H M Hyndman September 1915

Cost of War: III

Thrift no Panacea without Increased Production

Source: Nineteenth Century and After,one of 3 articles from different political viewpoints discussing the topic of war finance. September 1915, pp. 714-28;
Transcribed: by Ted Crawford.

For some time past there has been a vigorous agitation in Parliament, on the platform, and in the Press, carried on with the object of urging upon the whole nation the imperative necessity for individual thrift. On this point public opinion has been almost unanimous. The reason for such an organised propaganda in favour of personal economy is obvious. We are told, on the highest authority, that this country is spending for military purposes at the rate of 3,000,000 a day, or, in round figures, upwards of 1,000,000,000 a year. It is, therefore, calculated that up to the 31st of March 1916 the total outgoings due to the cost of the War will be little, if at all, short of 1,300,000,000. An exceptional effort of the mind is needed in order to comprehend what such colossal figures really mean. They are as phenomenal in national finance as the War itself is unprecedented in international conflict. Nothing at all approaching to such stupendous outlay on sheer economic waste has been heard of in the entire record of the human race.

The more closely they are examined the more alarming these statements appear. The United Kingdom is a wealthy country, but the strain of the War is already being felt very seriously even here, and we have not only to bear our own financial burdens, but we are obliged to help in the near future, as in the past, most of our Allies. Now the highest estimate of the national savings is that made by Mr. Lloyd George when Chancellor of the Exchequer. This estimate loosely gives between 300,000,000 and 400,000,000 as the total surplus available for investment, chiefly, of course, belonging to the upper classes, in ordinary times of peace. It would be difficult, in my opinion, to justify fully even the lower figure of this calculation. But let that pass. The entire value of the investments of the country abroad is put at about 4,000,000,000. On the basis, therefore, of the maximum amount of savings, or 400,000,000 in the year, we shall have spent, at the very least, a sum equal to three years’ national savings, and upwards of 30 per cent. of the total value of English investments outside of these islands; for which, be it said in passing, there is at the present moment practically no market for realisation for cash, on any considerable scale, at very low prices. Assuredly, also, the borrowers themselves are in no case to pay back the principal, even if the loans could be legally called in before reimbursement was due.

It is clear, likewise, that, as regular trade and industry are very hard hit by the War, the savings of the country while it lasts must be very much below any such calculations as those cited above. Furthermore, as we depend upon foreign sources for the supply of fully five sixths of our indispensable food, it is obvious that, unless, either directly or indirectly, we can pay for it by profits earned, services rendered (freight, etc.), or goods exchanged, there will be a very heavy drain upon our gold reserves, such as they may be, or upon our national credit, to meet a very considerable portion of the liabilities for sustenance from without which cannot be so discharged. There will, that is to say, be a steady economic drain upon the national resources which cannot as yet be completely estimated. But, whatever its amount may be, it will come at a very trying time for our national finance.

No wonder, consequently, that Mr. Bonar Law, when speaking in support of Mr. Asquith’s appeal for thrift at the great meeting of City men, gave a broad hint that, failing voluntary public subscriptions on a sufficient scale to the huge Government War Loan, it might be necessary to resort to ‘a forced loan’ in order to carry out successfully the national policy. No journal, so far as I saw, commented on this suggestion of a disagreeable possibility. But the possibility exists.

Nor does the interest side of the National Budget afford any greater satisfaction than the total of Government commitments, and the contraction of business on the old scale. The interest upon money borrowed to meet the exigencies of the War on the current yearly account is, we are told, 58,000,000 in round figures. Close upon 80,000,000 of additional taxation has to be provided, in order to meet national obligations which cannot be evaded under any circumstances. Thus, on the one hand, the War greatly reduces the possibility of making profits, renders realisation of many investments difficult or impossible, and, at the same time, compels the Government to lessen still further the prospect of making savings by exceptionally heavy taxation upon incomes, and death-duties upon inheritance. And all the while we have to pay other countries increased prices for our absolutely necessary foodstuffs – wheat, meat, etc.

