(1) Draft speech

ECONOMICS AND PROGRESS

Any lecture with such a title sounds as if it would be very dull. The very word economics is today synonymous with two things—a lot of theories, and a lot of statistics. On theories, one is reminded of the three philosophers in Peacock's Headlong Hall, who after carefully examining identical evidence and experience drew respectively the conclusions:

(i) that the state of mankind and the world was steadily improving over time; (ii) that it was steadily deteriorating; (iii) that while there was much to be said on both sides, on the whole it was remaining the same.

On statistics, we have to be very wary, because a few statistics can be used to deduce a lot of conclusion, many of them false. For example, what would you conclude from the following set of figures, which appear in the annual booklet from the Statistical Office of the European Communities? From Table 98 of the 1967 edition we learn that while 88 per cent of houses in the United States have bathrooms, in Switzerland it is 69 per cent, Sweden 61 per cent, Netherlands 59 per cent, Germany 49 per cent, and a number of other countries fewer still! I hope you haven't concluded too much! In the first place, figures of this kind tend to be out-of-date. Although in the 1967 booklet, these relate to the years when a census of this distribution was [end p1] taken which happens to be about 1961, 1962. So the percentages may have changed since then. Secondly, these figures are just a snapshot of the facts at one particular time. Usually in economics and statistics it is the trends that are important and one wants a fairly wide range of comparable figures over a period of time.

You might, however, be interested in some of the other odd "facts" (if figures can ever be called facts) which I came across while preparing this talk. Calories, for example, the sort that we eat. Did you know that, according to the 1967 booklet, Mrs. Average in E.F.T.A. countries eats more calories per day than Mrs. Average in E.E.C. countries. We in E.F.T.A. eat on average just over 3,000 calories a day while E.E.C. on average eat some 2,800 calories a day. In separate countries, Denmark leads the field (if that is the way to put it) with 3,300. I regret to say that the United Kingdom comes a close second followed immediately by Switzerland, Sweden, and Belgium.

When it comes to passenger cars (as distinct from commercial vehicles), then in Europe, Sweden leads us all with 240 per 1,000 people, France has 198, Germany 178, United Kingdom 174, Denmark and Switzerland 170.

On telephones, again Sweden easily leads with 434 per 1,000, Switzerland next with 373, Denmark 284, Norway 242, and the rest of us seem very poor by comparison!

When it comes to television the order is Sweden, United [end p2] Kingdom, Denmark, Germany.

That has been a very miscellaneous collection of statistics, all of them relating to consumption of a number of products. When looking for economic progress we tend to look for certain features:

1. How much and how fast has the Gross National Product risen?

2. What is the income per head of the population?

3. What is the standard of living and how fast is it rising? It is this factor which tends to be measured in numbers of cars, T.V. sets, telephones, refrigerators and various anti-drudge devices such as washing machines, electric cleaners, etc.

4. What proportion of the population stays on at school or goes to University?

5. What level of social security provision, both private and state do retired people enjoy?

Incidentally, if I may digress on this point for a moment, it is interesting to note the different ages for retirement under the many European pension schemes.

Italy has the lowest age—possibly due to her difficult unemployment problem in the past—60 men, 55 women.

France, 60 men—can defer until 65. (Austria, Belgium, Germany,) (Finland, Netherlands, Portugal,) (Spain, Switzerland, U.K.) Men 65, but have different ages for women. (Austria, Belgium, Germany U.K.)—60 for women. [end p3] Switzerland—62 for women. Finland, Netherlands and Portugal—65 for women. Sweden and Denmark—67 men and women Norway and Eire—70

These differences represent different developments with regard to social security schemes, varying histories with regard to numbers of employed and kind of occupation and also possibly a different age structure of population. In Europe as a whole the number of persons aged 65 and over are representing an increasing proportion of the population. The forward studies suggest that this trend will continue. At the other end of the scale, higher school leaving age and more students at college and university has meant that young people start employment later. The number of people in work has remained constant. Taking the first ten years of the Common Market countries, in 1958, 100 employed persons had to support 127 who were not. But by 1967, 100 employed persons had to support 150. The only exceptions to this rule in E.E.C. are the Netherlands and Belgium. One of the differences between the European countries and the United States is that the latter tends to have a higher proportion of young people.

