FINANCE-PUBLIC AND PRIVATE
PESSIMISM AS A STIMULUS
- By ARTHUR W. BIDDY. .
Tur.ui; is a pessimism which is demoralizing, and we are all ••familiar with it. It leads nowhere ; indeed, by its paralysing influence it can produce on the individual or the nation something akin to a paralysis of the body; crippling initiative and enterprise. On the other hand, it is open to question whether very .much the same crippling effects may not be produced by an unfounded optimism. If would be a poor kind of optimism, for example, if, in the case of some business which is declining through bad inanagement or excessive expenditure, attempts should be made to gloss over matters and, with a cheery optimism, reserves should be drawn upon to maintain high dividends hoping that something " will turn up " to put things right later. In such a case, a little pessimism, a plainer facing of the facts, however unpleasant at the time, might prove to be a better way of reaching happier times, later on, than . ignoring the actual facts of the position. What is true of a private business enterprise is true also of .a nation and we haVe to-daY to look no farther for examples than France to see that less optimism and a straighter facing of facts a year or two ago would probably have saved that country from the acute troubles with which it is confronted to-day.
Two POINTS- OF VIEW.
I am constrained to. make. these observations because it is impossible to read not only our own journals but those - Laf other countries without perceiving a great difference of opinion in regard to the manner in which . our own industrial- problems to-day should be viewed; - In some quarters, for example, we find that the continued visible adverse Trade Balance is emphasized as a serious matter ; while in. others a much more hopeful view is taken. We are told that allowance must be made for the after effects of the War ; that there are many causes affecting the figtireg quite beyond our control (which is true) ; and further, that as against this adverse trade balance we can easily set our annual income from foreign investments a&umulated OVer many generations. MoreoVer, in these same quarters, which apparently..believe in cure by the Coue method, we also told that the selimis note struck by some writers here is actually having an injurious effect . up0m our credit abroad. In Canada and the United States, we are told, there is a disposition to regard England as " down and out " and that it is quite time that English people :abandoned the habit of self- depreciation. -8. NM TO EFFORT AND UNITY.
Now, I am far from asserting that for a foreign country to conceive the idea of our financial and industrial position here being of an unsatisfactory character is desirable. --Just as; in real warfare, we do not make known our weak positions to the enemy, so, in the great industrial competition and struggle we shall do well to observe a certain reticence lest what is really intended for stiraulfis at home; shoUld occasion an impression ...that the indiistrial position- in Great Britain is much worse than it ' actually is. - NeYertheless,- I believe- - that of the two courses, namely, 'an over-emphasis of the _economic difficulties with which we have to contend after the War and an ;easy optimistic underestimate of such difficulties it is the hittdr whiCh in the long run is the more dangerous. I believe With Sir Robert Horne that the greatest inspira- tion to effort, on the part of the worker, and the. greatest inspiration to unity between Capital and Lobo*, will be obtained by an adequate recognition of the great task which lies beforeus in regaining industrial prosperity on lines cakidated at one and the same time to -provide full employment for our _people and a balance of trade which will' eristirc a-sufficient command of the foreign exchanges to maintain the 'Standard and the supremacy of the London Money' Market. •
THE TRADE FIGURES.
During the past week we have had the publication of our Foreign Trade Returns, which in themselves may well give ground for anxious thought. For the month of November there Was again a heavy visible adverse balance, while for the eleven months of the year the .total of the adverse balance is no less than X342,000,000, being worse than the position last year by £47,000,000, while, as com- pared with two years ago, the adverse trade balance is greater by 1164,000,000. I am aware that there are many explanations of the specially unfavourable figures of the past eleven months. Coal exports themselves, owing to special causes, are down by about £20,000,000, while our trade has also suffered by the chaotic conditions in China, to say nothing of the manner in which it has been - affected for years by the great upheaval-and disorganiza- tion in Russia.' - -These, however, are . conditions which have affected all centres, though we do -not find the same expression in their trade_ figures:. „ • - - RISE IN hiPORTS.'• Moreover, it is not merely the decline. m exports .which we have to' look at in the Trade Retiikni, but also the failure •of iMports to give--indication Of Our endeavouring to rectify -the position by economy in consumption. Of course it is -true that'we can have an increase -in imports of ra* materials, which-are. often-the precursor-of a wel- come revival in exporth later On but that is not the kind of expansion which has been taking place in this ..country during the past few years, and however-much, on humani- tarian.grounds, we may welcome theinet that nnemploy- ment has not occasioned that severe curtailment of imports which reflects acute distress,, the question is whether without that acute distress we have been able to get the necessary stimulus to effort and cheap pro- duction. It may jar upon our sense of fitness that a country-such as the United States, which is so prosperous, should become alarmed even if there. is a falling off in its excess of exports over imports, or should give heed even to signs of a slaCkening of a growth in the acchinulatiOn of wealth. Weinow, however, _ that some such spirit as that is required in any private enterprise if it is to main- tain its place and create wealth notonly for shareholders but for the workers, and I venture to think that it is just the lack of that spirit of proper concern" which lies at the root of some of our troubles to-day.. -
EVADING THE ISSUES. •.
It is a 'matter where the shortcoinings apply :tix almost every section of the, community. If Governments were alive to the demands of the position it :would not be necessary to goad our statesmen into the adoption of drastic economies in National Expenditure. If Capital and Labour both perceived whither things were tending there .would he a greater effort to come together and to abandon many Trade Union restrictions, recognizing that, above all things, what was required at the present time from the highest to the lowest in the country was the stimulus of reward to the efficient and industrious and short shrift to the slacker, whatever indulgence in the matter,.of minimum wage might he meted out to the but less capable worker. Instead, however, do we not find that the tendency is to refuse to. look facts in the .face and to grasp at any solution of our economic .problems which will avoid coming to grips with the hard facts of the ease ? Governments fly. to Tariffs and Pro- tection rather than deal drastically with Expenditure. The inflationist; heedless of the examples of Russia and France, will tell us that currency or credit expansion will set matters right. Wage earners will press for solution of the difficulties by way of nationalization, and many capitalists and industrialists will be so concerned as to how to snatch profits out of the situation at the moment. as to be unmindful of the direction in which conditions are drifting. In all cases the desire would seem to be to maintain the status quo whether as regards National Expenditure, hours or . conditions of labour, annual profits or the present standard of living, hoping that by some kind of device matters will later be easier and the position come right of itself. . Of course, Great Britain is not " down and out," either industrially or in any other sense, but the question is whether at a critical moment in her financial and indus- trial history she is not holding back that united effort which was never more urgently needed.
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