Articles following the release of 'A Life For Liberty'
Arthur Seldon: a life in economics.
Born into a poor London East-End Jewish immigrant family, and orphaned at the age of two, Arthur Seldon (1916-2005) became one Britain’s most influential and controversial economists in the second half of the twentieth century.
To what extent do childhood experiences affect a person’s intellectual ideas later in life? For me, this is a particularly interesting aspect of Colin Robinson’s biography of Arthur Seldon. Arthur was a leading supporter of economic liberalism, which, put simply, advocates that the economy of a nation functions best when state interference is minimal. One of the most influential liberal economists of the late twentieth century, Arthur was for me an avuncular friend for whom I felt much affection.
When Pinchas and Masha Margolis, Jewish immigrants from the Ukraine, arrived in London in about 1903, little would they have imagined that any of their children would ever attend a ceremony in Buckingham Palace in order to receive an award like the Order of Commander of the British Empire. However, their son Abraham (later known as ‘Arthur Seldon’) did. He was born in 1916 at Mrs Levy’s Maternity Home in London’s East End, and was their fifth and last child, because both his parents died in the Spanish Flu in 1918. Whereas Abraham’s siblings were farmed out either to family members or to the Norwood Jewish Orphanage, Abraham was adopted by a childless Jewish immigrant couple, Eva and Marks Slaberdain.
In the Agreement of Adoption that Marks Slaberdain, the cobbler (who lived and worked at 154 Oxford Road, Stepney), signed, he and Eva agreed to provide, at their own expense, “ … a thoroughly good education…”, and this they did. Out of their very meagre earnings, they paid for private violin lessons. When he reached the end of his schooling, aged 17, certain members of his family encouraged Arthur to leave education and to find gainful employment. His mother, Eva, insisted that her Arthur be allowed to continue into higher education. Abraham helped his father on Saturdays in Whitechapel Market where he would have witnessed the vibrant economic activity of the East End Jews.
Between the ages of five and ten, Abraham attended Dempsey Street Elementary School, a local state primary school, where he fared well. In 1925, illness prevented him from taking the examination for admission to grammar school. So, he failed to enter to the local grammar school, Sir Henry Raine’s School (near to Commercial Road). Instead, he was given a place in a local, less prestigious, secondary school. Not content with this, the young Abraham and one of his friends (Eric, later Baron Sharp, who was also lived in Oxford Road, and became a director of Monsanto), took the extraordinary expedient of pleading their case with the headmaster of Raine’s grammar school. The headmaster, impressed by the boys’ chutzpah and obvious intelligence, granted Abraham and his friend places in his school.
At Raine’s Abraham met EJ Hayward, a history teacher, who greatly influenced his future intellectual development. Hayward made the teenage Abraham question the political wisdom that predominated during the early 1930s: namely, that state control and planning was superior to permitting the free market to drive the economy. Aged seventeen, whilst at Raine’s, Abraham wrote an essay in which he compared the two approaches. One of his conclusions was: “…State tampering with prices and interference in any industries but natural monopolies … must lead to chaotic results.” Near the end of this essay, the seventeen year old revealed that the study of economics had led him to reject his earlier sympathies with socialist politics (quite common amongst the Jews of the East End, but not discussed in great detail in Robinson’s biography). Study of economics pushed his political stance right of centre. His essay ends: “Will I change again? I wonder…” He never did!
When Abraham joined the Bachelor of Commerce course at the London School of Economics (‘LSE’) in 1934, this university was an exciting cauldron of political ideas stirred by leading academics from both the left and the right. It was economics that grabbed his mind, and it was in the Economics Department that he met some of the major exponents of economic liberalism: Friedrich Hayek, Lionel Robbins, and Arnold Plant. With teachers such as these, Abraham Slaberdain became increasingly convinced that economic liberalism (rather than state intervention) is the best way to promote the wellbeing of country’s economy.
Whilst at the LSE Abraham changed his name to ‘Arthur’, and then, in 1939, at the suggestion of his teacher Arnold Plant, he changed his surname to ‘Seldon’ believing that sounded less foreign than Slaberdain. At the outbreak of World War Two, Arthur, now Arnold Plant’s research assistant, was called up for military service. Just prior to that, he and my father (who had recently arrived at LSE from Cape Town) worked together on conducting government opinion-polls. Arthur served in North Africa and assisted in planning aspects of the invasion of Italy.
After the war, unable to subsist on the low salaries that accepting an academic post would have entailed, Arthur became the editor of Store, a journal concerned with the affairs of large department stores. This job suited him because its remuneration was adequate, and it also allowed him sufficient time to continue his academic pursuits at the LSE. An unexpected benefit resulted from working at Store: he met, and fell in love with Marjorie Perrott (daughter of William Willett, who promoted the adoption of Daylight Saving in the United Kingdom). They wanted to marry, but Marjorie was not Jewish, and this proved to be a difficulty at first. Arthur’s mother, Eva, had made it very clear that she expected Arthur to marry a Jewess. He did not want to upset his, by now, frail mother by ‘marrying out’, yet it was Marjorie on whom his heart was set. In 1948, they married in secret, hoping that, given time, Eva might eventually get used to the idea. She did, and no doubt her acceptance of Marjorie was eased by the birth of Arthur’s first son in 1951. Eva, by now widowed, was supported by Arthur until the end of her life and became an integral part of Arthur’s new family.
