The State and Industry
By W.T. Layton
M.A., C.H., C.B.E.; Editor of the Economist, 1922; formerly Member of Munitions Council, and Director of Economic and Financial Section of the League of Nations; Director of Welwyn Garden City; Fellow of Gonville and Caius College, Cambridge, 1910.
Mr. Layton said:—The existing system of private enterprise has been seriously attacked on many grounds. For my present purpose I shall deal with four: (1) The critic points to the extreme differences of wealth and poverty which have emerged from this system of private enterprise; (2) it has produced and is producing to-day recurrent periods of depression which result in insecurity and unemployment for the worker; (3) the critics say the system is producing great aggregations of capital and monopolies, and that by throwing social power into the hands of those controlling the capital of the country, it leads to exploitation of the many by industrial and financial magnates; (4) it produces a chronic state of internal war which saps industrial activity and the economic life of the community.
I shall not attempt to minimise the force of these objections; but in order to get our ideas into correct perspective it should be observed that the first two of these features are not new phenomena arising out of our industrial system. You find extreme inequalities of distribution in practically all forms of society—in the slave state, the feudal state, in India and in China to-day. Nor is this the first period of history in which there has been insecurity. If you look at any primitive community, and note the effect of harvest fluctuations and the inevitable famine following upon them, you will recognise that the variations of fortune which affect such communities are more disastrous in their effect than the trade variations of the modern world.
But after all qualifications have been made these four indictments are sufficiently serious and must be met, for it is these and similar considerations which have driven many to desire the complete abolition of the system. Some wish to abolish private property, and desire a Communist solution. Others practically attack the system of private enterprise, and wish to substitute either the community in some form or another (e.g. state socialism), or some corporate form of industry (e.g. guild socialism).