I do not think any advocate of collective and individual economy would represent the situation as more hazardous than this: We are face to face with a most serious financial and economic crisis. Though Lord Loreburn may have anticipated events somewhat when he talked of bankruptcy and revolution in other nations as the possible result of the terrific struggle in which practically all Europe is engaged, it is quite certain that we have already been far too lax in dealing with our own position, both during and after the War. The Government, in fact, refused at first to listen to any warnings whatever.

But the question for the moment is: Will thrift, which is so earnestly, and almost enthusiastically, set forth to-day as a panacea for poverty, suffice for our necessities? May not our difficulties even be increased if we rely too much upon this one remedy for our national War emergency? Economies in the matter of salaries to a vast bureaucracy, or in non-productive official expenditure which could be postponed, might be advisable. Relentless thrift by individuals may have no such beneficial results.


What, then, do Messrs. Asquith, Lloyd George, Bonar Law, McKenna and Lord Kitchener mean when they so vigorously inculcate thrift as a national duty? They cannot imagine that thrift in any way creates wealth. Obviously, the wealth must be available, and at the disposal of individuals, before it can be economised. Our rulers, therefore, are probably anxious to discourage waste of wealth in order that the margin thus obtained may be used more advantageously than it is at present. Unfortunately, they do not say so. Neither do they, when holding forth upon the necessity for reduction of personal expenditure, give any indication of what should be done with the wealth, or rather with the money, thus saved – the money fetish dominates every suggestion of the sort – except that it would be extremely useful if invested in Government 41 per cents., to be unproductively devoted to the manufacture of high-explosion shells and other war munitions.

Thrift in itself means that those who practise this virtue – which is being imposed upon many of us, whether we like it or not – curtail their own demand for commodities. This means, again, that those who produce the commodities, other things being equal, lose to that extent the Market for their goods. What may conceivably be beneficial personal restraint or individual self-discipline, for the buyer, involves a manifest lessening of saleable output to the seller. He must either find a new purchaser for his product, by offering it at a lower price to another who can pay for it at the smaller cost, and was not in a position to acquire it before at the higher rate, or he must cease to produce it altogether. Such would be the general position of the producers should everybody with sufficient income to be a customer take the advice of Messrs Asquith, Law, and the rest of our teachers of economy. They would cut off their production and, if employers of labour, would, perforce, discharge their hands.

Nor would the position of these last be in the least bettered if the thrifty ones invested the results of their individual economy in the Government securities at 43 per cent., to be expended on wholly unproductive munitions. Unless, indeed, being thus deprived of their livelihood in making or raising goods that were used before, they were employed by the nation at high wages in the manufacture of munitions, or went to the Front to fight the enemy at the country’s cost, which is likewise no productive occupation; or finally were – but this last supposition comes under the heading of reorganised production, which I shall deal with later, and has, in any case, no direct relation to thrift as at present advocated.

Now this primary effect of national thrift cannot be gainsaid as an economic proposition. If the demand slackens, the supply must sooner or later fall away. The restricted market for commodities connotes a smaller area of production. The smaller area of production involves a lessened employment of labour. The lessened employment of labour means that, in the first instance at any rate, there is some encumbrance upon the State.

And this, taken by itself, is the inevitable rule in the case of home products, whether thrift is applied to the giving up of luxuries or the curtailment of necessaries.

The same reasoning clearly applies to thrift in the matter of domestic service. Discharge of domestic servants is one of the simplest methods of reducing expenditure on the part of the well-to-do. Undoubtedly the number of 2,000,000 of the population under this heading is excessive, and there can be no question that a very large proportion might be dispensed with, as unnecessary aids to luxury or ostentation. But, even so, this reduction of unproductive service by way of economy does not necessarily give the desired result from the point of view of the community at large. All depends upon how the saving thus made is used, on the one hand, and what becomes of the discharged servants on the other. Should the wages and keep of the servants, as reckoned in money, not be used to increase production at home, and should the servants out of place be unable to obtain useful productive employment elsewhere, it is still difficult to discern how the State could be immediately advantaged.

Again, it is easy to say that it is the duty of every man and woman, at such a time as this, to cut down all luxuries in the shape of food, dress, motor-cars, horses, and so on. Speaking generally, all would agree with that proposition. When engaged in a war which has compelled the nation to put millions of men in the field, to raise the number of our sailors afloat to 300,000, to consider seriously whether some form of compulsory service may not be necessary, and to lament losses in killed, wounded and missing to an extent never before heard of, those who carry on ‘business as usual’ for their own personal enjoyment are guilty not only of bad taste but of manifest indifference to the concerns of the nation. That is the moral side of the matter. I am dealing, however, with the economic effects of the thrift campaign, supposing it to be successful on a large scale.