Arthur Seldon left Store in 1949, and became employed as economic advisor to the Brewer’s Society, a body that was involved in policy-making for the brewery industry. During the eight years he worked with the Brewer’s, Arthur surprised the industry by questioning the wisdom of the ‘tied house’ rules that forced public houses to stock only the products made by the breweries that owned them. His careful economic analysis of this resulted in the controversial discovery that by abandoning the ‘tied house’ system, not only would consumers benefit, but so also would the breweries themselves. It was while working for the Brewer’s that Antony Fisher invited him to join his recently founded Institute of Economic Affairs (‘IEA’). Fisher who had originally wanted to go into politics to promote the ideas of economic liberalism had been persuaded by Friedrich Hayek not to do so, but instead to create a scholarly research organisation which could provide the intellectuals of the country with studies that would reveal to them the benefits of economic liberalism. Hayek felt that if an organisation existed with this aim, then the climate of public opinion could be changed, and as a result the politicians would be forced to follow. This was the role of the IEA, whose editorial staff Arthur joined 1957. Two years later, he became the full-time editor of the IEA.
The IEA was for Arthur the fertile ground in which his intellectual talents flowered to their fullest. In addition to influencing the nature of the publications commissioned by the IEA, Arthur edited the hundreds of publications it issued. He did not merely dot i’s and cross t’s, but, more importantly, he ensured that ideas were expounded in language that made the economic arguments and their practical consequences understandable by those not fluent in the techniques of economics. Along with Ralph Harris, the General Director of the IEA who shared many of Arthur’s ideas, the IEA achieved the policy-influencing aims that Hayek had envisaged. Arthur’s pivotal role in the IEA is described in great detail by Colin Robinson, but, suffice it to say, so influential were the ideas promoted by the IEA, that many of them were adopted by governments all over the globe including that led by Margaret Thatcher. Until the end of his life, and well after his retirement from the IEA, Arthur continued to publish the results of his analyses of economic and social issues, and to expose their defects and fallacies.
When asked, in 2000, whether his Jewish background in the East End was an important influence in his subsequent intellectual development, Arthur replied that, with the exception of the lessons he had learnt from Jewish working class self-help, he found very little connection between his early background and his later way of thinking. Colin Robinson does not accept this reply without question, and his description of self-administered welfare in the Jewish communities from which Arthur came makes for an interesting chapter in his book.
The self-help to which Arthur referred was an aspect of communal life peculiar to the East End Jewish community, and it even attracted favourable comment from an opponent of self-help, the socialist Beatrice Webb, one of the founders of founder of the LSE. Colin Robinson makes frequent references to the numerous ‘Chevras’ which not only served the religious needs of their immigrant members (and also those who were not members) and also their social needs. Amongst the numerous organisations that the Jews had set up to assist their poorer brethren was The Jewish Board of Guardians.
Founded in 1859 by Ephraim Alex (son of a Jewish dentist who practised in the East End), this organisation, along with the ‘chevras, and others like it (notably the so-called ‘friendly societies’), helped people to help themselves. Loans were offered for trade and business purposes to help the poor raise themselves from the ranks of the needy. When Arthur Seldon was born, the situation was much the same as when Webb studied it a few years earlier. Arthur’s adopted parents, poor as they were, did not rely on outside help. When his father Marks Slaberdain died, Eva received an adequate pension based on what her late husband had contributed to his trade-related friendly society. We will never know whether Arthur’s early exposure to this environment where self-help was favoured over charity influenced his ideas later in life. However, many things that he may have learnt from it resurfaced, notably, in his numerous, controversial, carefully argued publications that questioned the wisdom of the welfare state.
From 1959 until 1998, Arthur relentlessly criticised the welfare state. He felt that not only did it take away the dignity of the poorer members of society by depriving them of choice in matters of health and other aspects of life, but also he demonstrated that it was wasteful of resources (for example, it is foolish, he argued, to offer services to the middle classes that could afford them because that reduced the amounts of limited resources available to assist the neediest), and this led to higher taxation, which in turn acted as a disincentive to the will to work. Controversial as these ideas were, they made people think. Arthur did not only criticise the welfare state, but offered solutions, unpalatable to most governments, that would have put the cash available for welfare directly into the hands of those who need it, so that they could use it to their greatest benefit. Arthur considered that supporters of state controlled welfare who argue that the needy are incapable of making their own sensible decisions about their own lives are illiberal and paternalistic.
Colin Robinson made no mention of the political life of Arthur’s brother Cecil Margolis. Although not sharing the same intellectual leanings as Arthur, Cecil, a successful businessman, campaigned as a supporter of economic liberalism (and a determined opponent of state subsidies) and was elected a councillor in Harrogate. Cecil’s and Arthur’s upbringing in the Jewish East End may well have influenced their ideas, but, possibly, they may have had economic liberalism in their blood …
Whether or not Robinson’s book answers the question of how much Arthur Seldon’s early life influenced his later intellectual output, can only be judged by the reader. However, as someone with no knowledge of economics, I was impressed by the lucid style used by Colin Robinson to explain matters that might have otherwise mystified me. His fascinating book, which provides an interesting glimpse into the world of the Jewish immigrants in the East End, is written with the same sort of clarity that Arthur Seldon spent his working life encouraging.
“Arthur Seldon. A life for liberty” by Colin Robinson, is published by Profile Books Ltd.: London, 2009 (ISBN 978-1-84668-249-0).