Introduction

When a professional student of social affairs writes a political book, his first duty is plainly to say so. This is a political book. I do not wish to disguise this by describing it, as I might perhaps have done, by the more elegant and ambitious name of an essay in social philosophy. But, whatever the name, the essential point remains that all I shall have to say is derived from certain ultimate values. I hope I have adequately discharged in the book itself a second and no less important duty: to make it clear beyond doubt what these ultimate values are on which the whole argument depends.

There is, however, one thing I want to add to this. Though this is a political book, I am as certain as anyone can be that the beliefs set out in it are not determined by my personal interests. I can discover no reason why the kind of society which seems to me desirable should offer greater advantages to me than to the great majority of the people of this country. In fact, I am always told by my socialist colleagues that as an economist I should occupy a much more important position in the kind ofsociety to

which I am opposed-provided, of course, that I could bring myselfto accept their views. I feel equally certain that my opposition to these views is not due to their being different from those with which I have grown up, since they are the very views which I held as a young man and which have led me to make the study of economics my profession. For those who, in the current fashion, seek interested motives in every profession of a political opinion, I may, perhaps, be allowed to add that I have every possible reason for not writing or publishing this book. It is certain to offend many people with whom I wish to live on friendly terms; it has forced me to put aside work for which I feel better qualified and to which I attach greater importance in the long run; and, above all, it is certain to prejudice the reception of the results of the more strictly academic work to which all my inclinations lead me.

If in spite of this I have come to regard the writing of this book as a duty which I must not evade, this was mainly due to a peculiar and serious feature of the discussions of problems of future economic policy at the present time, of which the public is scarcely suffiCiently aware. This is the fact that the majority of economists have now for some years been absorbed by the war machine, and silenced by their official positions, and that in consequence public opinion on these problems is to an alarming extent guided by amateurs and cranks, by people who have an axe to grind or a pet panacea to sell. In these circumstances one who still has the leisure for literary work is hardly entitled to keep to himself apprehensions which current tendencies must create in the minds of many who cannot publicly express them-though in different circumstances I should have gladly left the discussion of questions of national policy to those who are both better authorised and better qualified for the task. The central argument of this book was first sketched in an article entitled “Freedom and the Economic System,” which appeared in the Contemporary Review for April, 1938, and was later PREFACE ix reprinted in an enlarged form as one of the “Public Policy Pamphlets”, edited by Professor H. D. Gideonse for the University of Chicago Press (1939). I have to thank the editors and publishers of both these publications for permission to reproduce certain passages from them. London School of Economics, Cambridge, December, 1943

Introduction

Few discoveries are more irritating than those which expose the pedigree of ideas. Lord Acton.

We do not know the results of contemporary events.

But we can learn from the past to avoid a repetition ofthe same process.

The following pages are the product of an experience as near as possible to twice living through the same period-or at least twice watching a very similar evolution ofideas.

While this is an experience one is not likely to gain in one country, it may in certain circumstances be acquired by living in turn for long periods in different countries. Though the influences to which the trend of thought is subject in most civilised nations are to a large extent similar, they do not necessarily operate at the same time or at the same speed.

Thus, by moving from one country to another, one may sometimes twice watch similar phases ofintellectual development. The senses have then become peculiarly acute. When one hears for a second time opinions expressed or measures advocated which one has first met twenty or twentyfive years ago, they assume a new meaning as symptoms of a definite trend. They suggest, if not the necessity, at least the probability, that developments will take a similar course.

We are in danger of repeating the fate of Germany.

The danger is not immediate. Conditions here are still so remote from those witnessed in recent years in Germany as to make it difficult to believe that we are moving in the same direction.

Yet, though the road be long, it is one on which it becomes more difficult to turn back as one advances. If in the long run we are the makers of our own fate, in the short run we are the captives of the ideas we have created. Only if we recognise the danger in time can we hope to avert it.

It is not to the Germany of Hitler, the Germany of the present war, that this country bears yet any resemblance. But students of the currents ofideas can hardly fail to see that there is more than a superficial similarity between the trend ofthought in Germany during and after the last war and the present current of ideas in this country. There exists now in this country certainly the same determination that the organisation of the nation we have achieved for purposes of defence shall be retained for the purposes of creation.

There is the same contempt for 19th century liberalism, the same spurious “realism” and even cynicism, the same fatalistic acceptance of “inevitable trends”. And at least nine out of every ten of the lessons which our most vociferous reformers are so anxious we should learn from this war are precisely the lessons which the Germans did learn from the last war and which have done much to produce the Nazi system.

We shall have opportunity in the course of this book to show that there are a large number of other points where, at an interval of fifteen to twenty-five years, we seem to follow the example of Germany. Although one does not like to be reminded, it is not so many years since the socialist policy of that country was generally held up by progressives as an example to be imitated, just as in more recent years Sweden has been the model country to which progressive eyes were directed. All those whose memory goes further back know how deeply, for at least a generation before the last war, German thought and German practice influenced ideals and policy in this country.

