PLANNING FOR THE AFTER-WAR PERIOD

Press, Volume LXXIX, Issue 23943, 10 May 1943, Page 4

PLANNING FOR THE AFTER-WAR PERIOD

EXPANSION BY RESTRICTION

[By OSCAR HOBSOI “The more they talk about expansion, the more they slan restriction.” This acid comment on current discussion of the post-war world fell on my ears the other day. And who in this context are “they”? "They,” it appeared, are politicians of many shades of opinion, from right to left, many industrialists and businessmen, and, above all, most ox the civil servants who are now devoting time to planning our policy for after the war. I am sure there is a lot of truth m the charge. It is so much easier to plan negatively than positively, to “go and see what baby is doing and tell him he mustn’t” than to persuade him into some constructive activity. Let me give an example or two of what I mean. The other day Dr. Dalton, President of the Board of Trade, speaking in the Commons, proclaimed the Government’s economic watchword to be “expansion.” But when he proceeded to details he laid great emphasis on the conclusion of international commodity agreements, such as the recent Wheat Agreement between the United Kingdom and the four producing countries. United States, Canada, Australia, and Argentina. And it is known that in fact a good deal of bureaucratic energy is already being devoted to working on agreements for other commodities. Now the wheat agreement establishes export quotas for the producing countries and establishes also the basis for a future price for wheat. To that extent it is definitely not expansionary, but restrictionist, and its saving grace, the establishment of a relief pool of a size quite inadequate to meet Europe’s estimated requirements, does little , to atone for its fundamental defect. A Policy for Industry

Another example—the very kernel of the famous statement of a policy for industry by the 120 industrial leaders —consists in the demand that industry should be permitted to govern itself through trade associations. That inevitably means price-fixing, output-quotas, and regulation of new entry into an industry—all restrictionary concepts. Undoubtedly there are great benefits to be gained from voluntary association within an industry, but I have no doubt that, if pressed, a great majority of the signatories would opt for the monopoly expedient of making membership of the trade associations compulsory by way of checkmating the “blackleg” who would share in the benefits of association without paying his cost. Yet another example—the London Chamber of Commerce and the Archbishop of Canterbury agree in recommending that the banks’ power to grant credit should be controlled and restricted. Why? Apparently in the view of the Archbishop because “credit” is like light, air, land, and water, one of the primary requisites of life in the modern world. Light and air, he said, were still free, but land and water “and similarly credit” must be subject to social control. But “credit” means “trust,” "confidence,” and in particular that kind of trust which leads a banker to lend money to a business customer for the purposes of his business and sometimes to a private customer for private and professional purposes. Why, then, in heaven’s name, should the Archbishop and the Chamber of Commerce want to control this form of confidence? Is there so much mutual “trust” in this modern world that we can afford arbitrarily to suppress the manifestation of it by efficient and universally respected institutions which have grown up hand in hand with the modern industrial system?

Credit is an energising, activating, creative factor in economic life, not, as so many'people seem to think, a purely mechanical, statistical entity brought into existence by clerks writing in

in the "Spectator.”] ledgers. Why should it not continue to be free, like "light an# air”—like any innocent human relationship for mutual benefit. No doubt it may be said that as credit-creating institutions the banks are not enough: that they must behave according to commercial rules, and that there are purposes for which loans should be legitimately made—housing, "unremunerative” public works, and the like—which are outside the scope of the banks. But, if *\o, what is there to prevent the Stat* creating special credit institutions for the purpose? Nothing. The banks' have no monopoly of credit-grant* ig and would have no justification ever for claiming one if they Wert's® foolish as to do so.

A final example. It is not only Britons who are preaching expansion and still thinking restriction—and one may add preaching internationalism and “non-discrimination” and thinking nationalism and privilege. Americans are doing it, too. Everyone knows that the acid test of whether even one tithe of the blessings promised by the Atlantic Charter and the Mutual Aid Agreements can be realised is the United States’ post-war tariff policy. Has any representative American —have Roosevelt, Wallace, Hull, Sumner Welles, who have preached economic freedom in such stirring terms —ever undertaken unequivocally that the United States would at the end of the war cut its tariff to ribbons? No—and as things are it is a foolish question to ask. But does not its very folly prove that in Congress and in Wall Street and in Detroit, as well as in Whitehall and Throgmorton street and Birmingham, there are innumerable "they” who are still thinking restriction while they talk expansion. Some Control Necessary Now all this is not an argument against Government control of commerce and industry. I know as well as anyone else that control of a kind there must be. especially in the year or two following the war, when wa shall be shaping the transition from a fully-fledged war-time authoritarian, collectivist, communist (call it what you will) system to—whatever system is to follow. My complaint is that so many people are thinking of controls in completely wrong terms. They ara thinking of them not as essential conditions of maximum freedom, but as the instruments by which the world can be shaped according to their own specification. They insist on dictating to the plant how it shall grow;, they are not contefit with providing it with those conditions of climate and soil which will enable it best to develop its own innate qualities. They—these arrogant “they”—think they know better than the consumer what he wants. They know at any rate what he ought to want. They are willing to supersede the free market and themselves determine what shall or shall not be produced, and where and how. They have their own arbitrary definitions of the words “wasteful,” “uneconomic,” “inefficient.” They are impatient of the subtler and less direct forms of control, under which monopoly and privilege are dealt with by withdrawal of legal protection, by freeing the channels which impede competition, by compelling full disclosure of, profit* and accounts, by dealing with tha abuses of the patent law. These are forms of control which a genuine relief in freedom would suggest But “they" can imagine nothing but the cruder and more ruthless forms of control sanctioned by present national emergency. It is a natum mental outlook—at the end of a half century which has been filled with wars, their preparation, and their aftermath. But it is an outlook which must imperatively be changed if there if ever to be hope of sustained peace ill the world. -