The Audit of War by Correlli Barnett (1986)

‘The time and energy and thought which we are all giving to the Brave New World is wildly disproportionate to what is being given to the Cruel New World.’ (British economist J.M. Keynes, quoted page 40)

The full title of this book is The Audit of War: The Illusion and Reality of Britain as a Great Nation, which very accurately states its aim and its Manichaean structure. It is not your average leisurely, rather reassuring history book but a fierce and forcefully argued polemic which, if you’re British, is intellectually and emotionally devastating.

The basic premise is this: When Barnett wrote the book, received opinion tended to think that Britain fell behind its industrial competitors (America, Germany and Japan) and prey to the so-called ‘British disease’ of abysmal industrial performance, in the decades after the end of the Second World War. During the war itself, the nation had pulled together and demonstrated wonders of industrial production, showing what you can achieve if your economy is planned and centrally controlled towards one great aim i.e. fighting for survival. Celebration of the scientific, industrial and manufacturing triumphs of central planning – radar, the Spitfire, countless ships – helped to justify the 1945 Labour government’s policy of nationalising ‘the commanding heights’ of the economy – namely the coal and steel industries, gas, railways, and so on – in order to continue that spirit of wartime unity and success. It was only in the decades that followed that timid management and obstructive unions undermined the crowning achievement of the war years in the 1950s and 60s. Thus received opinion.

Barnett is at pains to show that this entire narrative is completely untrue, a myth, the product of wartime propaganda which those in charge knew at the time was profoundly misleading.

Barnett ‘drew on a mass of once secret and hitherto unpublished Whitehall and Cabinet-committee files’ which had only just become available in the early 1980s, as well as published reports, surveys and data, to show in excruciating detail that far from being a shining beacon of industrial success, the war years in fact represented the shambolic climax of over a century of mismanagement, short-sightedness, governmental and business failure at all levels.

In other words, it was during the war itself that the worst aspects of British economic mismanagement came to a head and set the tone for the post-war decline. These included:

  • the shameful lack of technical schools and colleges, resulting in chronic shortages of decently educated let alone skilled workmen, supervisors and management
  • the fragmentation of all Britain’s industries into small, scattered, often family-run companies overseen by narrow-minded and jealously protective sons and grandsons of the founders
  • the dominance of what Barnett calls ‘the practical man’, the man who pulled himself up by his bootstraps and learned on the job and worked things out by rule of thumb – a pitiful contrast to the regiments of highly trained, superbly educated engineers found in America and Germany
  • the ruinous, lazy, jobsworth attitude of the workers in every industry who generally a) hated the management b) rejected any changes or improvements or suggestions for greater efficiency c) clung on to petty privileges through d) the mechanism of scores of petty-minded trade unions and their stroppy shop stewards who used almost any excuse to stage a sudden wildcat strike, or walkout, or go-slow

Chapters three to nine depict in excruciating detail – really mind-blowing, life-altering detail – the deep-rooted and profound failings of Britain’s core industries – coal mining, steel-making, shipbuilding, tank and truck manufacture – and then goes on to highlight the failings of the ‘new’ technologies like radar and radio.

Reading in such detail about the bad design, the failure to co-ordinate design and manufacture, the failure to invest in the right plant and factories, the refusal of trade unions to accept new technologies or working methods, the excruciating delays, and then the crappiness of the end products (Britain’s tanks and lorries being good examples) is more than depressing, it is devastating.

All the more so because Barnett polemically opened the book with a portrait of the high-minded, bien-pensant, liberal elite of left-leaning politicians, ethical thinkers, art directors, liberal columnists and so forth who focused all their thinking and powerful rhetoric NOT on how the British economy needed to be rescued from its parlous state and comprehensively overhauled, but on how society needed to be changed and improved after the war.

He is excoriatingly, blisteringly critical of what he calls ‘the “enlightened” Establishment’ which produced numerous books, articles and pamphlets calling for the end of the war to be followed by the creation of a welfare state, the building of a ‘New Jerusalem’, a national health service free to all, millions of new houses – he shows in detail how these purely social and reformist aims became the top priority of politicians from all parties – rather than retooling British industry to compete in a harsher economic world.

