My Life

My Life - Oswald MosleyBevan's speech about 'the commanding heights of economic power', regarded by theLabour Party as a brilliant flash of insight a generation after its first statement in theBirmingham proposals to which the party outside Birmingham had been altogetherblind. The third anticipated by twenty-four years the partial application of this policyby Sir Stafford Cripps and the Treasury in 1949— devaluation without a floatingexchange rate—which chiefly enabled the success of our export trade in the ensuingdecade; also by forty-two years the half-hearted attempt of another Labouradministration in 1967 to follow in Cripps's footsteps.These policies went beyond the concepts of Keynes, from whom I and others learntour basic economics. It was in this period that I first put the question: Is Keynesenough? My answer was, no: it was necessary to do more. The present epoch hasalready seen the doctrine of Keynes fully implemented, and before long we shall seethe decision between these two opinions in the coming economic situation. Thedifference between us in the sphere of monetary policy at that time was stated in myspeech on the Birmingham proposals as follows: 'These facts of our recent experienceare recognised by modern monetary reformers.... They join with us in deprecating anyfall in the general price-level, and aim, as we do, at stability of prices. Here arises thefirst difference between modern but non-socialist economists and the Birminghamproposals. At this point we carry modern monetary theory through a further stage towhat I claim is its logical conclusion. . . . They say they will give extra purchasingpower without recourse to the fatal expedient of the fall in the price-level byexpanding credit as and when more goods are produced. Mr. Brand, the well-knownbanker and economist, said, in the course of our recent controversy in The Times: "Asthe general wealth of the community increases, its purchasing power, represented bycurrency and bank deposits, will, under a proper currency system, be allowed toincrease correspondingly in order to avoid falling prices".'When the goods are produced he is prepared to supply more money to buy them, andconsequently no fall in the price-level will result unless the generally acceptedquantity theory of money be refuted. But we reply that the goods will not be producedunless manufacturers see markets ready to absorb them. Unemployment haunts usbecause industry will not produce without markets. Demand must precede supply.Our monetary reformers put the cart before the horse when they say that goods mustbe produced before the purchasing power to buy them has been created. Themodernised bankers like Mr. Brand say to industry, in effect, "Produce more goodsand then we will expand credit". Industry says to the bankers, "Show us first a marketand then we will produce the goods." . . .'We part company definitely with these monetary reformers when we advocate thatState banks should give a clear lead by the bold and vigorous use of the national credit.We propose first to expand credit in order to create demand. That new and greaterdemand must, of course, be met by a new and greater supply of goods. Here oursocialist planning must enter in. We must see that more goods are forthcoming tomeet the new demand. If, by socialist planning, we can ensure a greater supply ofgoods corresponding to the greater supply of money, inflation and price rise cannotresult. On the other hand, the new demand will have mobilised the service of men andmachines now idle in the production of urgently wanted commodities. . . .'The first essential of any successful socialist planning is to see that the new money151 of 424