Arnold Toynbee’s theory of history holds that civilizations grow by responding successfully to challenges under the leadership of creative minorities, and decline when those minorities fail to react creatively. Professor Friedrich Hayek considers that “…the growth of civilization rests largely on the individuals’ making the best use of whatever accidents they encounter.” Unlike Marx, both Toynbee and Hayek give the individual a place in the making of history and they certainly do not consider that the whole of history is shaped by economic forces.
One of the weaknesses of Marxism is that of an internal lack of belief in its own doctrine. If history is inevitably on its side and shaped exclusively by economic forces then there would seem to be no need for all the propaganda, subversion and treachery perpetrated by its supporters in an attempt to make the inevitable happen. A critic of the theory of Marxist inevitability could easily point out that it was the “accident” of the facilities provided by Germany in 1917, when the Russian Revolution broke out, which allowed Lenin to return to Russia. Without the provision of a sealed train to travel with other socialists to the Baltic and then Russia, the course of the revolution could have been very different. The whole history of World War II would probably have been very different if Germany had attacked Russia and not the West in 1939.
Professor Hayek has written that “the ideas which are changing our civilization respect no boundaries.”
Certainly intellectual ideas spread like measles yet their triumph at a particular time and place depend upon a variety of circumstances and accidents. Is there any means of deciding what these are?
The greatest challenge for the West in our time is the preservation and the extension of its belief in freedom against collectivism, of liberty against tyranny, of free enterprise against socialism. Can we learn to turn our ideas into accepted reality in defense of the rule of law, personal liberty, minimum government and economic freedom?
The first thing we must do is to examine the lessons of history. To the Marxist and the left wing destroyers, history is not a relating of the events of the past but a weapon in an ideological conflict. Let me give two illustrations, both connected with my country.
Empire: Exploitation or Benefit?
Take first the sapping of British confidence by popularizing a false Marxist conception of what was the nature of the British Empire. The truth is that the second British Empire arose particularly in Asia and Africa, out of a mixture of exploration, trading, military, missionary and accidental factors. A politically realistic concept of competing nation states required Britain to have military bases to protect her mutually beneficial world trade after the Industrial Revolution.
In the nineteenth century it was considered that the empire was temporary. There was no claim to build an empire of a 1000 years. Adam Smith opposed the possession of colonies on economic grounds. He wrote, “Under the present system of management, therefore, Great Britain derives nothing but loss from the dominion which she assumes over her colonies.” In the 1840s and 1850s a whole school of influential liberal and conservative thinkers opposed all empire, apart from the possession of coaling stations, as an economic and military burden on Britain.
It was only in the 1870s and 1880s that Benjamin Disraeli and the Conservatives discovered the potentials of empire as a great asset in patriotic feeling and national unity. It is ironic that from this very time dates the beginning of the economic and military decline of Britain, due possibly to the export of much of our capital to empire and also the emigration of hundreds of thousands of our most able and adventurous youths to the white “colonies” of Australia, New Zealand, Canada and South Africa.
Yet the empire was always a liberal empire in a way that was unique. The rule of law and considerable equality before the law was given to areas which had never known them before and look like never knowing them again. There was a Pax Britannica which equalled that of Rome. We operated an open-door trading policy which allowed foreign competition for colonial markets. The intellectuals of the colonial territories were also trained on Macaulay and the thinkers of liberty and freedom at Oxford and Cambridge—hardly the way to retain servile colonial territories. Soon the white colonies became home-ruled dominions—the lessons of the American War of Independence had been learned. Even in India and Africa forms of parliamentary and representative assemblies were introduced. Every territory given its independence had a constitution which was based on popular suffrage, the courts and representative institutions.
Yet the Marxists in alliance with other left-wing destroyers and certain starry-eyed but ill-read men and women have attacked the British Empire as if it were something for which Britain should apologize forever without the hope of absolution. If you destroy a man’s past, his present and future are also destroyed. This has been attempted in Britain with many of our allies in the free world, including some Americans, playing the Marxist game. Cast your eyes now on the tyrannies and primitive and bloody tribes and millions of massacred people in the countries that have replaced the British Empire. Look at the power vacuum its end created which America has desperately tried to fill. Can it be doubted that the British Empire was, within the concept of fallen man, something of which Britain should be proud?
