April 2, 1947

PC

James MacKerras Macdonnell

Progressive Conservative

Mr. J. M. MACDONNELL (Muskoka-Ontario):

Mr. Speaker, while this bill we are considering deals with certain controls set out therein, nevertheless I think it has been clear from the course of the debate that the whole principle of control and the attitude of members of this house toward the controlled economy is an important element, and at the outset I should like to make some rather general observations on that point.

I have the feeling that at the present time there are two views which, like the parallel lines we learned about at school, if produced ever so far both ways will not meet. My own feeling is that that should not be so, that these differences are not absolute. It is my hopi to say some things which might enable those parallel lines to come a little closer together. Of course one hopes that when the parallel lines come closer, the line which inclines will be the other one and not one's own l,ne. However, that is as may be.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. KNOWLES:

Is that what you were doing yesterday?

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

Yesterday is past and we are down to serious things again. Yesterday was All-Fools' day, and that includes everybody.

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?

Mr. COLD WELL@

Particularly those who voted the wrong way.

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CCF

Percy Ellis Wright

Co-operative Commonwealth Federation (C.C.F.)

Mr. WRIGHT:

Both ways.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

It is natural I suppose that I should seem to address some of my remarks mainly to the gentlemen on my immediate left. I do that with great respect, and I do it with the feeling that while our views differ very greatly, nevertheless we are pursuing the same objective, although we sometimes forget that. It is with that in mind that I begin.

I wish to begin by referring to certain views expressed by the leader of the C.C.F. party, because frankly I am puzzled from time to time as to what his actual view is on this important question. I want to read this sentence from what he said on a previous occasion-and I hope this will not be an infringement of the rules. I quote from Hansard of February 3 last, page 69:

The struggle today is really between those who believe in social ownership and cooperative endeavour and those who believe in the continuance of the exploitation of the people by powerful groups of vested interests.

I regret the word "exploitation". I have looked it up in the dictionary in order to make quite sure what it means. The word "exploitation" has a sinister sense. It means that certain people are trying to take unfair andoppressive advantage of other people, and I shall have more to say about that. I wish to make it clear that I am not trying to gloss over the defects and dangers and failures of the system I believe in. Nevertheless I

regretted that word.

I propose now to refer to another statement which the hon. gentleman made and which I [DOT]suggest, to the house and to him is a very different statement. I think I have him almost word perfect if I recall that he said in this house: "I do not object to private enterprise, but if they take the profits they must take the risks." I approve of that. I am notobjecting to a single word in it. I wish to

appeal to the hon. gentleman-and I shall not ask him to answer now-as to which of these two voices I should listen to. I am going to recall to him a saying which I looked up the other day. I have often heard the saying "to appeal from Philip drunk to Philip sober", but I never knew what it meant until the other day.

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Until yesterday.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

I allow the hon. gentleman to have his score. I looked it up the other day and found that it refers to an evidently famous incident in literature where Philip of Maeedon had given

[Mr. Macdonnell.l

a judgment on a certain woman and she said, "I appeal." The king, who apparently had been dining not wisely but too well, said, "You appeal to whom?" She said, "To Philip when sober." And apparently her appeal made when he was sober was successful. I am now going to appeal to the hon. member for Hose-town-Biggar (Mr. Coldwell); and when I say intoxicated of course I mean merely with the exuberance of his own thoughts, but I am going to appeal to him in that quality, to what I consider the sober quality in which he uttered the words, when he said he did not object to private enterprise but if they took the profits they must take the risk.

I now wish to come to his colleague, who is not here today but at present is flying somewhere on the way to Vancouver, and I hope high up in the air over the Rocky mountains. He spoke last night and I think he made too good an argument against freedom; and when I say "freedom" may I there say freedom cannot be absolute. What we want is as much freedom as we can have. We start from that point of view, recognizing at the same time there must be some regulation. I take it also that when we talk about a fully planned economy what we have in mind is the people who would like planning and want as much planning as possible and will only leave that area of freedom which is over after there is as much planning as they consider wise.

As I was saying, I think the hon. member for Vancouver East (Mr. Maclnnis) last night made too good an argument. First of all, he talked about "cut-throat competition"; then he went on to talk about "exploiting". I suggest you cannot have it two ways. If you are going to have cut-throat competition, surely that very phrase means that you are going to get the advantage that we say comes from competition. You are going to get low prices. I am not forgetting that cut-throat competition can in the end by a process that sometimes happens lead to monopoly, and I will have something more to say about that later. But I still say the hon. member made too good a case when on the one hand he decried cut-throat competition and on the other hand went on to talk about exploiting. You cannot have it both ways at the same time.

Then he went on to another thing which I do not think he really meant. He said that we in this party-and this is often said-are intent on going back to those conditions which brought tragic results before the war. I think that is what he said; I took it down at the time. I do not think he meant that. I do not think anyone in the group to my left means that we, more than anyone else, want to go

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back to those conditions. We admit the evil of those conditions; but that is being used as a convenient thing to throw at us, and; therefore I am going to make just two comments about it. I am going to remind people of two things, first of all that we were not responsible for those conditions. I am not going to suggest who was responsible. Perhaps it would not be unfair to say that in the gay twenties governments were inclined to believe that booms could go on forever, just as private individuals did.

