200 YEARS - From Poverty to Decency (Part 2)

A REVIEW of SOCIAL CONDITIONS from LAISSEZ-FAIRE to FABIAN SOCIALISM and BACK - PLUS a LOOK at what the FUTURE MIGHT HOLD

INDEX to PART 2  -  REVITALIZE THE DEMOCRATIC WELFARE STATE !

• THE PROGRESS OF REFORM
• BACK TO LAISSEZ-FAIRE
• WHAT OF THE FUTURE ?
• OVERPOPULATION AND POLLUTION
• SOURCES

THE PROGRESS OF REFORM

In these 200 years there have been many thousands of reformers throughout the world working to improve the lot of "the poor" (possibly 30% of the population) and to bring a sense of decency to the remaining 70%.

Reformers known as humanitarians had been fighting slavery, which was eventually outlawed for all British citizens in 1833, though parliament voted 20 million pounds to compensate planters for the loss of their slaves, a huge sum in those days.

The parliamentary system itself went through many reforms. In England the 1832 Act which enfranchised many middle class people and did away with "Rotten Boroughs".(17)

The Chartists agitated for a vote for every adult male as well as better working conditions in 1830 to 1840, they failed in England but they emigrated or were transported to Australia where their democratic ideals brought reform quicker in South Australia than in England.

Robert Owen(18) has been described as a British utopian socialist, father of the co-operative movement. By about 1810 he proved that if factory workers were paid more, treated better, and had shorter hours, the factory would out compete all-others. It was to take two to three generations before the Factory Acts caught up with his standards.
Thousands came from all over Europe to see his factory at New Lanark in Scotland but the example was not copied. He tried to set up a model communal village in Indiana, USA but this was not successful. Today you can have a guided tour around "Historic New Harmony" to explore these utopian experiments.(19)

Economic Development   It must not be forgotten that Britain was in the forefront of the industrial revolution. Many were making fortunes and many of the improved conditions in this 200 years were due to technical advances. In 1851 the Great Exhibition was held in London, became the inspiration for many international world fairs. The Crystal Palace(20) was built in Hyde Park, with cast iron frames and glass panels which had considerable beauty. It comes as a surprise to realise this was a prefabricated building. After the exhibition it was taken down and re-erected at Sydenham in South London (not far from where I lived). We were saddened when it burnt down in 1936.

In the 1860s British manufacturers found their home market penetrated by German exports. The Board of Trade sent an expert mission to investigate. The report showed the economic costs of under-educated management and too many workers who could not read or write. The result was the 1871 Act for universal primary education. It's an ill wind......

Karl Marx wrote the Communist Manifesto(21) in 1847, was banished from Belgium and later from Germany and wrote his greatest work "Das Kapital" In London. While his economic theories have often been acclaimed, his ideas on class struggle and the dictatorship of the proletariat have resulted in Communist countries being ruled by a very bloody set of dictators. While this may have led to the collapse of Communist Russia we can take no pleasure in this event, there is more unemployment and real poverty in Russia today under the so called free-enterprise regime.(22)

In western countries Laissez-faire politicians have been able to use the fear of Communism to delay the election of democratic socialists and stop the adoption of reasonable reforms.

The Fabian Society(23) was founded on Jan 1st 1884 in London. It was not a political party, ie it did not put up candidates for election, but it was, and still is a socialist think tank, which rejected the Marxist theory of class struggle. It wished to promote equality for all through collective ownership and democratic control of the nation's resources.

The Society soon attracted many talented people including Sidney and Beatrice Webb; George Bernard Shaw;(24) future Prime Minister James Ramsay MacDonald; Annie Besant and HG Wells.

They were familiar with the sprawling slums of London, and in the words of GBS said "the greatest of our evils, and the worst of our crimes is poverty ... our first duty, to which every other consideration should be sacrificed, is not to be poor." -  The Capitalist system went hand-in-hand with the slums, the solution was a rational, planned, socialist society.  So began the work of research and education led by Sidney and Beatrice Webb who produced many pamphlets such as the 1887 "Facts for Socialists" which pointed out that the infant death rate at impoverished Bethnal Green was twice that of rich Belgravia.
"Fabian Essays" edited by GBS in 1889 astounded the unknown authors by selling 46,000 copies. One of its more interesting arguments was about municipal socialism.  Local Councils owned property, provided services and were run for the benefit of the ratepayers.  In short a socialist organisation.  All that socialists had to do was to vote for Councillors who would support their ideas. In many cases this had been done. The bottom had not fallen out of the universe so perhaps socialism was not so bad after all.