The Truth on the Industrial Revolution
The second illustration of Marxist revision is the interpretation of the Industrial Revolution and the rise of capitalism in Britain. It was a process which raised the standard of living of all classes in Britain, particularly the working classes, to a level undreamed of in previous generations. Greater leisure also brought a nineteenth century popular cultural renaissance, and economic liberty prepared the way for extending political liberty, which eventually culminated in all men and women having the vote. Yet the Marxists and the Socialists portray the Industrial Revolution as a time of virtual enslavement of the working classes, as if the pre-industrial state of man was one of `Merrie England’ with everyone dancing round the maypoles on the village green in between eating prime meat and vegetables in the pure country air for three score years and ten!
As I wrote in The Long Debate on Poverty, pre-industrial rural living conditions in my native Lancashire were very poor indeed. Housing accommodations frequently consisted of a two or three-roomed cottage which served as a home for six or eight persons and as a spinning and weaving workshop for all members of the family from the earliest childhood. Food was limited to oatmeal porridge, milk, bread, cheese and potatoes, with meat a rare luxury.
In towns, conditions were often worse, and many families lived and worked in a single room amidst insanitary conditions. One man reported to a Parliamentary Committee on the conditions of the non-factory domestic-system hand-loom weavers:
The great majority of hand-loom cotton-weavers work in cellars sufficiently light to enable them to throw the shuttle, but cheerless because seldom visited by the sun…I have seen them working in cellars dug out of an undrained swamp; the streets formed by their houses without sewers, and flooded with rain; the water therefore running down the bare walls of the cellars, and rendering them unfit for the abode of dogs or cats…The floor is but seldom boarded or paved…
It was little wonder there was a short expectancy of life in the pre-industrial society. The living standard of workers in factories after the Industrial Revolution was up to three times higher than that of the previous agricultural laborer. Thus capitalism raised their economic sights and also increased their political liberties.
These two illustrations show the importance of a correct interpretation and teaching of history. The Marxist intellectuals and their satellites have purveyed a view which is all too commonly accepted about the need for socialism to remedy the evils of capitalism. By doing so they have changed the course of history—in Britain the Socialists have come to power on a gross perversion of history, and by the parallel attack on the British Empire they have sapped the will of the British people and driven wedges between Britain and her allies in the free world. Indeed, by convincing the intellectual elite of Britain that they pillaged a great empire and enslaved their peoples and that we owe reparation, they have encouraged immigration into Britain creating dangerous social tensions which never before existed.
The Formula To Win
How do we who believe in the free world counter-act such pressures and ensure the continuance of liberty? How do we win general and particular battles against the left. I believe there is a formula we can honorably use which will help us to be far more effective.
Firstly we need the genuine thinkers and philosophers who state our basic beliefs. We have many of those in the free world’ both dead and alive. There are some of the fathers of the American Revolution; there is John Locke, the British philosopher; there is Adam Smith and the Wealth of Nations. There are de Tocqueville, Mises, Popper, and Hayek, and there are others. We must put on the armor of their ideas which cross our national and personal boundaries.
We then need popularizers to bring these ideas to light in the public’s eye. They must fully understand them and apply them to both general and particular cases. These are the school and college lecturers, the journalists, the radio and television commentators and publicists. They have an important role to play. F. A. Hayek refers to them as the “second hand dealers in ideas” without in any way detracting from their significance in deciding whether good or bad ideas eventually prevail.
This group overlaps with a third group—those who create movements to advance the application of specific ideas to policy. These are the political pressure groups on government administrations and political parties.
Fourthly, the ideas must be taken up by one or more political parties which believe the ideas are both right and popular. They must see electoral advantage in adopting a specific program.
Finally, there must be the accident or circumstance which brings the issue to a head and forces or encourages a political party to put the program into immediate operation.
