government service, where could he go? There is no private service, because it is not allowed. Everything is the monopoly of the Government. He would not be taken on again by the Government in another branch because be proved himself, in their opinion, unfit to have a position of trust in the country. What are you going to do with him? Are you going to give him an old age pension or the "dole," as you give the unfortunate men who cannot find work? Surely you cannot do that for him. You have got to treat him worse. Are you going to send him to some concentration camp, to be employed on forced labour? He could not be allowed to starve. I would ask noble Lords to deal specifically with that point when they come to speak. What is going to happen under Socialism to a State employee who loses his job? I think that is a very important point.

Now, my Lords, if you will allow me, I would like to deal for a few minutes with another form of State Socialism. This form is not nearly so complete as the one outlined by the noble Lord who moved the Motion, but still it is of great importance as a finger-post to point to what would be the result of full Socialism in this country. I refer, of course, to the semi-Socialism which has spread all over the world, where a State Department is set up, with taxes and the Exchequer behind it, in order to compete with private enterprise. The great outstanding examples of this are the railways and shipping. Let me deal with shipping. After the War, when the States had done very good business with their State shipping, they continued it in peace time and under peace conditions; and France, Australia, Canada, and the United States of America set up State fleets to compete with private enterprise. Where are they all now? So far as know, they are practically all gone, and they have cost hundreds of millions to the taxpayers in the stupid countries where shipping was a State trade.

Let me deal with the railways. Canada, Australia, New Zealand, South Africa, France, and. many other countries have operated State railways. Many State railways still exist, but very few of them have ever shown a profit to the State. They have nearly always been run at a loss. When you see what happened to the shipping and to the railways, when you see what happened in Queensland, where banking, mines, hotels and refreshment rooms were run by the State in opposition to private enterprise, when you see the bankruptcy that came to Queensland because of these vagaries, surely noble Lords opposite ought to hesitate a thousand times before they suggest that we should change our well-tried system for these will-o'-the-wisps which only bring losses to the taxpayers of the respective countries.

Now it may be said: "Well, that may be so, but why should State enterprise, in your opinion, be unsuccessful in this country and in other countries?" State enterprise would mean that the various industries would be run by the British Civil Service. I have had a little experience, although not as much as many of your Lordships, of the British Civil Service, and I say unhesitatingly that, go the world over, in private enterprise or in public enterprise, you will not find a. higher level of intelligence and devotion to duty than you find in the British Civil Service. In anything I may say I do hope that any members of the Civil Service who are friends of mine will not think I am saying anything personal to them or running down their abilities. It is the system under which they work that makes it impossible for them to compete with private enterprise, where there is more responsibility assumed by heads of departments and even by low officials than is possible in a Government Department.

I will tell you why I think that the Civil Service could not compete successfully with private enterprise if it were put on equal terms. I say unhesitatingly that it is because nationalisation is unprogressive, and must be unprogressive. It is unenterprising and uninventive. It tends to level down and not to level up. I think that is absolutely true. You will find in a State Department that the pace of the slowest and the most stupid tends to become the pace of the quickest and the most able. Nationalisation deprives the individual of the hope of reward, and when individual profits are eliminated you can put up the shutter on efficiency. It induces a spirit of routine and red tape. It is slow—and this is very true—to introduce improved methods. A Government Department does not like to run any risks or to take any chances; it likes to go on the broad, straight, uninteresting and thirty-mile-limit path which is safest for the reputation of those who have to run the enterprise. There is no personal incentive to check waste and extravagance—an important point, my Lords. A Government Department is exposed to political influence, and under the noble Lord's suggestion of democratic control it would be very much exposed to political interference. A Government Department takes months to come to decisions which a private firm or individual would take in a few days. In private enterprise the test of the profit and loss account is always conclusive, whereas in a State enterprise the prevailing influences conspire to obscure it.

Those are some of the disadvantages of Socialism. Now, who are the people who advocate Socialism? It is largely advocated by people who are frankly jealous of those who are better off, by those who are jealous of the success of the captains of industry and jealous of the position of a man who has done good county work. It is also advocated by people who have never run, and will never be able to run, a business themselves. As a Party, it is advocated by noble Lords opposite. As a Party they have shown themselves pathetically incompetent to run the Government. When they were in office from 1929 to 1931 they squandered £192,000,000 of public money in wasteful public works. What was the result? Was employment increased or unemployment decreased? Not at all. While they were in office the number of unemployed rose, in two and a half years, from 1,100,000 to 2,700,000; that is to say, it more than doubled. When the noble Lords opposite came into office there were two unemployed, as compared with five unemployed when they ran away from office in the summer of 1931. On the other hand, the present Government, who adhere to worn-out decrepit political theories, who, according to noble Lords opposite, are troglodites who cannot see further than the end of their noses, have during their term of office reduced unemployment by 600,000. If the two are compared, can you wonder that many people are very loth to accept the panacea offered by the noble Lord? No, my Lords, I refuse to see any virtue in a State system which would deprive us of liberty and would convert us into a number of dull, mechanical units performing our allotted task without ambition or hope.

I will not keep your Lordships very much longer, but I should like now to leave the fallacies of Karl Marx and his disciples and put before your Lordships a picture of what Individualism and Capitalism—I am not afraid of the word "Capitalism" but am proud of it for the great things Capitalism has done—have done not only for the worker and the rich man, but for the country as a whole during the last 100 years. Our present economic system is of course not perfect. Nothing that is human is perfect. As soon as we get up to one rise, and do away with one injustice, another appears in the hills in front of us and we must always go on trying to improve within the ambit of the present economic system. But what has happened during the last 100 years under Capitalism? I should like some noble Lord to deal with these figures, because they are very remarkable, very stupendous, almost un-believable. In the last 100 years under Capitalism wages have trebled, working hours per week have fallen from sixty to forty-six; the expenditure on Poor Law relief has doubled; expenditure on education has risen from a few hundred pounds in 1835 to over £100 millions in 1935. The population has increased from 16,000,000 to 45,000,000; the death-rate has been halved.