Assume, now, that the whole of the well-to-do classes adopt the counsel given, have our advisers fully thought out the result of the complete success of their campaign? Manifestly, the increase of the number of men and women who could only find work in Government employment would be phenomenal. Some argue as if shopkeepers and their assistants alone would suffer by the absence of customers from a wholesale suspension of luxury trade. Serious, however, as that suffering by itself would be, this is a very superficial view to take of the question. Large numbers of those who manufacture, decorate, or make up articles of dress, classed as luxuries, would be thrown out of work. Similarly with all engaged in providing foods, outside of those which are labelled as strictly necessary. The same condition naturally applies to motor-cars and their accessories; though, petrol being an imported commodity, the cessation of purchase would not directly affect our own working population, except in a possible reduction of American or Mexican or Russian demand for articles they produce. In any case, a widespread cessation of any home market for luxuries could not have the wholly beneficial effect upon national wealth and State finance that has throughout been taken for granted.

Nor should it be overlooked that many of the goods stigmatised as luxuries, such as wine, fruits, canned fish, cheese, gloves, silks, etc., are sent to us by the Ally with whom we are on the closest terms of friendship, whose armies are fighting side by side with ours to a common end, and whose finance, to put the case moderately, it is of the greatest importance for us to maintain at a high level of soundness and efficiency. If we English cut down drastically our purchases of French articles (with which all of us could at need dispense to a considerable extent), are we not dealing a very heavy blow at the prosperity of our neighbours? And would not this blow be felt with altogether exceptional keenness at a time when one-fifth of France, comprising her most important industrial districts, is still in the hands of the enemy? Already ill-wishers to the great Entente of the Western Powers are doing their utmost to breed bad blood between the two nations – with the most highly paid pro-German assistance – by arguing that we are not doing our fair share of the fighting, and are leaving the hardest of the hard struggle to be borne by France. This propaganda of mutual distrust has been checked lately, and never affected the minds of the leaders of the French Republic. But if all the great industrial cities and towns of France, outside the occupied area, were suddenly deprived of their English trade to an extent far in excess of the natural reduction due to the heavy expenses of the War, is it not certain that this would place a very powerful economic argument in the hands of our worst enemies? ‘Perfide Albion,’ they would urge, ‘is saving for war at your expense while you are employing English labour to the tune of 60,000,000, provided for the moment by British banks, but guaranteed by French credit.

I am anxious that such arguments, leading easily to denunciation, should have the ground cut from under them as far as possible in the case of our French Ally, for reasons which are not, I think, commonly understood on this side of the Channel. As already said, France stands at present in a peculiarly hazardous economic position, seeing that one-fifth of her most valuable territory is in the hands of enemies and its resources are even being used against her. This is bad enough. But the Republic is also suffering another most serious pecuniary loss, which does not, as a rule, come within the ordinary purview of economists and financiers. It is calculated that in time of peace the visits of foreigners to the French capital and the provinces result in an accession to French wealth, in one form or another, of from 70,000,000 to 90,000,000 a year. An unusual proportion of this vast sum represents clear net profit. The year 1914-15 and the first months at least of 1916 will see almost a suspension of the payment of this pleasure toll, to the great loss of those French wage-earners who work for the pleasure-seekers as well as of the profiteers who benefit so largely by their coming. I am not at all sure that our financiers and propagandists of thrift quite apprehend what the effect of the suppression of our luxury trade with France would be at this critical juncture. It is clear that, advantageous though it may seem as a general principle, it may have great drawbacks in its special application.

So far I have dealt entirely with thrift as it affects the well-to-do classes, which I may take roughly as all who possess an assured income of above 500 a year. Below that level the same reasoning applies, though in a much less degree, seeing that the margin for application to luxuries as distinguished from necessaries – a difficult line to draw, be it said, in our complicated society of to-day – is very rapidly reduced as the income is lessened. There are so-called luxuries which increase efficiency: there are also luxuries which lessen efficiency. To forgo the former is, even for the individual, a doubtful advantage. A sudden reduction of the standard of life in the lower grade of income may engender physical and mental depression among a large class of the community, unless the change is accompanied by opportunity afforded, as in the case of men serving in the Army, of leading a generally more healthy life. This is a mischief apart entirely from the economic drawbacks already noted.