But before I digressed on ages of retirement and the differing population structures we were talking about the larger themes of Economics and Progress. Judged in material terms, the progress is not in doubt; incomes are up; industrial production has risen, [end p4] the standard of living has risen, and universities have expanded. It is interesting, however, to see how the economic situation has developed, and with it the arguments and the emphasis.

The Trade-Cycle Period

Those of you who remember the thirties, and possibly the twenties, will know from experience the different problems we had then. It seemed that trade went in cycles with enormous differences between boom and slump. The years 1929–1933 contained such economic catastrophe that none of us would wish to live through them again. We have now become accustomed to fairly steady progress and we, therefore, tend to forget that in the United States, the gross national product fell by one-third (33⅓ per cent) in the four years from 1929. In one year alone, 1931–32, it actually fell by 15 per cent. In terms of Gross National Product, it doesn't sound very human or very important. In terms of the misery created by unemployment, and in other countries, inflation, the experience is etched on the memories of people and of nations. Countries were affected slightly differently, but all suffered. To Germany, the worst scourge was inflation as her people saw money lose its value, not yearly, but daily. This experience may even now be a partial explanation of why Germany is so insistent and successful in maintaining the value of, and confidence in her currency. In the United Kingdom the value of money (if you had any) actually increased between the war years. For example, 20s. in 1920 was worth 30s. in 1938, (but is only worth 8s. now!). [end p5]

Our bitterest memories of those years come from unemployment; the danger of losing one's job and being unable to get another. This perhaps explains our tendency towards restrictive practices which eke out the available work, and explains the trouble still caused by making employees redundant.

Whatever the different experiences, all efforts of economic theorists during the late thirties were concentrated on “ironing out” the booms and slumps. The publication in 1936 of Keynes celebrated work “The General Theory of Employment, Interest and Money” seemed to provide a solution. Economics became more mathematical and more exacting as endeavours were made to forecast the course of the cycle, analyse and explain its irregularities, and to judge when to apply the necessary remedial action. In economics, and in politics, the timing of policies is of supreme importance.

In the words of the authors of “Technological Economics” (Davies and McCarthy) published 1967, economics has become a science of decision taking and is an attempt to provide a quantitative basis for decision taking in social affairs.

The Economics of the Post-War Years

In the post-war period, neither in the United States nor in Europe have we had anything resembling the slumps of the thirties. Almost every year after the post-war recovery period, the national income in real terms has increased. In some years it has gone ahead faster, in some more slowly. This uneven progress has [end p6] been criticised by some politicians as “stop-go” , and some have implied that if only a government of a different political complexion were substituted for the present, the stop could be eliminated and thereafter it would be all “go” . This has always seemed to me to be a false assertion. To avoid the extremes of boom and slump one obviously has to stimulate demand at the onset of a recession, and to restrict demand if a boom looks like going too fast. To this extent, stop-go policies are not undesirable but are a necessary ingredient of economic policy.

The Late Fifties and the Sixties—GROWTH

Perhaps because of our comparative economic success in the early post-war years and also because of the miraculous recovery of Germany and Japan, a new objective crept into economic and political theory, GROWTH. Not only was it desirable to continue growing, but henceforth we must grow faster. Specific targets were set and performance measured by how nations performed as compared with others. Economic theory began to concentrate on the causes of growth but in spite of the volumes that have been written we still do not know precisely how to accelerate growth in the long-term although there is a good deal that can be done about it in the short-term.

It is not, however, my purpose here to deal with an analysis of growth but to discuss some of the other factors which arise from it.

It may be asked why go on growing? Bearing in mind that [end p7] growth is usually defined as increase in consumption per head, will there not come a time when people will say we've got enough, no more work this week? Undoubtedly there are a few cases where this is true and it may explain the rate of absenteeism in some industries. There are, however, other causes. Such an attitude usually means that although the employee would probably like to go on to attain the next step up in the standard of living ladder be it an extra holiday or another car, or a boat, the taxation level on his extra earnings is so great that it isn't worth the effort. This, of course, could easily be remedied.

In my view, in most European countries or even in the United States, we are nowhere near the end of the desire for increased standards of living.