The small investor, a class non-existent a hundred years ago, has now in the Post Office Savings Bank, in insurance societies, in trustees savings banks, in savings certificates and in other thrift agencies £3,000,000,000 sterling—enough money to carry on the government of this country for three years if it were necessary to turn to that source of income. What is the position of the wage-earner? He is now insured against ill-health and loss of work; in his old age he receives a pension; millions own their houses. There has been a great improvement in health, housing, education, food, clothing, and amusements. Under Capitalism the motor car, the wireless, the popular Press—if that is really a blessing, I do not know—the cinema, the gramophone, unknown a hundred years ago, are at the service of the people; and the crowning achievement of Capitalism, which has made us one of the richest nations on earth, is that Capitalism has made us the financial centre of the world.

To sum up. The real issue in my opinion between Capitalism and Socialism—and I give it with great deference for your consideration—is this: which system will work for the greatest good of the greatest number? In view of the facts I have given about Capitalism, can there possibly be any doubt? I have endeavoured to show that wherever Socialism or State trading enterprise has been tried it has been a complete and utter failure, as in Russia, Australia, and other countries, to which of course may be added, though it is some time ago, France after the great Revolution of 1792. Wherever these experiments have been tried they have done varying degrees of harm, but here the results would be too fearful to contemplate, with our world-wide financial commitments, our dependence on export trade, our huge urban population, and, above all, our dependence on imports from overseas for our food supplies. We are going to have a. General Election next year. It is up to every man who wishes for the prosperity of this old country of ours to work between now and then as hard as he can. It is often said that this or that Election is the most important in the history of the old country. I say unhesitatingly that the next Election will be far the roost important Election we have ever had in this country, because these two great ideals of Individualism and Socialism must clash, and in my opinion, if they clash to the detriment of Individualism, God help the country. I beg to move.

Amendment moved— Leave out all the words after ("That"), and insert ("this House believing that the abolition of private enterprise in the means of production and distribution would impoverish the people and aggravate existing evils, is unalterably opposed to any scheme of legislation which would deprive the State of the benefits of individual initiative; and being convinced that Capitalism, which has proved itself capable of being adapted to the needs of the people, has immeasurably raised the standard of living of all classes, reduced hours of labour, increased wages, added to the amenities of lice, raised the standard of education, declines to substitute for this well-tried system one which is purely speculative and would be found impracticable and oppressive in operation.")—(Lord Mount Temple.)

LORD TEMPLEMORE

My Lords, the noble Lord who introduced this Motion spoke with great force and, as one would expect, with great knowledge of his subject. He rightly pointed out to your Lordships that this Motion is in exactly the same terms, with the exception of the split infinitive on which I congratulate him and the Party opposite, as the Motion which was moved exactly twelve years ago to-day by the noble Viscount who usually sits on the Cross Benches when he attends this House. Referring to the noble Viscount, Lord Snowden, I must say that I observe with great disappointment that he is not in his place to-day. I should very much have liked to have seen him here, agreeing or otherwise with his former colleagues.

At the outset of my speech, I should like to say that this, of course, is an academic Motion. It is not at the moment practical politics, and there may be, and no doubt are, differences of opinion in the ranks of a Government formed like this one, a National Government; but speaking as I do to-day on my own behalf, I desire to give an unhesitating negative to the Resolution which has been proposed by the noble Lord, Lord Sanderson. I do not stand here in any way in a white sheet bewailing the failure of Capitalism. I believe in Capitalism. I believe it has done wonderful things for this country and, properly controlled and brought up to modern standards, it will do still more. I think it would be the height of folly for us to depart into the nebulous realms of Socialism, which has always been, as I propose to show, a failure wherever it has been tried, and whose adoption in this country would leave the state of this country, and indeed of the world, a great deal worse than it is at the present moment.

I must join issue, to start with, with two remarks which the noble Lord, Lord Sanderson, made. He said he did not like shareholders; the Party opposite did not like shareholders because they did not give value for services rendered in the particular businesses in which they held shares. Of course they do not. What are shareholders? They are not only people of what is called the rentier class who sit down with pensions and do not do very much else except draw their dividends. Shareholders are, in addition, professional men, soldiers and sailors, doctors, lawyers, and members of your Lordships' House, and I do not think anyone could accuse members of your Lordships' House of being idle men. Of course shareholders do not work in the businesses in which they hold their shares, but their capital goes to support those industries, and I really cannot see much objection in that. Then the noble Lord said that he thought owners of property were overpaid. A good many of your Lordships are landowners—I am one myself in a small way—but I never really heard it laid down even by Socialists that the landowner was overpaid.

The noble Lord mentioned a great many evils from which he said the people suffered owing to our social system, but he omitted to state the very large benefits which have accrued to the working classes during the period, say, of the last ten years. I have obtained a few figures with which I shall keep your Lordships for a few moments, though I do not propose to put before you many figures. Let us take the cost of living. It stood in 1924 at the index figure of 175; in 1934 it had fallen to 141. The number of insured workers in employment in Great Britain in 1924 was 9.53 millions and in 1934 10.14 millions. The average daily amount of postal receipts—a pretty good gauge of the country's prosperity—was in 1924 £114,618 and in 1934 it had risen to £137,582. Again, take the amount received from depositors in the Post Office Savings Bank. In 1924 the amount of deposits received was £81,056,000, and in 1934 it was £94,758,000.

The noble Lord, I think, said that there had been no improvement in the health services. I think he used those words, or words very like them. I can only say that in a statement made on the 20th of June last year, during the debate on the Vote for the Ministry of Health in the House of Commons, the Minister of Health stated that during the last ten years, owing to the improvement in the infant death-rate, we have saved 40,000 more infants under one every year than we were saving at the beginning of the century and the figures for the ten years at the beginning of the century were a great improvement on those of any preceding such period. He also stated that in the last fifteen years we have cut down the death-rate of children under five years of age from the three diseases most fatal to children —namely, bronchitis, diarrhœa and measles—by more than half, and also that where one person died of whooping-cough in 1932, nearly four died at the beginning of the century; where four died of diphtheria at the beginning of the century only one died in 1932; while of scarlet fever where one died in 1932 over seven were dying at the beginning of the century. The most remarkable scientific result of all was shown by the fact that where twenty-two people died of typhoid fever at the beginning of the century only one died in 1932. I think those figures are a very good example of the improvement which has been made in the health services of this country under the despised capitalist system.