When, however, we come to deal with the working class, the question of the limit of beneficial thrift becomes more intricate still. Immense harm has been done by our rulers and politicians in talking as if the wage-earners as a whole were a shiftless and extravagant class. I am not writing as a Social-Democrat, nor is this a propagandist article. But, although the well-to-do classes are making great personal sacrifices, the wage-earners of the United Kingdom are, nevertheless, doing nearly all the fighting in war; as, in the economic sense, they do the producing in peace. The rent, interest, and profits of the well-to-do classes, which enable them to expend large sums yearly in luxuries, as well as to make great savings, are drawn, in the main, less payment for freights and interest on external investments, from the unpaid labour of the home wage-earners. Surplus value, in fact, is derived, so far as this country is concerned, from unpaid labour. It is, therefore, deeply to be regretted that Tories, Liberals, and Radicals should of late have found a convenient scapegoat for their own shortcomings in the British working-man. When Mr. Lloyd George, as Chancellor of the Exchequer, calls ‘drink,’ generically, as great an enemy of this country as Germany, and Mr. Philip Snowden, the Socialist and Labour member for Blackburn, speaks of our ‘drink-sodden democracy,’ it is evident that contempt, and almost hatred, for the producers is not confined to those who call themselves Conservatives or Unionists.

Twenty-three years ago I proved, as a witness before the Royal Commission on Labour, that a man, his wife, and two children could not keep all the four of them in good health and decently clad in London, apart from making any provision for old age, upon a weekly wage of thirty shillings. Since that date the purchasing power of thirty shillings in necessaries of life, outside of any luxuries, has fallen by at least 20 per cent. Yet even to-day a thirty-shilling weekly wage with a purchasing value of twenty-four shillings is considerably above the average, earning of the British worker, taking casual labour and out-of-work periods into account. Though, therefore, there are many trade-unionists who earn more than this – and averages are proverbially dangerous – it is safe to say that, taken as a whole, there is no widespread margin for thrift among the British working classes of to-day, even when the skilled among them are working overtime and are getting war bonuses. The reduction in the real value of their earnings by the fall in the purchasing power of gold fully makes up for the extra pay they may now be receiving. It is not too much to state that in the great majority of cases thrift can only be exercised at the cost of efficiency, by the scaling down of the standard of life as it exists to-day.

The working class as a whole indulges in but three ‘luxuries’ – tea, tobacco, and a certain quantity of beer and spirits. Those are the only purchases in a working-class family on which thrift could be exercised. Now taxation upon all these ‘luxuries’ is tremendously heavy. So much so that none can deny that the wage-earners, by consuming them, pay already considerably more than their fair share of the national burden. Let us assume that they and their class decide to take the advice of their superiors and carry thrift to its extreme limit. What should we have then? A collapse in the receipts of the Chancellor of the Exchequer, which the most dexterous financier living could not make up, without trenching most seriously upon those savings by the well-to-do class which it is the object of this same thrift agitation to promote and encourage.

I do not contend that the decision of the wage-earners to restrict the consumption of the articles upon which they pay such confiscatory taxation, to maintain a Constitution and an economic system which give them no property in their own country, would be wholly injurious. The use of tobacco and spirituous liquors might probably be reduced to some extent to the physical advantage of the abstainers. But let us suppose that the consumption is curtailed by no more than a half on these two items alone. The Chancellor of the Exchequer of the day would then be compelled, in order to make up the deficit of not less than 30,000,000 thus caused in his annual Budget, either to push still further his demand for income-tax and death-duties from the well-to-do, or to attempt a direct deduction from wages to that amount, on the ground that his Budget had been ruined by the popular adoption of the thrift policy he preached. The alternative is not a pleasing one. And I still leave untouched the point that the voluntary surrender of small luxuries by the wage-earners might tend, in a strong competitive market, to lower their standard of life all round; as well as another consideration, which is of growing importance, namely that the workers, though they may benefit as individuals by saving, place themselves more and more at the disposal of their capitalist masters as a class. This is because these savings are used to strengthen the capitalists by loans from the banks in ordinary times; and are refused to the depositors – as has occurred in more than one instance – when they demand the repayment of their own money for extraordinary purposes such as strikes.