But improvement in material well-being is not the only objective of growth. In his 1964 election manifesto, Sir Alec Douglas-Home, then Prime Minister of Great Britain and leader of the Conservative Party, said:

… “greatness is not measured in terms of prosperity alone. What counts is the purpose to which we put prosperity. The Conservative purpose is clear … It is to raise the quality of our society and its influence for good in the world. We are using the growth of wealth to expand opportunities for the young, to provide more generously for the old and the sick and the handicapped, to aid developing countries still battling against widespread [end p8] poverty, and to maintain the strength on which national security and our work for peace depend.”

To me, the key phrase is that of raising the quality of our society—an explicit recognition that growth has other ends as well as those of increased consumption. Please do not think that I decry increased material welfare. I think it a laudable objective that a husband and wife should wish to raise the standard of living for the family to include benefits which they themselves never enjoyed. To beautify the home, to have labour-saving devices, to have enough for foreign travel and some savings to invest. The quality of life includes these but it includes other things as well. It has always seemed ironic to me that with wages and salaries higher and more time and money spent on education, orchestras, ballet and theatre need substantial state subsidies to continue.

However good state welfare may be, it can never be a substitute for the good neighbour.

In building new homes and new roads we must watch design carefully. While we may have to replace beautiful countryside with homes and highways, let us make them as attractive as we can for the money spent. Some of our most beautiful buildings and cities are hundreds of years old. Many of the people who had money in those times had supreme tastes and an eye for beauty. Our standards in lay-out and design should be equally high. [end p9]

Problems Arising from Growth

I want to turn now to some of the problems and circumstances that have arisen from the comparatively rapid growth we have experienced. In this connection the first point is that in a large part economic growth has been due to tremendous advances in engineering and technology. Machines have become more and more complex and capable of carrying out more functions. Go into a shipbuilding yard these days and you will see very large buildings housing quantities of precision ruling machinery but only a few people in each shop handling it all. Indeed going round one shipyard the most work-people I ever saw together were half-a-dozen mending a hole in the road. With the advance of machines, industries have had to adapt to them and the new techniques. The whole system of work has changed. Enormous sums have been required for investment in the new technology. The capital sum laid down per worker in factories is steadily increasing. It can sometimes exceed half the total wages the worker will earn over his entire working life. Man himself seems to become more remote from the product which is increasingly produced by the machine.

Secondly, along with the advances in technology has come a rapid increase in knowledge itself. At the beginning of his book on computers and the changing world, John Hargreaves points out that whereas in 1850, knowledge was doubling every 100 years, by 1960 it was doubling every 10 years and by 1970 will be doubling [end p10] every 5 years. Added to this we are now able through computers to calculate more quickly. Man can carry out 15 calculations per minute, a slide rule 30, an early calculating machine 850 and a modern computer up to 6 million calculations per minute.

Thirdly, allied to engineering advance and increased knowledge has been increasing size of industrial units.

Mergers and conglomerates are the order of the day. But the very size and complexity of the industrial unit has produced problems for the human unit. To me this was summed up by one person, a highly qualified professional man who said: “I used to work with enthusiasm” . The large organisation has become like a set of pigeon-holes, each specialty or department working away in its own little hole, separate from the others and not fully knowing what is going on in the others.

Against this background, it is not really very surprising that frustrations are increasing. Most of us like to feel that our role is important even though it is small. We like to feel appreciated and if we are to have pride in our work, we want to be able to see the whole of which we are a part. Even the economist, who should be considering the effect of all these things is a specialist—a thing apart from the others. And like other specialists he is talking his own language. Each group of specialists has created its own jargon. I begin to wonder whether the groups understand one another, indeed I fear they do not. What should unite them is their common interest [end p11] in the company and society of which they are a part and their common ability to communicate with one another and take part in the dialogue. Each specialist left solely to his own narrow subject will see the situation only from his own point of view and the resulting fragmentation could destroy society as the confusion of tongues led to abandoning the tower of Babel.

The role of management and of the politician is to try to grasp the whole of these matters; to look at the separate parts in relation to one another and to recognise that the management of people is as important if not more so than the co-ordination of machines. ([Manuscript note by MT] Expand on unwisdom of govt. by experts.) [end p12]

Man as an Individual in the Growth Economy

From the picture I have drawn it seems likely that in future increasing wealth will come from two sources:

i) the ideas and efforts of technologists and innovators ii) the machines created by their inventiveness and provided through investment.