My noble friend Lord Mount Temple, whom I should like, if he will allow me, to congratulate on his very excellent speech, went into a few figures regarding certain Socialist enterprises which had been started in different countries, and, with your Lordships' permission, I propose to go into them in a little more detail. Shipping appears for some reason or other to have been a very favourite subject on which to try the tenets of Socialism. State shipping has been tried by the United States, by France, by Canada and by Australia. The United States started State shipping in 1916. and from 1916 to 1930 the taxpayer of the United States is reckoned to have lost no less than £670,000,000 in State-controlled shipping. Take France, which in 1919 formed a merchant fleet called the French State Merchant Fleet. I see that from 1919 to 1924, when this unfortunate fleet was given up, the French taxpayer lost no less than £43,000,000 in capital losses over and above annual losses on the fleet. Australia affords a very striking, example as regards national shipping. From 1916 to 1928, when the vessels were sold, the losses to the Australian taxpayers amounted to £14,500,000.

Let us take railways. It is well known that the main reason why the Australian States cannot balance their Budgets is to be found in the heavy losses on the railways. The total loss from 1915 to 1932 on the Australian State Railways is reckoned to have been £81,000,000. The loss on the French State Railways which have now been under Government control for twenty-one years amounted up to two years ago, which is the latest date at which figures are available, to £32,000,000, and the loss was supposed to be increasing by £80,000 per day. I think a good many of your Lordships will have travelled in France on the well-known Western Railway, which was always under State control, and I think you will agree that it is the very worst managed concern you could possibly imagine. So much for the railways. Then take State trading. Outside Russia, no country has experimented more, for some reason or other, in schemes of nationalisation and State trading than Australia, and such experiments have been tried as the public ownership of mines, cattle stations, timber yards, electricity, banking, hotels and other enterprises, and in the majority of cases the result has been a hopeless loss to the taxpayers. In very nearly every case these concerns, when they are "broke,'' are handed back to private enterprise.

I cannot believe that you can graft a system of State Socialism such as is proposed on to a nation when it is entirely at variance with its nature and customs. This country is a very individualist country. We dislike instinctively—I am afraid we have to put up with it a good deal more than we did—having our lives ordered for us by officials. I am glad to have the concurrence of the noble Lord, Lord Strabolgi, on that. That would have to be the case in a very much larger degree under any system of Socialism. Who are the really rich men in this country to-day? If you look round you will see that very nearly all of them are men who started in the world with very little and who, by their hard work, by their immense energy and by their foresight, have created the big businesses that you see in the country to-day. As an example of such a business as I have in mind I would quote the great concern which is now presided over by the noble Marquess who leads the Liberal Party (the Marquess of Reading). It was started sixty years ago by Mr. Brunner and the grandfather of my noble friend Lord Melchett, who I regret not to see in his place. That would not have been possible under a Socialistic State, because you could not have got anybody to take the risks that these young men took in those days, or, if the State took the risk and the concern failed, the loss would fall on the nation—that is, on the taxpayer. It is quite a fallacy, I think, to say, as Socialists do say, that men would work better for the State than they do for private individuals. The advantage of the capitalist system, as I see it, is that if a concern fails it goes to the wall, it goes into bankruptcy, and, therefore, you root out automatically inefficiency from your trade system. It may be a harsh system, but it is a system that has served this country very well for very many hundreds of years, and I think it would be a great pity to change it.

Then take the matter from the political point of view. Under the capitalist system, people sometimes say that unless you start with advantages of family connections or immense wealth or something of that kind you cannot get on in politics. Whenever they say that to me, I point to the Labour Governments who held office in 1924 and in 1929–31. Most of them were men who started with no natural advantages at all, and rose to the highest positions in the State. I have a particular example in my mind, the noble Lord, Lord Snell, who has left his place for a moment. The noble Lord, Lord Snell, started with no advantages whatever. He has been a member of Parliament, he is now a respected member of your Lordships' House, he has been an Under-Secretary of State in one of the principal Departments of Government, and he is now Chairman of the London County Council, the greatest municipality in the world.

I would ask noble Lords opposite a question, and I hope we shall get an answer to it, for I believe a certain number of them are going to speak in the debate. The noble Lord, Lord Sanderson, said in his opening remarks that they were going to take over various industries. The question to which I should like an answer is: how are they going to do it? I see that the Motion refers to "gradual supersession." As I understand the word "gradual"—though as my noble friend below the gangway said Socialist orators are not always agreed about this—it means that you are going to start with certain industries, say banks and coal mines, to take two at a venture. You are going to take them over and put in Socialist officials to run them. Of course it is going to take a. little time to do that. Meanwhile the other industries of this country are apparently to carry on working for profit under the capitalist system. This House, if it proves at all obstructive, is to be abolished, and I understand from Sir Stafford Cripps and some of the more extreme members of the Party opposite, that even the House of Commons is not going to be allowed to function too much, because I gather that it is only going to be allowed to meet in order to register the decrees of the Government, and the country is going to be run by Orders-in Council.

I should very much like to know from noble Lords opposite what they think would be the state of those various other industries, which would be very much like ducks running about the farmyard waiting for the farmer's wife to wring their necks. I venture to think that the state of those industries would not be very enviable, either for the shareholders or for the taxpayers of the country. About two or three weeks ago we had a sort of semi-crisis, semi-panic in the City of London. We are used to these things in these days. A few years ago—certainly before the War—it would have been a very much worse crisis. But we are used to these things now, and Consols merely dropped 1½ to 2 points, which is considered nothing in these times. What was the reason for that panic? People talked about pepper and there were rumours about a new Stavisky scandal. There was an unfortunate by-election at Wavertree, and people said that was the reason. I do not believe it for a moment. What I think was the real reason was that certain newspapers who are not over-friendly to this Government spread a rumour on a Sunday that there was a crisis and disagreement in the Cabinet and that a General Election might be imminent.

The mere suggestion that this might be so and that the Party represented by noble Lords opposite might come into power was sufficient to cause this small crisis. That was not caused by the wicked Tory Party. It was caused by small investors and foreigners who took their money away. If the Party represented by noble Lords opposite came into office with their policy of spoliation—for it is nothing else—I venture to suggest that the consequences to this country might be very serious indeed. I have purposely not mentioned Russia in my speech because we are all rather inclined perhaps to get heated when we talk about Russia, and I did not wish my remarks to be acrimonious.

LORD STRABOLGI

Your colleague is on the way there.

