Hugh Dalton

Edward Hugh John Neale Dalton, Baron Dalton, (16 August 1887 – 13 February 1962) was a British Labour Party economist and politician who served as Chancellor of the Exchequer from 1945 to 1947. He shaped Labour Party foreign policy in the 1930s, opposing pacifism; promoting rearmament against the German threat; and strongly opposed the appeasement policy of Prime Minister Neville Chamberlain in 1938. Dalton served in Winston Churchill's wartime coalition cabinet; following the Dunkirk evacuation he was Minister of Economic Warfare, and established Special Operations Executive. Later in the war he was President of the Board of Trade. As Chancellor in Clement Attlee's Labour Government, he pushed his policy of cheap money too hard, and mishandled the sterling crisis of 1947 in which much of the 1946 Anglo-American loan was wasted. His political position was already in jeopardy in 1947 when he was forced to resign for, seemingly inadvertently, revealing a sentence of the budget to a reporter minutes before delivering his budget speech. Dalton later returned to the cabinet in relatively minor positions.

Early life

Hugh Dalton was born in Neath in South Wales. His father, John Neale Dalton, was a Church of England clergyman who became chaplain to Queen Victoria, tutor to the princes Albert Victor and his younger brother George (later King George V), and a canon of Windsor.

Dalton was educated at Summer Fields School and then at Eton College. He then went to King's College, Cambridge, where he was active in student politics; his socialist views, then very rare amongst undergraduates, earned him the nickname "Comrade Hugh". Whilst at Cambridge he was President of the Cambridge University Fabian Society. He did not succeed in becoming President of the Cambridge Union Society, despite three attempts to be elected Secretary. At Cambridge, Dalton was especially close to Rupert Brooke whom he met on his first day as an undergraduate and about whom he wrote in the 1950s that "the radiance of his memory still lights my path". Dalton's decision as an undergraduate to join the Labour Party gave him the reputation of being a "class traitor" and an "Etonian renegade" who had abandoned the traditional "Establishment" values of his Eton-Cambridge education; many Conservatives of similar public school and Oxbridge background always had a special distaste for him. Dalton came from a deeply Anglican Tory family devoted to what later generations would call "one nation Conservatism" who instilled into him the idea that members of the British elite had a duty to the nation to serve the greater good by using their talents. He did not see his conversion to socialism as a betrayal of his background as his critics alleged, but rather a continuation as he claimed that socialism was merely the more efficient system for ensuring the greater good of ordinary people.

He went on to study at the London School of Economics (LSE) and the Middle Temple. During the First World War he was called up into the Army Service Corps, later transferring to the Royal Artillery in January 1917. He served as a lieutenant on the French and Italian fronts, where he was awarded the Italian decoration, the Medaglia di Bronzo al Valor Militare, in recognition of his "contempt for danger" during the retreat from Caporetto; he later wrote a memoir of the war called With British Guns in Italy. Dalton's military service was the formative event of his youth. Dalton later wrote: "I am of that generation which during the Great War was massacred in droves upon the battlefields. Like many millions of others, I served in the Army and unlike most of the best friends of my youth I survived the war. It was my beliefs that politics, rightly handled, can put an end to war, which more than anything else, drew me into the active life of politics when the war was over." Unlike many others involved in the Labour Party in the interwar period, Dalton was no pacifist, and instead embraced the idea that collective security and armed deterrence were the best means of avoiding another world war. Following demobilisation, he returned to the LSE and the University of London as a lecturer, where he was awarded a DSc (hence his title "Dr Dalton") for a thesis on the principles of public finance in 1920.

Political career

thumbnail|Dalton (right), Minister of Economic Warfare, and [[Colin Gubbins, chief of the Special Operations Executive, talking to a Czech officer during a visit to Czech troops near Leamington Spa, Warwickshire]]

Dalton stood unsuccessfully for Parliament four times: at the 1922 Cambridge by-election, in Maidstone at the 1922 general election, in Cardiff East at the 1923 general election, and the 1924 Holland with Boston by-election, before entering Parliament for Peckham at the 1924 general election.

