Freeman

ARTICLE

Selected Facts in the British Nationalized Coal Industry

MARCH 01, 1961 by GEORGE WINDER

Mr. Winder, formerly a Solicitor of the Su­preme Court in New Zealand, is now farming in England. He has written widely on law, agriculture, and economics, his most recent book being A Short History of Money.

Propaganda is a very respectable word fallen on evil days. It came first into general use as the name for a committee of cardinals whose object was to spread the Gospel amongst the heathen. But it fell into deep disgrace when it became associated with the out­pourings of Dr. Goebbels. Many people then realized that state propaganda could become one of the most dangerous instruments on earth. As a result, there arose a strong feeling against giving the government, in times of peace, any right whatever to communi­cate to the people anything but the most innocuous and easily con­firmable facts.

But what of those semi governmental concerns such as TVA in America and the nationalized in­dustries in Great Britain; have they the right to speak for them­selves? Whether they have or not, they most certainly do. Their pub­lic relations officers have the pow­er to spend a great deal of money, and one result of this is the pro­duction of beautifully illustrated booklets little calculated to restore the word propaganda in our esteem. In Great Britain the object of many of these quasi-govern­mental publications is not to im­part information, but to perpetu­ate the nationalization of the in­dustry which issues them.

There is a British Broadcasting Company program called "Any Questions?" in which a panel of exceptionally well-informed men, including some of the more intelli­gent members of Parliament from all sides of the House, discuss questions of public interest. On one occasion a question on the coal industry brought the reply that coal production had increased since the industry had been na­tionalized. The discussion, heard by some millions of people, was then continued on the basis of this assumption, not even the Conserv­ative Member of Parliament on the panel correcting it.

A possible explanation why these very exceptional men on this "Any Questions?" program were so ill-informed is that they may have read some of the booklets issued by the British Coal Board. Misled themselves, they have in turn mis­led millions of listeners, thus illus­trating the power of a few book­lets.

This article, therefore, has two objects. One is to warn the Ameri­can people of the dangers of prop­aganda from quasi-governmental organizations, and the other is to give, by way of illustration, some of the figures concerning the Brit­ish coal industry that such propa­ganda has tended to conceal.

Official Report

Perhaps the most tendentious booklet issued by the British Coal Board appeared four years ago under the name, Investing in Coal. This begins by informing its readers that "when the Nation­al Coal Board took over Britain‘s mines on January 1, 1947, they became responsible for an indus­try which had been shrinking for more than a quarter of a century." It then describes the wonderful way the Coal Board has recon­structed and developed the indus­try under its "Plan for Coal," and "proves" its case by giving figures, some of which are those of actual production, while others are the speculations of the planners.

Here are some of these figures:

 

Million tons of coal produced

 Tons of coal output per man

1947  ………..

197

263

1955  ………..

221

298

1960

(Est.) …

228

319

1965 (Est.) …

240

342

To make sure these figures are driven home, a graph is provided which, by the device of continuing the upward movement of an illus­trated mountain of coal until 1965, makes all the more impressive the apparent rise in production since nationalization.

Propaganda can often be liter­ally true, but at the same time very misleading. In fact some peo­ple consider this the very highest form of propaganda, because it can be indulged in with impunity. These Coal Board figures are of this nature. They are literally true, but they constitute propaganda just the same, for they are so se­lective as to be utterly and com­pletely misleading. The reason for this is the choice of 1947 as the year on which calculations are based.

At the time, the industry had been in complete control of the government since the outbreak of World War II. It had not recov­ered from its low wartime produc­tion which was due to many of the miners joining the forces, the in­ability to replace miners’ equip­ment, and probably also to the very fact of government control. With 1947 as a base, there is hardly another industry in the country which has not expanded its production far more than has the coal industry. If, however, this booklet had based its survey on any average year under free enterprise before the war, the im­pression given would have been completely different. Such a com­parison would have disclosed thatthe British coal industry, far from expanding under nationalization, has not yet caught up to its prewar production, and now looks as if it never will.

Against the 221 million tons the booklet displays for production in 1955, the industry, under private enterprise, can show a higher fig­ure in nearly every year of this century. In 1913 production was 287 million tons. In 1923 and 1924 it was respectively 276 and 267 million tons. Even in the three years immediately before the last war—1937 to 1939—when the in­dustry suffered many difficulties, production averaged 233 million tons.

