Liberalism at Large

by Alexander Zevin

  5.Crowther authored a ‘Report on the Irish Banking and Currency System’ for the Irish Banks’ Standing Committee, which recommended branch closures to increase profitability in the sector and to offer depositors a higher rate of interest, amidst the Depression. Cormac Ó Gráda, Ireland: A New Economic History, 1780–1939, Oxford 1994, p. 371.

  6.Lysaght, Brendan Bracken, p. 256.

  7.The Smithsons described it as ‘a didactic building, a dry building’. It stands as both a rebuke and affirmation of the surrounding neighbourhood: Helena Webster, Modernism without Rhetoric: Essays on the Work of Alison and Peter Smithson, London 1997, p. 60; Irénée Scalbert, ‘The Smithsons and the Economist Building Plaza’, AA Files, Autumn 1995, p.19; ‘The Economist Bids Farewell to a Formative Home’, Economist, 24 December 2016.

  8.‘Crowther, Geoffrey, Baron Crowther (1907–1972)’, Roland Bird in ODNB, 2004.

  9.Crowther Letter, 8 December 1947, Layton Papers, TCC, Box 82.53.

  10.Crowther to Layton, 9 July 1944, Layton Papers, TCC, Box 81.9. ‘The rapid growth in circulation during the last three years puts us into a position to show what we can do in the post-war years.’ Crowther to Layton, 1938, Layton Papers, TCC, Box 81.X.

  11.This dictated the scale of the project, requiring purchase of over forty adjacent lots on the St. James site – mainly on favourable terms from the Crown Estates – to generate enough floor area. According to Peter Dallas Smith, one of the paper’s two business managers and in charge of the project, Crowther ‘saw himself as a tycoon in the making’: Scalbert, ‘The Smithsons and the Economist Building Plaza’, p.19. Crowther briefly became chairman of the largest hotel group in Britain after the ill-fated merger of Trust Houses and Forte Holdings: The Times, 7 February 1972. See Edwards, Pursuit of Reason, p. 867.

  12.The term ‘planning’ masked disagreements between the 153 signatories of The Next Five Years, especially as to whether it constituted socialism or was a capitalist alternative to it. See Daniel Ritschel, The Politics of Planning: The Debate on Economic Planning in Britain in the 1930s, Oxford 1997, pp. 232–79.

  13.The Next Five Years: An Essay in Political Agreement, London 1935, pp. 97–124.

  14.Crowther did not wish it to seem ‘L.G’s book’: Ritschel, Politics of Planning, pp. 242, 249, 253, 266–73. Peter Sloman notes that despite the dominance of upper- and lower-case liberals in it, the Liberal Party diverged from the group on protection and industrial self-government: The Liberal Party and the Economy, Oxford 2016, pp. 113–17.

  15.Geoffrey Crowther, Ways and Means: A Study of the Economic Structure of Great Britain Today, London 1936, pp. 179–87; Economics for Democrats, London 1939, p. 33.

  16.Next Five Years, pp. 117–19. Crowther was vague about how to achieve higher levels of domestic investment; he did not suggest it should happen by restricting what the City sent abroad. After rejecting criticisms of foreign lending, he concluded, ‘So we might as well make up our minds to a continuance of foreign lending as soon as the present world crisis is past’: Ways and Means, pp. 154–56, 185–89.

  17.Ibid., p. 75.

  18.‘It is fully possible to maintain profits, and yet to impose such heavy taxation on the rich that all large incomes are severely reduced’; to ‘allow profits to arise and then tax high incomes is a policy of levelling incomes up’:’ Ibid., pp. 75, 115.

  19.Crowther, Ways and Means, p. 13; Economics for Democrats, p. 30. In the end, what was more liberal – in the sense of claiming to fairly represent all classes of the community, not just sectional interests in it – than an ideology without a party able (on its own) to put it into effect.

  20.Ibid., pp. 140, 191.

  21.‘The Keynes Plan’, 2 March 1940.

  22.Provided ‘we prevent the enemy from overrunning our industrial areas or bombing them out of existence’, those material advantages over Germany – including a higher national income overall, access to cheap raw materials and food, the ability to scale up civilian production for war – would turn into ‘actual military superiority’: Crowther, Ways and Means, p. vi; David Edgerton, Warfare State Britain, 1920–1970, Cambridge 2006, pp. 56–57.

  23.Crowther’s only flaws were ‘too much faith in rationing’ and a ‘too optimistic … vision of the post-war world’: F. A. Hayek, ‘How We Can Do It’, The Spectator, 6 September 1940.

