WORLD SOLUTION

Evening Star, Issue 22350, 28 May 1936, Page 2

WORLD SOLUTION

ADDRESS BY MR D. M. SHERWOBD An address entitled ‘ Monetary lieform- as a Solution to World Affairs ’ was given to professional men in the Manchester Unity Chambers last night by Mr D. M. Sherwood, a chartered accountant -from London. There was a large audience, presided over by Cr W. A. Scott. Mr Sherwood pleaded for a new attitude of mind on the part of thinking people to deal with the unprecedented problems facing the world to-day. He thought that in this era of specialisation there was a tendency for scientists, professional, and business men to become so engrossed each in his own particular field of activity as to lose sight of the major issue, which was “ Where arc we going? Where do we want to get to in our economic and social affairs?” “In any impartial examination of tho conditions in any country of Western civilisation,” Mr Sherwood continued, “ the following four paradoxes become startlingly apparent.” The first paradox was poverty amidst olenty. Just because that phrase was hackneyed wo should not forget its awful .significance. To-day we had the n nest plant and equipment the world had over known for producing all the necessities and luxuries of life—there was not one material thing that any nation could not produce or exchange for its production so as to keep all its neopie, not only out of poverty, but in comfort. The existing production system might not be perfect, but it had withstood the vital test—it had both literally and metanhorically produced the goods. In fact, last year every single primary product of importance had, in part, been deliberately destroyed or restricted. This, as the Dean of Canterbury _ bad said, was the , very flinging back into God’s face of His gifts. All tho while there was a crying need for these goods, and the only reason why thev were not consumed was because of lack of purchasing power in the bands of the people.

Tho second paradox was that of the unemployment whilst there was work to bo done. People had become so used to associating poverty with unemployment that they failed to realise the true significance of this paradox, lu any sensible society there might be povertv, if all the people working all the time could not produce enough for all Or on the other hand, there might be'unemployment, if some could produce enough for all. But it was ridiculous that poverty should co-exist with unemployment. Again, said the speaker, tho reason for it was lack ot purchasing power, because if the uneinployed were reabsorbed in industry their output could not be consumed. The third paradox was the war existing to-day between politicians frantically trying to find work for men whilst engineers and scientists were inventing machines to throw men out of work. To-day it was estimated that something like 75 per cent. of t-he ' vo vf clone was unnecessary. In addition it was well known that tens of thousands of inventions were sabotaged and purposely kept off the market, because if industry were made really efficient again we could not consume its production owing to lack of purchasing power. Finally, continued Mr Sherwood, the fourth and most tragic paradox was that of the peoples of the world earnestly desiring peace and yet everywhere nations preparing for war. Nations to-day did not make war because of inherent hatred, but because of economic necessity. There were two main causes of war—both economic. The first cause was discontent at home due to the wretched living conditions of the vast majority of tho people; tho second, bitterness abroad due to an everincreasing struggle for export markets. Manufacturers unable to sell their goods at home were forced to export them at any cost, and as more and more nations became industrialised so economic warfare became more intense and led inevitably to military warfare. Once again it was safe to say that in ,a rational state these causes of war could not co-exist, because the people would bo given the additional purchasing power’ to buy the goods they so desperately needed, and which the manufacturers so earnestly sought to sell.

Mr Sherwood explained that it was necessary to differentiate between money in the hands of the consumers and money in the hands of the producers. Money available for spending in consumption was purchasing power, while money available for use in production was capital. To-day there was a dearth of the former and a glut of ' the latter. In fact, the reason why there was so much “ idle money ’ was ■ due to lack of profitable investment, which in turn was directly attributable ; to lack of purchasing power. According to the Douglas analysis,, owing to the charging of reserves into prices and to other reasons, the in- ■ come distributed by industry in any i period was never sufficient to purchase the output of industry in that period, i Under the present system there was i one other way, and one only, by which i income could reach the community, and that was through the construction, r of non-consumable goods, such as new factories, public works, and armaments. financed chiefly by new borrow- ' ing. That was how the system had i kept going in the past, and through a century or so of continuous capital expansion it had worked, spasmodically but well enough perhaps, but now, even if we would, we could not go on as in the past. First, because there was no point in building more capital works when in highly-industnahsed countries the present plant ivas'standing half-idle, and, secondly, because the limit of public indebtedness Lad nearly been reached. The choice before the world to-day was either to retain the orthodox method of making up the shortage of purchasing power by rapidly expanding armaments production or to adopt a scentific method of calculating the extent of that shortage and making it up by a direct financing of consmnntion. The speaker thought it hardly necessary to enlarge on the horrors looming ahead of our retention of the orthodox method, and suggested that if a scientific change was made the prosperity of a nation would then depend on the productivity of its industry. At the conclusion of his address Mr Sherwood received sustained applause.