Economic councils arc bodies in which functional, vocational and professional interests like industry, trade, agriculture, medical profession, etc. are represented. These councils are based on the argument of functional representation. It is contended that the producer is as important in the present society as the consumer and his viewpoint must find equal representation in Parliament.
Secondly, it is pointed out that major part °f legislation passed by Parliament affects these vocations and professions and they need to be consulted. Thirdly, it is argued that legislation has become so technical and demands so much of expert knowledge that toe lay Parliaments are incapable of comprehending them and hence expert councils representing these vocations and services must be established so that they could give expert advice.
It is further pointed out that people in the modern industrial society have more common interests in their professional group rather than in the locality they live in. Thus it is argued that Economic Councils be organized cither with the power to legislate on economic matters or at least to advise Parliament and government on their economic legislation. Since the first World War, such councils have been established in different countries, the most important of which are:
National Economic Council of Germany:
Under the Weimer Constitution of Germany first of all, a National Economic Council was established in 1920. It consisted of 326 members divided into ten professional groups.
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It had no legislative authority but the government could not take any decision in economic matters without listening to its viewpoint. It could introduce proposals for legislation on its own initiative in the German Parliament.
National Economic Council of France:
In a number of countries on the continent, Economic Councils have been established. One such council was established in France in 1925. In 1936, the council was enlarged and given permanent legal basis. It consists of about one hundred members representing various economic interests and classes. The Prime Minister of France is to be an ex-officio Chairman of the Council.
All Bills touching economic problems arc submitted to it before they are introduced in Parliament. Its report must be laid before Parliament. Under the Fourth Republic, the National Economic Council was given a constitutional position. It was similar in composition as the N.E.C. under the 1936 law.
Economic Council of England:
Likewise, there is a National Economic Council in England as well. The Prime Minister is its ex-officio Chairman. The Chancellor of the Exchequer and three prominent Cabinet Ministers are also its members by virtue of their office.
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It consists of twenty members representing various economic interests. Its functions are similar as those of the French Council. Recently in England, a new consultative method has been devised by the Boards of Trade.
For each consumer’s goods industry “working parties” have been organized. Each party consists of 1/3 representatives of employers, 1/3 of workers and 1/ 3 independent members. These bodies devise ways and means for increasing production and efficiency in the concerned industry.
Demerits:
The working of the economic councils has not fulfilled the hopes attached with this system. Some of the defects are:
(1) There can be no adequate basis of representation of various vocational and professional groups. Even within one group there are many interests to be represented which cannot be given appropriate and adequate representation.
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(2) These councils are a house divided against themselves. The representatives of various interests represent sectional interests and fail to adopt a national outlook.
(3) Since these councils are advisory and do not bear responsibility, they fail to give sound advice. Very often they are irresponsible.
(4) These councils consists of experts and experts always take a narrow view. They cannot take a broad national view.
(5) In a democracy, the will of the people must prevail and that can be expressed only through territorial parliament.
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(6) These councils would fail to reconcile opposite class interests like those of the capitalists and the workers.
Points to Remember
Establishment of National Economic Councils has become a fashion in all countries with capitalistic economy. These Councils represent various economic and professional interests in the country.
They investigate various economic problems facing the country. They suggest ways and means for solving economic problems. They have merely advisory functions.