To some extent this is true even of agriculture in which mechanisation, increasing use of chemicals and development of special seeds and breeds has increased yields many times.

As new wealth will come increasingly from machinery in proportion to labour, it would seem that as many as possible should attempt to save to invest in industry and agriculture, so that we all may draw some of our income from this source of wealth. Every man a capitalist could indeed become a reality, and the differences between those who get their income from labour and those who draw it from investment would gradually disappear.

It would also serve to change each person's view of the whole task.

As individuals seem to matter less in the industrial economy, the need for the family as the unit of society increases. In our own homes we are indeed individuals of considerable importance knowing that there our problems and [end p13] be shared by people to whom we matter, who matter to us. Here whatever happens one can look forward to affection and loyalty.

You will perhaps forgive me for mentioning this aspect in a lecture which is related to economics. But if legislation in our various countries is such that it undermines or reduces the importance of the family at the same time as the individual feels he is of less economic significance then our problems will be increased many-fold.

Relief of Poverty and Ignorance

There is one other theme I should like to mention. Looking at the world's problems half a century ago, and assuming that there would be no more war, we should have probably thought that two basic policies would solve most things. One, the relief of poverty and two, the relief of ignorance, and with this in mind, the churches and many dedicated people as well as governments embarked fervently on social programmes and on education. People of very high calibre spent their lives on these subjects, both at home and in African and Asian countries. In most European countries and in the United States primarily, poverty and illiteracy are largely a thing of the past. In some of them, especially perhaps Sweden which we acknowledge as having a very high standard of living and education, it must seem that both these things have been [end p14] eradicated completely. We now know, however, that relief of poverty and ignorance has not solved as much as we hoped. These were the obvious problems but now another set have been revealed; drugs, increased crime, lack of respectability. Please do not misunderstand me when I say that poverty and ignorance were the easy things to tackle. Easy in the sense that they were obvious and one could see the response. To our African and Asian friends it must still seem difficult to tackle them, so enormous are their numbers.

Economics is concerned with goods and money.

Progress is concerned with goods, money and human nature.

This is much more difficult. The problems of human nature have persisted longer than the problems of economics and have proved far more intractable.

Yet I am an eternal optimist and my conclusion is that of the first philosopher to which I referred at the beginning—on the whole mankind is improving. The fatal thing is to expect too much too soon. Let us be satisfied if we always go forward. [end p15]

No governments can create the good society or strengthen people's character by passing legislation. But there are certain things which can be done.

1. They can keep personal taxation at a level which allows proper scope for personal and family decision making on spending. This will be regarded as fair by most people and so discourage tax evasion with its bad effect on moral standards.

2. They can encourage people to own things ranging from savings to houses, so that they have a personal stake in the future of their country.

3. They can ensure that state welfare, although adequate, does not either prevent people from making their own provision for themselves and their families, from taking an interest in their children's education or from helping each other.

4. Care should be taken in industry to explain decisions to employees in good time and to make them feel “part of the firm” where possible. A man should not spend months on just one small part of the whole process of production but should be given opportunities to see how all the different parts fit together.

It is encouraging that we in the Western world, while determined to retain the emphasis on individual freedom and personal choice, are searching to give new meaning to economic growth by improving the quality of life as well as the standard of living.

It is encouraging that at the same time Communist countries are [end p16] also beginning to realise that no society can flourish which completely denies individual freedom and the younger people in these countries are in the forefront of this battle.

(2) Articles from Swedish press

All articles from the archives of the daily Swedish newspaper SvD, formerly known (prior to 2004) as Svenska Dagbladet. www.svd.se

30 August 1969: EFU delegate: Prosperity creates problems, the individual becomes unimportant

The economic growth will continue, says Margaret Thatcher, Minister of Communication in the British shadow cabinet, when she talked about “Economy and Progress” at the European Female Union’s EFU eighth general assembly in Stockholm on Friday.

Material prosperity does however create other problems, she pointed out. The greater the units of production and the higher degree of industrialization, the individual is less important in the process of production. Therefore it is important that the employee is compensated for being unsatisfied professionally.

This can be arranged through e.g. using more assets to make the public areas more beautiful, Margaret Thatcher claimed.

The authorities are concentrating too much on economic growth and not how to use it most effectively to make the individual feel stimulated.

