FINANCE-PUBLIC - AND PRIVATE
. INDUSTRIAL ANXIETIES
By ARTHUR W. KIDDY NOT the least depressing point with regard_ to the situation is the apparent disinclination, if not actually to-look facts in the face, at all events to refuse-to recog- nize them. While, of course, conditions differ in many industries, it would probably not be very wide-,-Of- to b mark- to say that nine-tenths of our failure to •compete in particular directions with foreign countries can be traced to impossible and unsound conditions imposed by -Trade Unions or by Labour in one form or another during recent years. Again, speaking in the roughest and -broadest fashion, the effect. of those influences has been to restrict output and maintain prices at a level not only handicapping us in competition with other countries as regards our exports, but even making it impossible for consumers at home to obtain many: of the comforts and even necessaries of life which, if pro- duced• in greater quantities, could be sold at a lower cost, and benefit wage earners and consumers alike. Instead of this many of the large industrialists for some years have preferred to give up the struggle against Trade Union and labour restrictions and to endeavour rather to fall into line with that process by obtaining their income from the higher prices of goods sold. - VARIED PROPOSALS.
. During the past week there bas been discussion in more than one quarter of remedies for our industrial problems. We have had the -Independent Labour Party at Gloucester once more inveighing against Capital and urging the nationalization of our industries and banks ; and we haVe had- Sir Alfred Mond putting forward proposals along the lines of using the dole in certain directions for providing work rather • than unemploy- ment. The inherent defects of Sir Alfred's proposals, however, seem, in the opinion of the City, to lie in the fact that they constitute a kind of transfer of the -sub- sidizing of unemployment to a subsidizing of particular industries. Finally, a not uninteresting develapment- of the week has been the publication of the details of a scheme for the extending of the influence and operations of what is described as an Industrial Institute, having for its objects the close study of industrial problems. Especially is it intended to examine the problem of what may be termed the " balance " of industrial activities, the idea apparently being that employment might be better stabilized if as the result of exhaustive investigation it were possible to prevent miscalculations on the part of industrialists as to the measure of an impending trade movement. That is to say, it is hoped that we might thus avoid excess production based on too optimistic expectations with regard to the future, thereby preventing the inevitable reaction.
INSUFFICIENT REMEDIES.
I cannot help thinking, however, that these proposal one and all have the disadvantage of failing to focus attention upon some of the essential factors mentioned in a previous paragraph. Indeed, there is a sense in which they tend actually to divert attention from certain plain facts which are before our eyes,. The tendency seems rather to shirk not only remedies but even plain speaking which may in any way disturb the susceptibilities of those who either have great powers at the polling booths or, by a process of combination, seem prepared from time to time to enforce their claims by holding our -industries and the community generally to ransom.
ILLUSIONS AND REALITIES.
The real problem, of course, with which this country is confronted is that of discovering how all sections of the_ community, including Labour and Capital, can be inspired to greater and more efficient effort in the matter of output to the advantage of the community as a whole, and especially in regaining of our power to pay for our imports by a corresponding or a more than corresponding export of goods and services. The thing has got to be • . done, for it is only along those. lines that we shall obtain solvency, let alone prosperity. How, then, is this stimulus to common effort to be obtained ? It may appear, I know, to be nothing more than simply a dis- agreeable platitude, but nevertheless I believe that in the present instance the stimulus will have to come from a perception of the real need. for effort. We know that e in 1918 Mr. Lloyd George ndeavoured to supply the stimulus by picturing good _ things for everyone, with the cost of the War to be paid by the Germans. Equally, however, we know that the thing was not only an illusion and a sham, but a very dangerous illusion, and, moreover, it is one, I think, which would have been exposed long ago but for our system of " managed " currency as compared with the more rigid requirements of the Gold Standard.
DRAWING UPON CAPITAL.
During the War we were obliged temporarily to abandon many sound principles, and, rightly enough (at the moment), not only expanded credit but even mortgaged our future powers of production to keep things going. As an inevitable consequence, of course, we got inflation, false standards of living, and so forth. It can be admitted, however, that even for a period after the War, when demobilization was slow and when all the War reactions were in full force, a 'continuation of the process on diminishing lines may still have been necessary. It is now, however, seven years since the War, and, while something has been accomplished in the shape of Debt redemption, and, as a consequence of the curbing of inflation, the cost of living has been somewhat reduced, our trade figures, to say nothing of those of unemployment, tell us plainly enough that we are still meeting all the demands of Labour, whether through the uneconomic wage Or through unnecessary Government expenditure out of capital, and even by drawing upon our credit power. If even this process were shaping along lines making for increased industrial activity and sounder industrial conditions ; if, in a word, we were putting capital into the business, it might not be so serious-a matter. • So far from that being the ease, however, we are actually witnessing a demoraliza- tion in our industries which increases from day to day.
CURRENCY INFLUENCES.
Under a managed currency, as it seems to me, we say in effect that we need not pay too much attention to whether we are covering imports by exports, for if exchanges move against us we shall not have to export gold but shall simply meet the situation by paying more for our imports irrespective of the loss sustained through the exchange, and shall not trouble too much about whether our industries are on a sound basis so long as the wage earner is satisfied both as regards hours of working and the scale of living. Under a Gold Standard, however, the principle laid down is that our ability to make payments for our imports is limited by our power to export and our supplies of gold. If these combined resources are clearly proving inadequate for requirements, there is a tendency to regard the matter as very serious indeed, and inasmuch as it is serious it might be better, perhaps, that we should all realize the situation.
Previous page