This opening chapter is flagellates what Barnett satirically calls ‘New Jerusalemism’, the anti-science, anti-industrial mindset cultivated by hundreds of posh public schools which taught their pupils Horace, cricket and little else – an education in high-minded uselessness which melded with the parallel, non-conformist religious tradition which lies behind the Labour Party – to create a high-minded, loftily ‘moral’ concern for welfare and social security – without giving any thought to who would pay for it.

(In this, Barnett echoes the conclusions of the American academic Martin J. Wiener in his 1981 book English Culture and the Decline of the Industrial Spirit, which was, to quote Wikipedia:

a concerted attack on the British elite for its indifference to and wariness of industrialism and commercialism. Although the commercial and industrial revolutions originated in England, Wiener blamed a persistent strain in British culture, characterised by wariness of capitalist expansion and yearning for an arcadian rural society, which had prevented England – and Britain as a whole – from fully exploiting the benefits of what it had created. He was particularly scathing about the self-made industrial capitalists of the 19th century who, from the middle of that century onwards, increasingly sent their children to public schools where ‘the sons of businessmen were looked down upon and science was barely taught’.)

Chapter two investigates in more detail the precise policies of the ‘New Jerusalemers’ – that Britain must be rebuilt whatever the cost as embodied in the famous Beveridge Report of November 1942, which is generally seen as setting out the framework for the post-war Welfare State, guaranteeing every citizen a decent standard of living, good housing and free education. Barnett shows how Beveridge very successfully publicised his report, through the press and via the army’s influential Army Bureau of Current Affairs (ABCA), and how allies recruited powerful liberals in the media such as the owner of the best-selling weekly magazine Picture Post, along with scores of other opinion formers, creating an unstoppable momentum. All this had far more impact than the cautious, sometimes very pessimistic, reports about the economy commissioned by the Treasury under Chancellor Kingsley Wood. Barnett shows that even Labour figures like Clement Attlee were aware of the economic plight; but chose to ignore it in order to fulfil what they thought of as higher, moral and political obligations.

In chapter three Barnett examines more closely the state of the economy which all the New Jerusalem zealots were assuming would steam ahead in the post-war period, providing the money for the new welfare state and the promised massive rebuilding programme. It makes very bleak reading, key points being:

  • Barnett’s previous book, The Decline of British Power, had anatomised the failure of British industry to invest, modernise and compete between the wars. Instead it was able to rest on its laurels and export sub-standard products to the captive markets of the colonies.
  • This helps explain why Britain’s economy and industries only survived the war because of American money. The Lend-Lease scheme provided the tooling machines, raw materials and food which kept Britain afloat. Lend-Lease was cancelled almost immediately the war ended, leaving Britain to fend for itself and facing certain bankruptcy.
  • American money allowed the British ruling and industrial class for six long years to completely drop all thoughts of competitive exporting i.e. being a commercial success, in order to entirely focus on producing war munitions and goods.
  • Barnett quotes a riveting report produced by the Board of Trade which extensively surveyed the likely post-war effectiveness of individual British industries: out of 53 sectors, only two evinced unqualified optimism (cosmetics and sewage systems)
  • He shows how British goods produced during the war (guns, trucks, tanks) were consistently poorer in design and performance than those produced by the Americans or Germans. I was brought up to think the world-famous Spitfire fighter plane outclassed the German Messerschmitt: but it takes Barnett to point out that it took nearly double the man hours to produce a Spitfire as to produce a Messerschmitt. This is one example from hundreds which he provides in devastating detail demonstrating over and over again the uncompetitive, low productivity, bad design, go-slow trade unions and incompetent management which, once the war ended and industry returned to having to sell things abroad, produced worse products at higher prices than their European and American competitors.

