TOPICS OF THE DAY.
THE ESSENTIAL QUESTION. THE ESSENTIAL QUESTION. THERE is only one question before the country, the question of economy, the question how to save the nation by spending less and working more. There are plenty of other problems, like the Housing question, the question of National Health, and the question of a fairer and more reasonable organization of our Industries. But before a question even so important as Housing comes the absolutely vital problem, the sins qua non, of living within our means. Living within our means does not imply running a few short years of riot on borrowed money and then seeing our social and economic system dissolve in a ruin which must involve all classes, but first of all the hand labourers.
The first thing to remember in a financial situation so menacing as that with which we are now faced is that there is one cure and only one, and that is economizing. Remember also that there are no substitutes for economy. It is that and nothing else. The most ingenious of Germans was never able to discover one. We can have Ersatz butter, Ersatz leather, Ersatz tea, coffee, tobacco, and string, but no Ersatz thrift. No one mast be allowed to persuade us that he has some dodge—" equally as good as " economy. If he says he has, he is either a fool or a liar. He is also one or the other if he pretends that economy can be anything but painful and difficult or be made without self-sacrifice, or again that it is something which you can shove off on your neighbour and escape from yourself. Every class, every man, every woman, and every child in the country must bear a part of the burden. Again, economy is not a thing which can be applied in small and convenient doses and according as the patient cad bear it. It is conditioned by things entirely outside the patient's feelings. Though there is plenty of choice in the ways in which it can be applied, it is useless to say that the country cannot, or will not, or ought not to bear more than a certain amount of economy. It has got to bear whatever is needed. As the French Finance Minister said : " We have got to pluck the goose. The only thing is to try and make the process of pluCking as little painful as possible." What does economy mean in the national balancesheet ? It means exactly the same as it does in the citizen's private budget. You may borrow, realize your capital, or live on credit during a great emergency, even if the emergency is a long one, but you cannot erect borrowing into a permanent system. It is a kind of alcohol which may tide you over a crisis, but if you try to live upon it the end is madness and death. We can say with Arterous Ward that it is the supreme duty to live within our means and pay our way, but, alas ! we must not add with the genial humorist, even if we have to borrow the money to do it with." Translated into terms of action, this means that at a time when we are paying out some two millions a day more'than is coming in—i.e., when we are faced with an annual deficit of six hundred millions—we must cut down expenditure, and cut it down drastically. It is true in theory that we might make both ends meet by obtaining a greater revenue, that is, by more taxes, and on this point we shall have something to say presently. Speaking generally, however, we have very nearly reached the limit of useful taxation. The point at which taxes cease to draw—i.e., cease to be remunerative—is in sight. We have certainly already reached the limit of borrowing and of manufacturing money out of paper. All the signs of inflation are written large before us, and inflation is a kind of cheating. You mock a man by raising his salary from £1 to £2 a week. He is delighted till he finds that, like his labour, most things he buys have doubled in price also. Therefore the only remedy, though it is so difficult and so painful that it hardly looks like a remedy, is to cut down expenditure. How can we cut down expenditure ? There is only one way. By boldness and courage. By not being afraid that if you are economical here or there you will be destroyed by this or that enemy,' or that if you practise this or that economy you will run the risk of revolution and so forth, or again by the bogy that your economies will ruin this or that industry. At present the chief places of leakage, the places where money is running away, are the three fighting Services of the Sea, the Land, and the Air ; the subsidies to wages in various forms, such as those given on the Railways and in Coal-Mining ; and through the bounties in respect of various products. All these must be dealt with, though of course they must be dealt with in such a way that we shall not be left naked before our enemies, of whom there are no doubt plenty.