Anne Brauksiepe, Minister of Family and Youth in Western Germany, stressed that youngsters must be given a greater responsibility. Partly to lessen the rift between generations, partly to give this group citizens a purpose. The high levels of suicide means they are bored.

If they are not too young to do military service or enter the war they are not too young for voting either, said Anne Brauksiepe in commenting the lowering of voting age in Germany for the next general elections.

The negotiations during the second session of the general assembly were led by the French minister Marie-Madeleine Dienesch, who in her opening address talked about the 25th anniversary of the World War II liberation of Paris. It was in great part Swedish acts saving the city from being destroyed, she said.

8 August 1969: The European Female Union to be meeting in Stockholm

Western Germany’s Minister of Family and Youth Frau Aenne Brauksiepe, Secretary or Minister of French Department of Social Affairs Mlle Marie-Madeleine Dienesch and the British shadow cabinet Minister of Transport, Mrs. M Thatcher, are among the most recognised names of the 200 conservative and Christian Democrat female politicians, who will be meeting in Stockholm August 24-30. It is the European Female Union – EFU – which for the first time is holding a general assembly meeting – its eighth – in a land with the non-socialist parties in opposition. The Swedish section hosts with Ingrid Sundberg MP chairing and all of parliament’s Moderate [referring to the Moderate Party, the Swedish Tory] females taking part.

EFU was founded in 1953 by an Austrian initiative in defence of western values and as a counterbalance to the Socialist International of Women. Its founder and first chairman, Frau Lola Solar, member of the National Council, has declared she will be present in Stockholm. She is today honorary chairman. Acting president is the member of Hamburg’s “Bürgenschaft”, Frau Charlotte Fera, along with Minster Brauksiepe, chairman of CDU’s Women’s Organisation. The German delegation is constituted of totally 16 members of the Bundestag [Western Germany’s parliament].

The conference week starts with work in the nine commissions, which already have conducted inquiries for the European Council. During the public part of the programme three presentations will be held, only one by a female – Mrs. Thatcher. The two gentlemen are Ambassador Gunnar Heckscher and the chief of Banco di Roma signor Vittorio Veronese, previously engaged in UNESCO.

On Thursday August 28 the Moderate Party will be holding a reception with Yngve Holmberg [party chairman] hosting – both he and the women’s organization chairman [of the Moderate party] Ethel Florén-Whinter are speakers at the opening of the congress.

25 August 1969: 200 Participants in Female Conference

On Sunday the European Female Union began its week-long general assembly meeting in Stockholm. The first day was planned for intra-organisation meetings only. The 200 female politicians from nine countries will not be full house until today, when the conference is opened at Building of Industry. The conference is hosted by the union’s Swedish section with Chairman Ingrid Sundberg, MP.

29 August 1969: Gunnar Heckscher at EFU: The Reddest Maoists are Intolerant Moralists

The apprentices of Mao and Marcuse are developing to as rigorous and intolerant moralists as old Queen Victoria, they can make a difference between fundamental moral principles and conventional attitudes in the own coterie to the same extent as she. This in spite of the biggest attraction of the teachings of Mao and Marcuse being a positively strict morality – something by many young people considered being too rare among us older people.

Moral norms in social relations is one of the most difficult requirements for democracy and here the older generation has failed more than in any other issue, claimed Ambassador Gunnar Heckscher when speaking to the European Female Union’s eighth general assembly meeting which was opened on Thursday in Stockholm.

More Morality than Marx

Today’s anti-capitalist currents are less influenced by scientific Marxism and more of the opinion that economic activity is conducted without considering human values and morality. People disappointed with democratic politics are usually of the same opinion.

Therefore it is vital for democracy to maintain fundamental moral norms in everything connected to public life.

The impatient zeal to equalise put forward by perfectionists and social moralists, who refuse to see the great steps towards greater equality in the Western democracies already taken, can become a threat to democracy – foremost through the demands of homogenous social structure tomorrow or the day after at the latest.

They do their best to crush the political democracy because this cannot be achieved through slow democratic processes.

Threatening the Press

Even more dangerous to democracy are, according to Mr. Heckscher, tendencies in public opinion and news reporting.