Just reading the contents page of the book gives you the main message:

Part 1 Dreams and Illusions
1. The Dream of new Jerusalem
2. the Illusion of Limitless Possibility

Part II – The Industrial Machine
3. ‘The prospect is bleak’: 1943-45
4. An Industrial Worst Case: Coal
5. ‘In Great Need of Modernisation’: Steel
6. ‘The Fossilisation of Inefficiency’: Shipbuilding
7. A Mass Industry Improvised: Aircraft 1936-39
8. New technology and Old Failings: Aircraft 1939-44
9. The Dependence on America: Radar and Much Else

Part III Reality – Human Resources
10. The Legacy of the Industrial Revolution
11. Education for Industrial Decline

Part IV The Limits of the Possible
12. New Jerusalem or Economic Miracle
13. Tinkering as Industrial Strategy
14. The Lost Victory

The guilt of ‘the practical man’

Each chapter in part two is a brutally critical analysis of the failure of a key British industry. Since virtually all energy was provided by coal (coal playing the central role in the economy now taken by oil), Barnett makes you want to weep tears of frustration and grief at the complete failure of the coalmine owners, managers, workers or government to devise any workable plans to modernise the industry and bring it up to the levels of efficiency and productivity achieved by mines in America, Germany, France and Belgium.

One vast theme which emerges is the fragmentation of these industries which stretches right back to the origins of the industrial revolution when any landowner who discovered coal on their land set up their own mine, run their own way, with their own quirky systems, layout, technology and ad hoc railways lines.

In coal and steel it was this fragmentation which dragged down productivity, with the promise made by the national government during the second World War to guarantee wages and prices, merely delaying the howling need to close down unproductive pits and consolidate profitable ones and invest in more modern (i.e. German) equipment.

But Barnett also has it in for the type of management which ran so many of these small to medium size operations. Early on he starts calling this figure ‘the practical man’, and uses the same rhetorical device of scornful repetition to castigate this bogeyman as he used with his mocking repetition of ‘New Jerusalemites’ in the opening chapters.

‘The practical man’ is an amateur, who has learned on the job, is proud of his practical experience and uses rule of thumb and intuition to make decisions. All this is contrasted with Germany, in particular, which by the mid-1800s, yes, a century before the Second World War, had already set up a network of technical schools and colleges, and – as Barnett shows – were consistently turning out ten times as many skilled workers with useful apprenticeships, as well as trained industrial chemists, physicists, scientists of all kinds.

Barnett lays out side by side the systematic way in which the German state set about creating an education system which guaranteed a highly educated general population, from which it then selected the best and brightest to go on to world-leading technical schools, colleges and universities, next to the shambolic, uncentralised, ad hoc way the British relied on individual cities, local councils and even parishes, or the occasional philanthropist to rig up a ramshackle unco-ordinated mosaic of half-cocked and inefficient schools and colleges. The result was the ‘deep ignorance’, the illiteracy and lack of education of the vast bulk of the British population which appalled visitors during the 1930s.

With, of course, the notable exception of reams of graduates from top public schools and Oxbridge who had been drilled in Classics – that vital requirement for ‘the English gentleman’ – but didn’t know one end of a steam lathe from the other.

Big ideas

Britain only survived the war because of American funding Britain was bankrupt by 1941. It was given a loan of gold by the Belgian government which would have tided it over for another year at most, but was rescued from complete collapse by the signing of the Lend-Lease arrangement with America which prevented Britain actually going bankrupt. Britain was only able to fight the Second World War because of American money, materials and equipment.

Britain’s good luck on stumbling across industrial production was also its doom Britain was lucky to stumble into the Industrial Revolution but the seeds of its later failure were sown by the very thing which made it the pioneer. This was the lucky confluence of iron, coal and water in a number of places – Lancashire, South Wales, some parts of the north-east – which tended to be far from centres of population.

It was the convenient proximity of these raw materials which enabled the industrial revolution to take place in Britain first – but it had the fatal effect of fragmenting the companies and industries which were set up to exploit it. It led to a huge number of disparate enterprises scattered all over the UK.

It also created a tradition of strong independent founders of each individual mine and factory, ‘masters’, practical men, with little or no education or training. It entrenched in their minds and the minds of their descendants the notion that profitability stemmed from long hours and hard wages, not from fancy new technological innovations. We’ll be ‘avin’ none of your fancy new university ideas, Obadiah.

