The Road to Prosperity The Road to Prosperity. By Sir
George Paish. (Bonn. Os. net.)
Britain Looks Forward. Studies of the Present Conditions by Various Writes. Edited by Sir A. Robbins. (T. Fisher ITnwin. Os.)
The Letters of an Individualist to " The Times," 1921-1926. By Ernest J. P. Berm. (Bann. 3s. 6d. net.)
Ii is a puzzle to most people how Great Britain has managed to get on as well as she has, financially and commercially, in times when we were told that her trade showed " no signs of recovery " and that individuals (who might in other circumstances have cast their 'surplus money into trade enterprises) were " crushed " by the unparalleled taxation. She has got on surprisingly well " considering," as the common phrase is ; and the fact suggests that there has really not been quite enough " considering " in another sense. There have been errors of calculation, and it is the merit of two of the books before us—Sir George Paish's book and that edited by Sir Alfred Robbins—that they put the reader on the track of discovering certain mistakes.
To begin with, the economists—even the Free Traders— always underestimate the invisible exports. These exports, in the form of freights, services, foreign dividends and so on,. are elusive things upon which you cannot immediately place in statistical finger and the amount of which consequently has to be more or less guessed. No economist cares to be eaught out in romantic guessing and so he is apt to guess much too low. In spite of the encouraging experiences of the nation before the Wai the tendency to guess too low has survived. " Encouraging " is not too strong a word, for those who believed that Great Britain was rushing to her doom before the War had to eat their own arguments. - Who that lived through the Tariff Reform controversy will forget Mr. Joseph Chamberlain's simple but drastic and terrifying argument that when our imports exceeded our exports we were to the extent of the excess " bleeding to death " ? Then the War came and Great Britain had to deal out money right and left to those hungry Allies who, according to the argument, had already nearly bled her white by their com- petitive trade and superior fiscal methods.
Another source of error is the habit of the official statisticians of making their main statistics deal with what have for many years been the staple industries of the country—railways, Chipping, coal and the rest of what are called the heavy ;Industries. In the past theSe have been the test industries, and the progress or decline of industry was rightly judged in accordance with their movements. But since the War all sorts of new industries have greatly expanded and they have to a large extent offset the failure of the old industries. Take two that strike every eye—the motor industry and the allied induStry of transportation by road. The old staple industries, it is to be hoped, will recover and more than recover, but in the meantime there are consolations which have been insufficiently measured.
Unnecessary despondency may also be traced to the eemonrists' inveterate practice of allowing themselves to
be intellectually intimidated by the size of a countrv. Huge China and huge India suggest huge trade, and it trade is not growing there or if some part- of it has been lost the economists shake their heads, not noticing that thriving trades in several much smaller countries coati have jumped into existence. New Zealand—to take only One instance—which has a population of less than a million and a half, imports from Great Britain as large an amount as is imported by- China with her
40),C0 " Keep your eye on the BritiJh Empire" is certainly the soundest maxim for the future. The develop. ment of the Empire is possible by a variety of methods; it is a theme and a prize for everybody, Free Trader and Protectionist alike. The reader is advised to turn to Mr. Philip Kerr's valuable study on this subject in Britain Looki Forward.
The recent Colwyn Report authorized us to be reasonably optimistic about the future of the country, and to believe that if we attended to production we should be able to carry our load of taxation without undue difficulty. This was good hearing. The nation had no doubt a little exaggerated the load. Has not that exaggeration been yet another source of error in the diagnosis of many economists ? Mr. W. T. Layton, in his lucid survey which is the first study in Britain Looks Forward, thinks that it :has. Heavy direct taxation, he says, does not affect prices or impede us in our competition with other countries, although it does, of course, interfere with the free play of economic forces and to some extent hampers enterprise. The fact remains that the Income Tax is not levied till the profits have been made. Again, half of the total of taxes collected by the Government is paid out again in interest upon War Debt. This sum amounts to £310,000,000; only £35,000,000 is interest on external debt. The interest, in short, is paid to a large extent to the same people who arc paying the taxes for the reduction of the Debt.
Sir George Palsies book inspires what may be called conditional hopefulness ; he has no doubt whatever about our future prosperity, if only the present trade restrictions all over the world can be modified. The nations, old and new alike, have hedged themselves in behind high barriers. His argument against this madness is an amplification of the recent bankers' manifesto. The whole trouble is that we cannot sell the goods which we could easily produce. Even so we are now producing as much as before tine War. We must both produce more and sell more if we arc to get rid of unemployment. Unemployment at the moment is due to the increase of population without a corresponding extension . markets. We our markets. We must add a word of welcome to the ninth edition of Sir Ernest Benn's letters to the Times. Behold an individualkt indeed ! He makes. not one concession to those who feel compelled to dilute the faith of the Manchester School. His letters are on a variety of subjects, and naturally when he wrote them he had no idea of bringing them into relation with one another, yet they forni a strikingly coherent whole.
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