TOPICS OF THE DAY.
HIGH PRICES AND QUACK REMEDIES.
WE sincerely hope that the Government are not going to do anything foolish in regard to the rise in the prices of corn and other foodstuffs. We naturally desire to give the Government the benefit of the doubt in such a matter, but we are bound to say we are alarmed by the persistence of the cry that " something must be done about the monstrous rise in prices," and by the talk of the " unjustifiable action" of this or that class in " causing or not preventing the rise." As Lord Melbourne told the world long ago, when people say that something must be done, but do not say what, it is a sure sign that they are going to do something foolish. And it is very easy indeed to do foolish things in regard to prices. When prices rise the appeal for action of some sort seems most poignant, and yet this is just the time when foolish action may do irreparable injury. Before, however, we deal in detail with the question of the rise in prices we want to make it quite clear to, our readers that we are not obsessed by any fanatical loyalty to Free Trade or to a system of anti-Socialist principles. The business of the country just now is to beat the Germans and to think for the time of nothing else. Concentration upon that object is the sacred duty of every Englishman. In order to accomplish it the abrogation of Free Trade principles or anti-Socialist principles should not count the weight of a. feather. It certainly does not count nearly as much as that with us. If Protection or Tariff Reform would beat the Germans, we should become the most unyielding Pro- tectionists or Tariff Reformers in the world. But though we do not intend to let any adhesion to Free Trade fetter us, we are not going, out of a perverted desire for self- sacrifice, to rush into folly. We are not prepared to set the house on fire in order to show our devotion to our family. If we believe that the maintenance of Free Trade, principles and anti-Socialist principles is going to help us in the fight, then most assuredly they shall not be abandoned. All we ask, all we desire, is that these questions shall be treated fairly on their merits, and that no one shall be required to give up his Free Trade principles merely because they are dear to him, and because be ought to be ready to sacrifice his most cherished possessions to his country's cause. If giving up abstract principles can be shown to be of public utility, they must be cast off like rags. If, on the contrary, this cannot be proved, but just the reverse, then we must stick to them and abandon the privileges of self-sacrifice. The first thing to remember is that a-rise in the price of food and other necessaries, though it may seem an evil and may cause terrible suffering at the moment, may at the same time be the only effective way of curing the disease. Let us consider what a rise in prices actually means, to what it is due, and what will be its effect. A rise in prices must be due to one of two things—either to an increase in demand or to a shortage of supply, or to the joint operation of these two facts. In the case of foodstuffs a sudden increase of demand is not very likely. Fashion no doubt affects many things, but it is never the fashion in the workaday world to vary one's consumption of bread. There- fore we may take it that when the price of wheat goes up in any particular country it means that for some reason or other there is a shortage of supply, a shortage which may be due, of course, to many things—e.g., owing to there being actually less corn produced in the world, or, again, to a temporary inability to transport the corn from the places where it is grown to the places where it is wanted. But assuming, as we must, that the reason why prices are going up in England is the shortage of supply, the great, the essential thing is to apply the only true remedy—that is, to increase the local supply, to get rid of the shortage. Now we venture to say without the slightest fear of contradiction, even by statisticians or Socialists, that there is nothing in the whole armoury of economics or of politics so capable of producing. an increase in the. rise supply of anything in demand as a se in prices. A rise in prices is the hoisting of the economic danger-signal, a visible warning to the world that more of a particular thing is needed, a notice that men who want an increased reward for their laboure should at once get to work to increase the. supplyand to prevent the shortage. A rise in the price of corn is, to vary the metaphor, a proclamation, by sound of trumpet and beat of drum, to all mankind, or at any rate to large sections of mankind, to leave off doing other things and to grow foodstuffs—provided they want, as all men do, to make their fortunes. A rise in price will draw food from the ends of the earth as by a magnet—far better than any system of Government control or any system of Government trading in cereals. It is a rise in prices, and nothing else, that can be hoard throughout the length and breath of the habitable world. It will speed the plough across a million of yet virgin acres. The farmers of the world catch the signal that wheat has risen ten shillings a quarter in the markets of England, and at once millions of backs are bending to the furrows on Canadian prairies, on the irrigated lands of India and Australia, in New Zealand valleys, and upon the vast pastures of the Plate. The storm-signal that is hoisted in England is repeated throughout the globe. One seems to hear the bustle of the farm bands as they harness the horses, the mules, or the bullocks, and yoke them for the fray—man's great battle with famine. Woe betide him who out of ignorance or folly rushes at the danger-signal that is making such beneficent proclamation to mankind, and hauls it down, sends back the horses to their stables, and leaves the longing land unploughed ! The man who thinks merely of the symptoms of the moment, and holds that it is the signals that make the accidents, will prove, in spite of good intentions, the greatest enemy of mankind. Such a man is like a doctor who sees a patient with a temperature of a hundred and five and, without con- sidering the cause of the temperature and the true way to abate it, concentrates all his thoughts upon getting at once a favourable reading on his clinical thermometer. If the doctor were to pack his patient in ice, and, when the temperature was down to the normal, looked round to ask for our applause, and declared that he had cured a deadly disease, what should we say to him ? We should tell him that in his ignorance and folly he was far more likely to prove a murderer than a curer of men. If he expostulated and asked us whether we did not realize how greatly the patient had suffered and how acute had been hie agony—an agony in which he had implored the doctor to save him from the heats of fever at all costs—and then went on to ask whether any one could be so hard- hearted as not to listen to such appeals, surely we should turn from him as the worst of quacks.