LORD TEMPLEMORE

I would only say about Russia that the new system which the rulers of Russia are imposing on the country, the effects of which we have yet to see, is designed—to put it very mildly—to cause an immense amount of inconvenience and suffering to the people of Russia. I warn noble Lords opposite that if they and their Party imposed even one-hundredth of these inconveniences and ills upon the people of this country they would be driven from office in a very short time by an infuriated people. To borrow language from across the Atlantic, they would be told that that was where they would get off. I must not detain your Lordships much longer. I have done my best to show that in my opinion Socialism where it has been tried has been a complete failure, and I have done my best to show that in my opinion Capitalism, brought up to date and controlled in accordance with modern ideas, is still, and will continue to be, the best policy for this country.

Many hard things have been said about this House and about your Lordships. You have been called obstructionists, defenders of privilege, thwarters of the people's will, and described by other epithets which go down so well on Socialist platforms. My Lords, you need not mind that. This House has many enemies, but it has a great many friends—many more, I think, than some of us occasionally realise. People expect this House on occasions like this to speak its mind and give its vote in no uncertain terms. What I think has never been denied is that beneath the various qualities which your Lordships individually may possess, there lies a very sound substratum of strong common sense. That common sense will, I hope, be shown in full measure to-morrow when your Lordships go into the Lobby to defeat by a large majority this specious and most dangerous Resolution.

LORD ALLEN OF HURTWOOD had placed on the Paper an Amendment to leave out all the words after "That" and insert "in view of the failure of society adequately to utilise and organize natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, this House declares that legislative effect should be urgently directed to transforming the present industrial and social order by a rapid extension of the policy of collective organisation which has been increasingly adopted by every Government in modern times, and which now needs to be expressed in many varieties of public ownership and democratic control rather than in any one rigid formula, and which should be submitted to the attention of the nation by a constructive appeal to good will and intelligence and not as an appeal to class-hatred or as seeming to involve a financial or constitutional crisis."

The noble Lord said: My Lords, I should like to begin my speech by a word of gratitude to the noble Lord who has just sat down for making it so clear to the House that the speech which he has delivered was not on behalf of His Majesty's Government. That explanation has made my task as a supporter of the Government a great deal easier, and I am grateful to him for that opening statement. I am sure that the noble Lord fully realises that, however fantastic it may be to him, there are amongst the supporters of this Government those who rank themselves as sincere and lifelong Socialists and who intend to remain so notwithstanding their support of this Government. But when the noble Lord goes on to say that this Motion is an academic Motion, I am bound to disagree. While I listened to the noble Lord, Lord Sanderson, I could not help but feel that the speech which he delivered was a very different kind of speech from many of the speeches which are delivered on behalf of the Labour Party, both officially and unofficially. I am going to take my life in my hands and deal with this question of Socialism in no academic sense at all, but in terms of the situation which will confront this nation probably within a year from now.

The noble Lord, Lord Sanderson, has interested us by telling us how, in some remote future, industry may be organised under the Socialist State. What I am concerned with in my speech is whether Socialists are going to have a chance of using their programme, and whether a Socialist Party is ever going to become the Government of this country in order to apply its programme at all. At the next General Election we are going to. be called to battle on the issue of Socialism both by His Majesty's Opposition and by His Majesty's Government. Whether that is a wise thing for the political democracy of this land I shall proceed to argue, but in order to prove my point I ask permission to read a quotation from the Leader of the Conservative Party, the Lord President of the Council, Mr. Stanley Baldwin. In a New Year message which Mr. Baldwin sent to the Primrose League, he used these words: Whether the General Election conies this year or a little later, 1935 is going to be politically a very important and critical year. I therefore urge all members of the League to let no opportunity pass of exposing the dangerous policy of Socialism. It is more necessary than ever to bring home to the electors the fact that the principles on which the League is based are a real bulwark against the devastating creed of Socialism.

Now, My Lords, I am sure I shall have the sympathy at least of some noble Lords on this side of the House when I say that this reference to the "devastating creed of Socialism" as the issue upon which the next Election is to be fought came a little hardly to certain supporters of the Government from the Leader of the Conservative Party. I very much hope that when we are called to battle we shall have less of those remarks from the Deputy Prime Minister of the National Government. It is, however, clear that at the next Election we are going to be called upon, apparently from both sides of the House, to deal with this question of Socialism as though it were either a menace from the Government point of view, or going to be made into a menace by the Labour Opposition. I cannot think of anything more disastrous to the future of political democracy in this country, anything more likely to impede the rapid social development that is now available, anything more likely to prevent the alleviation of the sufferings of the working class, than that we should be called to battle in the year 1933 on an unreal issue in which we are to fight either Capitalism on the one hand or Socialism on the other.

May I examine the actual wording of the Motion which has been tabled by the noble Lord, Lord Sanderson? I should like to make it perfectly clear that if the procedure of this House requires me, when a Division is to be taken, to choose between the Motion which the noble Lord has put down and the Amendment which my noble friend Lord Mount Temple has put down—even though I desire to improve, as I think, on the wording of the noble Lord's Motion—I intend to vote for the Motion which has been tabled by the noble Lord, Lord Sanderson. I think, however, that that Motion is out of date. I fully remember the circumstances in which it was tabled, for I happened to be Chairman of the Independent Labour Party at the time when Mr. Philip Snowden put that Motion down in the House of Commons; I was therefore present at its birth. But, my Lords, twelve years have passed since then, and surely, though it may be strategically amusing to put down, in order to tease the noble Viscount, Lord Snowden, a Motion which was moved by him twelve years ago, it is not helpful to the cause of Socialism to submit here today a Motion the terms of which are not in accord with the times in which we live.

I submit to the noble Lords that, if they want to assist the cause of Socialism, they ought to present here a form of wording which does not suggest that we are going to change our social system by any one rigid formula or which points to any one particular cause as that which creates our present discontent. I am bound to point oat to the noble Lord, Lord Sanderson, that, despite all the gentleness of the manner in which he has approached his subject, unhappily one of the things which has happened during the last twelve years is that the manner in which Socialists are presenting their case to the public has been obscured by anger, by envy and by the stirring up of misapprehension which is creating a barrier between their creed and the public. It is for that reason that I have had the hardihood to attempt to re-word the noble Lord's Motion, not because I seek to defeat Socialism but because I want to commend it to the minds, the intelligence and the good will of the people of this country.