Dalton was unusual amongst Labour MPs, most of whom felt very strongly that the Treaty of Versailles was too harsh towards Germany, and who advocated revising the treaty in favour of Germany. Dalton's war experiences in the First World War had made him something of a Germanphobe. In 1926, he visited Poland and discovered that in the disputed regions of Upper Silesia and the Polish Corridor that German and Polish populations were hopelessly geographically mixed with no clear-cut geographical lines between the two quarrelling communities. As such, Dalton concluded that returning Upper Silesia and the Polish Corridor to Germany would not solve the German-Polish dispute as all that would do would be to transfer Poles into Germany just as transferring Upper Silesia and the Polish Corridor had transferred Germans into Poland. Dalton argued that "wholesale transfers of population" were the only way to achieve "perfection" because otherwise there would always be communities of Poles or Germans on the "wrong" side of the frontier. At the time, Dalton rejected this course and urged the "obliteration" of frontiers between Germany and Poland as the best way of securing peace in Europe, arguing for some sort of German-Polish federation. He recalled about his visit to Poland: "I came away aware for the first time of this most gifted and romantic nation, so brave, so gay, with so much good looks and personal charm in both sexes...It was this visit that finally determined me to try to rewrite the foreign policy of the Labour Party". Dalton wrote the prevailing viewpoint in the Labour Party in the 1920s was "...a silly syllogism 'Everything that came out of the Allied victory in the war and the Treaty of Versailles is bad. Poland came out of all that. Therefore Poland is bad'. But few of these "experts" had ever visited Poland or met typical Poles". Dalton was very interested in Eastern Europe and maintained close ties with the Polish Socialist Party. In his 1928 book Towards the Peace of Nations, Dalton praised the forced population exchanges between Turkey and Greece in 1922–1923 for its "cumulatively good" consequences and recommended a similar policy towards Eastern Europe.

Dalton was regarded in the 1920s as a protégé of Arthur Henderson and like Henderson, he supported the League of Nations, which he saw as an organisation that would promote free trade, disarmament, and arbitration of international disputes. There was a notable contradiction within the Labour Party in the interwar period between its support for disarmament vs. support for collective security, which implied a willingness to go to war against an aggressor state. Dalton was one of the first Labour leaders to confront the contradiction, which led him to choose collective security over disarmament. Other Labour leaders such as Ramsay MacDonald and Arthur Ponsonby preferred disarmament or to gloss over the contradiction by claiming that support for collective security would automatically lead to disarmament. In Towards the Peace of Nations, Dalton argued that if the League of Nations should invoke military sanctions against a state that had committed aggression, then Britain should go to war, which led him to argue the British military should not be abolished or sharply reduced as others in the Labour Party wanted.

Widely respected for his intellectual achievements in economics, Dalton rose in the Labour Party's ranks, with election in 1925 to the shadow cabinet and, with strong union backing, to the Labour Party National Executive Committee (NEC). At the 1929 general election, he succeeded his wife Ruth Dalton, who retired, as Labour Member of Parliament (MP) for Bishop Auckland.He gained ministerial and foreign policy experience as Under-Secretary at the Foreign Office in Ramsay MacDonald's second government, between 1929 and 1931. Starting in 1930, Dalton became a Zionist and strongly supported seeing the Palestine Mandate (modern Israel) ultimately becoming a Jewish state. Most Zionists at the time were socialist, and Dalton in a 1930 speech predicated a future Israeli state would be a "socialist commonwealth". As undersecretary, he clashed with the Foreign Secretary, Arthur Henderson-who favoured returning the Polish Corridor and Upper Silesia to Germany, writing in 1940 that "there was no reason why we should back German claims against Poland, and that moreover, it could not be in British interests to aggrandise at Poland's expense a Germany, which had been and might become again, what Poland could never be, a grim menace to this country". He lost this position as under-secretary when he, and most Labour leaders, rejected MacDonald's National Government. As with most other Labour MPs, he lost his seat in 1931; he was elected again in 1935.

