From International Socialism (1st series), No.4, Spring 1961, p.30.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Saving in a Free Society
J. Enoch Powell
Hutchinson for IEA. 1960. 21s. 136 pp.
Modern Conservative economics is founded firmly upon a pragmatically amended version of laissez-faire. The amendments take place in practice, rather than economics, but occasionally the first intrudes on the second.
Mr Powell, however, lets little practical amendments impinge on his analysis. On the contrary, his is one of the more consistent approaches. His extravagantly priced book explores the Victorian virtue of thrift and seeks to reconcile it with modern economics. With a Utilitarian nicety about individuals (so far as one can tell, always members of the investing class), he expends a lascivious precision over trivia. Finally, pressing on through considerable quantities of half-illuminating statistics, to the key conclusions: profit taxes ‘distort’ the economy, government manipulation of the interest rate ‘distorts’ the economy, inflation is a bad thing and ‘distorts’ investment decisions, taxes on savings ‘distort’ the distribution of real resources, and, finally, the key to the matter, less income tax would increase savings and could be regained through indirect taxation.
The conclusions are admirably worked out in a world where there are only high savers (i.e. high income receivers) and equilibrium growth, rather than justice, is the prime consideration. The State in this picture is a self-negating umpire, or even, just an observer – any interference on its part destroys the beautiful logical mechanism leading far more effectively to the ‘satisfaction’ of individual ‘wants’. Which individual is a question he cannot ask.
However, the interest of Mr Powell lies not in his musings but in his position. Other Conservatives do not look upon the economy in quite so purist a fashion, but nevertheless more and more are reaching similar conclusions to Mr Powell. When the jargon is unpacked, this book is a contribution to the steady disintegration of the Welfare State. Retaining the verbiage of welfare, never risking a violent measure, the present government is dismantling the legal apparatus set up by Labour to act as some small protection for the working-class. If the economic wind blows, the machinery of inter-war oppression will be found to be reassembled intact and yet again the working-class will find itself beginning from scratch in the struggle to keep alive.
Last updated: 18 February 2010