The Webbs continued their research into social conditions, publishing "History of Trade Unions" and "Industrial Democracy" and many other books.  In 1894 they founded the London School of Economics and in 1913 they launched the "New Statesman"(25) the weekly which became famous under the editorship of Kingsley Martin.

The Fabian Society helped to form The Labour Party in 1900, which slowly gained representatives in parliament. Between the wars two minority labour governments were formed but they were powerless to effect reforms.

This was a bad time for socialists; 2 world wars and the 1930 financial slump led many socialists, including the Webbs, to praise Russia.  However Bertrand Russell(26) when visiting impoverished mathematicians in Leningrad, realised that they could not speak out for fear of the consequences. He was not deceived.

There are over 100 local Fabian societies affiliated with the parent body and groups have been formed from time to time overseas, some of them in Australia. Had it not been for this network of societies, which all believed in the importance of Democracy, and their influence on trade unions and the Labour party, Britain might well have taken the communist path, taking with it the colonies and dominions, leaving the United States out in the cold.

The Attlee(27) Government was formed in 1945 after defeating Churchill, much to everyone's surprise. Clement Attlee's book, "The Labour Party in Perspective" dated 1937 shows that both his democratic principles and practical policies were well advanced.
The Attlee government introduced comprehensive legislation for the establishment of the Welfare State. Its provisions were adapted by many countries to suit their own conditions. The Beveridge(28) Report (which was based on Fabian research) was the basis of the National Health Service and National Insurance (Pensions), was passed in 1948. Some industries were nationalised, it is claimed that these were not successful but that may have been due to the run down condition of those industries.
While the Attlee government only lasted 5 years, the imprint of its legislation lasted much longer than that, and history will record Clement Attlee as one of the great prime ministers of our time.

BACK TO LAISSEZ-FAIRE

During the early 70s inflation became serious and gave the forces opposed to the Welfare State the opportunity to dismantle its achievements.  Keynesian economists disappeared from the scene and Freidmanites took their place.  Small government was advocated, expenditure cuts became the rule. This meant "downsizing" in both government and private industry.   Deregulation of Banks and reduced controls on overseas transactions allowed the bank's new gambling activities which are now nine tenths or more of all their international transactions.  Reduced taxation became all important.   To balance the Budget, governments had to privatise and sell up assets.  Labour governments found they had to adopt right wing policies in order to retain power.  At least they tried to maintain the safety net, but liberal governments had no such compunction.

Large global(29) Companies have always been powerful, but now even small companies realised they could transfer their money and operations to another country where labor was cheaper. They could go "off-shore" or they could stay if they had tax inducements. The real power in the world today is the Company and because we all have to take note of what the Company says or does, the Company is a threat to democracy, governments have lost a large part of their power. This is why we have so much contempt for our politicians.

The company has little control over what it does, behaving like an automaton, it works hard to make the best product at the cheapest price and tries to ignore all other considerations.  They ignore the environment, their shareholders, their workers, they will dump their chief executive officer if their market price falls.  This mindless automaton rules the world.

My trade union friend supports right wing policies, he makes it very clear his concern is that the company should stay right here, providing him and his children with a job. A very powerful argument with shades of George Bernard Shaw, "the greatest of our evils, and the worst of our crimes is poverty ... our first duty, to which every other consideration should be sacrificed, is not to be poor."  It is for this reason that there are factions within the labor party, the old left, which created the welfare state, and the new right which is constrained by the power of the company. When we vote for labor we do not know which faction we are voting for. Thus the company is destroying democracy.(30)

But this does not help those who are now unemployed and make no mistake about it, the current policy of Laissez-faire has not achieved the claims made for it, on the contrary, unemployment has gone up, there is continual stress and fear that your job might disappear tomorrow, your country is loaded with more debt per head than ever before, other countries economies have recently collapsed and may drag us down further. No banana republic has ever recovered from it's crash, continuing to pay many thousands of millions in interest on loans while their people starve.(31)

WHAT OF THE FUTURE ?