Dalton published Practical Socialism for Britain, a bold and highly influential assessment of a future Labour government's policy options, in 1935. The book revived updated nuts-and-bolts Fabianism, which had been out of favour, and could be used to attack the more militant Left. His emphasis was on using the state as a national planning agency, an approach that appealed well beyond Labour. Dalton had the reputation of being "a brilliant man, but rash, hot-headed and impulsive, a shinning diamond of mercurial, unstable gifts with a penchant for self-damage". He was considered to be one of the most intelligent of the Labour MPs who was destined for high office should Labour win a general election, but also someone who had a self-destructive streak owing to his vanity and impulsive tendencies.

Foreign policy

Turning his attention to the looming crisis in Europe, he became the Labour Party's spokesman on foreign policy in Parliament. A crucial turning point in his views towards Germany was a meeting with a French diplomat Pierre Comert who told him on the basis of secret intelligence that Germany was rearming rapidly in violation of the terms of the Treaty of Versailles and had already established an air force (forbidden by Versailles). Comert ended his interview by telling him that strategic bombing could destroy entire cities within hours and that "the lunatics in charge [of Germany] are capable of this!" In May 1935, he wrote in his diary that Clement Attlee had given a speech in Smethwick in the West Midlands on the topic of the looming tensions between Japan and China, which he predicted could cause another world war. Dalton judged the speech a failure as he wrote: "And he talked about the Sino-Jap dispute!...Infinitely remote from the audience in both time and space". Dalton had a very Euro-centric conception of British foreign policy and tended to see Japan's imperialistic policy towards China as a far lesser concern compared to the potential threat posed by Nazi Germany.

Pacifism was a strong element in the Labour Party, until the Left moved to support arms for Republican ("Loyalist") Spain during the Spanish Civil War of 1936–1939. The Labour Party was divided between one faction opposed on principle to all war vs. another that was willing to support war against fascist aggression, and as one of the leaders of the latter faction, Dalton frequently fought against the pacifist faction. Dalton clashed in particular with Stafford Cripps, the leader of the pacifistic extreme left wing of the Labour Party. In a 1936 speech Cripps announced that he not only would oppose any war against Germany, but would actually welcome the German conquest of Britain under the grounds that German capitalists were more exploitive and vicious than British capitalists, and hence Nazi rule would bring about a socialist revolution in Britain more quickly. Dalton charged that Cripps had expressed the "judgement of a flea" in that speech, but opposed having Cripps expelled from Labour under the grounds that it would divide Labour and might led to the government calling a snap election. In September 1936, Dalton visited Paris to see the French Premier Léon Blum. He sharply criticised Blum for not offering more aid to the Spanish Republic, only to be countered by Blum who stated he was afraid of causing a civil war in France if he intervened in Spain. However Dalton was not enthusiastic for the Labour party policy of wanting to intervene, later stating:

<blockquote>I was far from enthusiastic for the slogan "arms for Spain" if this meant, as some of my friends eagerly did, that we were to supply arms which otherwise we should keep for ourselves, for I was much more conscious than most of my friends of the terrible insufficiency of British armaments against the German danger.</blockquote>

His views were different from those of Attlee, later recalling that before the Second World War he believed:

<blockquote>as Germany and Italy were potential enemies of Britain and Franco was their ally, it was in Britain's interest that Franco should not win the Spanish Civil War. It was on this proposition rather than any extravagant eulogy of the Spanish Government that I based most of my public references to this most tragic struggle.

In his biography of Attlee and Churchill, Leo McKinstry wrote: "Attlee had initially decided that two of the other most vital jobs, the Treasury and the Foreign Office, should be filled by Bevin and Dalton respectively. But the King had baulked at the idea of Dalton as Foreign Secretary, seeing him as untrustworthy and partisan. Similarly, the Foreign Office exerted pressure against Dalton, the outgoing Foreign Secretary Anthony Eden declaring that ‘it should be Bevin’." In 1944, Dalton, a Zionist, called for the establishment of a Jewish state in Palestine. He argued for population transfer, stating, "Let the Arabs be encouraged to move out, as the Jews move in." He went even further and discussed the possibility of "extending the present Palestinian boundaries, by agreement with Egypt, Syria, or Trans-Jordan." In private, Dalton often referred to people of colour as "diseased nigger communities" or "wogs." Between 1945 and 1948, the three principal Zionist groups in Palestine, the Haganah on the left and the Irgun and Lehi (which the British called the "Stern Gang") on the right waged a guerrilla struggle against the British. Dalton for all his support for Zionism was described as being "appalled" by the attacks on British soldiers and policemen, especially by the ruthless tactics of the Irgun and Stern Gang.

