Adventures in Guardianland, Part 1: How British central planning defeated the Nazis’ free-market war machine
10 August 2017
SUGGESTED
Healthcare
9 August 2017
Economic Theory
11 August 2017
Trade, Development, and Immigration
8 November 2024
Given Progressives’ oft-stated love of humankind, you’d think they would avoid hankering for the good old days of WWII, when a large proportion of humanity bent their efforts towards killing one another.
But that is to forget something. When leaders decide it is time for “the continuation of politics by other means”, then central planning – the source of all good things, to the Progressive’s mind – comes into its own.
Here is political economist Will Hutton, Principal of Hertford College, discussing the splendour of Britain’s wartime command economy in The Guardian last month. Hutton uses 1059 words to develop his theme, but it can be summed up by the following two paragraphs:
“One of the reasons the allies won the war was that we out-manufactured and out-produced Germany, Italy and Japan. The imbalances in power in some theatres of war are startling. Equally, Britain boasted great scientific and technological strength. Sophisticated radar identified German flight formations. The Spitfire and Hurricane – and, later, the Lancaster bomber – were more fit for purpose than their German counterparts and manufactured in greater volumes.
So, yes, we should and must salute the men in their flotilla of small boats who lifted tens of thousands of stricken British soldiers from the Dunkirk beaches. But much less fashionable is a salute to the superb performance of the British economy and the way its organisation was driven by government before and during the war. This is not part of our national mythology, for the obvious reason that it is very inconvenient for the prevailing orthodoxy. Public initiative, public endeavour, public direction of industry, planning and state co-ordination are never supposed to work, even though they did triumphantly, before the war, during it and after it.”
There are several things with which we might cavil. For example, the fact that we plucky Brits had the resources of a globe-spanning empire at our disposal may have influenced production somewhat. Then there is the odd idea that free market economics is the “orthodoxy” of our age, and that making the case for state planning is unfashionable. Where has Hutton been over the last decade? It is extremely fashionable to praise the virtues of a big, active government, and to sneer at free market economics. That is the orthodoxy of our age. Thirdly, while Hutton’s claim that the British government played an active role in the wartime economy is true, it is a trivial observation. Of course wartime economies are, to some extent, state-directed economies. What else could they be? There is no demand from private households for tanks and battleships.
And this brings us to the chief problem with Prof. Hutton’s argument for central planning. He seems to have forgotten that the Axis countries, being fascist regimes, had economies that were even more centrally-planned than our own. By 1940, command economists had already been wreaking havoc in Germany for some seven years, and in Italy for two decades. Almost immediately after coming to power, Hitler’s government embarked on a massive public works programme. In 1936, the first Four-Year-Plan (Vierjahresplan) was passed. It increased the extent of government control over all important sectors of the economy.
Far from being an example of the desirability of appointing people like Prof. Hutton to run your economy, WWII is a testament to why you shouldn’t.
I fail to see why we should adopt the then economic models of our erstwhile foes. We won the war, didn’t we?
But that is to forget something. When leaders decide it is time for “the continuation of politics by other means”, then central planning – the source of all good things, to the Progressive’s mind – comes into its own.
Here is political economist Will Hutton, Principal of Hertford College, discussing the splendour of Britain’s wartime command economy in The Guardian last month. Hutton uses 1059 words to develop his theme, but it can be summed up by the following two paragraphs:
“One of the reasons the allies won the war was that we out-manufactured and out-produced Germany, Italy and Japan. The imbalances in power in some theatres of war are startling. Equally, Britain boasted great scientific and technological strength. Sophisticated radar identified German flight formations. The Spitfire and Hurricane – and, later, the Lancaster bomber – were more fit for purpose than their German counterparts and manufactured in greater volumes.
So, yes, we should and must salute the men in their flotilla of small boats who lifted tens of thousands of stricken British soldiers from the Dunkirk beaches. But much less fashionable is a salute to the superb performance of the British economy and the way its organisation was driven by government before and during the war. This is not part of our national mythology, for the obvious reason that it is very inconvenient for the prevailing orthodoxy. Public initiative, public endeavour, public direction of industry, planning and state co-ordination are never supposed to work, even though they did triumphantly, before the war, during it and after it.”
There are several things with which we might cavil. For example, the fact that we plucky Brits had the resources of a globe-spanning empire at our disposal may have influenced production somewhat. Then there is the odd idea that free market economics is the “orthodoxy” of our age, and that making the case for state planning is unfashionable. Where has Hutton been over the last decade? It is extremely fashionable to praise the virtues of a big, active government, and to sneer at free market economics. That is the orthodoxy of our age. Thirdly, while Hutton’s claim that the British government played an active role in the wartime economy is true, it is a trivial observation. Of course wartime economies are, to some extent, state-directed economies. What else could they be? There is no demand from private households for tanks and battleships.