In that Motion the noble Lord, Lord Sanderson, refers to what he calls the failure of the capitalist system. The noble Lord, Lord Mount Temple, refers to that same system as being a well-tried system. The noble Earl, Lord Peel, does not want even partially to alter that system, and the noble Lord, Lord Templemore, who spoke from the Front Bench, says that it is impossible to graft on to the system of this country, with its individualistic outlook, any kind of Socialist system. The noble Lords seem to have been living in an Alice-in-Wonderland world during the last fifty years. There is no such thing as a capitalist system at the present moment, any more than there is a Socialist system. We are living in a period of transition which is neither capitalist nor Socialist, and if I may claim your Lordships' patience for a sufficient time I propose to bring forward a series of illustrations to prove how we have long since passed out of any organisation of society which can be described by the word "system" in any shape or form.

Every Government in succession during the last fifty years, right up to the time of the present Government, has been steadily engaged in increasing the area of collective organisation in this country: bringing under the State, under municipalities or under public utility corporations first this function and then that. We have the extraordinarily good fortune in this country, as compared with the situation which we see in countries abroad, to be living in a nation which seems to have the capacity for doing that very grafting which Lord Templemore said we could not do. That is exactly the quality which we possess. Whereas other countries pass through the storms of revolutions and catastrophes, we are able stage by stage to adapt ourselves to new circumstances and to graft new methods of organisation on to an old system. What is the result? To-day we are the least unfortunate country in a most unfortunate world. If we can avoid this unreal struggle taking place at the next Election, I believe that during the next two or three years we can advance rapidly towards that state of society for which the noble Lord, Lord Sanderson, has pleaded in this House.

The tragedy of the present position, if I may speak for one moment on the electoral prospects of the country, is that the vast bulk of the people—probably something between 50 and 60 per cent. of the electors—are altogether out of touch with the various political machines which seek their suffrage. If you happen to be a Socialist, as I am, and if you therefore wish to cast your vote for Socialism, you find the Socialist Party building this foolish barrier between its programme and its public. If you happen to be, as I am, a supporter of the idea of a National Government, you see this Government becoming less and less national in actuality, whatever it may be in name. I only wish that the noble Lord, Lord Stonehaven, were here in order that I might, remind him of some of the difficulties he is finding in the constituencies to-day of getting local Conservative organisations even to re-adopt their National Labour candidates who have served them in Parliament in support of the Government. Therefore, from the point of view of the country as a whole, what do you see if you watch the electoral graph at by-elections? We are faced with a position in which the country is out of tune with the political organisations which are appealing for its support.

What does the Leader of the Conservative Party say? He says we are to gird up our loins to fight Socialism. May I be permitted for a few moments to try to describe what I think Socialism is? First, it is a great social ideal which seeks to cultivate amongst citizens of a nation a spirit of service to each other, to bring nearer an. equality which gives them a greater opportunity of serving both their nation and themselves. Secondly, Socialism is a device by which the State collectively, year by year, seeks to redistribute the national wealth, and I would ask permission to give just a few figures as to what has already taken place in that respect. If you take the Inland Revenue report which has recently been put into your Lordships' hands you will find that the total number of large incomes has been substantially reduced during the last seven or eight years, and not because of the general increase of poverty which the world is experiencing. If you take the condition of the wage earners since 1914, the real wages, not money wages, have increased by nearly 20 per cent. If you take the survey of poverty in London which was organised by Charles Booth in 1880, you find that 30 per cent. of the population of London were below the poverty level. In 1928, when a similar survey was taken in comparable circumstances, those below the poverty level were only 8.7 per cent. That is the first result of Socialism, in so jar as its seeks to redistribute the national wealth between the different classes.

Then, thirdly, Socialism is an attempt by which the nation carries the burdens of the less fortunate members of society. Those burdens were previously carried, in so far as they were not borne by the persons themselves, through private initiative on the part of charitable organisations, but since the turn of the century the State and municipalities have intervened, and so to-day you have built up in this country a great body of social services, whether concerned with health, housing or other purposes—a body of social activity which makes this country the envy of the whole world, so far as social services are concerned. In 1910 £63,000,000 were spent for the purpose of social services. In 1931 that sum had increased to £490,000,000, and that shows that even if you allow for the changing value of money the nation to-day is spending for the purpose of social services three times per head the amount which it was spending twenty-one years ago. The survey of the League of Nations of the world on its economic side, contains this definite statement: The general drift of the public utility and social services is almost inevitably in the direction of re-distributing income in favour of the poorer classes. When the indirect provision of real income noted above is considered, it becomes clear that the standard of living has risen substantially. That is the third aspect of Socialism, which has been grafted on to our social system.

Fourthly, Socialism is an attempt to bring a sense of design into an economic system always disorganised. It seeks to use the functions of the State in order that industry may perform its duties more efficiently with less waste of capital and less suffering to those engaged therein. It used to be said in the old days that Socialism was production for use rather than profit. I think it should now be said that Socialism is production for public profit rather than private profit. That should be the new definition which we should give it. I wonder if I may hold your Lordships' attention for a moment just to mention the enormous variety of the interventions by the State in the world of industrial organisation. You begin with the nationalised Post Office and when there was an inquiry only about two or three years ago the report was unanimous after all this experience in favour of continuing the Post Office as it was. Then you have your public utility corporations, and many varieties of State intervention to assist and co-ordinate industrial functions. Under the present Government you have had a rapid extension of Socialism grafted on to our individualistic society. You have had many kinds of marketing schemes which seek to regularise production and to meet the needs of the consumer through supplying commodities to your social services as now organised. You have, for instance, the milk scheme—

LORD MOUNT TEMPLE

Surely the fallacy in the noble Lord's latter argument in claiming these new ideas as Socialism is the fact that the State does not produce. In the electric schemes, for instance, the production is continuous by the private man or private corporation and not by the State.

LORD ALLEN OF HURTWOOD

The noble Lord appears to have read his modern Socialist books just as badly as he read Karl Marx. He gave us some description of what he believed to be the views of Karl Marx which I think there would be the utmost difficulty in recognising as Karl Marx's sentiment. Now he is seeking—

LORD MOUNT TEMPLE

I am sorry, but I must interrupt my noble friend. Does he deny that in the cases he has mentioned the private individual, the private company continues to produce, and that it is not done by the State?

