The League of Nations
Co-operation as Security Nosonv can deny that the whole of our economic life to-day is international. The World Economic Conference in 1927 only served to register a fact which has been visible for some decades, but has only since the War impinged upon the con- sciousness of those not actively engaged in world commerce. There are international trade conferences, such as that held periodically in the wool trade. There are international trusts, indeed, it may- be doubted whether there are any other trusts, since the wide interests in any scheme of trustification involve ownership of capital and organizations in many other countries other than those in which the principals may happen to reside. The Trades Union movement is international in character, and is extended into spheres where the trade unions proper do not reach ; professional congresses are being held every week ; technicians • have woken up to the fact that they have no secrets to give away so important as these which they may gain by co-operation with their fellows in other nations, and are prepared to barter their special discoveries away if they may be allowed to share in those of other coun- tries. Even Governments have been known to realize that one country cannot be prosperous when all its neighbours are bankrupt, a fact which has contributed materially to the recovery of Central Europe. And above all the change is visible in the ordinary language of ordinary people. How many speakers on any given subject to-day do not begin their remarks with the words " the problem to-day is properly an international and not a national one " ? We in England know well that the crisis in the coal and textile trades cannot be remedied without international co-operation. The financial problem which is confronting the nations to-day has long been recognized as international in character, and, other attempts at co-operation having proved insufficient, an international bank is being formed, with a view, expressed by its founders, to securing that co-operation and the economy which is impossible without it.
These activities are summed up under one head, that of Rationalization (cf. Urwick: The Meaning of Rationalization), whose object is the elimination of waste, whether incurred by production in excess of consumption, by unnecessary competi- tion, or by faulty technique of production. Beginning in post-War Germany the movement rapidly became inter- national and has expressed the change from national to international in a number of world conferences which have had important results.
THE DANGERS OF RATIONALIZATION.
But its nature is not yet sufficiently realized. Parallel with the international there has grown up a national school of rationalization, which in some ways helps, and in some ways conflicts with, the international. National rationalization of an industry is, of course, a useful and almost an indis- pensable preliminary to international rationalization. Unfor- tunately, it is not always seen in this way. It is often viewed as a means of competing more effectively with the industry in other countries. There is grave danger that this will take place in the coal industry in Great Britain, where there is talk of what amounts to an export subsidy being given to the rationalized industry at the expense in the first place of the home consumer, and ultimately, it is hoped, of the foreigner. Great Britain is, of course, not the worst sinner in this respect. The tendency is, however, growing. The Government is to help, give money, remit taxation, derate, or subsidize in some other way any industry which finds itself incapable of competing, for one reason or another, with its Continental neighbours. This is not the place to enter upon the great free-trade- protection controversy, but at least it is as well that British industrialists and business men should recognize which way they are going, and recognize that they are swimming against the main stream of tendencies to which we have already referred.
Tun REAL PROBLEM.
But the problem is an even bigger one than that, and concerns the whole relation between the community, national or international, and the individual or the industry. The ultimate question which the business man has got to face is whether he would rather rely for support upon a Government which is in any case slow-moving, and has no understanding of his particular problems, or whether he will co-operate with his colleagues in the same industry, both in his own country and outside it, and rely for his prosperity upon mutual assistance between them and the prosperity of the industry as a whole, which only they can properly secure.
On the one hand there is an ally (the Government) which is swayed by other interests as well as those of the industry to be fostered ; on the other, there is an ally almost all of whose interests are the same as those of the national industry ; and it has been shown, by the formation of these very trusts and organizations which we have mentioned, that each national industry can reap advantage from international co-operation as compared with the reduplication (and the consequent inefficiency and wasteful competition) which is the result of economic nationalism. Which is the safer shelter ? It is for the industrialist to remember also that, even should the State not be handicapped in giving him its whole-hearted support, it may be quite unable materially to affect the world situation in the industry, which depends upon factors that are outside its scope of action. Sacrifices will be necessary, but many of the losses involved would prob- ably have had to be cut in any case, e.g., by the closing down of uneconomic mines, and in.this case the result can be absolute security, whereas economic nationalism can never secure more than a precarious and momentary advantage.
INTERNATIONAL LABOUR MOVEMENT.
There is another section of the rationalization movement which fits easily only into an international framework. We have already referred to the international character of the trades union movement, which is also making for the democrat- ization of industry and trade through the co-operation of the unions in management. This movement has, of course, still far to go, but the movement is there, as is shown by the Melchett-Turner Conference. The I.L.O. exists to settle the international aspects of the movement, which also con- verge with the social service activities of governments. But, if the unions are extending their scope in the direction of management, the managements of the world, under the guise of the welfare and the industrial psychology movements, are extending their scope in the direction of social services. Each individual industry is assuming more and more respon- sibility for the well-being of each of its members.
The two sides are thus converging. What if they should eventually meet ? We have only to envisage, as was done by a writer in the Spectator of November 23rd (and again by a correspondent in our Letter columns this week), the creation of industrial councils, consisting of representatives of both unions and employers, and a system of reserve pay, by which each industry should maintain its own permanent reserve of labour, to convert these rather nebulous beginnings into a complete and stable system, independent of Governments, though subject to them in minor matters and the administration of justice. The latter suggestion would also take the problem of unem- ployment relief out of politics, thus avoiding the present party auction of unemployed votes.
INTERNATIONAL DEMOCRACY.
This is not to put business before politics, as is so much the fashion nowadays in certain quarters, but to envisage a state of affairs in which international democracy can function in the political sphere because the basis is already laid in international economic democracy. The political structure cannot exist independently of the economic, and vice versa. Each must dovetail into the other, and if we are ever to have international political security, that security must be also economic, social, and individual. Security can only come about by means of positive co-operation, and never by means of merely restrictive—i.e., negative—regulation. In such a fabric as that outlined this co-operation would be the vital bond of society. It is for each individual, and in particular for each man of business, to consider how far it is practicable, remembering the while that if he does not go forward he must go back, and, therefore, not erring unduly upon the side of
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