From all which it appears that the great thrift propaganda, if successful, will not, taken by itself, prove the unqualified boon to the country which its supporters imagine. Now I am as fully alive as any Cabinet Minister or Editor to the drawbacks of waste, and I know that this nation, rich and poor together, is wasteful. Waste, by whomsoever practised, involves injury to all classes, and tends to engender inefficiency all round. But the truth remains that the economic effects of wholesale thrift will be so great and so complicated that its advocates ought at least to disclose some complete supplementary policy calculated to meet its obvious deficiencies.


No policy will in any way tend to lessen the dangerous economic effect of spending 3,000,000 a day upon war, unless it is based upon increased production within the United Kingdom. All the thrift possible will not avert the dangers ahead of us during the War, and the even greater dangers which may accompany peace. Nothing but organised and improved production will help us. Delay in this direction is in the highest degree hazardous. Action should be taken at once, not merely to meet emergencies for the coming two or three years, but as a portion of a complete scheme of national reorganisation, to be carried out steadily and usefully by the rising generation, in the interest of the whole people, when permanent peace is secured.

We cannot reason, without many provisos and modifications, from what was achieved by a small, and in the main agricultural, people, at a period of national crisis, to what may be successfully done by a great industrial country, whose population is mainly divorced from the soil. But the problem which did not stagger the statesmen of little Denmark, when she found herself in an almost hopeless position fifty years ago, ought not to daunt our own men of affairs, now that they, too, have to face on a much larger scale, and amid much wider complications, similar difficulties in Great Britain.

Denmark, robbed of Schleswig-Holstein, with the costs of an unsuccessful war weighing heavily upon her diminished resources, was compelled to look at home for the means of building up afresh the well-being of her people. There was but one way to do this for the general advantage. More wealth must be produced, even from inferior soils, and the Government must use its best endeavours to aid the cultivators in their struggle to keep themselves and their families on a good standard of life, by providing for their own needs and leaving sufficient margin for export. To this must be added a thoroughly good system of education, so that the agriculturists might comprehend, and take advantage of, the organisation and improvements which the State placed at their disposal. So the Danes decided. It was no easy task. The system of cultivation and ownership adopted may even be regarded as reactionary, from the point of view of nations who have attained to a higher stage of economic development. But the main thing is that the combination of heavy labour on the soil, careful education of adults as well as children, judicious financial assistance from the State, and scientific aid by experts, appointed and paid by the community, have brought about the result aimed at. The people as a whole are well-to-do and intelligent; the farms are, speaking generally, well tilled and profitable; the national credit is maintained at a high level; the exports of farm-produce to Great Britain alone amount to many millions sterling; and the manufacturing industry has likewise extended. Denmark to-day is a prosperous and contented State, whose Social-Democracy is gaining ground peacefully and thoroughly; though exposed, there as elsewhere, to persecution by officials who cannot recognise that even their own successful co-operative State agencies are inevitably tending towards a more complete co-ordination of effort in production and distribution.

Happily, we have not been beaten in war as Denmark was, nor have Kent, Sussex, and one-fifth, of our island been annexed by Prussia as the reward of the conqueror. But, even so far, the losses which we know we must sustain, and the sacrifices which we are well aware we must make, in order to ensure victory, may be put almost on the same level as those which Denmark had to undergo as the outcome of defeat. They must be compensated for on similar lines. Carelessness and apathy must be given up finally. The whole people must be educated and trained thoroughly both in mind and in body. Physical deterioration, the result of bad social conditions, must be regarded and dealt with as a national crime, to be removed by national effort. The organisation of agriculture and industry must be undertaken, not by irresponsible nominated and indifferent bureaucrats, but by capable, thoroughly trained enthusiasts for progress, well versed in farming and industry, elected by the people themselves. We have refused for many a long year to organise for resistance in war, though persistently threatened with attack. Now we have to pay dearly for our neglect. We have likewise refused to organise for production in peace, though also threatened with world-wide competition from the same quarter. Now we are paying for that too. High time therefore that the nation as a whole should rise above the Caucuses and Coalitions of the politicians who have landed us unprepared in our present stupendous and costly struggle, and take order with its own affairs in the interest of every man, woman, and child of our population.

