My Life

My Life - Oswald Mosleyproblem, and the same problem in other countries will not be settled until Europe is ascomplete a community as the component countries are today. It will not then be aquestion of Britain having an adverse balance of payments and France and Germanyhaving a surplus, or vice versa, but only a question of whether a firm in Manchestercan or cannot compete successfully with a similar firm in Lyons or Hamburg. Weshall no more have balance of payments problems within Europe than we havebalance of payments problems between Yorkshire and Lancashire today. A commoncurrency will follow naturally from any such arrangement. Until Europe is thusintegrated it will be found that these problems are insoluble and will cause continuallyincreasing friction until we end in a major crisis.The bankers' dream is of course theoretically possible with all countries accepting thedictatorship of international finance to keep their trade in near balance, and withtemporary deficits serviced by the banks until the correction of compulsory deflationhas worked. In what the bankers conceive to be an entirely rational world, the carrotof loan and the stick of credit restriction would keep all trotting together in a fashionboth orderly and profitable. The trouble is that the world is not rational in this way,less so than ever today. The completion of western industrialisation and the desire ofother countries to imitate the process both in its successes and failures, thedevelopment of science with its enormous productive potential, and the desire ofeveryone to play the big frog in the puddle at the same time, has shattered any hopesof a return to the nineteenth-century bankers' system. It rested on the basis of povertyeconomics, which were easy to control, but are in extreme contrast to the plentyeconomics of today, which already suggest to industrialist and worker that they can befree of bankers' control in a producers' system. Bankers will eventually discover theirtwentieth-century role in the profitable organisation of the vast new enterprises of ascientific, producers' system. In the meantime, so far from solving the balance ofpayments problems for every country at the same time, the bankers have failed evento agree on a plan to secure international liquidity which is primarily their concern;several different solutions are available, but the will has been lacking to agree on anydurable policy.The matter of international liquidity and related issues, now so laboriously debated,will in the long term be found irrelevant to the fundamental question. It is highlydesirable that solutions to these difficulties should be found, but the effect of successwould be transient if the deeper problems are not faced. Roosevelt in the thirtiestemporarily solved the liquidity problem by doubling the price of gold, but the effectswere exhausted within three to four years for exactly the same reasons as are stilloperative.Sir Stafford Cripps temporarily solved the British balance of payments problem in1949 by a devaluation of 30 per cent, followed by the austerity of credit restrictions toprevent or rather retard a commensurate rise in internal prices, but in due course theproblem returned in a form aggravated by a drug which was no remedy; it will returnyet more speedily after the devaluation of 14 per cent in 1967. There are certainfundamental questions to which I have long drawn attention which will return in amore acute form than ever when the artificial effects of war and armament booms areeliminated or even reduced. Before we approach these larger questions and thesolutions I have proposed, it may be well briefly to consider the policies by whichEurope is now aggravating problems which are already difficult enough.403 of 424