The author has spent about half of his adult life in his native Austria, in close touch with German intellectual life, and the other halfin the United States and England. In the dozen years in which this country has now become his home he has become increasingly convinced that at least some of the forces which have destroyed freedom in Germany are also at work here, and that the character and the source of this danger are, if possible, even less understood than they were in Germany. The supreme tragedy is still not seen that in Germany it was largely people of goodwill, men who were admired and held up as models in this country, who prepared the way, if they did not actually create, the forces which now stand for everything they detest.

Yet our chance of averting a similar fate depends on our facing the danger and on our being prepared to revise even our most cherished hopes and ambitions ifthey should prove to be the source ofthe danger. There are few signs yet that we have the intellectual courage to admit to ourselves that we may have been wrong. Few are ready to recognise that the rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies.

This is a truth which most people were unwilling to see even when the similarities of many of the repellent features of the internal regimes in communist Russia and national-socialist Germany were widely recognised. As a result, many who think themselves infinitely superior to the aberrations of Nazism and sincerely hate all its manifestations, work at the same time for ideals whose realisation would lead straight to the abhorred tyranny. All parallels between developments in different countries are, of course, deceptive; but I am not basing my argument mainly on such parallels. Nor am I arguing that these developments are inevitable. If they were, there would be no point in writing this. They can be prevented if people realise in time where their efforts may lead. But till recently there was little hope that any attempt to make them see the danger would be successful. It seems, however, as if the time were now ripe for a fuller discussion of the whole issue. Not only is the problem now more widely recognised, there are also special reasons which at this juncture make it imperative that we should face the issues squarely.

It will, perhaps, be said that this is not the time to raise an issue on which opinions clash sharply. But the socialism of which we speak is not a party matter, and the questions which we are discussing have little to do with the questions at dispute between political parties. It does not affect our problem that some groups may want less socialism than others, that some want socialism mainly in the interest of one group and others in that of another. The important point is that, ifwe take the people whose views influence developments, they are now in this country in some measure all socialists. Ifit is no longer fashionable to emphasise that uwe are all socialists now", this is so merely because the fact is too obvious. Scarcely anybody doubts that we must continue to move towards socialism, and most people are merely trying to deflect this movement in the interest of a particular class or group.

It is because nearly everybody wants it that we are moving in this direction. There are no objective facts which make it inevitable. We shall have to say something about the alleged inevitability of uplanning" later. The main question is where this movement will lead us. Is it not possible that ifthe people whose convictions now give it an irresistible momentum began to see what only a few yet apprehend, they would recoil in horror and abandon the quest which for half a century has engaged so many people of goodwill? Where these common beliefs of our generation will lead us is a problem not for one party but for every one of us, a problem of the most momentous significance. Is there a greater tragedy imaginable than that in our endeavour consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?

There is an even more pressing reason why at this time we should seriously endeavour to understand the forces which have created National Socialism: that this will enable us to understand our enemy and the issue at stake between us. It cannot be denied that there is yet little recognition of the positive ideals for which we are fighting. We know that we are fighting for freedom to shape our life according to our own ideas. That is a great deal, but not enough. It is not enough to give us the firm beliefs which we need to resist an enemy who uses propaganda as one of his main weapons not only in the most blatant but also in the most subtle forms. It is still more insufficient when we have to counter this propaganda among the people in the countries under his control and elsewhere, where the effect of this propaganda will not disappear with the defeat of the Axis powers. It is not enough ifwe are to show to others that what we are fighting for is worth their support, and not enough to guide us in the building of a new Europe safe against the dangers to which the old one has succumbed.

It is a lamentable fact that the English in their dealings with the dictators before the war, not less than in their attempts at propaganda and in the discussion of their war aims, have shown an inner insecurity and uncertainty of aim which can be explained only by confusion about their own ideals and the nature of the differences which separated them from the enemy. We have been misled as much because we have refused to believe that the enemy was sincere in the profession of some beliefs which we shared as because we believed in the sincerity ofsome of his other claims. Have not the parties of the Left as well as those of the Right been deceived by believing that the NationalSocialist Party was in the service ofthe capitalists and opposed to all forms of socialism? How many features of Hitler’s system have not been recommended to us for imitation from the most unexpected quarters, unaware that they are an integral part of that system and incompatible with the free society we hope to preserve? The number of dangerous mistakes we have made before and since the outbreak of war because we do not understand the opponent with whom we are faced is appalling. It seems almost as if we did not want to understand the development which has produced totalitarianism because such an understanding might destroy some of the dearest illusions to which we are determined to cling.

We shall never be successful in our dealings with the Germans till we understand the character and the growth of the ideas which now govern them.

