EMPLOYERS AND REDUCED PRODUCTION.
[To the Editor of the SPECTATOR.] SIR,—In discussing the present position of industry it is well to differentiate carefully between the export and home
trade. In the matter of exports where we are faced with world competition it is probably true that there is no wilful diminution of output on the part of manufacturers. The tendency, logically, must be to reduce cost and selling price.
But in the home market there is grave suspicion that the movement is towards small turnover with disproportionate profits. This has a boomerang effect. But the business community generally do not take the long view, and they fail to discern, or are unconcerned at, the appalling results which the policy must produce inevitably. Sufficient unto the day are the profits thereof.
Up to 1914 the population which our industrial development had made possible, maintained or progressed in its standard of living liy reason of its ability to consume regularly a certain number of articles—food, clothing, sport, amusement, &c. Then this progress was arrested. During the War we were content, nay compelled, to reduce our standard of living. It should be the end and aim of our business men to promote the return to the 1914 conditions in the matter of consumption. We shall not be able to support our 1914 population again until that point is reached. It is feared that business people are preventing this by putting exaggerated and artificial prices upon all articles. We find usually that where cost has risen by 100 per cent., price has moved forward by 150 per cent. Consequently the nation consumes less. The standard of living falls and thousands are thrown out of employment. The evidences of luxury which we see are quite illusory. It is the universal suspicion that the middle-men are the people with the bulgtng purses. But, of course, this unhealthy state of affairs cannot last. The reserve fund must in course of time discppear. The theory that artificial prices can be maintained in a competitive world will be scouted by the counsel for the defence. But competition cannot have full sway at present. The lack of new building alone would prevent it. But I submit that there is a wider cause. During the War the members of the various businesses were com- pelled to organize and co-operate in order to share the reduced supplies and to make arrangements for carrying on with depleted staffs. In a word, competition ceased. Is it possible that something similar now exists for regulating supplies and controlling prices—even for keeping out possible com- petitors ? Until we return again to the full and healthy activity of competition we cannot hope for relief from the present crippling prices. Many thoughtful people who are opposed on principle to Socialism are beginning to ask whether after all that creed is not the solution of the present puzzle.—
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