31 JULY 1941, Page 16

Trade After the War

The Reconstruction of World Trade. By J. B. Condliffe. (George Allen and Unwin. US. 6d.) PROFESSOR CONDLIFFE has had great opportunities for the study of international trade, for he was the compiler for a number of years of the annual World Economic Survey for the Intelligence Section of the League of Nations. He has now written a really important book dealing with fundamental issues which will have to be decided in the post-war world.

In the first part he analyses the causes (partly but by no means wholly inherent in the spread of economic nationalism) which led to the breakdown of the nineteenth-century system of world trade based on free enterprise, private initiative in investment, and stable exchanges. He looks back on this as a golden age of economic progress to which we cannot hope to return, much though we would like to do so. There is, however, a certain risk in concentrating on the obvious benefits of this system and ignoring its defects, of which the most notable perhaps were the exploitation of the labour of the producers of primary pro- ducts throughout the world, and the cyclical fluctuations which were tending to become increasingly world-wide and harmful in their effects.

In the second part, Professor Condliffe gives a detailed account of the new methods of trading, especially of those which grew up after the collapse of the gold standard in 1931. This part is based on a large number of memoranda written by experts belonging to different countries and submitted to the Twelfth Session of the International Studies Conference in 1939. It pro- vides the most comprehensive and up-to-date analysis that has appeared of the astonishing jungle of regulations, quotas and restrictive provisions of all kinds which sprouted like rank weeds in these years, obliterating the old channels of trade and destroy- ing most of the natural bases of the international division of labour.

In his concluding chapters he looks forward with a very tempered measure of optimism to the future. Assuming a German defeat, he suggests that we may have regional groupings on the Continent of Europe of what were formerly independent States. But the big question then remains whether these will integrate economically along lines of self-sufficiency, forming what the Germans call a Grossraumwirtschaft parallel with the other semi-closed economic empires of Japan and Russia, thus constraining the British Empire, the United States and Latin America to adapt themselves to a system of trading between large economic blocs ; or, on the other hand, whether there will be an attempted restoration of multilateral trading based on world-wide economic co-operation.

The choice for British statesmen may be put broadly as one between entering a European Confederation or joining with the United States in an effort to re-establish a world trading system. Which alternative will govern the future of international rela-

-tions will be determined very largely, on the one hand, by tix willingness of the United States to make good its professed policy of peaceful trading development; and, on the other, h, the readiness of the British Commonwealth to give up inuno. diate strategic and economic advantages for the larger security and economic opportunity of participation in a world traeint system.

As Professor Condliffe further points out, a sine qua non for a return to multilateral trading is that the United States should recognise the implications of her creditor position (a position bound to be intensified after the war) and, by lowering her tang and raising her price-level, make it possible for her debtors to pay her in goods instead of in gold. It is important, however, to observe that multilateral trading is not necessarily synonymour with free trade nor with the absence of regulation of condition, of supply and marketing—for such regulation may well prove (despite obvious dangers) to be a permanent feature in the cast of many of the world's primary products.

Finally, attention may be drawn to Professor Condliffe'i emphatic warning that " the worst of all policies in the long run, though the most tempting, would be the extension of inter- national loans or proposals for international action that were not followed up by consistent leadership in the working out ei continuing means of international co-operation."