I am not going to say anything more about that except that I think during those years the leader of this party, Lord Bennett, who was in power then, tried courageously to meet difficult and unprecedented conditions and did devise schemes which, though perhaps not perfect, in the years succeeding were in effect followed, with adaptations if you will, and that he did break the ground with courage and energy in trying to deal with a situation which had never been foreseen and which was extremely difficult. While commenting on that point I should like to say that when people say we want to go back to the conditions of the thirties, that is a very unfair thing because we accept, as everyone accepts, the fact that there have been great changes since that time.

What have been the changes since then? I shall mention two or three. In the first place we have grown to accept a measure of social security and social services that was not accepted then. Second, we have grown to accept the measure of taxation which is necessary to maintain those social services. Third. I would point out-and I go back to what I said about freedom-that freedom is never absolute. The other day our own party went on record in favour of certain floor prices. We recognize that in the thirties the farmers were left exposed to the full force of the blizzard while other people were able to get some shelter, at any rate. Therefore, as I say, when anyone suggests that, we are prepared to go back to the conditions of the thirties, in my opinion that is a very unfair statement and one which should not be made.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. KNOWLES:

We claim that would be the effect.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

I doubt if everyone to my left is quite as careful as my hon. friend in the statements he makes, or rather in the statement he makes now.

Then I should like to turn to this question of planning, because I think I can understand why planning is attractive. But let us bear in mind that it is planning for other people that is' attractive, that there is not so much

attraction in having other people plan for us. I think it very important to remember that. Last evening I believe the hon. member for Vancouver East (Mr. Maclnnis) had that in mind when he made what J think was a very wise statement in regard to planning. At page 1946 of Hansard he said:

We all object to interference with our freedom. I do; indeed, if there is anyone who likes to have his own way more than I do, I should like to meet him.

I thought that was a very sound observation on the part of the hon. gentleman. I was reminded of the story with which no doubt all hon. members are familiar, of the Irishman who was having the judgment day expounded to him. After it had been explained he asked, "Well, will the Murphys be there?" He was told, "Yes, they will be there." He asked, "Will the O'Flahertys 'be there?" He was told, "Yes, they will be there." "Will all the Finnegans be there?" "Yes, they will be there." Then, he said, "Well, I'm thinkin' there'll be mighty little judging done the first day." I thought that might be said in regard to planning and regulating the hon. gentleman, who today is absent.

I said I wanted to see if there was not some area of agreement, to see if these parallel lines could come together at all, because when we are talking about these matters which go to the very root of our economic welfare in the future I think it desirable that we should try, as far as we can, to talk the same language. I suggest that there is an area of agreement. I suggest, for example, that we will all agree and are all agreed that the tremendously important thing now is production. That is becoming a terribly commonplace expression, but let us remember that it was not always commonplace. Let us remember that we were suffering, or thought we were suffering years ago, from over-production. In that connection I want to read a sentence or two from the British white paper, because it is interesting I think, to have the case as set out by Mr. Attlee to the British people, and it is interesting to read the remarks he made which I think mutatis mutandis apply to us here. At the end of this long paper he has this to say:

Apart from these special dangers-

Which he has outlined.

-the great difference between our economic conditions today and those between the wars is that, for as far ahead as we can see, there will be a high demand for the products of industry. It would appear that there is no danger for many years to come that industry as a whole will have to work below capacity because of a falling off in the general demand for its products.

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And later he said:

The problem of today is to increase production to fill the gap between the quantity of goods on the market and the amount of purchasing power available to buy those goods. We must remove the idea of spinning out production in order to avoid unemployment, or of restricting output in order to safeguard earnings. On the contrary, industry, employers and workers alike, must be ready to adopt every possible means of increasing production, secure in the knowledge that this does not carry with it any threat to employment.

I say I think we can agree on the question of production, and I come next to the question of incentive. That is not so easy; nevertheless I feel-and I have now in mind particularly hon. gentlemen immediately to my left- that particularly when you are talking to those who are farmers you are talking to people who do understand incentive, because after all if there is any man in the world who has an incentive it is the farmer, who works and gets the fruits of his own labour under his own vine and fig tree. Therefore I suggest that when farmers are thinking about this question of incentive they must have very much the same attitude as the rest of us; and I suggest also that when farmers are thinking about controls they should realize-and I think this is very important-that by far the greater part of their own economic life is lived entirely free -of controls, that the only controls they seek, ns far as I know, are controls in connection with prices and in connection with their own marketing. The great part of their life is entirely free of controls.

In connection with this matter of incentive I should like to read an extract from an article appearing in the London Economist, that great English liberal weekly. I always object to the fact that this fine word "liberal" has been appropriated by a political party. Today I was wondering if one could not accuse the Liberal party of something like grand larceny for having chosen this word, which is a fine and noble word, and put it to uses which even the Minister of National Health and Welfare (Mr. Martin) would not suggest are always fine or always noble.