Corn Laws Repealed
Let me illustrate this explanation of the transition of ideas into reality from events in Britain and Germany. The classic case is the repeal of the Corn Laws in 1846 in Britain, after which for some forty years Britain was more wedded to the free society and free enterprise than any other country has ever been.
The economic doctrine of the sixteenth, seventeenth and eighteenth centuries was mercantilism. Its basic aim was to enhance the power of the state by ensuring an inflow of precious metals. To this end exports were encouraged and imports restricted. Monopolies were granted to producers and there was much interference by government regulations with trade. As part of this doctrine the import of wheat was restricted from 1663, and from 1673 bounties were paid on all wheat exported.
Adam Smith was one of the most influential of those who provided the ideas which brought the downfall of this system when he published The Wealth of Nations in 1776. He considered that the Corn Laws interfered with the natural course of trade and led to high prices at home.
His ideas were immediately recognized for their worth by politicians like Edmund Burke and a host of lesser figures around the country. Economists like David Ricardo and political -philosophers like Jeremy Bentham popularized his ideas at a high level, while scores of others in essays and speeches spread his influence throughout the country.
Meanwhile the third stage was reached when a political pressure group was established in the form of the Anti-Corn Law Association. From its start in Manchester in 1838, it grew into the Anti-Corn Law League. It was probably the most formidable political pressure group ever known in the United Kingdom. There had been Anti-Corn Law Associations before dating back to the end of the eighteenth century, but they had nothing like the political muscle of the Anti-Corn Law League.
The league mobilized the new industrial wealth of Britain, especially that of the cotton manufacturers. Huge sums of money were raised, paid lecturers sent round the country, meetings held everywhere, delegations waited regularly on all prominent men, and tracts and pamphlets flooded the country. Subventions were paid to newspapers to win their support and The Economist, which still exists, was founded as a free trade organ in 1843.
League candidates spent large sums of money to win the support of voters and they registered in all possible constituencies. Although it was a self-proclaimed middle-class organization, it adjusted its economic arguments to suit its audiences, whether tenant farmers, rural laborers or urban working class. The government was threatened with massive civil disobedience and the league in certain cases stayed only just on the right side of the law.
By 1845 the Whigs, one of the two great parties, accepted the need for repeal. The Radicals under Cobden had always opposed the Corn Laws, and it remained only for the Conservative Party to be converted. It was believed by that year that Peel, the Conservative Prime Minister, himself favored the end of the Corn Laws and was simply waiting for his party and its land owning supporters to move to his opinion for him to end the Corn Laws. The occasion, however, was the potato famine bringing a food shortage of a kind unknown since 1811, especially in Ireland. In 1846 the Corn Laws were repealed and the great period of British free trade was inaugurated.
Germany’s “Economic Miracle”
My second example is that of the German “economic miracle” of 1948. The merits of a free enterprise society in Germany had previously been expounded as an idea by Wilhelm Roepke and Walter Eucken. Here it was the event, more than the pressure group, which brought political action, although there were many Germans who had suffered under Hitler who were pushing for the return of a much freer society.
The German events are well described by Antony Fisher in Must History Repeat Itself?He states, “In 1948 Germany was in a state of economic collapse. Inflation paralyzed industry and business. Post-war reconstruction was at a standstill and morale could hardly have been lower.” In 1948 production was only half the 1936 level, exports were one-tenth and imports one-quarter the level of 1938. Infant mortality was high and food consumption low.
The German economy was blanketed by a network of controls so that goods only appeared on the black market. Society had returned to primitive barter, in which cigarettes and other articles supplanted state paper money. Many expected Germany to be permanently weakened economically. The Christian Democrats under the leadership of Konrad Adenauer and Ludwig Erhard decided to try the free enterprise ideas. They went ahead despite the opposition of the German Social Democrats, the Socialist ministers in power in Britain and influential in the Control Commission, the German trade unions who threatened a general strike, and the German civil service, which began secretly drafting new decrees for the re-establishment of controls.
