SKELETON AT THE HOLIDAY
THE surburban trains held up outside the London termini, with a lighter load of workpeople than usual, to allow the seaside excursions and boat trains to get away, are a symbol of Britain in August, 1953. This year's August Bank Holiday is reported to have been the busiest ever known. That statement is ambiguous and difficult to verify. But it may mean that more money was spent on holiday-making on that one day than on any previous day in British history. The fact that the note circulation, an indicator of ready-money in the pockets of the public, is higher now than it has ever been before tends to support that interpretation. It is certain that more people will have holidays with pay this year than ever before. The lines of cars on the road reflect the 27,043 new registrations in May, the latest available figure and the highest since the war. The British public is evidently out to have the best time that money will buy. It is difficult to judge just how good a time it is having, but it is easy to see that a vast amount of money is going into the attempt.
The fact that the search for pleasure and recreation on such a scale is even possible might seem to indicate that Britain is in a singularly happy period of its history. And it is true that we have seen worse days since the war. August in recent years has not necessarily been a month free from care. In 1947 there was the convertibility crisis, in 1949 constant alarums and excursions leading up to khe devaluation of the pound, in 1950 the Korean war in its blackest phase, and in 1951 the rapid economic decline which had a political outcome in the resignation of the Labour Government ancl a General Election. This year we are at least spared the outward and threatening signs of early disaster. And we are not accustomed to being moved, as a people, -by anything less. The criers of " Wolf " are temporarily silent. At Oxford, where the Liberal Summer School combines business with pleasure, one of the most distinguished speakers con- tented himself with the tentative prophecy that "our country will not sink swiftly but founder slowly like a water-logged raft." For the vast majority of the working population that prospect, temporarily obscured by holidays with pay, seems not to he intolerable. In fact what is wrong with us at this moment may be failure of foresight and atrophy of the imagination. And both these defects are obviously very difficult to cure.
In the circumstances there is little reward for harping on the precariousness of our present economic position. If any particular group knows better than the rest that a larger force of British miners has so far produced 1,200,000 tons less coal in 1953 than in 1952 it is the miners themselves—and this year they are taking an extra week's paid holiday. Trade unionists, or at any rate trade union officials, must realise that their set policy of concentrating on maintaining or increasing their share of the national product rather than on increasing the product itself only adds to the precariousness of the national position. But at the moment the new wage Claims Are piling up A merrily as ever. The public at large, after years of reminders from both of the great political parties, must realise that a buoyant home demand will not help us if our power to compete in the export markets declines. Yet the public is at this moment engaged in an almost desperate bid to consume more, and there is no final guarantee that it will cease to make the bid when the holiday season is over. Even the exhortations of the politicians are muted in the August sunshine.
In short the recital of the dangers in which we stand is least likely to have an effect on the people. who most need such reminders. The present state of Britain may not be a very safe one, but the majority of the people would prefer not to change it. It is useless to tell them that the longer they go on trying to keep it as it is the worse it will get— that there will bc new difficulties with the balance of payments, followed by more regulations, followed by more difficulties. It is worse than usele s to tell them that a slight increase in the present very low level of unemployment would be accompanied by greatei elasticity in the economy and a quicker transfer of men and resources from declining, to expanding industries, or that temporarily higher prices for some items of home consumption would lead to a healthier international balance and more solid prosperity all round. For any increase whatever in unemployment, any rise whatever in the cost of living, would take the matter clean out of the field of economics, where it belongs, and into the field of politics. There may be—in fact there almost certainly are —Socialist politicians who know that the present lever of unemployment is too low and the present level of home consumption too high, but there is not one who would dream of saying so in public. That is unfortunate enough. But what is even more unfortunate is that there are no Conservative politicians who dare say it either.
The obvious hope of both parties, and also of those members of the public who bother to think about the subject at all, is that good luck will intervene to prolong the existing impression that the British economy is not doing too badly. There are indeed a number of pieces of good luck that may still fall to our lot. Tthe terms of trade may continue to move in our favour. Exports may increase rapidly. Private saving, which has disappeared, may reappear. Businesses may then be spared the necessity for doing all the saving themselves, which means that they may be able to cut down the present high rate of profits, to the delight of all. American aid may not fall off as rapidly next year as it seems likely to do. All these gifts may be showered upon us not singly but together while we sun ourselves on the beaches or explore the continent. Each of them singly would be an unexpected, and on the whole undeserved, stroke of luck. Collectively, they would be a miracle. But it is a miracle which the country will continue, consciously or unconsciously, to hope for—on the possible occurrence of which, indeed, it will continue to base its actions.
Economists, maddened by this obstinate insouciance of. the general public, might almost be pardoned for looking round for possible disasters to shock them out of it. Obviously exhortation has got us nowhere. Might there be one event sufficiently important and sufficiently startling to set the people to work ? Now it so happens that there is, potentially, such an event. It is, of course, a recession in the United States. It would only have to be very slight—so slight that Americans themselves wOuld hardly notice it—to expose overnight all the present weaknesses in the British economy. The American banks are strong, American businesses in general are bolstered by large reserves, and American consumers could easily reduce their demands for goods and services without suffering any pain. Anything in the nature of an old-fashioned slump is difficult to envisage in such circumstances. That white hope of the Communist world is unlikely to be fulfilled. But something far less than a slump in the United States would be sufficient to bring down prices in the world markets and make life very difficult for both Britain and the sterling area as a whole. It could happen. Indeed it would be prude at to anticipate that it will happen, sooner or later. American prosperity may continue on its upward way, but it is on the whole unlikely that it will continue for ever without any check or interruption whatever. If there were a check tomorrow it would find the British gold and dollar reserves less than half what they should be for safety, and increasing at a rate which would not bring them up to the safety-level for at least two years, even if the July rate of increase could be maintained. We must certainly not rule out the possibility of trouble from across the Atlantic. But at the same time it is too much to expect that even that would have the right galvanic effect on industrial productivity. It would be so much easier to blame the Americans for all our troubles, cut down our imports again, apply a few more controls, and sink a little deeper into lethargy.
It is a gloomy conclusion. It is most unlikely to be acceptable to holiday-makers or to send them scurrying home to work. Nor is there any reason why it should. It would be churlish— in fact it would be downright foolish—not to wish the holiday- makers plenty of enjoyment this year and still more next year. All they really have to do is work a little harder between holidays.
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