Those in a position to influence the public opinion are failing their tasks if they use their position in order to put forward their own prejudices, preferences or even opinions. The intolerant conformism – sometimes “conservative” but today more often “radical” [–] which distinguishes important parts of the press, radio and TV in a majority of democratically ruled countries is one of the greatest threats to democracy.

It is dangerous if the public blindly believes what they are told, because it can be deprived of information on differing opinions, contradicting information and nuances. Even more dangerous is if people get so tired with the information so they do not believe it. Then they are deprived the most necessary foundation for democratic decision-making and are exposed to propagandists clever enough to speak to their feelings.

One of the most offending elements in mass media is the tendency to ascribe certain objectives to people. An opinion or a fact is not assessed and presented considering its actual value but considering the profession and the general opinions of the person [… copy ends here]

29 August 1969: Yngve Holmberg [chairman of the Moderate party]: A New EEC

From the Swedish point of view we cannot become hypnotised by different ways of joining the common market, Yngve Holmberg pointed out in his European summary. We also have to be more interested in what could happen in the EEC, how the aims of EEC’s work can be widened and adapted to the new demands of the European politics of the 1970’s. We know, e.g., that the need to strengthen the political authority of the institutions of EEC is greater. The Agricultural Politics and customs fees can give the EEC great economic values at its disposal. A common budget does however require increased parliamentary control which in turn will actualise the need for direct elections. In this European discussion Sweden must try to take part. A platform for such a discussion can be made through contributing to the European integration through putting Nordek [from “Nordic Economy”; a proposed Scandinavian organisation for economic cooperation.] into effect, claimed Mr. Holmberg.

26 August 1969: Solving Female Problems

Image Caption: “Lola Solar, Austria, Charlotte Pera, Germany, and Ingrid Sundberg, Sweden, are studying the programme for the European Female Union’s meeting in Stockholm”

As long as there are political problems especially concerning women there have to exist political women’s organisations, said the president of the European Female Union, Lola Solar from Austria, when the Union’s week-long general assembly meeting was opened Monday in Stockholm at Building of Industry.

The approximately 200 women from nine of the Union’s eleven countries, who have gotten together for the meeting, agreed that political women’s organisations should be abolished the day when men and women have similar problems to solve and when there is no male resistance to female participation in politics any longer.

Some matters have to be put forward by women to be effective, said one of the Swiss representatives, Louise Wenzinger, who in her country is fighting for females’ right to vote.

Married women’s citizenship when married to a foreigner, the standing of au pair girls, and political right to asylum are among the issues to be discussed by the participants at the meeting.

There will also be a number of visits to modern Swedish orphanages, old people’s homes, pensioner hotels, and hospitals. Swedish industrial companies have invited the participants to visits and are paying for lunches. Among other things, Swedish children’s food will be studied and tried.

Among the lecturers speaking at the conference is Professor Gunnar Heckscher, who will speak on &ldquoDemocracy as a Task”.

The main language during the general assembly meeting is German. The European Female Union was established in Austria 1953, mainly as a counterweight to the very active Socialist International of Women.

27 August 1969: Study Visit with a Fan

It is a bit humourous in Swedish (“with a fan” means to do something quickly), but it sounds pretty stupid in English. Perhaps a more accurate translation would be “A Quick Study Visit”. Image Caption: “Vice CEO of the Swedish Fan Factory Lennart Malmort demonstrates a dust separator for journey leader Margareta Edner, Joan Wickers, England, and Lena Ohnesorge, Germany”.

They are diligently studying Sweden from different points of view, the ladies participating in the European Female Union conference in Stockholm. On Tuesday representatives for the Union’s commissions set out to different locations in the city. Modern orphanages were e.g. visited by the ladies of the Family Commission, who also studied and tasted Swedish children’s food.

The Swedish Fan Factory [a company named, in Swedish, “Svenska Fläktfabriken”] received a visit from number of municipally active ladies, who were received by vice CEO Lennart Malmort. Swedish Hospital Ventilation [a company named, in Swedish, “Svensk Sjukhusventilation”] gained the greatest interest from the visitors. They got to know most thinks about air conditioning and ventilation, and received information on industrial air pollution control. The people giving information were director Sven B. Andersson and engineers Karl-Erik Samuelsson and Lennart Erlesand. After a movie about the aluminium industry’s attempts to control air pollution the municipal ladies [sic] were invited for lunch.