The Role of Persuasion in Economic Affairs

I want to speak, as I think you will expect me to, about some problems of the British economy; but instead of throwing at you a mass of facts and figures, which are hard to take in by ear, I propose to let what I have to say grow out of the theme which I have taken as my title — the Role of Persuasion in Economic Affairs. Let me put it in this way. There is a saying in England, and I dare say here, that there are two ways of getting a donkey to progress along a road — by holding a carrot in front of his nose and by applying a stick to his behind. But experts say there is also a third way, of which we normally hear less, namely, by stroking his ears — in other words by establishing a code by means of which the animal becomes aware of what is expected of him and behaves accordingly. For the first six years after the war we in England lived under a regime of which the leitmotiv was planning, regulation, prohibition; for the last three years we have lived under one of which the leitmotiv has been the restoration of incentive and the regeneration of enterprise. But in point of fact under both regimes immense reliance has also been quietly placed on the efficacy of this third force of a code of communication of looked-for behaviour.