EASTERN CHEAP LABOUR

Evening Star, Issue 23093, 20 October 1938, Page 1

EASTERN CHEAP LABOUR

A PROBLEM OF THE WEST ABUNDANT PRODUCTION NOT ENOUGH In a report on ‘ Problems of Industry in the East,’ which was submitted to the International Labour Conference at its recent session here, Mr Harold B. Butler, Director of the International Labour Office, sees the closing of the economic gap between East and West as “ one of the greatest problems of the present time.” While admitting that the process has already begun, Mr Butler warns that it can hardly be carried forward peacefully _without some effort at international adjustment. “ As yet,” he explains, “ the West, aware only of the domestic difficulties caused by the influx of Eastern products into its marketSj and for the most part ignorant of or indifferent to the dangers arising from the over-popula-tion and poverty of the Orient, is seeking to defend itself by quotas, tariffs, and similar means. On the other side, the East, becoming daily more conscious of its own pressing economic and social troubles, is seeking to find outlets for its industry everywhere, with little regard to the disturbances caused to the social equilibrium of Western countries.

“ These methods of economic warfare are likely to defeat their own ends. Only through mutual co-operation and better understanding can a modus vivendi tolerable to all parties be gradually' worked out and applied. “ Clearly the only effective remedy is to raise living standards in the East. This may be expected not only to relieve the situation so far as international competition is concerned, but also to contribute to the solution of the problem of excessive population increase.

“ There are only two known curbs for a growth in numbers in excess of the means of subsistence: one is that of “ Nature ” —starvation, disease, infanticide, and exterminatory wars; the other is urbanisation and higher living standards. Experience in the West has shown clearly that, consequent upon industrialisation, the rate of population increase slows down. In Japanese cities similar factors would appear to be already at work.” But, in order to raise living standards, Mr Butler points out, the first requirement is to improve efficiency both in manufactures and agriculture, find this calls, among other things, for a direct attack upon illiteracy and disease. He adds:—

" Once a beginning has been made here, experience has shown that productive efficiency progresses rapidly. But to increase output is only one of the elements in the'problem." Emphasising the that abundant production does assurance of prosperity, andvthat there must also be the possibility of selling the goods produced, Mr Butler says:— " It is here that the principal difficulty arises. Industry in the East cannot depend solely upon the increased markets coming from the improved efficiency of its agriculture. For as rapidlv "as agricultural output expands, new mouths arrive to consume it, and the margin for the purchase of manufactured goods remains small. " If standards of living are to be

raised, markets for industrial products must bo found abroad. For this reason international trade is of especial importance in the sqcial and economic ■development of Asia. So far relatively little progress has been made. At present the total value of international trade carried on by the 1,000 million inhabitants of the Ea§t is not appreciably greater than that of the United Kingdom, with less than 50 millions. “ Development in this field has_ become vitally necessary. Whether it is a question of finding markets for_ plantation products, of promoting industrialisation so as to provide work forthose whom the land can no longer support, of attracting new capital, or of obtaining raw materials for industries already developed, commerce with other countries is essential to the East.” However, Mr Butler believes that if Eastern goods arc to find a ready mar'ket the downward swings of business cycles in the great industrial countries must ho as far as possible eliminated. “ This,” he says, “ is necessary for two principal reasons. In the first place, because otherwise the depression is passed on in an accentuated form to the producers of raw materials, resulting in the impoverishment of the plantations, of the mines, and of all the country around dependent upon them. In tlie second place, and still more important, because in a world subject to intermittent deficiencies of demand international trade and international investment cannot develop freely. In time of depression every nation of necessity seeks to protect its own_ producers, and the whole system of international trade is broken up in a vain attempt on the part of each separate country to deflect the disaster from its own shores.”

The promotion of international trade and the prevention of industrial depression, Mr Butler declares, can do more than anything else to help the countries of the East to higher standards of living. He adds that in this evolution the West also stands to gain in the long run". “ It is true,” he admits, “ that there will be difficult and painful adjustments to be made. It is true also that Western countries will no longer benefit as in the past from such exceedingly favourable terms of trade, where manufactured goods were exchanged against relatively large quantities of raw materials produced by the cheap labour of the 1 East. . , “But losses such as these can be much more than compensated by the immense advantage to be had if Western industry tackles thhe principal task before it "at the present timtf—the elimination, if only partial, of industrial depressions. ; Furthermore, once there is a balance in the East between manufacture and agriculture, it is reasonable to expect that what has regularly occurred in the past will occur again here. The total amount of international trade available to each country will -not be less, but greater than before, by reason of the fact that a people with high standards buys more than a people whose'standards are, perforce low. ' v ' ' “ These, it would seem, are the central problems of the East , in its progress towards higher levels jif living, and these some of the means by which the difficulties likely to be encountered may be turned or overcome. Even so brief an analysis as ■ that attempted here indicates how closely the countries of the world are linked together. The explosive force of population increase in Eastern countries is a danger not merely to the East, but to the whole world. Conversely, the improvement of conditions of life in the Orient depends to a great extent upon an enlightened trading policy on the part of Western nations, and upon the success with which these nations are able to cope with business cycles.”