Modern Capitalism: The Changing Balance of Public and Private Power
Every now and then, that overworked encomium “a major contribution” imposes itself upon the reviewer of a work on current affairs. In the case of Mr. Andrew Shonfield’s study of economic planning in the Western world since 1945, the author’s distinction is of help in overcoming one’s initial reluctance to employ a tired cliché. His vantage-point—he is Director of Studies at the Royal Institute of International Affairs—is an unusual one for a writer on economics, but then Mr. Shonfield is primarily concerned with the record of governments and central banks in Western Europe and North America. For this purpose, access to official information, and the ability to meet the key personalities on equal terms is as important as professional training. Possibly Mr. Shonfield would disclaim any authority beyond that of the “generalist.” There is some evidence that theoretical economics is not his forte, a handicap he shares with the reviewer. But in an “institutional” study this hardly matters. What does matter is that Mr. Shonfield has had the courage to write the kind of large-scale survey of current affairs everyone has been waiting for. His book is an important one, not least for the wind of iconoclasm that whistles through its pages: even with respect to Keynesian economics and other sacred cows hitherto in undisturbed possession of their respective pastures.
Before coming to what matters—the theory and practice of economic planning in Western Europe—a preliminary critical remark may be in order. Mr. Shonfield shares with other writers of his persuasion (broadly speaking the Liberal Left in Britain) a tendency to employ Fabian terminology in preference to the conventional nomenclature of officialdom and the academy. Thus he speaks of “capitalism,” and even of “Western capitalist society,” where an American writer would probably use a circumlocution. This makes him sound like a socialist—he is in fact an ardent advocate of governmental planning—though the theoretical assumptions he shares with the Fabian school are not always clearly spelled out. As against Mr. C. A. R. Crosland (currently Minister of Education in the Wilson government) Mr. Shonfield argues, with good reason, that Western industrial society is still “capitalist,” in the sense that it is basically a market economy controlled by private firms rather than by the public authorities. At the same time he leaves open the question how much public control there would have to be for the system to require a different name. Possibly this ambiguity is deliberate. The dividing line between liberalism and Fabian socialism has anyhow become rather blurred, for a British writer at least. On more general grounds it is questionable whether his use of the term “Western capitalist society” is legitimate. At any rate it owes nothing to Marx. The responsibility for it must be shared between the more conventional free-enterprisers and the Fabian school.
TO COME to what is most relevant and original in Mr. Shonfield’s work: We have here a descriptive study of the post-1945 Western economic environment, together with an account of central planning, and a…
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