It is a remarkable fact that, though the Government has assumed control of the railways and guaranteed the shareholders’ dividends, has commandeered thousands of tons of shipping, and is proceeding, under the War Munitions and Registration Acts, to deal collectively with national manufacture and industry generally, no step whatever has been taken to handle agriculture, which after all is the greatest national business. Nobody can deny the importance of making ready in every way possible to carry the War quickly through to a successful issue. The people have shown no disposition to shirk their responsibility in that respect. Neither can anyone who knows the truth dispute that a complete change in our methods of manufacture, taxation, transport, and organisation is indispensable if we are to hold our own at all with German competition after the War. Our shortcomings in many directions are too notorious to be concealed and will take some time to remedy.

But the position of agriculture is such that improvements might be introduced at once, which would vastly increase home production and lessen the drain for payment on account of the importation of absolutely necessary foodstuffs, which is one of the most threatening features of our present financial situation. Moreover, extension of cultivation is imperative in order to enable us to keep down prices, which have risen to an appalling height. What is the use of preaching thrift, thrift, thrift to wage-earners when, according to the Board of Trade figures, food-necessaries alone for a wage-earning family – and there is no ‘luxury’ in the list – which cost 25s. a week in July 1914, could not be bought from the great working-class Co-operative Stores for less than 33s. 6d. this July. Here is a rise of not less than 33 per cent. in less than a year. Compulsory thrift for the benefit of individual profit-makers, mostly foreigners!

So manifest was the necessity for immediate action on the part of the Government, to restrict prices and extend cultivation, that very shortly after the outbreak of the War the National Workers’ (War Emergency) Committee, representing 4,500,000 of the workers, most of them heads of families, or not fewer than 18,000,000 people in all, made earnest representations to the late Ministry on the subject. Wheat was then selling at from 35s. to 40s. a quarter and bread at about 6d. the 4-lb. loaf. The proposals were that the Government should at once commandeer the whole of the wheat in this island, amounting to 7,500,000 quarters, at current prices, and purchase largely in Canada, the United States, and elsewhere at the same rates, to such an amount as would place the country outside of the risk of any heavy rise in price whatever. We were laughed at as Utopians, and were told that we were striving simultaneously to capture the moon and to organise the millennium. Supply and Demand ruled the roost. Since then the Government itself has gone out on the ‘mad’ quest it then jeered at, and at this moment holds very heavy stocks of wheat, meat, etc., in order ‘to prevent panic,’ should the improved German submarines sink a considerable number of our food ships on the main trade routes!

I cite these facts now because, at the same time when these proposals were made and rejected, the National Workers’ Committee made other suggestions of an even more important character, to ensure a much larger acreage being placed under arable cultivation for this year’s harvest, when the need would be most pressing. They suggested that the Government should guarantee to all farmers who would grow wheat for the national consumption a price not lower than 40s. a quarter. That did not involve any interference with, or improvement of, existing agricultural conditions. But, coupled with a reasonable payment to the farmers for storage, it would unquestionably have greatly encouraged the provision of home supplies. It would also have enabled the Government to control prices. Needless to say, the idea was scouted by the same official wiseacres who derided the commandeering of wheat. And now Sir Harry Verney himself tells us the increase of cultivated area for the year does not exceed five per cent. To-day, nearly a year later, I believe some steps are at last about to be considered in the direction we indicated!

But these are, of course, only temporary measures. When dealing with such a vast problem as the reconstitution of what is still our greatest single national industry, agriculture, a much wider view must be taken. One of the very few good effects of the War is that essential measures, which would have been resisted as in the highest degree unconstitutional and subversionary a year ago, could be carried, if shown to be necessary, with little difficulty at the present time. The recognition of the supreme rights of the nation over individuals and classes cannot any longer be confined to its control over the wage-earning class. The possessing classes must be brought under the same regimen.