The theory which is once again put forth, that the Germans as such are inherently vicious, is hardly tenable and not very creditable to those who hold it. It dishonours the long series of Englishmen who during the past hundred years have gladly taken over what was best, and not only what was best, in German thought. It overlooks the fact that when eighty years ago John Stuart Mill was writing his great essay On Liberty he drew his inspiration, more than from any other men, from two Germans, Goethe and Wilhelm von Humboldt,l and forgets the fact that two of the most influential intellectual forebears of National Socialism, Thomas Carlyle and Houston Stewart Chamberlain, were a Scot and an Englishman.

In its cruder forms this view is a disgrace to those who by maintaining it adopt the worst features of German racial theories. The problem is not why the Germans as such are vicious, which congenitally they are probably no more than other peoples, but to determine the circumstances which during the last seventy years have made possible the progressive growth and the ultimate victory of a particular set of ideas, and why in the end this victory has brought the most vicious elements among them to the top. Mere hatred of everything German, instead of the particular ideas which now dominate the Germans is, moreover, very dangerous, because it blinds those who indulge in it against a real threat. It is to be feared that this attitude is frequently merely a kind of escapism, caused by an unwillingness to recognise tendencies which are not confined to Germany, and by reluctance to reexamine, and if necessary to discard, beliefs which we have taken over from the Germans and by which we are still as much deluded as the Germans were. It is doubly dangerous because the contention that only the peculiar wickedness of the Germans has produced the Nazi system is likely to I As some people may think this statement exaggerated, the testimony of Lord Morley may be worth quoting, who in his Recollections speaks of the “acknowledged point” that the main argument of the essay On Liberty “was not original but came from Germany”.

become the excuse for forcing on us the very institutions which have produced that wickedness. The interpretation of the developments in Germany and Italy about to be proffered in this book is very different from that given by most foreign observers and by the majority of exiles from those countries. But if this interpretation is correct, it will also explain why it -is almost impossible for a person who, like most ofthe exiles and the foreign correspondents of English and American newspapers, holds the now prevalent socialist views, to see those events in the proper perspective. 1 The superficial and misleading view, which sees in National-Socialism merely a reaction fomented by those whose privileges or interests were threatened by the advance of socialism, was naturally supported by all those who, although they were at one time active in the movement of ideas that has led to National-Socialism, have stopped at some point of that development and, by the conflict into which this brought them with the Nazis, were forced to leave their country. But the fact that they were numerically the only significant opposition to the Nazis means no more than that in the wider sense practically all Germans had become socialists, and that liberalism in the old sense had been driven out by socialism. As we hope to show, the conflict in existence between the National-Socialist “Right” and the “Left” in Germany is the 1 How thoroughly the views held in all quarters, even the most conservative, of a whole country can be coloured by the predominant Left bias of the foreign correspondents of its Press, is well illustrated by the views almost universally held in America about the relations between Great Britain and India. The Englishman who wishes to see events on the European Continent in the proper perspective must seriously consider the possibility that his views may have been distorted in precisely the same manner, and for the same reasons. This is in no way meant to reflect on the sincerity of the views of American and English foreign correspondents. But anyone who knows the kind of native circles with which foreign correspondents are likely to have close contacts, will have no difficulty in understanding the sources of this bias.

kind of conflict that will always arise between rival socialist factions. If this interpretation is correct it means, however, that many of those socialist refugees, in clinging to their beliefs, are now, though with the best will in the world, helping to lead their adopted country the way which Germany has gone. I know that many of my English friends have sometimes been shocked by the semi-Fascist views they would occasionally hear expressed by German refugees, whose genuinely socialist convictions could not be doubted. But while these English observers put this down to their being Germans, the true explanation is that they were socialists whose experience had carried them several stages beyond that yet reached by socialists in this country. It is true, of course, that German socialists have found much support in their country from certain features of the Prussian tradition; and this kinship between Prussianism and socialism, in which in Germany both sides gloried, gives additional support to our main contention. 1 But it would be a mistake to believe that the specific German rather than the socialist element produced totalitarianism. It was the prevalence ofsocialist views and not Prussianism that Germany had in common with Italy and Russia-and it was from the masses and not from the classes steeped in the Prussian tradition, and favoured by it, that National-Socialism arose.

1 That there did exist a certain kinship between socialism and the organisation of the Prussian State. consciously organised from the top as in no other country. is undeniable and was freely recognised already by the early French socialists. Long before the ideal of running the whole state on the same principles as a single factory was to inspire nineteenth-century socialism. the Prussian poet Novalis had already deplored that “no other state has ever been administered so much like a factory as Prussia since the death of Frederick William. U (C(Novalis [Friedrich von Hardenberg]. Glauben und Liebe. oder der Konig und die Konigin. 1798.)