It led the great industrial towns to grow like mushrooms from little villages, with no urban planning at all, little more than barracks with no water or sewage for the new armies of the proletariat who were worked, literally, to death by their masters.

And it was this, the untrammeled brutality and naked exploitation of the Georgian Industrial Revolution (i.e. up to about 1837) which led the British working class to become a race apart, living in slum work camps, working seven hours a day, filled with anger and resentment, and determined to cling on to every scrap of privilege and entitlement, resolutely set against any kind of change to long-established practices.

It led to the smouldering war between employers and employees which even a sympathetic witness, like Harold Wilson, noted in his 1945 study of the British coalmining industry. And which continued down to the catastrophic 1970s, when I grew up, and burst into flames during the great miners strike of 1984-5.

Barnett shows in unrelenting detail how all these ills derived directly from the unique conditions pertaining at the birth of the industrial revolution in the 1770s, and then never went away. In 1945 people were still living in damp, filthy slum terraces with no running water and no sewage facilities which had been built in 1800.

Thus was born the tradition of the British muddling through, while the Germans planned A Frenchman touring British industry between the wars noted that because of this lucky confluence of coal, iron and running water in key parts of Britain, from the start, an enterprising ‘master’ who could raise a little capital could just build a factory or works close to coal and iron deposits and on the nearest river to start making money.

Whereas in Germany and France, where iron, coal and water were not so conveniently placed together, potential industrialists had to carefully plan how to transport the raw materials they needed and how to process them to make the maximum profit from a more elaborate operation.

From the very start of their industrial revolutions, the French and Germans were forced to think and plan more carefully than the British, and so were motivated to set up technical and managerial colleges and courses to teach the skills of production management and planning – something which the British didn’t think of doing until generations later.

The workers the most reactionary force in society Reading Barnett’s innumerable accounts of the workers’ and trade unions’ stubborn resistance to any kind of change, to any kind of technological development or improvement in working practices, reading about their fierce opposition to women doing any work in the factories – all this forces on the reader the conclusion that – diametrically opposite to what Marx and all his followers down to E.P. Thompson claimed – the ‘working class’, far from being the spearhead, the avant-garde of society, was in fact the most conservative, small-minded, narrow and reactionary part of society.

This insight sheds new light on the entire kitchen sink, working class school of literature which grew up in the late 1950s / early 1960s and which I’ve been reading about in David Kynaston’s sequence of post-war histories. All the protagonists of those ‘new’ novels about working class life – in the Loneliness of the Long-Distance Runner or Saturday Night, Sunday Morning or Billy Liar – want to escape not just the poverty of their slums, but much more so the narrowness of expectation and the poverty of imagination, the profoundly repressive conservatism of the culture they’ve grown up in.

Reading Barnett gives you a whole new appreciation of the depth and scale of working class ignorance and fear of any change or innovation. From very early on, from the time of the Luddites, the appallingly mistreated workers in the cotton areas of Lancashire or coal minders learned to associate the introduction of any new machinery with layoffs and outright starvation. No wonder they resisted change. Change meant unemployment and inconceivable misery. Resistance to any kind of change became bred in the bone, an attitude which lasted for nearly 200 years (1770 to 1970).

Some doubts

1. Critical rhetoric

The impression given by the opening chapters which lampoon and satirise the high-minded feelings of a bien-pensant liberal elite gives the impression that the wish to create a welfare state, a national health service, and build decent housing was a vast conspiracy by the ruling class to foist feelgood social welfare on the nation.

It is rammed home by his strategy of repeating his ironic references to ‘the “enlightened” Establishment’ and ‘New Jerusalemism’, and highlighting the exceptional privilege of the key opinion formers by emphasising how they all, from the Archbishop of Canterbury on down, went to jolly good private schools where they had imbibed what Barnett takes to be a fatal combination of high-minded Christian principles and profound ignorance of industry or trade.

In fact, all his facts and figures may well make an excoriating case, but I also noted his rhetorical devices, deploying a powerfully sarcastic vocabulary when describing the New Jerusalem do-gooders who are always described as ‘prophets’, zealous, they ‘proselytise’ with ‘quenchless fervour’, they conduct ‘New Jerusalem evangelism’ and have ‘visions’ of a Brave New World, in fact they act ‘on the best romantic principle that sense must bend to feeling, and facts to faith’ (p.37). It is a sustained rhetorical attack which helps to give the book its powerful emotional charge, much more so than is usual in a history book.