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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. MARTIN:

May I respectfully point out that the hon. gentleman belongs to a party that once used the word "Liberal", but for some reason best know to itself, dropped it.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

We found ourselves in bad company, and thought we had better get away from it.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. KNOWLES:

You took the word

"Progressive" from them.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

Oh, no; I think they took it from us. On this question of incentive I should like to read from an article called "The Carrot and the Stick", which appeared in the London Economist. I recommend it to everyone who has not read it, because it seems to me to go to the basis of these matters, and the paragraph I am going to read at least has this advantage, that it criticizes everybody right across the board, the government, employers and employees. It ladles out criticism indiscriminately. It says:

But the whole drift of British society for two generations past has been to whittle away both at the carrot and the stick, until now very little of either is left.

Hon. gentlemen will appreciate, probably, that the carrot is the incentive which comes from profit and one's own earnings, the stick is the incentive such as you have in Russia, which comes from fear of unemployment, or some other kind of fear.

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?

An hon. MEMBER:

Who is the donkey?

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

We are the donkey. The article continues:

The rewards of success have not merely been shrivelled, they have been poisoned, since commercial success itself has been turned, in the eyes of wide circles of society, into a positive disgrace.

I should like to interject at that point a quotation from an English farmer. And I should think that my quoting from a farmer would commend itself to some extent. He has one or two things to say about industry which I have found most interesting, and which I should like to interject right here. This is what he says:

In fact, for some years now if a man dared to risk capital in any private enterprise he has been popularly and officially looked upon as a blood-sucking parasite, a regrettable but necessary nuisance, whose task should be made as difficult as possible. In short, the employer, as a member of the "boss class," must be hated and scorned, whereas the reformer or anyone whose job it is to inspect the employer's methods, is nationally applauded and respected. Yet I doubt very much whether a life spent in inspecting the work of other men is so wholly admirable.

And later on:

My point is that while the old system runs it is the members of the much despised and hated "boss class," who at their own risk finance, start, run, maintain and worry over productive enterprise; and that the reformer neither starts any business, runs one, nor risks any of his capital in one.

And I think at that point I might quote Mr. Churchill, who once made, as he so often did, an apt remark in this connection. He

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said what we should complain about was not the man who makes a profit, but rather the man who does not. Because, he said, after all his business goes broke and he ceases to be an employer.

And now I go on from the Economist:

There is a conspiracy of labour, capital and the state to deny enterprise its reward. The state takes it away in high taxation. All economic progress is, by definition, labour saving; yet the attitude of the trade unions, successfully maintained, is that they will permit laboursaving devices only provided that they do not in fact save labour. Nor is the attitude of organized capital any better. The embattled trade association movement has had great success in building up a code of industrial good manners which puts any attempt to reduce costs and prices by greater skill or enterprise under the ban of "destructive competition." The industrialist who discovers a way of making better things more cheaply (which is what he is sent on earth to do) is deprived by the state of all pecuniary return and by his own colleagues of any social reward. Instead of a carrot he gets a raspberry.

And there is one further quotation from the Economist I wish to read:

Britain finds herself today between two great competitors both of whom, in their different ways, keep a sharp edge on the motives that lead to action. In the United States, glittering prizes have always been offered to the ambitious, and they glitter no less today. Some attempts have been made in America to encase the stick in velvet, but thev have not gone very far. The difference in welfare between employment and unemployment, between success and failure, is still unmistakably sharp, and to offer to the incompetent the protection of restrictive practices is (with the time-hallowed exception of the tariff) contrary both to the law of the land and to the prevailing morality. The Soviet economy made an original attempt to do without incentives or sanctions, but it has long ago re-introduced them. Nowhere in the world today is a bigger premium paid for skill or intelligence or effort or (within the limits of a planned economy) enterprise. And nowhere, certainly, are the penalties of incompetence or laziness more sharp.

I want to come back now for a few minutes to these two kinds of economy, the so-called planned and the so-called unplanned. In the first place let me say that the idea that an unplanned economy is unplanned is sheer myth. Nobody believes that a business could last for one week if it were not planned. Every business is planned. The difference between the fully planned and what is sometimes called the unplanned economy, or what I call the private enterprise economy or the free enterprise economy, is this: it is the difference between a few people planning for all, with thousands and thousands of officials and people planning for themselves-and it will be noted that I am not using the word "bureaucrats".

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LIB

James Lorimer Ilsley (Minister of Justice and Attorney General of Canada)

Liberal

Mr. ILSLEY:

It is an improvement.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

They have thousands and thousands who come under them to carry out their will.

I should like to give some figures I have here to show what has happened in England in that respect. In England apparently civil servants increased in number from 1,450,000 in 1939 to 2,130,000 in 1946. And I should like to remind hon. members of the remark made in the house not long ago by the hon. member for Stanstead (Mr. Hackett) when he pointed out that this huge mass of officials has invaded office buildings in a flood, so that not only are they themselves withdrawn from useful work, but they are actually an obstruction to other people who hope to do productive work.

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

How many of those officials are there because of the war?

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

I cannot answer that.

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April 2, 1947