Small Is Beautiful: A Study of Economics as if People Mattered (35 page)

The Social Councils would have full control over the revenues flowing to them as dividends on the publicly-held shares. General guiding principles with regard to the expenditure of these funds might have to be laid down by legislation; but they should insist on a high degree of local independence and responsibility. The immediate objection that the Social Councils could scarcely be relied upon to dispose of their funds in the best possible way provokes the obvious reply that neither could there be any guarantee of this if the funds were controlled by Local Authorities or, as generally at present, by Central Government. On the contrary, it would seem safe to assume that local Social Councils, being truly representative of the local community, would be far more concerned to devote resources to vital social needs than could be expected from local or central civil servants.

To turn now to our third set of questions. The transition from the present system to the one here proposed would present no serious difficulties. As mentioned already, no questions of compensation arise, because the half-share in equity is being 'purchased' by the abolition of company profits taxes and all companies above a certain size are treated the same. The size definition can be set so that initially only a small number of very large firms is affected, so that the 'transition' becomes both gradual and experimental. If large enterprises under the scheme would pay as dividends to the 'public hand' a bit more than they would have paid as profit taxes outside the scheme, this would act as a socially desirable incentive to avoid excessive size.

It is worth emphasising that the conversion of profit tax into 'equity share'

significantly alters the psychological climate within which business decisions are taken. If profit taxes are at the level of (say) fifty per cent, the businessman is always tempted to argue that 'the Exchequer will pay half' of all marginal expenditures which could possibly have been avoided. (The avoidance of such expenditure would increase profits; but half the profits would anyhow go as profit taxes.) The psychological climate is quite different when profit taxes have been abolished and a public equity share has been introduced in their place; for the knowledge that half the company's equity is publicly owned does not obscure the fact that all avoidable expenditures reduce profits by the exact amount of the expenditure.

Numerous questions would naturally arise in connection with companies which operate in many different districts, including international companies.

But there can be no serious difficulties as long as two principles are firmly grasped: that profit tax is converted into 'equity share', and that the involvement of the public hand shall be local, that is, in the locality where the company employees actually work, live, travel, and make use of public services of all kinds. No doubt, in complicated cases of interlocking company structures there will be interesting work for accountants and lawyers; but there should be no real difficulties.

How could a company falling under this scheme raise additional capital?

The answer, again, is very simple: for every share issued to private shareholders, whether issued against payment or issued free, a free share is issued to the public hand. At first sight this might seem to be unjust - if private investors have to pay for the share, why should the public hand get it free? The answer, of course, is that the company as a whole does not pay profit tax; the profit attributable to the new capital funds, therefore, also escapes profit tax: and the public hand receives its free shares, as it were, in lieu of the profit taxes which would otherwise have to be paid.

Finally, there may be special problems in connection with company reorganisations, takeovers, windings-up, and so forth. They are all perfectly soluble in accordance with the principles already stated. In the case of windings-up, whether in bankruptcy or otherwise, the equity holding of the public hand would, of course, receive exactly the same treatment as those in private hands.

The above proposals may be taken as nothing more than an exercise in the art of 'constitution-making'. Such a scheme would be perfectly feasible; it would restructure large-scale industrial ownership without revolution, expropriation, centralisation, or the substitution of bureaucratic ponderousness for private flexibility. It could be introduced in an experimental and evolutionary manner - by starting with the biggest enterprises and gradually working down the scale, until it was felt that the public interest had been given sufficient weight in the citadels of business enterprise. All the indications are that the present structure of large scale industrial enterprise, in spite of heavy taxation and an endless proliferation of legislation, is not conducive to the public welfare.

In the excitement over the unfolding of his scientific and technical powers, modern man has built a system of production that ravishes nature and a type of society that mutilates man. If only there were more and more wealth, everything else, it is thought, would fall into place. Money is considered to be all-powerful; if it could not actually buy non-material values, such as justice, harmony, beauty or even health, it could circumvent the need for them or compensate for their loss. The development of production and the acquisition of wealth have thus become the highest goals of the modem world in relation to which all other goals, no matter how much lip-service may ~still be paid to them, have come to take second place. The highest goals require no justification all secondary goals have finally to justify themselves in terms of the service their attainment renders to the attainment of the highest.

This is the philosophy of materialism, and it is this philosophy - or metaphysic - which is now being challenged by events. There has never been a time, in any society in any part of the world, without its sages and teachers to challenge materialism and plead for a different order of priorities. The languages have differed, the symbols have varied, yet the message has always been the same: “seek ye first the kingdom of God, and these things (the material things which you also need) shall be added unto you.' They shall be added, we are told, here on earth where we need them, not simply in an after-life beyond our imagination. Today, however, this message reaches us not solely from the sages and saints but from the actual course of physical events. It speaks to us in the language of terrorism, genocide, breakdown, pollution, exhaustion. We live, it seems in a unique period of convergence. It is becoming apparent that there is not only a promise but also a threat in those astonishing words about the kingdom of God - the threat that 'unless you seek first the kingdom, these other things, which you also need, will cease to be available to you'. As a recent writer put it, without reference to economics and politics but nonetheless with direct reference to the condition of the modern world:

'If it can be said that man collectively shrinks back more and more from the Truth, it can also be said that on all sides the Truth is closing in more and more upon man. It might almost be said that, in order to receive a touch of It, which in the past required a lifetime of effort, all that is asked of him now is not to shrink back. And yet how difficult that is!'