  24.‘Most of the free world is opposed to communism’ – and rightly so. But ideology was less important now, for ‘the conquest of Russia is not an end in itself, but a means, an incident in the struggle with Britain and America for the domination of the world’: ‘Right About Turn’, 28 June 1941.

  25.For a few of his Economist pieces, see Isaac Deutscher: The Man and His Work, ed. David Horowitz, London 1971, pp. 233, 243–47. Orwell informed Deutscher that Churchill, Roosevelt and Stalin were plotting to divide the world permanently between themselves at Yalta. Deutscher pointed out that major conflicts between the Big Three were already rising to the surface. So incredulous was Orwell that he related their conversation in his column in the Tribune. Later, Orwell placed Deutscher’s name on his blacklist of ‘crypto-Communists and fellow travellers’, as a ‘sympathiser only’, which he handed to the UK’s Information Research Department in 1949. Isaac Deutscher, ‘The Mysticism of Cruelty’, in Marxism, Wars and Revolution: Essays from Four Decades, ed. Tamara Deutscher, London 1985, pp. 69–70; Andrew Rubin, Archives of Authority: Empire, Culture, and the Cold War, Princeton 2012, p. 29; Phillip Deery, ‘Confronting the Cominform: George Orwell and the Cold War Offensive of the Information Research Department, 1948–50’, Labour History, November 1997, p. 220.

  26.E. H. Carr: A Critical Appraisal, ed. Michael Cox, New York, 2000, p. 129; Capital and its Discontents, ed. Sasha Lilley, Oakland 2011, p. 205.

  27.Nicholas Davenport, Vested Interests or Common Pool, London 1942, p. 11.

  28.‘The New Socialism?’, 8 August 1942; ‘In the Balance’, 15 August 1942.

  29.See leaders from 3, 10, 17 October 1942; and ‘Letters to the Editor’, 28 November 1942.

  30.Jose Harris, William Beveridge: A Biography, Oxford 1977, pp. 97–98, 101. For Beveridge’s late, partial ‘conversion’ from classical to Keynesian-style liberalism, see Winch, Economics and Policy, London 1969, pp. 196–97, 273.

  31.Crowther blamed the element of income redistribution in the Beveridge plan on Balogh. Instead of stimulating consumption, Crowther favoured what he called ‘the investment approach’: ‘Social Priorities’, 5 December 1942.

  32.Still, welfare must never be so generous as to ‘lessen incentives to work and advancement’. Ibid.

  33.For examples of his war work on machine tool and raw material needs, productivity, tapping labour of married and unmarried women, see ‘The brake on our war effort due to the shortage of man-power in the war industries’, 8 May 1940, Beveridge Papers, LSE, 8/15/5, and ‘The Practicability of Present Programs’, 8 May 1942, Beveridge Papers, LSE Piercy 7/34.

  34.15 November 1943, Beveridge Papers, LSE, 9A/15/17.

  35.‘If the problem of Full Employment is to be solved within the framework of political democracy, it will have to be solved by the next Parliament – that is, by one or other of the two existing parties, or by both in coalition.’ Ibid.

  36.Stalin was the ultimate Keynesian, the ‘greatest living practitioner of the investment approach’, wrote Crowther half-facetiously. ‘The rate at which national income expands is an almost direct function of capital investment (as witness Russia). Man increases his productivity partly by getting cleverer; but mainly by increasing the ratio of horse-power per head. The achievements of the aircraft factories during the war have shown that the Englishman can have a productivity equal to, or even in excess of, the American, if he is given the proper equipment. Yet in industry as a whole, his productivity is barely half that of the American, and, in spite of lower wages, labour costs in this country are a higher proportion of total costs than in America … as long as there is any country in the world where mecha
nization, and with it the productivity per head, are higher than they are here, I refuse to admit that there is a case for deliberately restricting Investment or the Saving that makes it possible.’ Ibid. One striking paradox of Crowther’s enthusiasm for a Stalinist investment policy was that he wedded it to a defence of private investment.

  37.Beveridge rejected a number of Crowther’s points, including his hard distinction between structural and frictional unemployment, and the Soviet parallel. ‘The argument from Stalin does not appear to me strong. The investment approach was natural, indeed inevitable, in Russia in order to industrialise an agricultural and arm an unarmed country. This has no relevance to the United States or Britain; we shall end the war excessively industrialised and fully armed.’ Beveridge to Crowther, 1 December 1943, Beveridge Papers, LSE, 9A/15/17.

  38.Beveridge Papers, LSE, 9A/13, Folders 3–4. ‘Control of capital movements’ was broached in the finished text, but for only two paragraphs in a work of several hundred pages. Full Employment in a Free Society, London 1944, pp. 237–39.

