The Economic Crisis

Extract

The economic crisis with which Britain is faced today has very little to do either with Tory Misrule before the war or with Socialist Mismanagement since. It is to some extent due to the loss of most of our overseas investments during the war; but it is mainly due to the fact that we are finding it more and more difficult to export our manufactures in exchange for food and raw materials. More than a hundred years ago Disraeli declared that ‘the continent will not suffer England to become the workshop of the world’, and he was right in spite of the fact that during the latter part of the nineteenth century we grew wealthy by exporting our manufactures in exchange for cheap food. The situation today is very different. The rest of the world is becoming more and more industrialised and the world is short of food. The ruthless exploitation of virgin forests and farmlands has resulted in erosion in five continents so that yields are going down and land is passing out of cultivation. At the same time populations are increasing and there is somewhat greater equality of income so that the effective demand for food is increasing. The result is that the terms of trade are moving against us. We are having and shall have to pay more in manufactures for what food we cannot produce at home and for the raw materials we need to keep our factories going.