Economics is a chaotic system so any prediction is foolish, however a few pointers may be interesting.
The global company may be king now, but cannot last for ever. Modern production methods are such that it will soon be possible for just a few companies to produce all the goods required. There will be no work for the rest of us so we will not be able to buy the product. Similarly the fact that the Global company goes to the country which has the lowest wages will eventually erode all wages everywhere, again leading to low demand for the product and the eventual crash of the system.  
I hope that before the end point arrives companies and economists will realise that Laissez-faire does not work, and it is essential to have large government doing the many things that are required to maintain a civilised-society.(32)

In the immediate future I think it is possible that people everywhere will realise that there is no future in Laissez-faire and they will start to vote for governments prepared to support the welfare state. The recent election in Britain (1997) is a pointer but there are indications that Blair is constrained by the power of the companies. However it must be noted that in many third world countries, where there has been continuous poverty and very little welfare, they see no hope and are moving to hard-line, religious autocratic governments.

What Policies Should be Adopted ?  In order to reduce unemployment it will be necessary to expand government service. Private industry always loses as many jobs as it creates. There is much that can be restored and much that needs to be done to update the infrastructure; water and sewerage, schools and hospitals. To pay for it, taxes will have to be increased and reformed and I don't mean the GST. Anybody who argues against tax increases should be blatantly told that employment is more important.

• There should be a "Tobin Tax",(33) of about 1% on all international transfers of money.
  
• The government should raise money from the Reserve Bank at 1% interest for major works (as was done to build the Transcontinental railway years ago). At present the government is featherbedding the private banks, there being negligible risk in a government loan.
  
• The government should consult with our major trading partners with a view to passing financial legislation which might incur the markets displeasure simultaneously in many countries.
  
• Regulations should be enacted to control imports and exports. We cannot allow a continuing trade deficit, year in, year out. The Impex System(34) of Foreign Exchange is one possibility.
  
• The government should conduct a revue of the teaching of economics and inquire into the disappearance of Keynesian economists with a view to providing revision courses based on facts but designed to show the benefits of providing for all peoples, not just the rich.

Such reforms will provide economic levers, currently lacking, which should have some influence on employment levels. If they do not provide acceptable results then more drastic measures will be required. In the new world that we are entering, to do nothing or to take more of the same bad medicine is a very inadequate response.

OVERPOPULATION and POLLUTION

When thinking about the future all governments and all peoples, need to be aware of the most serious threat facing the world - overpopulation. United Nations figures(35) suggest that in about 3 decades population may reach a peak, if the U.N. program of family planning and education for women is successful. (If not, the population will reach higher levels.)
The industrial revolution has only been able to improve the living standards of western countries and has made little impression on third world countries. Churches and charities may try hard but the problems have grown with the population.
Recent UNICEF reports show that aid to developing countries reached its lowest level for 20 years. (1994 figures, published 1998) while the number of countries asking for aid increased by four countries.

RAT PLAGUES   To help understand the nature of the overpopulation threat consider the rat plague. Mr and Mrs Rat find themselves in a pleasant area with plenty of food.  They have children, and the children have children and the rat population increases by geometric progress to thousands who eat up all the food supply and then start eating each other. They are living in very crowded conditions so disease spreads rapidly and the whole of the rat group dies a horrible death except perhaps for two or three who escape to start the process all over again. In South Australia we have mouse plagues but the story is just the same.

MAN IS A TWO LEGGED RAT  (The sexist language is deliberate) but he has a brain which sometimes he uses and sometimes he does not. In Rwanda and what was Yugoslavia stupid brute force was used.  India and China have been trying to apply reasonable controls in their very serious situations.  In Western countries women have had a good education and have adopted family planning principles.  Even women in the Roman Catholic faith have taken little notice of the Vatican's opposition to family planning.  In third world countries large families are still the rule but western countries are using an excessive amount of the world's resources and spewing out most of the pollution.