Even Worse than Figures Show

But even these figures do not express the full extent of the Coal Board’s failure. In comparing the output of private ownership and state ownership in the coal indus­try, we should allow for the fact that in its efforts to meet the great postwar demand the Coal Board has made use of open cast or strip mining. This has damaged large areas of agricultural land, and originally was only adopted as a wartime expedient. Coal obtained in this way is usually of very poor quality and the system was never used in Britain by private enter­prise. To obtain a fair comparison, therefore, with the production of private enterprise the quantity quarried by the strip mining sys­tem should be deducted from the figures given for total postwar production. When this is done, the figure for coal production in 1955 is not 221 million tons, but 210.2 million tons. The greatest quantity of deep mined coal the Board has ever been able to produce in any one year was 213 million tons in 1954. Only in 1932 and 1933 in the depth of the depression, and in 1921 and 1926 when serious strikes hindered the industry, has produc­tion under private enterprise been that low during this century.

Mr. James Bowman, Chairman of the Board, in another beauti­fully printed brochure, issued in 1957, tells us that "for every six tons which it [the coal industry] produced ten years ago, it now turns out seven." He fails to men­tion, however, that for every six tons it produced in 1913 it now produces 4.3 tons.

The People Pay

The British coal mines are now the property of the people; the money spent on these beautifully printed booklets and brochures is, therefore, their money; surely they are entitled to all the facts, not just these selected facts which constitute nothing save propa­ganda for the Coal Board.

Here are a few items which the Coal Board carefully refrains from mentioning in its expensive publi­cations.

When the socialist government first took over the mines, they were so sure that they could re­gain the production attained be­fore the war under free enter­prise that they actually entered into a solemn contract with the United States of America under the Marshall Aid arrangements to supply 33 million tons of coal to Europe in 1950. This contract was never fulfilled, only 13.5 million tons being exported in that year to all overseas markets.

Since the Board has taken over, Great Britain‘s coal export trade, which at one time was considered the very foundation of her great­ness, has virtually disappeared. Before 1913, exports amounted to over 70 million tons a year. In 1929 it was 60 million tons. In 1931 in the depth of the great depression it was 42 million tons. In 1938 it was 35 million tons. But the most that the Coal Board has ever been able to export in any one year since nationalization has been 13,­972,000 tons, in 1953. This has since fallen to less than 5 million tons in 1958. Furthermore, Great Britain has even been reduced to importing coal from the United States. Newcastle has actually re­ceived coal from the United States which had to be unloaded into barges; the cranes on the wharves could not handle it as they were built only to load coal outward. Newcastle had never envisaged the day she would be required to im­port coal. Perhaps nothing else epitomizes the failure of Great Britain‘s nationalized coal indus­try quite so much as these "coals to Newcastle."

Under the Coal Board the num­ber of strikes have quadrupled, and the rate of absenteeism has doubled.

The one figure that has im­proved in the Coal Board’s statis­tics is the production per shift. The reason for this is that the government by 1955 had spent £696 million (almost $2 billion) in improving the pits and provid­ing new machinery. In addition, a great quantity of machinery was given free of charge to the Coal Board under Marshall Aid. This machinery makes it almost impos­sible for a miner not to produce more coal per shift, but he fully makes up for this by working few­er shifts. As Sir Charles Reid, the most distinguished member of the original Coal Board, once said, "We are putting into the pits day by day great masses of machinery, but it does not seem to matter what we do, the output per man is not rising." He also said, "With­out a more radical alteration in the Coal Board downwards, both in regard to control and person­nel, the nationalization of the mines may well prove a disastrous failure. It cannot deal with the indiscipline so rampant in the mines; it cannot keep an effective check on production costs; it can­not give confidence and effective leadership to management or men."

There is no sign in the produc­tion figures that the radical alter­ation Sir Charles demanded has ever taken place.

One Intervention Leads to Another

Perhaps I should point out that the Coal Board claim that it took over a declining industry is not al­together wrong. But this was not the fault of free enterprise; it was due solely to the interference of the government with the indus­try. In 1930, the socialist govern­ment of Mr. Ramsay McDonald, with a view to securing the sur­vival of the less efficient mines, and thus ensuring employment for the workers, passed the Coal Min­ing Act which fixed for each pit a production quota not to be ex­ceeded.

