Strt,—After reading the number of interesting letters provoked by my
article on " Healthy Agriculture," I think it may be useful to set out afresh and, I hope, with more clarity, some of the fundamental economic propositions on which my suggestions were based. It is natural that my plea for " economical" methods should rouse so much fury, for the term suggests to many people the budgetary parsimony which has intensi- fied trade depressions in the past. But if these critics had read further in my article they would have seen a definite recommendation for public works. There is, therefore, no justification in the charge that I have advocated " economy of money." On the contrary, it is essential that the old " Treasury view should be abolished and that purchasing-power shottld be maintained at a level sufficient to produce work for all, even if this does mean at times an' unbalanced budget.
In advocating economical methods I meant nothing more than the simple proposition that we should use our land, labour and capital in the way which will contribute most to the wealth and welfare of the community as Mr. Guy Naylor brought out so clearly in his excellent
letter last week. It may be said that this is a mere platitude, but it is surprising how many proposals for economic organisation are based on an implicit rejection of it. For example, it is inconsistent with this proposition to suggest that we should increase our production of wheat above the economic level rather than make cheap exports and import cheap wheat. Furthermore, even if there is a danger of unemployment and the Government is obliged to increase its expenditure to provide work, it is desirable that the same principle of economy should be applied to the _Government's expenditure. Work can be provided just as well by getting men to grow sugar-beet or to dig holes in the ground and fill them up again ; but how much better it is to take the opportunity to do some of the things which badly need to be done, such as beauti- fying our cities. It cannot be too strongly emphasised that this principle of economy is not a mere relic of outmoded nineteenth-century thought. It is just as relevant in a planned as in a laissez faire economy, as any student of Russian experience will testify. Can one imagine the Comintern allowing a large body of workers to grow, say, wheat on uneconomic soil when there was an urgent need to build a great road or develop an iron and steel industry and the necessary wheat could be obtained more cheaply from other areas?
I do not suggest, of course, that the free choice of independent con- sumers should alone determine what is to be produced. Clearly the Government may have to intervene for defence reasons and may therefore decide to subsidise agriculture. The case seems to me, however, a poor one as I tried to show in my article. There is, however, another reason why the Government should intervene. Because of the unequal distribu- tion of income and because people are not always rational in their expenditure, a large part of the population consumes insufficient protective foods. Subsidies such as those designed to increase their consumption are justified and are not inconsistent with an economical policy properly interpreted. In this respect they differ from a policy c:kt the utmost self- sufficiency which does no one any good except the vested interests.
There is one further consideration. As the result of a curious confusion of mind, the same people often advocate a large subsidised British agricul- ture and also the utmost collaboration with other countries. Can they not realise that such an agricultural policy will be regarded as purely nationalistic and may help to wreck many schemes for international
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