When the situation was judged almost irredeemable, Erhard in July 1948 replaced the inflated Reichmarks with a smaller supply of Deutschemarks and wiped out at one stroke all the controls on the German economy. The result was that Germany trebled her exports and almost doubled her money income between 1949 and 1956, while the cost of living rose only 14 percent. By 1960 Germany was the unchallenged economic leader of Europe. The greatest triumph of Erhard’s reforms was that the German Social Democratic Party before it could win an election was driven to promulgate the Bod Godesberg declaration to assure the voters that they were not a socialist party.
The German economic miracle is of great interest to me since a similar miracle is required in Britain to free us from the controls, restrictions, excessive government expenditure and heavy taxes if we are not to become a people’s socialist republic of the Polish pattern. This miracle can only be achieved if the Conservative Party recognizes the absolute necessity of following a free enterprise policy with freedom under the law. The ideas of the classical economists are promulgated by the influential and important Institute of Economic Affairs; leading journalists have begun to take up these ideas; the Conservative Party is active, and the intensifying economic problems of Britain mean that we shall have to go forward to a socialist society or revert to a free enterprise society. One factor is still missing—a dedicated political pressure group which could force the Conservative Party to adopt the only policies which will save both it and Britain. I am inclined to think the battle cry should be a “Less Taxes” movement which would unite millions in the opposition to overgovernment and socialism. Hayek will, however, shortly suggest a Free Money Movement, comparable to the free trade movement of the nineteenth century.
Another Attempt: The Voucher
In the last three years, since leaving teaching for politics, I have seen the operation of the various stages which transform ideas into reality. Let me illustrate this in one sphere: that of the educational voucher. The educational voucher is the plan to give all parents a voucher equivalent to the cost of state education which they can then exchange in paying for their children’s education at a school of their choice. It could be confined to the public sector only or extended to private schools that accept the voucher as part or full payment of fees. I prefer this latter plan since it would effectively make all schools private in the biggest denationalization from central and local government ever seen in Britain. I know that in the Alum Rock experiment in California the voucher was allowed to be used in the public schools only, but I firmly believe that its most beneficial operation requires that it be exchangeable in all schools. The great merit of the voucher is that it places control of schools in the hands of the consumer, where it should belong, and not with teachers or schools or bureaucrats as unresponsive producers. It will close the worst schools because no one given a voucher choice will go to them. The voucher can also be used to set up new private schools where existing public schools are unsatisfactory. The voucher thus strengthens the free society since it passes political and educational power back to the family, away from the bureaucratic state and local government officers. The acceptance of the idea of the voucher is by no means equivalent to the repeal of the Corn Laws or the German economic miracle, but it would be a major extension of the free society whose possible acceptance in Britain I have advocated and advanced after considering the relevant factors. It thus holds lessons for us all.
As a school principal ten years ago I worked out for my own interest a plan for a voucher system. Imagine my surprise when I found that the idea already existed. Adam Smith did not advocate a voucher system but he wrote that choice in education not only ensured the continuance of freedom but also improved the quality of education. He wrote, “Those parts of education, it is to be observed, for the teaching of which there are no public institutions, are generally the best taught.”
Tom Paine, author of the Rights of Man, worked out in 1790 in Virginia a method whereby poor families would receive an annual grant of four pounds for each child under the age of fourteen, which they must spend on their education. He proposed a simple law “enjoining the parents of such children to send them to school, to learn reading, writing and common arithmetic: the Minister of every parish of every denomination to certify jointly to an office for that purpose, that this duty is performed.”
In 1926 in Britain, Francis Cardinal Bourne, fourth Archbishop of Westminster, commended a type of voucher to a session of the National Catholic Congress meeting in Manchester. His specific aim was to remove the financial burden on the 10 percent Roman Catholic parents whose children attended Roman Catholic schools and the larger body of Anglican parents whose children were in Anglican schools.
Milton Friedman has advocated an education voucher, and so has Christopher Jencks, Director of the Center for the Study of Public Policy in Cambridge, Massachusetts, although he has placed limitations on its use which I would reject.
In Britain until recently the idea was little known. In 1967 the Institute of Economic Affairs published a book on it called Education: A Framework for Choice, which ran to a second edition in 1970. I wrote about it intermittently and there were other supporters but it was not popularized and seemed unlikely to be taken up by a political party.
