The Great Defect In British Economy

Chronicle (Levin), 12 July 1949, Page 5

The Great Defect In British Economy

ii LONDON, July 11. Discussing Sir Stafford Cripps' statement on gold and dollar reserves, The Bcononiist says: "If there is ohe thing eertain" in a medley of uncertainties, it is that the economic policy pursued hitherto by the Government, has reached a full stop. It is lack of confidence which makes this particular crisis difficult to deal with. It cannot be put right by further applications of existing policies because it is these existing •, policies theipselves which give rise to ihe distrust. At home, as well as ahroad, public opinion has come to the helief that the present policies of the British Government will not work. - Whether they are socially desirable or not is therefore unfortunately beside the point. The crisis will go on until something that' will work is put in their place. ' ' ' ' The great defect in British economy

now bemg revealed, is not that British productivity is lagging but that the British people are exacting too high a remuneration for their production. It is important to realise that this is due % not to foreigners stealing a march upon * Britain but t o the facf that Britain costs of production are too high nor only for the-dollar market or for overseas markets in general, but for the . British market as well. Until this is" put right, no amount of juggling witn prices and exchange rates will enable the British people to earn a good living as they did prewar. If the British people cannot afford to buy their own .goods, how can they expect foreigners to do so? "Though a further dose of austerirj undoubtedly is eiuiellyjiecessary, it must be realised that the British people are immensely weary of austerity and that it is very doubtful if they will continue to accept it unless they can be assured that it forms part of a fresh policy which- has a real hope o± working. "Basically what is at fault is not Labour Government policy but the nationai attitude of mind which, for the past two decades, has been spending the. fruits of production before they are earned, acting as though the world had the obligation to keep Britain, ana starving the production machine that alone can support the country. This attitude of mind would have pushed any Government that had been m power, . into similar courses of action and in the construction of this attituae of mind the Tories'bear fully as heavy a responsibility as the Socialists. The British people 's only hope of becoming solvent is to give unmistakable prooi that they are determined to put themselves back into the position where they can support themselves in a competitive "world, be the cost to them in abandonment of cherished illusions, what it may. Oahinet must find courage to be patriots, to admit the inteilectual error, and to judge all future policies by the only real test — whether they reduce the costs of production."