Are not we in danger of a quackery of this kind being practised now ? We know very well that many of those who read this article will tell us that we are unpractical doctrinaires, and that they care not two snaps of their fingers for talk about economic principles and the virtue of high prices. " While you are talking about economic laws and high prices and their remedies unfortunate men, women, and children have no bread to eat. You deserve the gallows for your callousness." We are afraid that that sort of talk is much more likely to be listened to by the present possessors of political power in this country than are our warnings. In spite of this, however, we shall not be deterred by our consciousness of the miseries inflicted by high prices from endeavouring to advise the true rather than the quack remedy. And remember that in this case it is not one of the quack remedies which consist of distilled water, a little sugar or salt, and a drop or two of perfume. It is a quack remedy of the really deadly sort—of the kind that puts the patient in desperate peril, and may ruin his constitution. If the Government were to do anything so mad as artifi- cially to interfere with prices here and to limit them by public decree, they would have taken the first step towards inflicting the most grievous injury upon the nation. Once proclaim to the world that nobody is to be allowed to try to make a fortune by sending wheat to England, that the price will be regulated by Government, and that profits will be kept within strict bounds, though losses will fall as usual, and we shall have begun to stimulate the shortage we want to prevent.
Who is going to embark upon the anxieties and expenses of bringing new land under cultivation if the British Government proclaim to him that, though he may be allowed to make a big loss, he will certainly be prevented from making a big profit ? At once the heart is taken out of
the speculation which was about to prove so great an in- centive to industry. Just as men tend to exaggerate the amount of money that is to be made out of high prices, so also they tend to exaggerate the risks of Government action. The farmer at first inclined to plunge heavily in corn pro- duction, even under unfavourable economic conditions, because of the high prices ruling in London, soon grows prudent and unenterprising when he hears that the Government are determined to keep wheat always below, say, 60s. a quarter. At once be is off the venture. " What is the use," he will say, " of my borrowing money from the bank and running all sorts of economic risks to produce corn for delivery in London next October if when it gets there I may be forced by the Government to sell at a price well below the cost of production ? It isn't good enough. I bad better at once cancel that order for the two new ploughs, for the new team of horses, and for the seed-corn which I gave last Tuesday; and be content with cultivating the same bit of ground that I did last year. Perhaps, indeed, I had better not risk so much as that. If prices are going to be regulated in London, the wisest thing for me to do is to abandon the cultivation of those ten extra acres which I started last year. It is almost certain that they will not pay if the price of corn is to be kept down artificially."
In our opinion, the Government will be most unwise if, under pressure from the Labour Party, they do anything to interfere with the free market in corn. In striking at high prices they would be striking at Nature's best remedy for scarcity. This does not mean that we want to suggest that a section of the community should be sacrificed as a signal to the world that we want more food. That, clearly, must not be. If the Government find that owing to the rise in prices there is real and great distress, then it will be far better to present a daily ration of bread to poor families than to attempt to regulate prices. But if that is not thought possible, then a bounty on corn would be a much better way of meeting the shortage than the quack remedy of fixing a maximum price, either for the commodity or for freights. If the Government were to offer to pay so much per acre to every British farmer who sowed wheat this spring, and an equivalent amount per quarter to every merchant abroad who brought corn to Britain, they would possibly be wasting money, but they would, at any rate, be doing two useful things—(l) helping to increase and not diminish supply,and (2) keeping down prices. Indeed, if one may imagine an extreme case, it might be worth the Govern- ,ment's while to fix not a maximum but a minimum price, and to encourage speculation in corn by telling the growers and importers that the Government during the war would never allow corn to go below, say, 60s. Speculators would thus be insured against a fall in price. If they could not sell at or above the fixed minimum, the Government would make up the difference. Assume GOs. per quarter to be the minimum. Then if the price of corn fell to 58s. the Government would pay the importers and home producers the difference. That would probably be very bad economics. but it would give a tremendous stimulus to the growth and importation of corn.
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