722
R. H. S. CROSSMAN
the economy, must depend on the profitability of industry. How
many schools we can have, how many roads we can build, how
much of our resources we can allocate to scientific research-the
answer to these questions depends, under our system of managed
capitalism, on the number of golden eggs that are laid by these
oligopolistic geese.
Theoretically, of course, these deficiencies in the public service
could be made good over a period by imposing taxation heavy
enough to raise all the revenue required. A Socialist Government,
it is often argued, would be able to finance the huge extensions of
welfare education and other public services to which it is committed
by encouraging a much faster rate of development in the private
sector of industry and then taxing away a sufficient amount of the
profits. This was the policy put forward by the Labour Party at the
October election and in the short run any Labour Government
would have to attempt it. But experience should have taught us that
the run might be very short indeed. In the Affluent Society
no
Government is able to give orders to Big Business. After one Budget
a Labour Chancellor who tried to squeeze private industry too hard
would soon discover that he was not master in his own house and
that there is a relatively low level above which taxation rates,
whether on the individual or on the company, are only raised at the
cost of provoking tax evasion and avoidance so widespread that
revenue is actually reduced.
If
the motive force of your economy is
the profit-making of large-scale modern private enterprise, a La–
bour Chancellor must be prepared to allow very large profits in–
deed and to admit that the number of golden eggs he can remove
is extremely limited.
In recent months we have seen remarkable evidence of resis–
tance by Big Business to public spending, even where national se–
curity is involved. When faced with clear evidence that the Rus–
sians are rapidly overtaking it in the nuclear race, many of us as–
sumed that the Eisenhower Administra tion would feel itself com–
pelled to allocate enough of the national resources to nuclear war–
fare in order to keep ahead. No doubt the White House would have
liked to do so, but it proved impossible. Although he knew that the
present levels of American defense spending would permit the Rus-
