27th October 2023
Arthur Cecil Pigou was effectively a Fabian socialist
I smelled a lot of (albeit rather refined) socialist thinking in Pigou’s Economics of Welfare, and suspected he might be linked with the Fabians.
Keynes was DEFINITELY a socialist (I’ve written a lot about it), but Pigou was merely “progressive”. [see my notes at: https://t.me/sanjeevsabhlok/9641]
https://hope.econ.duke.edu/sites/hope.econ.duke.edu/files/takami-pigou-welfare-new.pdf
Nevertheless, he pushed for far greater government intervention than had been acceptable to standard economists till before his time. I find his work on positive externalities particularly poor.
==In 1948, he wrote what would surely qualify as a Fabian Socialist Manifesto. (extract from his book, Socalism vs Capitalism). I recognise in this extract EVERYTHING THAT NEHRU DID TO DESTROY INDIA. Nehru was a Fabian. I thought only India was destroyed by them, but I find that they are active globally, even today: Positive externalities as a way to increase government power! VERY CLEVER!
* * *
If, then, it were in the writer’s power to direct his country’s destiny, he would accept, for the time being, the general structure of capitalism; but he would modify it gradually. He would use the weapon of graduated death duties and graduated income tax, not merely as instruments of revenue, but with the deliberate purpose of diminishing the glaring inequalities of fortune and opportunity which deface our present civilisation. He would take a leaf from the book of Soviet Russia and remember that the most important investment of all is investment in the health, intelligence and character of the people. To advocate “economy” in this field would, under his government, be a crimical offence. All industries affected with a public interest, or capable of wielding monopoly power, he would subject at least to public supervision and control. Some of them, certainly the manu4 facture of armaments, probably the coal industry, possibly the railways, he would nationalise, not, of course, on the pattern of the Pogt Office, but through public boards or commissions. The Bank of England he would make in name—what it is already in effect—a public institution; with instructions to use its power to mitigate, so far as may be, violent fluctuations in industry and employment. If all went well, further steps towards nationalisation of important industries would be taken by degrees. In controlling and developing these nationalised industries, the central government would inevitably need to “plan” an appropriate allocation If, then, it were in the writer’s power to direct his country’s destiny, he would accept, for the time being, the general structure of capitalism; but he would modify it gradually. He would use fortune and opportunity which deface our present civilisation. He would take a leaf from the book of Soviet Russia and remember that the most important investment of all is investment in the health, intelligence and character of the people. To advocate “economy” in this field would, under his government, be a crimical offence. All industries affected with a public interest, or capable of wielding monopoly power, he would subject at least to public supervision and control. Some of them, certainly the manufacture of armaments, probably the coal industry, possibly the railways, he would nationalise, not, of course, on the pattern of the Pogt Office, but through public boards or commissions. The Bank of England he would make in name—what it is already in effect—a public institution; with instructions to use its power to mitigate, so far as may be, violent fluctuations in industry and employment. If all went well, further steps towards nationalisation of important industries would be taken by degrees. In controlling and developing these nationalised industries, the central government would inevitably need to “plan” an appropriate allocation for a large part of the country’s annual investment in new capital.
I responded, very politely.