LORD ALLEN OF HURTWOOD

I most certainly do. In the case of public utility corporations such as in the matter of broadcasting, exactly the opposite is true. There is here no case at all of any private shareholder having any share in the profits or control. What we have discovered by process of time is that there are various methods by which you can introduce the principles of Socialism whereby the interest of the State and the interest of the body politic shall be put above the interest of any of the private individuals who compose that body. Through a public utility corporation you can get all the advantage of collective organisation and promote efficiency without the disadvantage which conies from political manipulation which may easily arise if you proceed to nationalise all industries and run them from Whitehall. The noble Lord has held me up in the development of my argument. I want now to go further. Not only have we developed all this new social activity but we have even in this House Lord Melchett coming forward with his scheme of an enabling Bill under which staple industries could put their houses in order so that they may become more efficient and better organised for the delivery of their goods and services. So far as the future of Socialism is concerned, I earnestly beg my noble friends opposite to realise that this is not patching the capitalist system at all, it is preparing a more orderly form of economic organisation, which they will be able to take over more effectively if at some future date they should consider it to be desirable.

What is the result of this development on the economic side? It is this. It was calculated a few years ago that practically two-thirds of the large-scale economic organisation of this country had already passed out of the sphere of unregulated private profit-making control. Then we are told that we cannot graft a new system on to an old one. I have ventured to put this argument forward because I think it would be such a tragedy that the history of that kind of development—and with that history being maintained by this Government, which has placed more Socialism on the Statute Book than was ever placed there by noble Lords opposite between 1929 and 1931—should be interrupted at the next Election. May I just say to my noble friends opposite that the public wants these methods, and the needs of the time require this system of organisation.

The noble Lord, Lord Sanderson, in his opening speech said that they did not preach class war. Let me read, if I may, a quotation, not from one of their unofficial speakers, but from one of their own official publications, and dealing with education of all subjects in the world. This is what their official publication says: The truth is that powerful sections of opinion hate the improvement of public education Tartly because it involves in creased expenditure.…But they hate it still more for another reason. Every measure which decreases, even to a small extent, educational inequalities seems to them a menace to social privilege, and arouses, therefore, their bitter opposition. English educational policy has been drawn on lines of social class. They desire to preserve those lines, and, if possible, to deepen them. That is a tragic way of presenting Socialism on a subject like education, and if it is not class war I do not know the significance of that phrase.

But to go further. Let me draw your Lordships' attention to a book that has been publicly blessed by the Leader of the Labour Party and other members of the late Cabinet. I have here the wrapper which appears round this book—"A book that tells Socialists precisely what to vote for and anti-Socialists precisely what to fear." Fancy presenting the Socialist case to unconverted people in terms of what is written here. It seems to me a tragic way of presenting the Socialist case. And you go further and you stir up the idea that, even if you receive a democratic mandate, your return to office will only have the effect of producing something in the nature of a crisis. I am studiously avoiding in this case any quotation from any unofficial speakers. I quote from the Deputy Leader of the Labour Party in the House of Commons. This is what he said: I am envisaging the period of the first Socialist Government in power "— that is, after a democratic mandate has been given— as one of crisis. The atmosphere will be comparable to that existing in this country at the beginning of the Great War. The important thing is not to do things with the most scrupulous regard to the theories of democracy or exact constitutional propriety, but to get on with the job. There is a declaration, not made in a speech which may have been misreported in the Press, but made in a calculated way in a book which tells the country that if they listen to the writer they will find themselves involved in a crisis, and that they must not have regard to the theories of democracy or exact constitutional propriety.

You are inviting other people to play with democracy who may not have that social concern for it that you claim for yourself. I cannot but feel that with all this stirring up in the nation of a belief that if His Majesty's Opposition should ever have the chance of becoming His Majesty's Government there would be this constitutional and financial crisis, you are doing what you know you have denounced in the case of the militarists, who say: "If you want peace, prepare for war." In your own domestic policy you yourselves are repeating the fallacy which you expose in the case of the militarists. In these circumstances, in whichever direction one looks, one feels that this immense chance which our nation has of continuing to develop without upheaval by the process of constitutional building and economic readjustment may easily he destroyed at the next Election if this is to be the mood which is applied to it by the Opposition. And therefore I urge that what we must do is to use politics to keep this process of democracy alive in Great Britain.

It was this issue that was at stake in 1931. It was this that caused many of us to support the Government. It will be infinitely more at stake at the next Election. It is the function of politics to keep open the door of progress so that all the new forces that are gathering way through science and education and in other directions may combine to create a new society. If once we allow that door to be slammed in our faces through a bitter class struggle over out-of-date doctrines, we may repeat in this country some of the disasters that have been seen abroad. That is the reason why I put down the Amendment that stands in my name on the Paper.

THE MARQUESS OF CREWE

My Lords, this debate exhibits one of the advantages which your Lordships' House possesses over another place. The noble Lord to whose speech we have just listened used the word "academic" in relation to this debate. The noble Lords representing the Opposition would not, I suppose, admit that this discussion is in any sense academic. They would say that they are looking forward at no very distant date to being able to fulfil the hopes explained in Lord Sanderson's Resolution, and therefore that they are doing a service to your Lordships in stating exactly what is going to occur when they come into office. However that may be, I must begin by echoing the protest that has already been made against the suggestion that the existing system, known as the capitalistic system, can be regarded as a failure or as having broken down. Of course, as we know, the world is in a disturbed state and there is a great deal we should like to see changed; but it is not fair or reasonable to relate that state of things to the existence of the particular economic conditions under which we live. It would be almost as reasonable to say that Christianity has broken down, that being the religious system under which a great part of the world lives. Or if you like, you may say, as some people do, that the whole system of representative government has broken down. But I repeat, it is unreasonable to relate the various misfortunes under which the world labours to our present system.

After all, there is nothing novel in the suggestions which are contained in the original Resolution. If those arguments are good, then they have been good for two hundred years or more, and there is no reason to suppose that they are better now than they have been at any other time. We know the kind of arguments that have always been used. There is a story of the French Revolution of 1848, that when one of the principal leaders came out from an enthusistic meeting and was about to get into his carriage, he perceived perhaps that there was some discrepancy between his position and that of his supporters. He looked round and said: "We are hoping for the time when everybody will have a carriage." One of the bystanders, with the logic of his nation, said "In that case who will drive me in mine?" That was a very crude appeal to the simple desire of a man to have something which he had not got. At other times there has been the appeal to the even less worthy sentiment, not that everybody should have a carriage, but that nobody should have one.