  39.‘Employment: The White Paper’, 3 June 1944; Winch, Economics and Policy, p. 271.

  40.Tyerman interviewed Beveridge in The Listener: ‘War in the Workshop’, 6 June 1940; ‘Getting the Job Done’, 13 June 1940. For exchanges after, see Beveridge Papers, LSE, (1944) 9A/24; (1946) 11/60; (1948) 2/B/48/1; (1956) 7/91.

  41.The Economist, 1843–1943: a Centenary Volume, London 1943, pp. 15–16.

  42.Hayek, ‘The Economist, 1843–1943. A Centenary Volume’, Economica, February 1944, p. 51.

  43.‘Road to Serfdom?’, 13 May 1944.

  44.The Delhi Conference in October 1940 set up a single ‘Economic War Council’, which was ‘probably far more needed than the looser Imperial War Cabinet so often asked for; and its institution would be another landmark in the development of free cooperation within the Commonwealth’: ‘Imperial War Economy’, 2 November 1940.

  45.‘The Commonwealth at War’, 17 August 1940.

  46.‘Salvation for India’, 22 June 1940. The Bengal and Punjab, two Muslim majority provinces, were central to the war effort: the former contained more than half of India’s industrial capacity, while the latter was the main recruiting ground for the Indian Army.

  47.‘National Unity’, 21 February 1942.

  48.‘It would be hypocritical to deny that the expediency of the moment has given British policy the air of a death-bed repentance.’ Still, ‘no nation has shown more tangibly than the British its recognition of the truth of Aristotle’s contention that a democracy cannot maintain an autocratic Empire without being corrupted and enfeebled’: ‘Message to India’, 14 March 1942.

  49.‘India at Stake’, 18 April 1942.

  50.‘Sterling balances, mainly from India and Egypt, totalled £3,500 million by 1945’: ‘End of an Era’, 3 January 1942.

  51.‘India at Stake’, 18 April 1942.

  52.‘Discussion’, The American Economic Review, March 1943, pp. 332–33, 458.

  53.Crowther gave a lecture at Harvard in August 1941 while on a ‘confidential mission for his government’. ‘English Economist Envisages Advanced Post-war Britain’, The Christian Science Monitor, 8 August 1941. In 1946 Hutton published Midwest at Noon based on his time there since 1940, which carried as subtitle ‘America’s Maturing Inland Empire – As Seen through the Eyes of a Modern Bryce’.

  54.‘Some very plain speaking is long overdue,’ wrote the Economist, ‘if only to act as a safety valve, and prevent worse happening.’ To hear Americans tell it, ‘Britain is imperialist, reactionary, selfish, exclusive, restrictive’, and was not doing its share of the fighting. ‘What makes the American criticisms so intolerable is not merely that they are unjust, but that they come from a source that has done so little to earn the right to postures of superiority. To be told by anyone that the British people are slacking in their war effort would be insufferable enough to a people struggling through their sixth winter of black-out and blockade and bombs, of queues and rations and coldness – but when the criticism comes from a nation that was practicing Cash-and-Carry during the Battle of Britain, whose consumption has risen through the war years, which is still without a national service act – then it is not to be borne.’ ‘With every outburst of moral indignation in America, the ordinary Englishman gets one degree more cynical about America’s real intentions about active collaboration, and one degree more ready to believe that the only reliable helping hand is in Soviet Russia’: ‘Noble Negatives’, 30 December 1944.

  55.Ethel Salter to Geoffrey Crowther, 2 January 1945, Layton Papers, TCC, Box 81.137–138.

  56.Isaiah Berlin, 7 January 1945, in Washington Despatches, 1941–45: Weekly Political Reports from the British Embassy, ed. H. G. Nicholas, Chicago 1981, pp. 493–94; Isaiah Berlin, 1 February 1945, in Flourishing: Letters 1928–1946, London 2004, p. 528.

  57.Peter Clarke, The Last Thousand Days of the British Empire: Churchill, Roosevelt and the Birth of the Pax Americana, London 2008, pp. 146–48.

  58.There was, in other words, no reason for the US to reject certain currency controls, or bilateral clearing schemes of the sort Britain had just signed with Belgium – a ‘miniature Keynes Plan’, designed to smooth payment imbalances between surplus and deficit countries, which the US rejected at Bretton Woods. Such controls would expand ‘the sum total of world trade’, as opposed to the bad kind of discrimination, which simply transferred ‘markets from one supplier to another’: ‘Peacetime Mutual Aid’, 13 December 1945. For Britain’s weak (and wishful) negotiating posture at Bretton Woods, and the acrimony it and the loan terms generated, see Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White and the Making of a New World Order, Princeton 2013.

