My Life

My Life - Oswald Mosleythey were an ingenious method for the management of an expansionary home marketin an island economy with the aid of a floating exchange rate, a possibility stillrelevant in 1968. They added to Labour policy the necessary ingredient of modernmonetary thinking—which was entirely lacking—and certain other devices whichwent beyond Keynes. But in this speech of 1930 I went further, and envisaged aneconomy insulated from the disruptive world forces; competition of cheap laboursupplied by finance with modern rationalised machinery, deliberate dumping belowproduction costs, price fluctuations and collapse of world markets; and also fromother countries' exchange manipulations to secure an artificial advantage for theirexports of which I had given warning long previously in parliamentary speeches.The insulation concept led inevitably to the idea first of an Empire and then of anEuropean economy which I developed later in full detail. Imperial socialism thengrew up and became adult in a greater sphere. The only possibility of making this ideaeffective was to develop an area large enough to be viable, containing its own marketand with access to sufficient raw materials and foodstuffs.Two experiences had intervened between the Birmingham proposals in April andAugust 1925 and my resignation speech in 1930: my American journey, and theinformation I obtained from the departments in my year of office. In America I hadseen the developing industrial processes already described. In the governmentdepartments I had been able to examine in practical detail the continually increasingdifficulties our export trades were encountering. Consequently, I had reached theconclusion that our traditional trading and financial system, resting on a large exportsurplus, could not continue indefinitely, and that the day would come when we wouldfind considerable difficulty in selling sufficient exports in open competition on worldmarkets even to pay for the essential foodstuffs and raw materials without which ourisland economy could not survive. In other words, our present balance of paymentsproblem was bound in the end to arise.The main theme which I stated in 1930 is now proved true, and is recognised in theattempts of all British parties to enter a larger and considerably insulated economicunit. Mr. Macmillan as Prime Minister stated when speaking in America on foreigntrade: 'Your trade is only 7 per cent of your gross national product, whereas ours is 32per cent of our comparable figures'. The implication of this speech, and of allsubsequent speeches and actions by responsible statesmen, is that this disproportioncould not indefinitely be maintained. The validity of my main theme is nowrecognised in all present policies, but was then rejected by all parties. They wereunited in the belief that we could only solve our problems by still further increasingour export trade to world markets. It is true that since then we have increased ourexports in absolute terms by means for which the country has no politicians to thank;but we have not solved our problem because our relative share of world trade hasprogressively declined to the point where we are confronted with recurrent balance ofpayments crises.Our absolute increase in export trade has been achieved by science and industrialtechnique alone. Only the remarkable diversification of our industries has saved us,and this has been entirely due to scientific discoveries and technologicaldevelopments. If we had been obliged to rely on the traditional trades of that periodwe should long since have been insolvent; for instance, the vast dimensions of our212 of 424