BRITAIN’S PATH

Evening Star, Issue 20987, 29 December 1931, Page 9

BRITAIN’S PATH

A NEW DIRECTION FREE TRADE ENDING WHAT OF THE FUTURE? Nearly all serious politicians in this country aro now convinced that a radical change in the fiscal system of Great Britain is close at hand (writes J. B. Firth, in the ‘ Daily Telegraph ’). Whether they rejoice at the prospect or are merely resigned thereto, whether they think or it in terms of permanency or simply to meet a present emergency, all alike “ know the change and feel it.” It is in the very air we breathe. So far have we moved away from the position of 1852, when it was possible for Gladstone to use these words: “It is not too-much to ask that now at least, after Ministries overturned and parties disorganised, the question of Freetrade should bo placed high and dry on the shore whither the tide of political party strife could no longer reach it.” So firmly assured the triumph of Freetrade then appeared to be that Disraeli, at any rate, accepted the controversy as closed, and had the splendid courage to say so. And now to-day the wheel has gone right round, and the tide has not only crept up to Freetrade in its high-and-dry shelter on the shore, but has washed it back into the sea, where it is labouring hard and like—for the time—to be engulfed. So things pass. I can imagine the shade of Cobden—or, better still, that of his. biographer, the late Lord Morley—quoting gloomily to himself the great lines from the soliloquy of Ajax: “All things the long and countless years first draw from darkness, then bury from light. And there is nothing beyond hope, but there is confusion for the dreadful oath and the stubborn will,” THE SANCTION. No moral principle that I can see is involved. It is no case for eloquence, but for balance-sheets. Those who bring Providence and Nature into the argument should bo at once suspect. “ The diversity of the productions of different regions,” said Mr Gladston, in characteristic vein, “ is the primeval law which sanctions their exchange.” But there is no “ sanction ” about it; merely convenience, and the balance of profit or loss. Great Britain is about to slip off Freetrade, ns she recently slipped off the gold standard, not because she has not battled hard and made huge sacrifices to remain upon it—in the honest belief that the free trade is between the nations the better —but because other countries have not even tried to play the Freetrade game, and because almost all the great tides of change have been steadily against itfor nearly half a century. Great Britain is going off Freetrade because she must if she desires to live as an industrial nation and support her too large population on docent and tolerable terms. On balance Great Britain throve mightily on Freetrade for sixty years. Not very intelligently, however, as it -would seem. There was very little provident statesmanship shown by British poiticians when they closed their eyes to the portents which blazed periodically in the heavens and allowed the countryside to decay, not for the good rea,sons they, protested*, hut for the Jiess rsput-

able reason they denied —viz., that they feared the wrath of the industrial population which they had taught to regard cheapness —however got—as all. GOING BACK. So here we are in 1931 ready to retrace our steps, but without much understanding,' I fear, of the labounous character' of the steep ascent. It is like rebuilding an embankment without stopping the traffic. But temporary disorganisation, however severe a,t times, is better than gradual total collapse. I was reading the other day a forgotten biography of one of the forgotten apostles of Free Trade, Mr Deacon Hume, once Secretary of the Board of Trade and the trusted expert adviser of all the leading statesmen of the ’thirties and ’forties of last centux;y. Sir Robert Peel repeatedly quoted hun in the House of Commons, as did Lord John Russell, Sir James Graham, and Mr Huskisson, and the evidence he gave before the famous Trade Commission of 1840 helped more than anything else to undermine the accepted Protectionist tradition among the most responsible men of the day. It is worth while glancing at a few extracts (deliberately chosen by his biographer to show his hero’s prescience,, not by a hostile critic eager to prove him wrong) from this evidence, because some of his most confident prophecies have been completloy falsified by the passage of time. “ If we were to give up our protective system altogether I think it would bo impossible for other countries to retain theirs much longer. “ If we were entirely to discontinue our system of protection, in a very little time it would be a race with other countries which would be first, or rather which should avoid to be last, to come in for the benefits of that trade which we would then open.” How easy it would be to ridicule! But ridicule is not my purpose. I am content to show that the most penetrating critic of the Protectionist system as it was in 1840—when the trade balance of Great Britain was overwhelmingly in her favour—was wholly wrong in his belief—shared to the full by Cobden —that other countries would follow Britain’s lead because they must. Whereas, in fact, they did not follow her lead because they did not desire to be swamped by British exports. NOT PROPHETS. Mr Deacon Hume and those who shared his views were all ardent Nationalists. Yet they failed to foresee the growth of economic nationalism, to my mind its natural development. . They did not even foresee the economic nationalism of the Northern States of America, which played not the main, but certainly no small part in bringing on the American Civil War, since the Southern States obstinately preferred cheap imports from Great Britain to the dear—and then inferior—products of the industrial north.