Economic policy

The Treasury faced urgent problems. Half of the wartime economy had been devoted to mobilizing soldiers, warplanes, bombs and munitions; an urgent transition to a peacetime budget was necessary, while minimizing inflation. Financial aid through Lend Lease from the United States was abruptly and unexpectedly terminated in September 1945, and new loans and cash grants from the United States and Canada were essential to keep living conditions tolerable. In the long run, Labour was committed to nationalization of industry and national planning of the economy, to more taxation of the rich and less of the poor, and to expanding the welfare state and creating free medical services for everyone. Dalton supported independence for India, saying in a 1946 speech: "If you are in a place where you are not wanted, and where you have not got the force, or perhaps the will, to quash those who don't want you, the only thing to do is come out". Dalton complained that subsiding the Greek government, which was losing a civil war against Communist guerrillas, was costing the British treasury too much and advised ending the subsidies. By contrast, Bevin who was serving as Foreign Secretary, pressed for continuing aid to Greece. Bevin argued if the Communists won the Greek Civil War, the new government in Athens would grant air and naval bases to the Soviet Union, which in turn would allow the Soviets to dominate the eastern Mediterranean Sea, which in effect would be the same as severing the Suez canal. In early 1947, there was a vigorous debate between Dalton and Bevin about subsiding the Greek government, which was won by Dalton who argued that HMG could not longer afford the subsidies. In this way, Dalton played an important role in triggering what came to be known as the Truman Doctrine as the United States was informed that Britain would cease subsiding Greece as of 1 April 1947, and if the Americans wanted to stop the Greek Communists from winning the civil war, they would have to take action.

Budget

Budgetary policy under Dalton was strongly progressive, as characterised by policies such as increased food subsidies, heavily subsidised rents to council house tenants, the lifting of restrictions on housebuilding, the financing of national assistance and family allowances, and extensive assistance to rural communities and Development Areas.

In one of his budgets, Dalton significantly increased spending on education (which included £4 million for the universities and the provision of free school milk), £38 million for the start (from August 1946) of family allowances, and an additional £10 million for Development Areas. In addition, the National Land Fund was established. Harold Macmillan, who inherited Dalton's housing responsibilities when the Conservatives returned to power in 1951, later acknowledged his debt to Dalton's championing of New Towns, and was grateful for the legacy of Dalton's Town Development Bill, which encouraged urban overfill schemes and the movement of industry out of cities.

Budget-leaking and resignation

Walking into the House of Commons to give the autumn 1947 budget speech, Dalton made an off-the-cuff remark to a journalist, telling him of some of the tax changes in the budget. The news was printed in the early edition of the evening papers before he had completed his speech, and whilst the stock market was still open. This was a scandal, and led to his resignation for leaking a budget secret. He was succeeded by Stafford Cripps. Though initially implicated in the allegations that led to the Lynskey tribunal in 1948, he was ultimately exonerated officially, but his reputation suffered another blow.

Return to cabinet

thumb|The paved surface of the [[Pennine Way on Black Hill in the Peak District National Park]]