And this brings us to the chief problem with Prof. Hutton’s argument for central planning. He seems to have forgotten that the Axis countries, being fascist regimes, had economies that were even more centrally-planned than our own. By 1940, command economists had already been wreaking havoc in Germany for some seven years, and in Italy for two decades. Almost immediately after coming to power, Hitler’s government embarked on a massive public works programme. In 1936, the first Four-Year-Plan (Vierjahresplan) was passed. It increased the extent of government control over all important sectors of the economy.
Far from being an example of the desirability of appointing people like Prof. Hutton to run your economy, WWII is a testament to why you shouldn’t.
I fail to see why we should adopt the then economic models of our erstwhile foes. We won the war, didn’t we?
11 thoughts on “Adventures in Guardianland, Part 1: How British central planning defeated the Nazis’ free-market war machine”
Comments are closed.
SHARE
He’s wrong about this too:
“The Spitfire and Hurricane – and, later, the Lancaster bomber – were more fit for purpose than their German counterparts and manufactured in greater volumes.”
Although it is true that the UK did generally out-produce Germany (from about mid-1941), his specific examples are wrong. The most produced fighter of the war was the Me-109 (over 30,000 produced). There were also over 20,000 FW-190s produced. Spitfire production totalled around 20,000 and around 15,000 Hawker Hurricanes were built.
Incidentally, one of the most successful aircraft of WW2 was the Mosquito – a private initiative that air ministry originally said it didn’t want because it didn’t meet its specification.
the real reason the Allies won is the Central planners had a much deeper Capital base to draw from (provided by the free market) another reason is their Central planners were even more rubbish than ours.
“Where has Hutton been over the last decade? It is extremely fashionable to praise the virtues of a big, active government, and to sneer at free market economics. That is the orthodoxy of our age.” ~ A contrary argument can be made.
“Thirdly, while Hutton’s claim that the British government played an active role in the wartime economy is true, it is a trivial observation. Of course wartime economies are, to some extent, state-directed economies. What else could they be? There is no demand from private households for tanks and battleships.” ~ Unless one views government as offering “private households” an intangible good – peace (let’s forego debate of that concept) – for which it requires “tanks and battleships” to create, in which case the whole thing can indeed be viewed in classical terms…constituting something of a paradox…
“…the chief problem with Prof. Hutton’s argument for central planning…[is that]…the Axis countries, being fascist regimes, had economies that were even more centrally-planned than our own.” ~ Is it not possible for one “centrally-planned” government/economy to outperform another?
“A contrary argument can be made.”
-Then make it.
And straight after the war the awesome centrally planned Ally economies went back to free markets.
Perhaps the central planners, having experienced how difficult it was to co-ordinate things even when they had all the strings, thought that central planning didn’t work that well?
People at the time certainly did not wonder at how marvelously things humming along.
of course, if the survival of the country is at stake and there is only one objective to economic activity, central planning has a better chance of success than if we are taking decisions about how to allocate resources to meet the diverse and unknowable needs of 60 million different people. I thought Hayek dealt with Hutton’s argument back in 1945
The progressives also gloss over the millions of days of labour lost to strike action during WW2. I’d like to have seen them try that in Germany.
Reading Hutton, It’s as if The Road To Serfdom never got written
It is the case that (looking merely at the UK and Germany) the UK war economy was much closer to a free-market model while Germany was more centrally-directed.
Someone has mentioned the Mosquito as an example of private initiative. Do not forget that all of Barnes Wallis’s greatest war work – the bomb which broke two dams, the Tallboy and Grand Slam penetration weapons – were also pure private enterprise. Indeed, when the first reconnaissance shots of the effect of Tallboy were shown at the Air Ministry a senior air officer asked “How many of these splendid weapons have we got?” The representative from Vickers who was present answered, “I’m afraid none. But we have a few, and we can sell them to you.” Without the willingness of Vickers to build them on spec, they would never have existed.
There are many other examples of engineers and manufacturing firms independently contributing ideas and even, here and there, prototypes without the backing of (often against the wishes of) the government agencies, but sometimes with covert support from the services involved.
Central Planners have always got ideas for tweaks they can do to improve things, so never admit defeat. In the 25 years after WWII, politicians of both parties ran governments with nationalised industries and support to keep failing factories alive “for the sake of the jobs”.
I wonder what would have happened if Trade Unions hadn’t been so drunk on power?