OVERPOPULATION EQUIVALENT TO WORLD WAR  The World Population Clock,(36) U.S. Bureau of the Census gives the world population as 5.88 thousand million people in March 1998, the 6000 million mark to be exceeded this year. Using recent figures, which take into account the slowing of the rate of increase which has become evident in some third world countries, the 7000 million mark will be reached in 2012 and 8000 million in 2026.(37)
The addition of one or two thousand million people, plus the pollution to be caused by many thousand million people catching up with western standards, will have an effect on the world little different from that of World War l and ll put together. It is therefore essential for all governments to enact programs as if they were fighting a war(38) - which they are. Failure to do this will lead to powerless governments and peoples trampelled by dictators. Here is a short list of what needs to be done:

• Plant more trees, require all logging firms to plant two trees for every one cut down. Penalties to apply even if they do the logging overseas.
• Install new, and upgrade old, sewer systems, no polluted water to be allowed in rivers or seas.
• Establish schemes to prevent soil erosion, to be updated every year.
• Develop engines that use water or have non-polluting exhausts. (Use of petrol to be phased out. NASA will help, they need an engine that uses electrolised water as they have found water on the moon)
• Build houses which need less timber, require less energy, using local materials.
• Support U.N. programs for family planning and education for women.
• Build new systems first, before downsizing the old ones.
• Require all firms intending to downsize to put some of their money into the above schemes so their staff will continue to be employed.
• Encourage film producers to provide less films about destruction and doom and more films about construction and hope.
• Provide an Australian Relief Service to go into any country when invited to build any of the above items.

Please add your suggestions (See Notes at bottom of this page)

Such a program will require the agreement and the cooperation of the great majority of electors in all countries, including those religions which need to re-examine their objections to family planning. It will also require a strong confident government with the power and determination to act in our best interests. While parts of this program can be farmed out to private firms, the idea of Laissez-faire should be put out with the rubbish.

Much of this program requires co-operation with other countries and the United Nations. Some of my friends have been disillusioned with the U.N. but their poor performance is due to the fact that they too have been constrained by economic rationalist theory.(39) Recent statements from the World Bank suggest they realise the need for change. Such changes can only come if we lobby our government and the Non Government Organisations represented on the U.N. If 50% of the Tobin Tax referred to earlier was sent to the U.N., by all countries, real inroads into Third World poverty could be made.

If we continue down our present path we can only look forward to continuing unemployment, deteriorating infrastructure including hospitals, schools, water, sewer and electricity supplies and if the MAI(40) is adopted we will find that our democracy will have no power to make corrections.  We owe it to the memory of many thousands of reformers who have helped to enact and improve our democratic and social system, we owe it to our grandchildren, to reform and revitalize the democratic welfare state.

Dick Clifford.
Your advice or comment is welcome, due to the 
excessive amount of spam I can no longer publish
my email address. Please write to:
120 Goodman Rd. Elizabeth South, Sth. Australia, 5112 

This document may be reproduced by any
means, in its entirety, with attribution.

SOURCES

The 15th Sambell Memorial Oration by Hugh Stretton,
Beatrice Webb, Woman of Conflict, Carole Seymour-Jones. (Try your public Library)
Encarta Encyclopedia.
The Debt Boomerang,  Susan George

People interested in economic reform should join Economic Reform Australia

The author was born and educated in London, served in the Royal Navy, was a member of the Forest Hill and Sydenham Fabian Society 1948 to 1952. Emigrated to Australia with parents and siblings in 1952. He has been active in the Australian Labor Party and in recent years with the Humanist Society of South Australia.
While the arguments are based on the history of England and Australia, peoples of other countries will find many similarities.

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BACK TO PART  1

To The Global Sustainable Development Resolution. A fitting sequel to "200 Years from Poverty to Decency".

"A SHORT HISTORY OF NEOLIBERALISM" by SUSAN GEORGE The Author of "The Debt Boomerang" answers the question "How did Neo-liberalism ever emerge from its ultra-minoritarian ghetto to become the dominant doctrine in the world today?"

BACK TO MAIN INDEX OF THIS WEB - (Humanist Society of South Australia)

The REALITY PAPERS Includes papers on Poverty Reduction, The Oil Age, and submissions on Defence and on the MAI

THE WORLD ON THE PRECIPICE - From Terrorism to Cut-throat Competition Up to the minute comment following the September 11th tragedy by Dick Clifford.

Background graphic from Cherish

visits since 17-4-98