Dalton returned to the cabinet in 1948, as Chancellor of the Duchy of Lancaster, making him a minister without portfolio. He became Minister of Town and Country Planning in 1950, the position being renamed as Minister of Local Government and Planning the following year. An avid outdoorsman, he served a term as president of the Ramblers Association, which promoted walking tours. As Chancellor in 1946 he had started the National Land Fund to resource national parks, and in 1951 he approved the Pennine Way, which involved the creation of 70 additional miles of rights of way. He still had the ear of the Prime Minister, and enjoyed promoting the careers of candidates with potential, but was no longer a major political player as he had been until 1947. In October 1950, a group of intellectuals from Communist China led by the writer Liu Ningyi visited Britain, and Dalton along with Bevan were assigned to meet the Chinese delegation. Liu read out a threatening statement saying that China would "not stand aside" from the Korean War and would intervene (in fact, Chinese forces had already crossed the Yalu river into North Korea) and accused the Labour government of being unfriendly towards China. In response, an angry Dalton told Liu that he had not met anyone who represented "real British" opinion and compared his visit, meeting only people associated with the British Communist Party, to a Labour Party delegation in China ruled by the Kuomintang. In November–December 1950, Dalton expressed much concern about the Korean War escalating into a Third World War, arguing that the world was in a highly dangerous situation when China and the United States fighting each other in Korea. Dalton urged Attlee to visit Washington D.C. to meet the American president Harry S. Truman to seek assurances that the United States would not use nuclear weapons and/or seek to escalate the Korean war into an all-out Sino-American war. Attlee visited Washington between 4–8 December 1949 for an emergency summit with Truman and reported that Truman had ruled out the use of nuclear weapons and escalation of the war. In 1951, the writer Monica Felton visited North Korea, China and the Soviet Union. In a radio broadcast from Moscow, she accused American forces of committing Nazi-style crimes in Korea. Upon her return to Britain, Dalton had her sacked from the Ministry of Local Government. He left government after Labour lost the 1951 general election.

Later years

Dalton lost his place (elected by party members, who in this era were Bevanite in their sympathies) on the Labour National Executive Committee in 1952. Dalton retired from the Shadow Cabinet in 1955, after thirty years as a front-bencher, and stood down from Parliament in the 1959 general election. He was made a Life Peer in 1960, but died two years later on 13 February 1962.

Personal life

In 1914 Dalton married Ruth with whom he had a daughter who died in infancy in the early 1920s.

Dalton's biographer, Ben Pimlott, accepts that Dalton had homosexual tendencies but concludes he never acted on them, stating that "no evidence exists that Dalton ever had a sexual relationship with another man, and his private life seems to have been one of blameless monogamy."

Michael Bloch, on the other hand, thinks that Dalton's love for Rupert Brooke, whom he met at Cambridge University's Fabian Society, went beyond the platonic, citing bike rides in the countryside and sleeping naked under the stars. In 1908, Dalton also made advances at James Strachey, "waving an immense steaming penis in his face and chuckling softly", as Brooke reported to James' brother Lytton.

In later life, Dalton seems to have refrained from sexual relationships with men, though he kept a fatherly interest in the career of various young men (such as Hugh Gaitskell, Richard Crossman and Tony Crosland, who had been noted for their good looks and had had same-sex experiences at Oxford) and was rather touchy-feely with them. According to Nicholas Davenport Dalton's unrequited feelings for Crosland became an embarrassing joke within the Labour Party.

Dalton's papers, including his diaries, are held at the LSE Library. His diaries have been digitised and are available on LSE's Digital Library.

Awards

Dalton was president of the Ramblers' Association from 1948 to 1950, and Master of the Drapers' Company in 1958–59. He was created a life peer as Baron Dalton, of Forest and Frith in the County Palatine of Durham on 28 January 1960.

Contributions in economics

Dalton substantially expanded Max Otto Lorenz's work in the measurement of income inequality, offering both an expanded array of techniques but also a set of principles by which to comprehend shifts in an income distribution, thereby providing a more compelling theoretical basis for understanding relationships between incomes (1920).

Following a suggestion by Pigou (1912, p. 24), Dalton proposed the condition that a transfer of income from a richer to a poorer person, so long as that transfer does not reverse the ranking of the two, will result in greater equity (Dalton, p. 351). This principle has come to be known as the Pigou–Dalton principle (see, e.g., Amartya Sen, 1973).

Dalton offered a theoretical proposition of a positive functional relationship between income and economic welfare, stating that economic welfare increases at an exponentially decreasing rate with increased income, leading to the conclusion that maximum social welfare is achievable only when all incomes are equal.

Early life

Political career

Foreign policy

Economic policy

Budget

Budget-leaking and resignation

Return to cabinet

Later years

Personal life

Awards

Contributions in economics

Arms

References

Cited sources

Further reading

Primary sources

External links