Political Arithmetic
By D. W. BROGAN UNECONOMIC nylons are being dumped on New Zealand, and steps have been taken to secure that these necessities are profitably manufactured in that pair of sceptred isles. For there, so the Minister assures us, they are being manufactured efficiently, but-they are being undercut by " uneconomic " prices quoted by underhand British manufac- turers. Worse, these miscreants are being encouraged, in this nefarious work of making cheaper nylons available, by the British Government, which makes nylon yarn available for export. The result is, seen from down under, not the export drive, but dumping. It is, of course, an old story. An " economic " price is your price plus a mark-up; anything below that is dumping, eco- nomic sabotage. And a community of two millions, whose basic resources are overwhelmingly agricultural, needs nylon factories; it is a matter of national dignity, and the agricultural producers can give more food-stuffs for fewer nylons or stream into the towns as they have been doing in Australia, thinking, not unnaturally, that doing what comes naturally is a mug's game. Doing what, economically speaking, comes unnaturally pays so much better. And the New Zealand decision is, no doubt, one of the causes of the slump in nylons here. " Why, people ask you to buy them now." It is also a cause of the fall in their price, and, soon, may release labour for the arma- ment factories. It is only a few days since I announced that I was going off to New York for a week, and not a female of my acquaintance has displayed the " sacra fames " that used to light up their morn-misleading eyes. It is, of course, not my intention to pillory New Zealand or its Ministers as exceptionally foolish or short-sighted. They are representativerulers in this modern world, where all the old rules are thrown, into the. discard and The Wealth of Nations is as exploded as the historicity of the early books of Livy. Useful infofmation can be dug out of the old, discarded economists, as M. Dumezil digs it out of Livy, but, as for accepting the arguments, " nous avons change tout cela." It is quite evident today that the old view that, if a thing could be produced cheaply in one place it had better be produced there rather than dearly in another, far from being regarded as axiomatic, is regarded as anti-social and anti-national. We are all mercan- tilists now. It had long struck me as odd or entertaining that university pupils, brought up simply on the " good thing " school of historiography, as sound as I had been on the evils of mercantilism, on the folly of Grenville or North, on the enlightened policy of the younger Pitt and Vergennes, on the stupidity of Bonaparte in not cementing the Treaty of Amiens with a commercial pact, etc., were, on questioning, unflinching mercantilists on contemporary issues. Indeed, Colbert would have been startled at some of the theories of trade I have heard advanced ! Eppur se muove. A colleague, who sees more of the young at that stage than I now do, tells me that history- teaching has, caught up with modern practice and that, even for the past, the young are against Pitt and Peel, Gladstone and Cobden. Symmetry, at least, has been attained.
I am aware that the free-trade argument was put too simply. (I can remember my father's horror when he heard that I had been tempted by tariff-reform " arguments " ! I learned to keep such sinful doubts to myself.) And re-reading some nineteenth-century political writers recently, I have been struck by the firmness of the assumption, in Green as in Bagehot, that protection is wrong. Mandell Creighton once said that his taking orders caused great scandal in Oxford since his Victorian colleagues thought that only a fool or a knave would do so. " And they knew that I was not a fool." The free-traders knew that neither Dizzy nor Joe was a fool. Q.E.D. And, of course, the argument from Adam Smith about defence and opulence has far greater force in our fear-tormented age than it had in his or Peel's. Should we trust for any substantial part of our essentials of life and war to an iron-curtain country ? Of course not. Should we trust ourselves too, for any essentials to any country outside Britain ? Perhaps not, but then we have to for the most essential of all, food, and, that being so, dreams of a water-tight defence economy, as complete as Fichte dreamed of, are not more than dreams for us. Nice work if you can get it maybe. We can't.
Other countries can make a more plausible case for self- sufficiency, and the demands of defence are so great and so- multiform today that counting the cost can be made to seem a form of penny wisdom (and we all know how foolish that is in this pound-minded age). Thus I have heard, in private con- versation, an economist, employed by a, protectionist lobby in America, justify tariffs on the oddest things by the example of the tariff on machine-made lace. Nothing, he said, could look sillier, seen from the old, classical standpoint. But the existence of this pampered minor industry justifies itself in war-time, since the machines that made lace could make nets for anti- aircraft batteries. No doubt there are many other industries that have the same claim to fostering care, and that in all countries. And the result is that the economies of the western nations are more and more like the attics of some houses whose mistresses simply cannot bear to throw anything away. " It may come in useful, you know."
One result of the decline in the old custom of counting the cost has been a decline in political economy. The debate on the Japanese Treaty produced some opinions that would have been thought extravagant by Colbert (and one or two that recalled Cato the Elder in the Roman Senate on the unfair pros- perity of Carthage). The same indifference to the old, crude, arithmetical standards is displayed in far more fields than in the belief in prohibitions, tariffs, quotas, " fair competition " (that is no competition).
Take, for example, the ingenious argument that hosiery-fac- tories, undercut in foreign markets by Japanese' mills that quote twenty per cent. lower, should be subsidised by twenty per cent. so as to be able to " compete." The charge on the Exchequer would be no real loss, since it would save unemployment bene- fit. It would be easy to parody this naive argument. If unem- ployment benefit were niade high enough, we could afford an eighty per cent. subsidy ! And why don't we ? Because if it is put that way we see that we can't afford it. Even a zealous M.P., looking after his constituents in the way American Con- gressmen and French Deputies used wickedly to do in the old days, can see that we can't devote eighty per cent. of our resources to giving things away even to produce full employ- ment. But how do we know that we can afford the twenty per cent. ? How do we know that we are not, in effect, subsidising a good many industries at a lot more than twenty per cent. ? And who pays for the subsidy? The old tariff-reformers used to say that the foreigner paid, but we have got beyond that. We pay. And who is " we " ? It is the industries that have to meet world prices, shipping, ship-building, banking, insurance, cars for export and so on. All the tinkerings with the wicked price- mechanism don't alter the fact that the world price-system is the final test of the viability o(our economy. And the naturally worried workers and bosses in the textile industries of Lancashire might devote less time to what the Government can do for them and a little to the invisible costs imposed by the labour habits of the port of Liverpool. For labour-wasting devices in Liverpool are one cause of unemployment in Black- burn. Mrs. Castle might discuss it with Mrs. Braddock.
Equally revealing is the proposal made by an M.P. who is also a Queen's Counsel that transportation costs should be evened so that Aberdeen (and if Aberdeen why not Lerwick ?) could compete with London. It is a hardship that it costs more to reach the great metropolitan market from Aberdeen than from Watford. But the transportation costs are a real cost whoever pays them, and if we, the taxpayers, pay them, the salutary pressure to avoid costs that can be avoided will disappear. The same refusal to be bound by arithmetic, the same belief that costs can be manoeuvred out of existence or, at any rate, out of sight, is manifested in a great deal of the agitation over London bus- and train-fares. The cost of transportation in London is a real- cost. It should cost more in transportation to live in Woodford Green than in Clapham and no good and much harm is done by dodging this sad truth. When the new House of Commons was being built, I hoped that the chance would be taken to improve the office facilities for the Members, improve them on a handsome scale. It is too late to do that now, but a few improvements are still possible: Could some one give Parliament an abacus ?
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