Unfortunately, our land system, like our political forms, is at least four full generations behind our economic development. Obstruction of the most stolid kind meets the conservative reformer at every step. The reconstitution of peasant proprietary or small leased holdings are the most advanced proposals. Both are strongly reactionary in their tendency under present conditions, and doomed to economic disaster in their practical working. No effort has been made to deal with the whole question as a great national problem. Private ownership is still sacred, individual profit is still the basis of production, collective or socialist organisation is still ignored by the bureaucrats in authority. We have already been forced, as a nation, to recognise that the old happy-go-lucky, laissez-faire system has completely broken down in the industrial domain, and our banks have only been saved from wholesale bankruptcy by Government intervention. Now that Free Trade has not prevented a rise of 50 per cent. in bread and as much in other necessaries, we may perhaps learn that temporary cheapness is not everything in the national economy, and that home production in agriculture cannot be safely disregarded.

Two great obstacles must be overcome before the community at large can deal with the national land in such wise as largely and advantageously to reduce our dependence on foreign sources of supply not only for wheat and meat but for butter, cheese, eggs, fruit, vegetables, and other eatables which can be beneficially produced at home. The first is the ownership of land in its present belated shape. The second is transport. To deal adequately with the landowners (and mine-owners) of Great Britain such a crisis as we are now passing through was needed to bring home to the people the exigencies of the case. Rents and royalties have no greater security against public demand than any other form of private property which stands in the way of the national interest. Temporary suggestions for the increase of production in war ought to lead to a thorough reorganisation capable of meeting the terrible situation in which we shall find ourselves at its close. We have already been taught that mere cheapness is not the final word in national well-being, that to permit a foreign country to possess the monopoly of an essential of industry, as with dyes, is not a far-sighted policy, and that the State may be called upon quite unprepared to assume suddenly functions which had before been left to individuals and companies. If advances from public funds, the support of public credit, and legalised delay in payment of rates, debts, and interest have been found essential in more directions than is yet commonly known, we may yet be able to induce the Government not only to inculcate personal thrift (the proceeds of which must remain in private hands, and may or may not be used to enhance home production), but also to decide that a more excellent way may be found by using the national resources for the purpose of enhancing that home production, which many hold to be the only possible solution of coming difficulties.

And it so happens that the second great national obstacle to the development of our agriculture can now be removed by, the Government itself. Some are clamouring for protection of home industries, in order to meet the organised competition at ruinously low prices which we may have to face later. But we must remember, before adopting any such methods, that our internal transport calls for immediate reform. Our present railway system is the most terrible example of the protection of the foreigner against the home producer, alike in agriculture and manufacture, that the world has ever seen. Elsewhere it is well understood that, in both departments of national industry, high freights are a curse to a country and hinder production to a far greater extent than mere statistics give any idea of. If the cost of carriage were systematically reduced in Great Britain, the reduction being partly met by an improvement in haulage methods on the railways, and by the organisation of motor traction, a more important step would be taken towards coping with the overwhelming financial liabilities which await us than anything yet suggested.

But the main thing is to make a beginning in our endeavour to enhance our own production. Though at the present moment we are suffering from a shortage of labour in some directions, precisely the contrary will be the case within a year or eighteen months. Then the difficulty will be to find good employment at remunerative wages – our millions of soldiers will have learnt their value in war – for men whose places have been to a large extent filled by the labour of women whom it will be no easy matter to discharge. Mere thrift will not solve that problem. Registration of capacity to produce and markets for products when produced are as essential as registration of persons.

The great Co-operative Societies, which are naturally resentful of Government interference and are dead against any political meddling, could, nevertheless, be of great use in helping forward a national reorganisation, if appealed to on the right lines. These vast self-supporting, self-organised, and self-controlled associations have 11,000,000 customers, or one quarter of the entire population of the United Kingdom. They have done a very great deal to steady prices and to restrict anything like panic in the critical months we have already passed through. I have reason to believe that their leaders and managers would be glad to aid in the future, provided nothing were done to change the basis of their work. Here, it seems to me, is a market to begin with for home produce, ready to hand, which might most advantageously be extended; if only our rulers, who have been given practically despotic authority over us, would clear their minds of the old anarchical political economy and regard the problem to be dealt with from the point of view of the well-being of the entire community.