I am quite prepared, however, to admit for my part that the communistic ideal has an attraction and fascination of its own. The efforts of Robert Owen and of those unsophisticated people who attempted to start communistic colonies, especially in America, evoke a certain degree of sympathy. The ideal of a community where everybody has the necessaries of life and nobody has any need of luxuries, because they do not exist, and where there is no need for money because there is nothing to buy—all that may be regarded as an attractive ideal. If one may compare smaller things with greater, it is not altogether different from the ideal of a future state in heaven which used to be held out to children in school-rooms some generations ago. I think the children all admitted that the prospect was most peaceful and beautiful, but the sharper ones among them could not help reflecting that, as a method of passing eternity, it would be rather wanting in variety and incident.

I think we all agree—and it has been brought out in the most interesting speech made by the noble Lord who has just sat down—that there has been a very marked advance, not merely of late years but for many years past, in the public ownership and control of many departments. As we all know, in the Middle Ages there were a number of small private armies some of which were from time to time used for national purposes. In later days, we all enjoyed in our boyhood stories of privateers, that is to say, ships which fought in the national wars under what would now be called a licence. The noble Lord, Lord Mount Temple, spoke of the Post Office, perhaps with a certain note of disparagement. I have no doubt that some of your Lordships know that for more than four hundred years the whole postal service of Central Europe was in the hands of a great Bavarian family, and it is only within living memory that a very large sum was paid to that family as final compensation for the postal service in the different countries concerned becoming a public business. I am quite sure that, whatever may be said of the Post Office, we would all rather see it conducted by Sir Kingsley Wood, to whom the noble Lord, Lord Strabolgi, paid a most handsome compliment yesterday, than by one of my noble friends on the Front Bench opposite as a private enterprise.

As Lord Allen has pointed out, there are many instances in which the public control has increased. Where I think a definite black line must be drawn between the two sets of opinions, where there is a great gulf fixed, is that, while among noble Lords generally there may be a great diversity of opinion as to the extent to which public control and ownership should be exercised—there being some who would like to see it reduced as far as possible and others who would like to see it considerably enlarged—everybody, judging by the terms of this Motion, who feels entitled to call himself a Socialist pure and simple, looks forward to applying it to everything. That, I take it, is a natural line of demarcation which has to be drawn and it is one which would make it impossible for anybody who does not desire to be ticketed as a Socialist pure and simple to vote for the Motion of the noble Lord, Lard Sanderson.

Now I think it is relevant, rather pursuing the line taken by the noble Lord, Lord Templemore, to ask what would actually happen in the event of noble Lords on these Benches being able to carry out their desires. I pass by very briefly the question of the extinction of small traders of all kinds—the little shopkeeper in the by-streets of towns, the village blacksmith, and the village wheelwright—because, I am sorry to say, there i3 a tendency, whether we are Socialists or not, towards the extinction of these people. I sometimes wonder whether the great brewery firms who are now extinguishing small licence holders, and the promoters of multiple shops and chain stores, always realise how much they are accustoming the public mind to a sort of ownership which is not in essence very different from the kind of ownership advocated by noble Lords on the Opposition Benches. There is not much difference whether you use the letter "N" or the letter "R," whether you talk of nationalising or rationalising. There may not be in all cases much difference—I wish there were more difference—between the two.

When one comes to some of the larger enterprises now conducted privately and which might be conducted publicly, I take in the first instance one of the textile industries, cotton, on which I speak with all the more confidence because I do not pretend to know much about it. But what one does realise is that it has been through a very bad time and that the present system may, without great exaggeration, be said to have broken down to a considerable degree, and therefore it would seem to offer a favourable playground for noble Lords on the Opposition Benches. We all know that the cotton industry is very complicated. All the raw material has to come from other countries and will continue to do so, because one feels that even noble Lords who are fascinated by the creation of an artificial sugar growing system in this country would scarcely propose to start an industry for growing cotton under glass, although it might give a great deal of employment. We all know that the whole business of importing is decidedly complicated and also that it offers, as it would still offer under public management, a great field for speculation, for gambling in futures, next year's crop, and double futures, the crop of the year after next; but in addition to that there is the immense complication of the spinning industry, weaving, and dyeing and finishing. Assuming that all the mill hands became, as they would become, Government servants, and that all those who now hope to make a little profit out of buying and selling would be working on a fixed salary, what conceivable reason is there for supposing that that immensely complicated export trade would be any better worked under public management than it is at present?

The noble Lord, Lord Sanderson, indicated—I am afraid it was rather a shock to some of your Lordships—the manner in which industries would be bought up. They would be bought up, apparently, not at what would be called market value, but by giving something of the nature of a life annuity to those interested in them. That is a form of expropriation, and I think we are also bound to use the word confiscation, of private property which in ordinary circumstances would be compensated for at what is known as market rate; and I take it that that system is to apply not merely to cotton mills and things which now could be bought cheaply, but to other property of all kinds which even now has considerable market value. I pass rapidly over the coal trade; that has already been mentioned. Of course the buying out of mineral rights is a totally different question. That is not a Socialist proposition at all. It is simply a question of public convenience. Personally I do not think anything very much would happen if it were done. I do not think it would be found that the coal trade would benefit to any material extent by the purchase of mineral rights because one serious difficulty which formerly existed no longer exists—namely, the system by which a landowner in a particular line of advance of a coal enterprise could obstruct it unless he were paid something beyond a fair rent. Therefore I do not think it would make very much difference. What I have said about the complication, of the cotton trade applies certainly in an equal degree to the many ramifications of the coal trade, both domestic and export.

Then there is the question of the land. Nationalisation of the land again, so far as the actual taking over by the State of the surface, would not be in the main a matter of great complication. It is quite true that if expensive farm buildings were taken over at an all-round low valuation, which I understand is the proposition, for a few years it would be a decidedly paying thing for the State, whatever might be the moral propriety of the act, and I presume that the result would be that all tenant farmers would be sooner or later, sooner rather than later, turned into bailiffs working at a fixed wage. I suppose the smallholders, who I am glad to say have been placed in large numbers in the county about which I know most, would be told that they would not have to work their holdings on their own account but would have to work them at a fixed payment, and if they made a profit, it would go, I presume, to the county or possibly to the Exchequer. I doubt if propositions of that kind will please very greatly a large number of small people. It is by no means a question of expropriating members of your Lordships' House and others outside. There are hundreds of thousands of people of very moderate means who would find that their means of living and their prospect of leaving anything to their families were entirely destroyed. No noble Lord has so far mentioned the abolition of freedom of bequest. I take it that is one of the items, an important one, in the creed which is held by noble Lords on those Benches.

