TREND OF TRADE

King Country Chronicle, Volume XXVI, Issue 3448, 22 November 1932, Page 6

TREND OF TRADE

TOWARD WORLD ORDER. SLATER’S ANALYSIS. The capitalistic system “under which the Western world has made its astonishing progress of the last century has developed deep-seated defects which threaten its existence unless they can be cured,” according to Sir Arthur Slater, the leading British economist. Writing in the tenth anniversary number of “Foreign Affairs,” Sir Arthur describes the present world economic situation as “the greatest challenge ever given to the constructive and collective intelligence of man.” The choice before the world to-day, he believes, is between trying to build up world trade based on a world order or moving further to-ward a system of closed units, each aiming to be self-sufficient. It is his view that in this choice the tendency of the United States will be decisive. “The choice is whether or not there is in general to be free intercourse or in general isolation and stagnation,” Sir Arthur says. “The issue is in some respects clearer now than it has ever been; for the collapse of the credit system has revealed the anatomy of the world’s economic structure. “So long as credit flows freely, economic policies that are inconsistent and impracticable can long continue without apparent disaster. The arrest of credit brings us face to face with realities. The ordinary man begins to realise that a country cannot be at once a successful creditor from the past and a successful exporter, and at the same time a reluctant importer and a reluctant new lender."

What May Happen. Sir Arthur fears that the disillusionments of the depression may lead the United States to decide to “cut its losses” in finance and commerce, and in future forgo the effort to establish a higher economic standard of living based in part, as it must be, on uncontrollable foreign events, in favour of accepting a lower but more stable standard. Other nations would have to follow suit, and the world would fall into several regional combines in restraint of world trade. “Shall we continue and intensify our present economic nationalism,” he asks, “or shall we retrace our steps?” The experience of the depression reveals, he believes, what economic nationalism can do to the world and to the individual countries concerned. For this reason he takes the view that, regardless of what the immediate future may be, the world will have to consider seriously acceptance of the broader policy of international

co-operation if the present system is to survive. He points out that lessons from the past are rarely learned, but that immediate suffering is often effective. “World trade,” he writes, “is now demonstrating its real value by its disappearance. The destruction of world currency by nationalism is showing us what we have lost. Under the pressure of necessity, leadership is reappearing in some countries. “Indeed, if we take a long view, the answer to our question can hardly be in doubt. The economic life of the world, as it grows and finds expression through all the multitudinous activities of man, implies more and more world trade and a world order. It is incredible that Government policies should permanently obstruct this natural and inevitable development.” The immediate answer, however, is more in doubt, Sir Arthur thinks. “We may drift on,” he says, “till natural forces at last compel a solution, after decades of intervening anarchy and disaster. Or we may, by deliberate policy, anticipate the conclusion and avoid the intermediate period of suffering and destruction. The issue depends upon a few great countries; upon their recognition that they cannot abdicate their responsibilties or isolate their fortunes from a world of which they are, and cannot be, integral units.”