A POLICY of economic restoration and development on a basis of
international and commonwealth co-operation will not yield the maximum results for this country unless there is a vigorous constructive policy at home. Too often the problem is regarded as one of reducing costs by. reducing wages. But even if the ques- tion were solely one of immediately scaling down costs of production, lower wages provide a poor method of achieving this end, because diminished purchasing power means restriction of home markets, and it is being more and More fu-11Y recognized that strong home markets are essential to our economic prosperity.
- But the problem which faces the country is not to be stated in so bald a way. We have suffered too much from short Views, and it is time we took the long view. Our problem is to make the fullest possible use of our national resources, so as to get minimum costs of produc- tion through the -elimination of waste and inefficiency, and to equip ourselves with the plant, machinery and organization necessary to win and hold markets under modern conditions. .
In the solution of this problem the State must play its part. The State ought, through some permanent body, to be continuously thinking, planning and at appropriate times. carrying out the development of our national resources. Transport is one of our fundamental industries. Freight Charges are an element in the cost of every article of trade. Speedy and efficient transport whether of raw materials Or finished products is necessary to successful trade. Are our docks, wharves and harbours, our shipping, railways, roads and _ waterways, yielding the greatest practicable efficiency ? Are they properly related and co-ordinated ? Are they defective, inadequate and out of date in any respects ? No one can say that the vast mechanism which comprises our, transport .system is satisfactory. Or take another licy industry—are our coal and water supplies being used to the best.advantage for the purposes of industry and transport ? No one pretends that they are. Is the land of the country— another of our primary services—being used to the best advantage ? Again, no one will pretend that it is.
These questions must be continuously _under review if - they are to be effectively solved. it ivis-Avith this-object in mind that during the past session the Labour Party introdueed an Unemployment Bill for the ,establishment of a, permanent National Employment and Development Board, composed of those Ministers of State whose Depart- ments were primarily involved, which would be required to present an annual report to Parliament, giving full details of the preparation, progress and examination of schemes of development. The Board would have their own Fund and perfect freedom as to the way in which they utilized it for development purposes, subject, of course, to Parliamentary criticism. Out of this Fund they would make advances "to be expended either in the United Kingdom or in any other part of the British Empire to or through such Government departments; Dominion or colonial governments, local or public authori ties, or associations of persons or companies, either by way • of grant or by way of loan . . . and upon such terms and subject to such conditions as they may think fit for any purpose calculated in their opinion to provide employment, including the better utilization and develop- ment of land, capital undertakings, transport, mines and electrical undertakings, or for any purpose contained in Section one of the Development and Road Improvement Funds Act, 1909, as amended, or Section one of the Trades Facilities Act, 1921, as amended, or .for othei purposes, including em igrat ion."
It will be observed that the Development Board wouhl be concerned with peopling and developing British territories overseas, but in this article I am primarily concerned with national development. Had there been such a body continuously in existence since the end of the War, directing and co-ordinating national efforts towards economic reconstruction, our plight to-day would be fat less serious than it is, and the country would have gone far to equip itself for the future. Unfortunately, as I think, the Bill was defeated, and a year hence we shalt still be without a concerted policy of national development. Ten years hence we may be blindly struggling to achieve what; say, Germany has secured through foresight, the " intolerable toil of thought " and co-ordinated action.
But it is not only the State which has direct responsi-- bilities in this matter. There is hardly an industry in this country which could come • successfully through an independent critical examination of its equipment, its methods and its organization. It is customary to put the blame for inefficiency and - low output upon the workers. It is interesting, therefore, to turn to the Report of the Federated American Engineering Societies on Waste in Industry (1921). According to this detailed and elaborate enquiry 81 per cent, of the waste in the metal trades is due to management, 9 per cent. to labour, and 10 per cent. is ascribed to other factors. In the men's. clothing trade the responsibility of management for waste is put at 75 per vent., whilst labour is charged with 16 per cent., and other factors 9 per cent. The difference in efficiency between the best and the worst firms in each industry was incredibly large. The causes of waste so far as management was concerned were lack of foresight and planning, lack of standards of performance and standardization of tools and product, inadequate cost control methods, and lack of research work. If this be true of America, it is at least equally true in this country.
The Reports of the Coal Conservation Committee and the three Committees of Enquiry into the Coal Industry, of the Committee on Industrial and Commercial Policy after the War, of the various Board of Trade Committees dealing with specific industries, of the various investiga- tions of the Industrial Fatigue Research Board, all show that the present organization of our industries is, to quote the words of a Labour report, "gravely defective from the point of view of efficient production, is costing much- more than it need cost, and is clearly without adequate intelligent direction." * - * Soe "The Waste of Capitalism," a report of a Labour (Aniunittee
of Inquiry into Produttion, (33 Eceleston Sq., S.W. Post fro?,1 a. )
It is true that firms here and there have shown what is regarded as the saving grace of captains of industry— initiative. The Consett Iron Company, for example, notwithstanding, or perhaps because of the bad times through which the industry has been passing, has during the past three years been laying down the most modem and economic steel plant that could be designed after full investigation of American and European practice, and it is said that by the end of this year the Company will be in a position to produce at a cost which will enable them to meet any competition.
If British industry will not voluntarily put its house in order, then the Government would be justified in exer- cising strong pressure and even compulsion to secure a drastic overhauling of each trade. Uneconomic methods, plant, buildings, and organization should be ruthlessly scrapped, every waste and every unproductive charge eliminated. Britain's economic standing in the world will depend in the future not upon its long tradition, not upon its past exploits, not upon the magic of the label "British,': but upon science, forethought and statesman- ship.
The policy of a national stocktaking, logically carried out, would provide productive work for those industries which are particularly badly hit—the heavy metal trades, engineering and shipbuilding, and would give a stimulus to every trade in the country, whilst at the same time it would raise the level of industrial and commercial effi- ciency, and so assist our foreign trade.
In this series of articles I have been able to do no more than indicate the main lines of a comprehensive and far- reaching policy. Broadly, it is proposed that the young and the old in industry should be demobilized, that there should be an International Conference with the object of securing a common policy and common action as regards monetary questions, the establishment of inter- national labour standards and the restoration of trade, that there should be an active policy of Imperial develop- ment and colonization, and that there should be a concerted programme of national development aiming at the fullest use of our national resources, the better provision of power and transport, and a radical reorgani- zation of our industries to meet new needs and new times.
[Concluded.]
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