One point of discussion which arose between the noble Lord, Lord Allen, and a noble Lord on this Front Bench is the manner in which these changes are to be brought into operation. Nothing could have been more pleasant than the tone in which the noble Lord, Lord Sanderson, foretold the methods by which these vast changes, amounting undoubtedly to a complete social revolution, are to be brought about. The noble Lord opposite, Lord Allen, was not, I think, quite so confident that it could be done with so much rose water. Nor am I. I recall a long and friendly conversation which I held some years ago with a distinguished exponent of Bolshevist principles. After telling me a great deal of what Russians were doing, how much they were encouraging art, and how on the whole things were working well, he expressed the opinion that if their principles were to be imposed on Western Europe it would be altogether impossible that it should be done without going through what they had had in Russia—namely, a violent revolution accompanied by a great deal of bloodshed. I replied that I was very glad to hear that, because it was precisely the view which a great many of us entertained here. We believe that if what is practically the Communistic system is to be forced on this country it could only be done by a violent revolution. I know that is not the opinion of noble Lords on those Benches, but it is an opinion which, I think, a great many of us must be allowed to hold.

I think I can speak for my noble friends on these Benches when I say it is altogether impossible for us to support for a moment the ideas presented by the noble Lord, Lord Sanderson. Nor, I am afraid, am I altogether prepared to adopt the views stated by the noble Lord, Lord Allen, from a somewhat different point of view. I suppose that in this debate we are justified in mentioning even Amendments which have not yet been moved and, therefore, I would ask your Lordships to consider whether the Amendment which my noble friend Lord Lothian has on the Paper does not on the whole represent the central point of view more than any other of the Amendments on the Paper. It is quite true that he mentions the obstacles placed in the way of progress by the barriers to international trade, and though that is not the subject which is specifically before us, I should think that your Lordships would be glad to see those barriers reduced all over the world. Apart from that, I think that my noble friend's Motion puts the common sense of the whole question as well as it need be put. I merely come back to asking noble Lords to reflect: Cui bono? Who are the people who are really going to get advantage out of the line of action indicated in the Motion of the noble Lord, Lord Sanderson? I can only say for myself that I shall have the utmost pleasure in voting against it.

LORD SNELL

My Lords, I have always considered that your Lordships' House is seen at its best when a question of fundamental importance such as the one we are discussing is before it, and inasmuch as this is not a Party matter we can, without any question of Party loyalty, try to get very near to what each one of us believes. Not that non-Party opinions always mean calmness and gentleness. Not long ago I was talking to a distinguished and revered philosophical teacher, and he complained that we politicians always imputed personal motives into our discussions whereas philosophers were calm and deliberate. I said to him: "Is that really so? So far as I have observed you idealists are not even on speaking terms with the pragmatists." He said: "No, indeed; they are not worth speaking to." We are somewhat in that position this afternoon. Issues have been raised which compel us to examine exactly where we stand in relation to the great problem of the social organisation of the future. Let me say at once that the Amendments that have been put down to my noble friend's Motion stand up in a quite unusual and refreshing way to the problem that has to be discussed.

The noble Lord, Lord Mount Temple, has put down an Amendment which is a full-throated shout of praise of the capitalist system. He warned your Lordships against the gentle guile of my noble friend Lord Sanderson, and said: "If you really want to know what Socialists are and what Socialism means you must not listen to this debate, but you must go to Hyde Park." I should be very sorry to force your Lordships to take that journey, and happily there is no need because I can bring Hyde Park to you. So far as public speaking is concerned, Hyde Park was my University, and I do not know that there is any better place. You see in me Hyde Park at its worst. The noble Lord also told us that this Motion was Karl Marx. Really, my Lords, if there is anything characteristic about British Socialism it is that it is not Marxian. The noble Lord, Lord Allen, complained that the Motion of my noble friend was twelve years old. He was aware, of course, of the classical reason for repeating it, but there was another reason to be found in the speeches of the noble Lards, Lord Mount Temple and Lord Templemore. The tone and temper of their replies belonged to thirty years ago. What would have been their intellectual condition if we had produced for debate a Resolution that was right up to date? It was a matter of great kindness to them, at least, to allow a time lag of twelve years.

It seemed to me as I listened to the noble Lord, Lord Mount Temple, that no parent was ever so blind to the faults of his child, so certain about its perfection as he was in regard to the capitalist system. So long as we adhered to that it would heal all ills. The Amendment moved by my noble friend Lord Allen was a reasoned and constructive Amendment with which I have no sort of difference. He appealed to us to approach this discussion in a spirit of intelligence and good will. I hope that he meant that to apply to both sides, and that we are not to be compelled to use the honeyed words of peace whilst his present political associates are to tread the Primrose League path of dalliance with anti-Socialist invective. So far as I am concerned, let me say on the question of the class war to which he referred, that I have never, in a public life much longer than his, said a word in its favour and that I have made hundreds of speeches against it. It is not quite fair to the Socialist movement, to the Labour movement, to pick out some isolated phrase of a man who perhaps spoke out of the misery he felt rather than from his knowledge of the situation and to present that as being the temper of the Socialist movement.

LORD ALLEN OF HURTWOOD

If I may be allowed to interrupt for a moment, I would like to point out to the noble Lord that the quotation I made so far as the class war was concerned was from one of the official books of the Labour Party itself.

LORD SNELL

The noble Lord himself has written official books which have been subject to a very searching criticism and denunciation. Let him have the charity towards others that he expects for himself. Let me remind the noble Lord of this, when he appeals for charity and good will, that in spite of all its faults England has the most constitutional, the most orderly, the most co-operative Socialist and Labour Party in the world. Its men and women are of the fibre that would do credit to any nation. I have known them and worked with them, and I want to say that I have never known, and do not wish to know, better men. But I have never heard, and he has never heard, one generous, one really fair word about their work or about what they stand for. Moderation has been answered by slander and their ideals have been derided. If poisoned words could have killed the Socialist movement it would have been dead long ago. The Amendment put on the Order Paper by the noble Earl, Lord Peel, assumes an attitude of shocked belligerency. The capitalist system is sacrosanct, Socialism is wicked.

EARL PEEL

That is not in the Amendment, however true it may be.