The Grey River Argus THURSDAY, February 10th, 1938. SLUMP POSSIBILITIES.

Grey River Argus, 10 February 1938, Page 4

The Grey River Argus THURSDAY, February 10th, 1938. SLUMP POSSIBILITIES.

A visiting English ■ economist has expressed the opinion that our export trade has at least a r full year of payable prices ahead. Meat is steady, while dairy prof duce and ivool tend rather low- ’ er. A. barometer not to be ignored is the state of employment in Britain, where our exports are mostly sold. The last two months have seen there a rapid r, increase in the numbers out of work. Much importance is re- - posed by capitalists in the maintenance of a spirit of confidence. Thus an explanation of decreased employment in Britain and continued “dullness” ’on the stock exchange is lacking, and the reason doubtless is that those who might give a radical explanation prefer to- give none lest it might reduce confidence. There is certainly great activity in Britain’s heavy industries, affording a great deal of employment, but it is due, more than anything else, to the present policy of rearmament, What, howeevr, will follow the relaxation of this burgeoning of armaments? What is there to take its place? Manifestly, if unemployment is once more growing, it is difficult to suggest ‘a substitute for armament orders. These are now going to ; increase in the United States, q whose economic condition has 0 now a greater reaction in Britain 3 than ever before. What happens j to-day on Wall Street is reflected 3 in ’ London to-morrow. There 3 may be some consolation in re--2 iterated statements that fluctuaj Lions and set-backs on exchanges J and stock markets have latterly been owing more to purely specu- ] lative and political factors than ] to any really alarming slump tendency. Yet every country toj day has a manipulated economy ] Some of our exporters talk of J compensated prices, whereas 1 they have a guarantee which asj sures them rather more than 1 they would obtain otherwise for j their produce. There will probI ably be another deficit in the fund I from which : the guarantee is [ drawn. But other countries are regulating industry and trade I more generally and rigidly than

[ this country, without bringing an I equal measure of stability. Our I planning has been dubbed sociali istic, but it compares most favI ourably indeed with the State planning oversea which is fundamentally capitalistic. Mr Nash has described our method as being essentially co-operative. British planning, largely identified with rearmament, yet designed to augment ‘ employment, has been based oh borrowing. It has been carried out by grace of the bankers, who will for generations obtain a return of three or four pounds for every hundred that they are advancing at present. Some fools imagine that a big war might bring a solution of the problem of recurring trade stag nation, but the European Warsolved no old economic problem, while it gave rise to a dozen new ones.- Another expedient being used is. housing construction, which both in America ahd Britain is planned on a great scale. In industrialised countries the great majority of people depend for a living on somebody else. They think in wages and salaries. Therefore the ebb and flow in these must continue when expedients temporary in character are relied on to augment them. The necessity for a planned economy is indicated, but it must go beyond temporary adjustments. Prices must be kept from going either too low or too high. As even a balance as possible between primary and secondary forms of industry is desirable. Yet in Britain this would entail a decrease in food imports, but it is yet threatened. What is indicated is that purchasing power may decrease, since work is in dined to decrease. Whatever, therefore, the hopes of those who still look for salvation to capi- , talistie industrialism alone, it is plain that it will afford no- lasting security. Thus a change is necessary. Every State already ( is changing its economic policy. I

Industry in the most capitalised countries looks than ever for State aid. When the capitalists do this, they are illogical if they complain because the workers also look to the State to induce stability. Finally, if this country runs a risk of loss when overseas conditions change for the worse, the obvious course is by internal adjustment and <J e ' velopment, to reduce that risk to the greatest possible extent.