Sometimes his language becomes virulent and intemperate:

The message that it was no longer politically possible openly to try to block or stall New Jerusalem was thrust down Conservative throats by the results of six by-elections held that February, all held in Conservative seats. (p.31)

‘Thrust down Conservative throats’ is obviously emotive and loaded language. It sounds like the Gestapo have taken over. More temperate phrasing might have been to say that in six by-elections in February 1943 the Conservative vote dropped by 8% or so, which told party leaders that the national mood was moving in favour of Labour and its support of the Beveridge Plan. There need not be any ‘thrusting down throats’. It is symptomatic of the barely concealed anger and contempt which fuel the book and make it such a thrilling read.

2. Brings into question the nature of democracy

Barnett describes how the 1942 Beveridge Report was greeted with enthusiasm not only by the working class newspapers, the Daily Mirror and Herald, but by the Times and the Telegraph too i.e. by all shades of political opinion. He claims that those newspapers, along with the influential magazine Picture Post, the BBC, the ABCA, and a host of other organisations, have all been ‘captured’ by the ‘romantic delusions’ of the ‘New Jerusalemites’. In other words, at various points, he gives the impression that there was a kind of conspiracy to foist the new Jerusalem, the welfare state and the NHS on an unsuspecting public.

But, at some point, I think almost any reader will step back from Barnett’s virulent rhetoric, and be tempted to think – well, everything you say about the absolutely dire performance of British industry and the British economy is obviously correct; and everything you say about the entire war effort only existing because of huge American subsidies is true; and everything you say about a huge cross-section of society – from the Archbishop of Canterbury to communist coalminers – refusing to face these economic facts, and instead agreeing that a new society must be built after the war, is also true, but…

But that is what the people wanted. The people had fought for six long years. Hundreds of thousands died and lost their homes, the entire nation suffered from the blackout and rationing and the prolonged psychological impact of war. It was not altogether irrational of them to want all this sacrifice to have been for something. And those old enough to remember it emphatically did not want a repetition of the last war when the politicians promised a land fit for heroes and a few years later there was a great slump, unemployment and the slums stayed as wretched as ever.

Barnett’s interpretation may be 100% correct and the decision to spend on a welfare state may have been, from the purely economic point of view, a disastrous choice and waste of resources when the rational thing would have been to invest in a comprehensive overhaul of every aspect of Britain’s creaking infrastructure and lamentable industrial base.

But I can see at least three objections to his thesis:

  1. It was what the overwhelming majority of the population wanted and in a democracy, like it or not, you have to do what the majority vote for. To have resisted the calls for reform which swept over all aspects of British society in 1945 would have required a dictatorship.
  2. If it had not been done then, when would it have been done? If successive governments had embarked on the plan for complete economic overhaul which Barnett advocates, does he think the social and economic conditions which allowed the creation of a welfare state would have ever come again? It’s one thing to say you have to earn the money before you can spend it, any child can grasp that message. But in the enormously complicated running of a huge country, does he imagine that one year, five years, ten years later on, the same unity and determination to create a centralised welfare state and national health system would have still existed? I doubt it.
  3. Lastly, the very power of his case undermines itself. What I mean is that Barnett shows in harrowing detail how economic fragmentation, bad management, terrible industrial relations and an appalling education system had placed Britain fifty years behind America or Germany by 1939 and were far more profoundly and deeply rooted in every aspect of British culture than is usually thought. In which case: what makes him think that a mere five years of economic investment, directed by the same old Oxbridge-educated mandarins who had presided over the previous hundred years of decline, would have made very much difference? If the problem was really as deep-rooted as he very persuasively shows it to be, who knows whether even ten years, or fifteen years, of systematic retooling and investment would have been enough. Would anything have been enough to cure the British disease, short of asking the Germans to come and run our entire society for us?

Agree or disagree, this is one of the most thought-provoking books I’ve ever read.


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