THE MID-DAY EINZIG •
Da. EINZIG stands in the same relation to the staider fraternity of economists as does the evening Press to the solid morning daily. The world's economic insanity rolls on its manic- depressive course; others gravely endeavour to diagnose the disease, Dr. Einzig gives us vivid periodical bulletins of the symptons. He has the journalist's flair for news value, the journalist's gift for the terse and telling phrase; and he has, too, the journalist's inevitable dogmatism—the dogmatism of the man pounding out a hundred-word leader on European affairs, one eye on the dock and the other on Reuter's latest telegram from the storm-centre, all qualifications and hesita- tions swept aside in the paramount interests of speed, com- pression and readability. Dr Einzig is no crank; he knows his job; in his particular field of red-hot economic topicality he is a master. But the afterthoughts and emendations, the cautious distinction between hypothesis and fact, knowledge and intelligent forecast, the reader must supply for himself.
As readers of the. Theory of Forward Exchange and one or two others will realise, these comments do not apply to everything that he has written. But the Economic Problems of the Next War is emphatically a case in point. With admirable simplicity and clarity it ranges over the whole fie:d : the lessons of the last War and their relevance, the ;'roblems of production and consumption, foreign trade and hie exchanges, budgetary and monetary questions, and the economic position, in case of war, of the chief world Powers Ivhether obviously belligerent or probably neutral. It is all done in a hundred and fifty pages, and it is all written so that h: who runs may read, without benefit of previous training in economic theory or more than an ordinary general know- ledge of economic institutions and their working. There is no attempt, as the author explains, to produce a comprehensive handbook of war economy ; he is concerned to " study some of the broad problems and suggest tentative solutions."
Some of his forecasts and proposals are virtually common form—for instance, that there will be a strong tendency to inflation, which should be resisted as far as possible; that taxation will have to be raised more steeply, and earlier, than during the last War; that rationing of consumption will have to be put into force immediately. Others are considerably more controversial. He does not seem to be sure in his own mind whether they are directed to the avoidance of gross social injustice or to the single aim of belligerent efficiency. In the interests of social justice and equality of sacrifice (if one can speak of such a thing in wartime) it is certainly desirable that industrial conscription—for both labour and capital of all kinds—should march hand in hand with the military conscrip- tion which no one doubts to be inevitable once hostilities begin. It is disgusting that A should be conscripted and exposed without choice to death and mutilation in the name of his country's need while B makes a fortune out of that same national necessity. But if you want to get B's product as quickly and efficiently as pos- sible, will you improve your prospect by conscripting him and his plant? It is unfortunately true that while it is pos- sible to treat strikes as mutinies, ca'canny by the entrepreneur is less easy to deal with. Better surely pay the market price, or ransom, or blackmail, in the interests of victory—and then tax it back again in the interests of outraged human decency. Altogether one feels that Dr. Einzig pays rather too little attention to the tax weapon as an effective and automatic sub- stitute for direct prohibitions and injunctions, with all the red tape and administrative congestion which, in inexperienced hands, they would entail.
In his comments on the purely financial side of war economy he is on surer ground. The question of exchange restrictions is prominently marked " Controversial," but Dr. Einzig's arguments in their favour are powerful and worth attention. When, however, he passes from a study of the desiderata of British policy to a survey of the economic war- potential of other nations, speculation and what one can only describe as wishful thinking bulk larger and larger. The neutrals will be universally benevolent towards the demo- cratic side. Inflation will probably very soon get out of hand in Germany. German foreign trade will be paralysed. America will repeal the Neutrality Act and will end by coming in. Britain has huge gold reserves and untapped resources in foreign securities; Germany has already ex- hausted both sources of supply. . . . The book ends with a list of twenty-nine reasons why Germany (with or without Italian aid) cannot hope to win a war against Britain and France. Let us hope that Herr Hider and his junior partner find them convincing.
HONOR CROOME.
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