Some two years ago Mrs. Marjorie Seldon, the wife of Arthur Seldon, the editorial director of the Institute of Economic Affairs, attempted to get a resolution through the National Council of Women in favor of the educational voucher. It passed but it did not obtain the necessary two-thirds majority to become the official policy of that organization. Mrs. Seldon then formed an organization called the Friends of the Educational Voucher in Representative Regions to expound the case for the voucher.
This organization has used leaflets, lobbying and letters to the press to raise popular support throughout the country. Some of the largest political meetings held in Britain last year were organized by it and in many constituencies there are now active pressure groups espousing the cause of the voucher on all occasions. Local polls have been held in towns showing the overwhelming support for it among all sections of the community, particularly the working class. Thus popularization of the idea and the pressure group movement were combined in one.
The circumstances were ripe for two reasons. Standards in many British primary schools (ages 5-11) were collapsing because of the replacement of firm, structured curriculum and standard assessment by informal, non-structured, fashionable teaching methods whose results have been appalling. There have been major scandals in certain schools—especially one in London, the William Tyndale School—where the children were generally illiterate, where discipline was nonexistent and where half the parents, largely working class and often immigrant, kept their children away from the school.
In secondary schools (11-18 years) there has been a similar deterioration in standards, this time by a mixture of the influence of new teaching methods linked with the destruction by the Labor Party of the tightly-structural grammar schools and their replacement by all-ability, large, city comprehensive schools where academic results and disciplinary standards, especially in the poorer areas, have again shown decline.
When the classical economists supported compulsory school education, they believed that minimum standards should be prescribed in all schools. Today, one hundred years later, such minimum standards are no longer enforced in Britain. There is thus grave disillusionment with the state educational system and people are prepared to try the educational voucher as an alternative.
The Conservative Party in Britain, after the election of Mrs. Margaret Thatcher as leader in place of Edward Heath, is more market-oriented so that my task of making the educational voucher party policy was considerably eased. Last year I was asked to chair a Parliamentary Committee of the Party to consider the educational voucher. I accepted and appointed members to represent the various strands of the party. We met regularly and interviewed academics, pressure groups, headmasters and other interested people with the result that this year we recommended a number of voucher experiments by local authorities as part of the Conservative policy at the next general election. This is a Hayekian solution: we will not insist from the center on local authorities undertaking voucher experiments, we will simply support and monitor such schemes as local authorities, by spontaneous evolution, wish to introduce. As a Conservative government we shall publicize the results of these experiments and leave areas to decide whether to introduce similar voucher experiments.
On July 21 this year, from the Conservative front bench of the House of Commons, I moved that up to six educational voucher experiments should be permitted and supported. It was backed by a three line whip—compulsory voting for all members of the party—which makes it official party policy. Mrs. Seldon was in the Parliamentary gallery to hear my speech and to listen to the debate. Needless to say, the motion was defeated by the whipped Labor majority, but nevertheless it was a considerable advance. It is an example of what can be achieved by an idea, supported by popular advocacy, a pressure group and acceptance by a political party provoked by an event or events which bring the issue into prominence.
The Free Society Can Win
The future of the free society depends upon its supporters understanding the techniques and pressure points of policy-making. We must first ensure that the Marxists and their allies do not misinterpret our past and destroy confidence in our countries and our mutual respect. We must realize that we are the creative minority who must meet the challenges of our time. We must go back to read the great thinkers and select powerful texts on freedom. We must see that these ideas are popularized in books, radio, television, newspapers and meetings. There must be pressure groups to alert public opinion and put pressure on political parties. The ideas must then be accepted by political parties ready for the events which will make their implementation seem the natural remedy for some widely felt grievance. The repeal of the Corn Laws, the German economic miracle and, to a much lesser extent, the advance of the educational voucher idea in Britain provide encouraging illustrations of what can be achieved. To succeed we must learn their lessons and summon up the confidence necessary to win further major victories. Ideas from ivory tower thinkers must be popularized, scattered like confetti and then, at the right time channelled by political pressure groups and parties to become an irresistible force for extending the economic, political and moral advantages of a free society.