  59.Leo Amery to Layton, 23 January 1945, Layton Papers, TCC, Box 81.137–138.

  60.This advice was given ‘against our better judgment’. ‘Our present need’ for dollars was nothing to be ashamed of, but a ‘consequence of the fact that we fought earliest, that we fought longest, and that we fought hardest. In moral terms we are creditors; and for that we shall pay $140 million a year for the rest of the twentieth century’: ‘Dollar Loan’, 8 December 1945. See also ‘Lend Lease Guillotine’, 25 August 1945; ‘Dollar Crisis’, 1 September 1945.

  61.A few weeks before Labour’s landslide, the Economist released its own electoral manifesto, underscoring a distrust of the two main parties unchanged since the 1930s. One section was on ‘national efficiency’, addressing Labour, which needed from the outset to secure a treaty with the trade unions that pledged them to end all restrictive labour practices in exchange for the bulk of productivity rises going to wages. But it also made less expected points, for example that direct public ownership – of coal pits or shipyards – was generally preferable to public ‘control’, since the former approach kept control and responsibility in the same hands. ‘Election Manifesto’, 30 June 1945.

  62.As a result of two world wars, foreign income as a share of national product in Britain may have fallen continuously since 1914. But the importance of the Empire within the makeup of overseas investment only grew. By 1936 sterling area holdings represented over 60 per cent of the total. ‘Foreign investment is the nation’s single greatest industry’, the Economist declared in 1937. Interest and dividends from abroad had declined, but still accounted for one-twentieth of the national income: ‘British Capital Abroad’ 6 August 1938. For a recent study of the limits that City-oriented growth placed on what social democratic policy options existed after 1945, see Aled Davies, The City of London and Social Democracy: The Political Economy of Finance in Britain, 1959–1979, Oxford 2017.

  63.Stephen Howe, Anticolonialism in British Politics: The Left and the End of Empire, 1918–1964, Oxford 1993, p. 144. For the social democratic ideology of empire promoted by Labour – Bevin, in particular – and its economic and geopolitical underpinnings, see John Darwin, The Empire Project: The Rise and Fall of the British World System, 1830–1970, London 2009, pp. 544
–47 and passim.

  64.Philip W. Bell, The Sterling Area in the Post-war World: Internal Mechanism and Cohesion, 1946–1952, Oxford 1956, pp. 316–17. For almost four-fifths of sterling area exports the British home market was 50 per cent larger than the US market. Darwin, Empire Project, pp. 582–83, 543, 547; Susan Strange, Sterling and British Policy: A Political Study of an International Currency in Decline, London 1971, pp. 4–5.

  65.Alec Cairncross, Years of Recovery: British Economic Policy, 1941–51, London 1985, p. 153.

  66.13 October 1945; The Next Five Years, p. 100.

  67.Davenport, Memoirs of a City Radical, 157.

  68.Jim Tomlinson, ‘The Attlee Government and the Balance of Payments, 1945–1951’, Twentieth Century British History, January 1991, pp. 52–53, 59. Dalton formulated his ‘practical socialism’ at the same time as Crowther his ‘extreme centre’, the latter noting their affinities in the Economist of 24 April 1934. Dalton was interventionist, but not necessarily on the left: contemptuous of the ‘thin, theoretical, tinny tintinnabulations’ of Harold Laski, he mentored Labour liberals like Evan Durbin, Douglas Jay and Hugh Gaitskell: Ben Pimlott, Hugh Dalton, London 1985, p. 398.

  69.‘Labour Landslide’, 18 July 1945; ‘First Twelve Months’, 10 August 1946; ‘Taxation of Rich’, 16 January 1946. Pimlott, Hugh Dalton, pp. 401–7.

  70.Dalton alluded to ‘several journals’ in his Mansion House speech that had questioned these moves, intending both the Economist and the Banker: ‘Cheap Money’, 7 September 1946; ‘Repayment of Local Loans’, 19 October 1946.

  71.‘The Case for Deflation’, 1 March 1947. See letters from Austin Robinson, Ralph Hawtrey and Frank Paish, among others, over the issue of ‘suppressed inflation’ in 8, 15, 22 March 1947; Pimlott, Hugh Dalton, p. 474.

  72.‘Moral Crisis’, 16 August 1947; ‘Inconvertible Again’, 23 August 1947; ‘Side-stepping the Issue’, 15 November 1947.

  73.‘Mr. Dalton’s Resignation’, 22 November 1947.