We shrink back from the truth if we believe that the destructive forces of the modern world can be 'brought under control' simply by mobilising more resources - of wealth, education, and research - to fight pollution, to preserve wildlife, to discover new sources of energy, and to arrive at more effective agreements on peaceful coexistence. Needless to say, wealth, education, research, and many other things are needed for any civilisation, but what is most needed today is a revision of the ends which these means are meant to serve. And this implies, above all else, the development of a life-style which accords to material things their proper, legitimate place, which is secondary and not primary.

The 'logic of production' is neither the logic of life nor that of society. It is a small and subservient part of both, The destructive forces unleashed by it cannot be brought under control, unless the 'logic of production' itself is brought under control - so that destructive forces cease to be unleashed. It is of little use trying to suppress terrorism if the production of deadly devices continues to be deemed a legitimate employment of man's creative powers.

Nor can the fight against pollution be successful if the patterns of production and consumption continue to be of a scale, a complexity, and a degree of violence which, as is becoming more and more apparent, do not fit into the laws of the universe, to which man is just as much subject as the rest of creation. Equally, the chance of mitigating the rate of resource depletion or of bringing harmony into the relationships between those in possession of wealth and power and those without is non-existent as long as there is no idea anywhere of enough being good and more-than- enough being of evil.

It is a hopeful sign that some awareness of these deeper issues is gradually

- if exceedingly cautiously - finding expression even in some official and semi-official utterances A report, written by a committee at the request of the Secretary of State for the Environment, talks about buying time during which technologically developed societies have an opportunity 'to revise their values and to change their political objectives'. It is a matter of 'moral choices', says the report; 'no amount of calculation can alone provide the answers.... The fundamental questioning of conventional values By young people all over the world is a symptom of the widespread unease with which our industrial civilisation is increasingly regarded.' Pollution must be brought under control and mankind's population and consumption of resources must be steered towards a permanent and sustainable equilibrium.

'Unless this is done, sooner or later - and some believe that there is little time left - the downfall of civilisation will not be a matter of science fiction. It will be the experience of our children and grand- children.'

But how is it to be done? What are the 'moral choices'? Is h just a matter, as the report also suggests, of deciding 'how much We are willing to pay for clean surroundings?' Mankind has indeed a certain freedom of choice: it is not bound by trends, by the 'logic of production', or by any other fragmentary logic. But it is bound by truth. Only in the service of truth is perfect freedom, and even those who today ask us 'to free our imagination from bondage to the existing system's fail to point the way to the recognition of truth.

It is hardly likely that twentieth-century man is called upon to discover truth that had never been discovered before. In the Christian tradition, as in all genuine traditions of mankind, the truth has been stated in religious terms, a language which has become well-nigh incomprehensible to the majority of modern men. The language can be revised, and there are contemporary writers who have done so, while leaving the truth inviolate.

Out of the whole Christian tradition, there is perhaps no body of teaching which is more relevant and appropriate to the modem predicament than the marvellously subtle and realistic doctrines of the Four Cardinal Virtues -
prudentia, juslisia, fortitudo, and temperantia
The meaning of prudentia, significantly called the 'mother' of all other virtues -
prudentia dictur genitrix virtutum
- is not conveyed by the word prudence, as currently used. It signifies the opposite o~ a small, mean, calculating attitude to life, which refuses to see and value anything that fails to promise an immediate utilitarian advantage.

'The pre-eminence of prudence means that realisation of the good presupposes knowledge of reality, He alone can do good who knows what things are like and what their situation is. The pre-eminence of prudence means that so-called 'good intentions' and so-called 'meaning well' by no means suffice. Realisation of the good presupposes that our actions are appropriate to the real situation, that is to the concrete realities which form the "environment" of a concrete human action; and that we therefore take this concrete reality seriously, with clear-eyed objectivity.'

This clear-eyed objectivity, however, cannot be achieved and prudence cannot be perfected except by an attitude of 'silent contemplation' of reality, during which the egocentric interests of man are at least temporarily silenced.

Only on the basis of this magnanimous kind of prudence can we achieve justice, fortitude and
temperantia
, which means knowing when enough is enough. 'Prudence implies a transformation of the knowledge of truth into decisions corresponding to reality.' What, therefore, could be of greater importance today than the study and cultivation of prudence, which would almost inevitably lead to a real understanding of the three other cardinal virtues, all of which are indispensable for the survival of civilisation.

Justice relates to truth, fortitude to goodness, and temperantia to beauty; while prudence, in a sense, comprises all three. The type of realism which behaves as if the good, the true, and the beautiful were too vague and subjective to be adopted as the highest aims of social or individual life, or were the automatic spin-off of the successful pursuit of wealth and power, has been aptly called 'crackpot-realism'. Everywhere people ask: 'What can I actually do?' The answer is as simple as it is disconcerting: we can. each of us, work to put our own inner house in order. The guidance we need for this work cannot be found in science or technology, the value of which utterly depends on the ends they serve; but it can still be found in the traditional wisdom of mankind.

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