“ There can bo no doubt that if we imported from any country any considerable quantity of goods, and tho manufacturers of that country were protected, the producers of those goods which we took would very soon find the great difficulty they had in getting their returns, and instead of our soliciting the Governments of those countries to admit our goods our advocates for that admission would bo in the country itself; they would arise from tho exporters of the goods which we received.” British manufacturers, Free Traders and Protectionists alike, may well rub their eyes in amazement. They certainly have not found American, French, German, and Italian exporters begging and imploring their own Governments to reduce their tariff walls and allow British goods to enter freely. On the contrary, their influence has steadily been cast on the side of High Protection,!

Underneath the strong humanitarian motive which profoundly influenced the early Free Traders (I mean their genuine sympathy with the distresses of “ the labouring poor ” and their desire that they should enjoy the blessings of cheap food), there lay their dominant passion for low wages and an abundant supply of cheap labour. That was the main industrial attraction which made Mr Cobden and the “ master manufacturers ” such ardent Freetraders. To quote Mr Deacon Hume again: “ That is the reason for taking off all protections. That is why I aril anxious to remove the impediments to an equal power of competition on our part. By impediments I mean the expense of living in this country and the charges upon that living.” . HIGH AND RIGID. All that is a tale of the past. British •wages and costs of production are high and rigid. Cheapness of food alone remains, yet most of the benefit of that cheapness never reaches the consumer at all. It is deftly intercepted by the middlemen, who are to-day the most clamant, but the least disinterested advocates of free imports. “ As soon as it happens, if ever the day should arrive, that we should be put to a severe trial of our manufacturing power, I can hardly doubt that the prosperity of the country will recede much faster than it has gone forward.” . TT In that passage Mr Deacon Hume showed singular prescience. Many of his contemporaries never seem to have considered the possibility of other manufacturing nations drawing up level to Great Britain, and actually passing her, in the competitive race. And he himself never conceived it possible that this should occur if the competing nations retained their protective systems. . , The relative industrial superiority of this country was receding fast lor two decades before the war; since the war the rate of decline has been enormously accelerated. But Mr Deanon Hume would have stood aghast at our colossal national expenditure on social services, at the crippling burdens thrown on British industry, and at the fetters and manacles in which industrialists hav© been compelled to toil at a hopeless ta.sk. Also, of course, he knew nothing of trusts and mass production, and assumed that free competition would continue inexorably to produce the survival of the fittest. .We have changed all that, too, since his day. Let me give just one last extract referring to the value of land; - “Decrease in the value of land will only occur from the decline of manufactures in this country. That is the only matter to which I look with any apprehension as regards the prosperity of this country.” ALTERED NOW. Clearly Mr Beacon Hume was confident that the repeal of .the Corn Laws would not hurt the agricultural interest. And for a time it did not. Indeed, during the ’fifties British agriculture reached its peak. But that roseate picture very soon faded after 1860, and with the exception of a few short intervals agriculture has been in constant decline for fifty years. The prophet’s “ apprehension” to-day would be extreme. The moral of it is that the shortterm view in economies is not always the same as the long; that the term Freetrade has been completely emptied of its older content; that the arguments by which it was first supported no longer apply and have not been supplemented by new; that the protection of the staple trades in which we were once supreme is vital to the national interest and that their decline admits of no adequate compensations elsewhere. In short, conditions at home and abroad are wholly changed, and to hold our own we must change with them, always ready to respond to any overtures lor a freer exchange of commodities, but always op a strictly reciprocal basis..