The only way to reduce expenditure in the great spending Services like the Navy, the Army, and the Air Force is to ration them as we have had to ration ourselves for meat and milk, butter and sugar. We must say to each and all of the great spending Departments : " We can only allot so much money each year to your Department, and you have got to give us an efficient Navy, a good. Army, and a good Air Service out of your allotment." Remember this can be done without a loss of efficiency if we have got the proper people to direct it, and if we take care to study our needs scientifically and not sensationally. Lord Cromer had just such a situation to face in Egypt. It was on a small scale, no doubt, but it was on a scale quite big enough to give us an example. He went to a bankrupt Egypt, and what in effect he said to himself was this : " I have got in the first place to pay the interest on the Debt, because if I assent to repudiation all public credit, and thus all trade, will go by the board. Next I must have an Army which will preserve order, and which will also defend Egypt from the hordes of savage Dervishes on the frontier. Finally I must get the people to work and to produce, and so substitute prosperity for slavery and misery." And he did it. Further, as he was wont to say, he showed that strict economy was not, as it looked at first sight as if it must be, the parent of inefficiency, but was, strangely enough, the parent of efficiency. The great effort made by the British Administration to keep down expenditure was found to be the very best school for beneficent adminstrators. Egypt, instead of being laid waste by the interdict of economy, began under its influence to bear abundant harvests of every kind.
If our rationing of the Services of all kinds is done with wisdom and forethought, and not with an idiotic prejudice • against the men who defend us, we may be quite as safe and yet spend very much less. No doubt we shall have to run certain risks, but if we are prudent, especially in the matter of not neglecting our mechanical forms of warfare—and here pains and trouble and ingenuity will be found just as effective as huge and lavish expenditure —we shall come through in safety.
We have taken the fighting Services as the prime example for applying our scheme of fiscal rationing, but it must be applied all round. Take for instance the great question of Housing, upon which we feel and have always felt so strongly. Good housing is absolutely vital to the nation, but it is no good to build a man a house for him to live in and then tax and rate him out of it. Yet this is what you must do if you build him too expensive a house—i.e., a house which the economic conditions will not allow him to live in. Therefore we are dead against rushing into a vast expenditure on bricks and mortar at the existing prices of these commodities. At present we are actually, though it is not apparent, being held up by those who, whether as labourers or as producers of material, have a monopoly in the work of building. We have got to tell the Unions and the industries who control the Building Trades that we are not going on with our building schemes till the cost of house production has gone down. If the cost of old systems of building cannot come down, then we are going to wait till we have learned how to build in new ways, as for example in Pise de Terre, with which we are afraid we have sometimes wearied our readers, though we are sure that our insistence, even if tiresome, has been absolutely necessary. In fine, we must say with Dido, if the Olympians of the Building Trades will not help us we will appeal to the Lords of the Underworld. If we have to dig our houses out of the ground as in Pise, we will do it rather than be ruined by the £1,200 labourer's cottage.
So much for the need for not merely talking about reducing expenditure but for doing. it, and for running whatever risks may be necessary in doing so, though, needless to say, it is as mad not to take forethought of these risks in peace time, as it was madness not to trouble about the vice of wasteful squandering in war time. Because we cannot have everything of the very best in the military departments, that is no reason for throwing all safeguards aside in an orgy of destructive economy. We have got to learn how to do things both well and cheaply. That is essential, and moreover can be done.
On another occasion we must treat of the other side of the question, and the various ways, if any, of raising new taxes, but we will say at once that of the suggestions that have been put forward the best appears to us to be that so strongly and so ably urged by the Daily Express—the plan of heavily taxing, or even appropriating for the State, that portion of men's fortunes which can be properly and clearly traced as due to the war. Whether this can be done equitably, or, if it is done equitably, in such a way as not to injure credit in business and at the same time in a way which will be really profitable to the State, we cannot say offhand. What we do say is that there is nothing per se objectionable in the proposal. It is indeed only a scheme for carrying out the principle already adopted in the Excess Profits Tax, the principle that no individual ought to be made richer by the catastrophe of the war—allowance of course being made for the mere appearance of riches due to inflation.
We have always thought that the great defect of the Excess Profits Tax was the crazy partiality with which it was levied, and also its somewhat upas-tree-like characteristics. If a plan can be found for applying equitably the principle that no one should be allowed to have made the war a source of inordinate profit, and if this can be done by a single operation and not by an annual incentive to the concealment of profits, none would rejoice more than we should. No doubt these are very large " ifs," but at any rate the subject is worth discussing. It must be discussed, however, not in a fever of expectation of great relief, but with steadiness and fairness.
Another matter which must soon demand the closest attention is the best way of making the National Debt bearable without—and this is fundamental—breaking in the very slightest degree any of the promises made to the State creditors. This, remember, is just as important in the interest of the nation as a whole as in that of those to whom the nation is in debt. The Debt requires a good deal of thinking about. Up till now it has been handled rather crudely and superficially.
Previous page