The effect of this was to do away with the competition that is the very essence of free enterprise. What inducement is there for a mine owner to put in modern ma­chinery when he cannot increase his production thereby? But in spite of this, the nationalized coal industry has never been able to overtake the production of the pri­vately owned mines even in their admittedly most backward period; instead, production has sunk still further. No public relations officer, as far as I am aware, has ever pointed this out.

Under nationalization the price of coal rose to about six times its prewar figure, 16 shillings a ton at the pit head in 1939, against 96 shillings in 1958. Since then it has risen still further. While in 1939 a ton of coal cost 23 per cent of the average weekly industrial wage, it cost 39 per cent in 1956. In spite of this great increase in the price of coal, almost double the rate of other necessities, the Board has an accumulated deficit of £65 million ($182 million).

For more than ten years after the nationalization of the industry there was an instant demand for all the coal the Board could bring to the surface. In fact, coal had to be rationed long after all other commodities had been freed from this wartime expedient. Most min­ers believed that this excessive de­mand would continue forever, but almost unnoticed, possibly because of the excessive price of coal, a change was taking place in the British people’s choice of fuel. The use of oil steadily increased in ships, factories, and in the home, and this reduced the demand for coal. For years supply had failed to meet demand, and now demand shrank to meet supply. This needed a great power of adaptation on the part of the Coal Board, but this is about the last thing one can expect from a board of officials. While the Board studied the situation, stocks of coal accumulated, littering the landscape and running the Board still further into debt.

Inevitable Unemployment

But, at last, the Board faced up to the position and the astonished miners discovered that some pits were actually being closed down, and that some of their friends were being dismissed as redun­dant. In Kent, the miners staged a stay-down-the-mine strike; but, as it was impossible to go on pay­ing miners to produce coal nobody wanted, they were inevitably de­feated. To many a miner it came as an astonishing revelation that the State could not guarantee him a job in his chosen occupation for­ever. His faith in nationalization received a resounding blow. At the present time, the coal production in Great Britain is still further on the decline.

Investing in Coal promised us 228 million tons of coal in 1960, with an output per man of 319 tons. In 1959 production was 206.1 million tons of both deep mined and strip mined coal, with an out­put per man of 294 tons. This fig­ure for production was some 9 mil­lion tons below the previous year, so the Board’s forecasts now look like figments of the imagination.

The British people’s "Invest­ment in Coal" amounted to £388 million in compensation for the previous owners, and by 1960 over £ 877 million had been spent on improvements—a total of over $3 billion. All they have received from this investment is a smaller supply of coal at a very much higher price than before. This investment must be one of the worst any peo­ple have ever made. But perhaps the most pernicious feature of the whole business is the way the Coal Board has served up its prop­aganda to conceal the defects of its own conception and organiza­tion. Fortunately, the Coal Board is also required by law to produce an Annual Report and Statement of Accounts. This humble booklet, known only to the initiated, does have the merit of stating facts; otherwise, this article could not have been written.   

 

***

The Tyrant as Slave

He who is the real tyrant, whatever men may think, is the real slave, and is obliged to practice the greatest adulation and servility, and to be the flatterer of the vilest of mankind. He has desires which he is utterly unable to satisfy, and has more wants than any one, and is truly poor, if you know how to inspect the whole soul of him: all his life long he is beset with fear and is full of convulsions, and distractions, even as the State which he resembles: and surely the resemblance holds?

Moreover . . . he grows worse from having power: he becomes and is of necessity more jealous, more faithless, more unjust, more friendless, more impious, than he was at first; he is the pur­veyor and cherisher of every sort of vice, and the consequence is that he is supremely miserable, and that he makes everybody else as miserable as himself.

Plato, The Republic

ASSOCIATED ISSUE

March 1961

comments powered by Disqus

EMAIL UPDATES

* indicates required
Sign me up for...

CURRENT ISSUE

July/August 2014

The United States' corporate tax burden is the highest in the world, but innovators will always find a way to duck away from Uncle Sam's reach. Doug Bandow explains how those with the means are renouncing their citizenship in increasing numbers, while J. Dayne Girard describes the innovative use of freeports to shield wealth from the myriad taxes and duties imposed on it as it moves around the world. Of course the politicians brand all of these people unpatriotic, hoping you won't think too hard about the difference between the usual crony-capitalist suspects and the global creative elite that have done so much to improve our lives. In a special tech section, Joseph Diedrich, Thomas Bogle, and Matthew McCaffrey look at various ways these innovators add value to our lives--even in ways they probably never expected.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION