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TILE present economic situation of this country is ad- mittedly unsatisfactory, and it requires, failing some radical change in national psychology, a super-optimist to take a roseate view of the future. No country has an unemployment problem approaching ours ; in no country except Russia, where the public expression of opinion is not encouraged, is there anything like the social unrest which we see here, and no country finds it necessary to spend in so-called " social services " 400 millions a year on doles, maintenance, pensions, insurance and education. Judging by the increase in these elee- mosynary contributions, it would almost seem that the appetite grows by eating and the more we attempt to 'ameliorate conditions, the less inclination there is to face economic facts and to meet a definite industrial situation with confidence and self-reliance. The easy times when we were " the, workshop of the world " have passed, and the gibe that we are " the workhouse of the world " con- tains a painful element of truth. We have a population growing by 800,000 a year, off-set by an emigration total of only 60,000. Our acres and our physical resources necessarily remain at a fixed or decreasing level, and our foreign markets relative to our growing needs are being circumscribed by ambitious competitors. Surely the moment has arrived, if the nation is to survive, that we should pull ourselves together and not asunder, and quit ourselves like men and not like spoilt children, crying for the moon and an easy life. But what do we find; a sullen opposition on the part of the Labour Socialist Party, the second largest. in the State, and a refusal to make the least concession to get us out of the rut, except on lines which the majority will not accept, and which have spelled loss if not ruin wherever they have been put into practice. So far as the Government is concerned, we observe an almost fatalistic reliance on " something ;turning up " to ease the situation, and a weak acquies- cence in semi-Socialistic nostrums, of which the 28 million subsidy and the recommendations of the coal report, if carefully considered, are good examples. It is true that a large section of public opinion does not reflect these views. There are always people who think that unpleasant facts can be conjured away with the parrot- cry of " pessimist." They observe that, despite unem- ployment on a vast scale, and unprecedented taxation, we manage to rub along somehow. The nation is well fed, well clothed, and the housing difficulty is being over- come, the Budget balances—or did—and even if it be true that the miners strike has involved the country in a direct loss of 800 millions, quite apart from future reper- cussions, no one seems a penny the worse, and it only goes to prove, so the optimists say, what " resiliency ' and untapped resources the nation possesses—so why worry ? But surely that is a superficial view. These optimists do not visualize either the prosperity which we might have enjoyed or appreciate the loss of the non-accumulated Capital resources essential for the maintenance of our growing population, or, to take a nearer view, the forth- coming balance-sheets of our leading industries, and the strain of next year's Budget. Neither do they grasp that we are gradually exhausting that intangible factor of Prosperity, goodwill," by means of which we are for a time retaining our foreign markets.
POLITICS AND ECONOMICS.
What is the reason, after making full allowances for geographical conditions and resources, that this country differs both in theory and practice from the- attitude of our most successful rivals. Is not the answer to be found in the fact that " politics " have become inextricably associated with economics, with the result that every economic fact, every theoretical argument has been dis- torted by partisan inuendo and suggestion ? Nowhere is calm and reasoned discussion possible. The politician, like the scene-painter, works with a big brush. He has to produce his effects, not by appeals to reason, but to the imagination. False analogies are his weapons, class hatred and envy the background of his picture. The rise of democracy, the advent of a " political " Labour Party, the cheap " stunt " Press, the very virtues of our devotion to liberty—or is it licence ?—cven our financial ortho- doxy, necessitating heavy taxation, have tended to the domination of yearnings " instead of " earnings," of rights instead of duties. All these factors have served to accentuate the natural tendency of mankind to shift the burden of their own shortcomings on to the shoulders of those who, to use the cant phrase, are " best able to bear them." Labour has not even gone the right way to achieve that end. They have only succeeded in raising prices against themselves, to render the employer's life a misery, and to check enterprise, initiative and security, which factors are the life-blood of the nation in a pre- dominantly competitive world.
EMPTY PHRASES.
It need hardly be said that few politicians appreciate— certainly few will admit—this conflict of economic and political aims. The difficulty is met by the adoption of a pseudo-economic phraseology, making an easy appeal to men's hearts instead of their heads, to their desires instead of to their deserts. Any attempt to meet inter- national competition by an increase in working hours, or reduction in unearned wages, is scarified as an attack on the workers' " standard of living." Not only that, but if for any reason the general price level rises, either owing to scarcity of or increased demand for raw material, or more often than not through increased cost of production due to sheltered wages—these very facts are made the basis for a percentual increase in the wage factor, itself the cause of the trouble. Every rhetorical artifice is used to divert attention from economic law. Private capi- talism, we are told, has broken down. " Production for use and not for profit " is dangled before an uncritical proletariat, as the panacea for our ills, though it would pass the wit of men to give a reasoned account of what this precious locution means.
NATIONALIZING FALLACY.
When it is proved beyond reasonable doubt that if the whole of the national incomes over £250 a year would, if divided amongst all the workers, not provide more than 5s. a week per family, and by reason of Death Duties and Income Tax in a year or two would provide even a lesser sum, that fact is used as a proof that the whole economic " system " must be changed. " Nationalization " and the most elaborate bureaucratic system ever devised has recently been reaffirmed at the Labour Party Conference at Margate as the unalterable policy which alone will bring industrial peace and plenty. The lessons of history are ignored, and every effort of conciliation is regarded as merely a scheme to retain " ill-gotten gains," and to postpone the coming of the " day.'
GENERAL UNREST.
In view of these doctrines and the feeble attempts to controvert them, it is not surprising that social unrest grows apace, that trade declines, and our captains of industry lose both heart and opportunity. Labour is not alone at fault. All political parties are to blame. The Liberal Party, which has always stood for individualism and liberty subordinated to the interests of the com- munity; has for technical reasons, which this is not the place to discuss, been debarred from pulling its weight in the economic maelstrom. The Conservative Party,. handicapped by the vice of " possession," labours under the delusion that it must apologize for its existence, and is loth to- preach -the pure economic doctrine.' As a result it is responsible for a mass of half-baked Socialistic legislation for which it gets no credit but all the blame which attaches to the apostate. All parties—Liberal, Labour, Conservative, Socialist, are for different reasons responsible for the present deplorable state of the country, and for the future, which is the graver because the consequences are neither visualized nor understood. Liberals because they have been false to their principles, Conservatives because they are afraid to be conservative, and the Labour Party because in their endeavour to impose an exotic and discredited economic system on an unwilling majority have only succeeded in getting the worst out of a system which in recent years has never been given a fair chance of freely functioning. If in answer to this it is claimed that certain trades have improved . their position, we may agree ; but they have only done so by abusing their monopoly at the expense of their unsheltered fellow-workers and an army of one and a half million unemployed.
EMOTIONAL CAMPAIGNS.
One of the strangest features about the present labour and social unrest, with all its deplorable moral and economic consequences, is that no one can logically state what the grievances are all about or suggest intelligible remedies. Very vaguely, of course, the claim is for a higher standard of living and shorter hours of labour ; but how that is to be achieved by the absurdly inadequate programme of " nationalization " none of the Labour leaders troubles to explain. If by nationalization is really meant " confiscation," well and good—we know where we are—but confiscation has been ruled out. Mr. Snowden, speaking for himself, expressly stated so in the House of Commons. Even in a recent statement of Labour's land policy, Mr. MacDonald provided for com- pensating the land owners under Schedule A. It is true that social amenity and prestige values were not to be paid for, but whether the land owner is to be robbed a little more or less is relatively unimportant from the point "of view of what is hoped to be achieved. All that is left to the imagination. We are never told in what way whole armies of bureaucrats supervising the mines and the railways and agriculture will add to national efficiency or lead to payment of higher wages. These diffi- culties are all covered up by the magic word " reorganiza- tion," and here again _everything is vague and nebulous; The truth is that wages, hours,. nationalization and re- construction are only the facade of the Socialist edifice, but the foundations are political and not economic. The " political complex," and not existing conditions, is the basis of social unrest. This point of view has been recently emphasized in a book by an American author, Mr. Lothrop Stoddard, called Scientific Humanism, to which more attention might have been given were it not for its somewhat repellent title.: He points to the fact that all mankind are " incurably inclined to ' rationalize ' their emotions." This means finding bad arguments for unproved or illogical assumptions. We are, he writes, " incredibly heedless in our beliefs, but find ourselves filled with illicit passion when anyone tries to .rob us of their companionship: The source of the trouble lies, not in the intellect, but in the emotions—that which divides men irreconcilably is not rational thought but emotional processes—.-yet everyone believes that it is the ideas which are the trouble."
AN APPEAL TO REASON.
It may be said that this explanation of labour unrest and its unfortunate reaction on the physical problem of living only adds to the difficulty of achieving peace in industry and willing co-operation between Capital and Labour. I do not think so. It only emphasizes the need of a new method of approach—an appeal to the head and not to the heart, to reason and not emotion, or in other words to common sense and economic law. Fortunately there are many signs that the world is approaching this ideal. The Locarno Pact in international politics, the tentative approaches of the bankers and the leaders of industry in the disunited States of Europe, are encourag- ing. Coming nearer home there is the Industrial Peace movement of Mr. Havelock Wilson, and the helpful sug- gestions of Sir Arthur Whinney, President of the Institute of Accountants. All this is to the good, and it is not too much to hope that " Labour " will shake itself free from the thraldom of the " political complex," and unite in a whole-hearted effort to make the best and not the worst of an economic system which is founded on the ineluctable
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