The Weekly Review - A Novice and the New Economics
by S. Sagar
A correspondent asks me when I am going to enlarge on the sentence with which I closed a recent article, a sentence expressing doubt about the remedy of the Credit Reformers.
As a matter of fact, I had not meant to enlarge upon it. I regard the subject much, as I regard the game of chess, that is, I find it fascinating, but I have always been too busy (or too lazy) to give it that close attention which I feel it requires. Hence my doubt is instinctive rather than informed; the doubt of the ordinary man to a new, wonderful, cure-all drug, or universal Morrison’s Pill. Not that the best of the Credit Reformers make any such claim for their remedy, but the best of them will, if they reflect, admit there is a suggestion of this about it. It seems so simple, and alas, our affairs are so involved! However, there are so many excellent men among the Credit Reformers with whose general outlook I agree, and, when you go into it at little, the thing is so very far from simple, that anything I write at the moment should be regarded not so much a criticism as a groping for a better understanding.
There are many phases of the subject, and some advocates stress one and some another, but I think all of them will agree that the movement had its origin in that age-old problem, which may be briefly described as “starvation in the midst of plenty.” I want to emphasize the fact that it is an old problem, because many of our contemporaries talk as if it were a new bone, the product of the development of mass production and so on, since the last war. But men who talk like this are forgetting the past. This problem has been an outstanding one since the dawn of the Industrial Revolution. The able champions of Credit Reform certainly make our present day economy look ridiculous, but none of them comes within miles of Carlyle and his savage irony about numberless bare-backs alongside a disastrous over-production of shirts. The Industrial Revolution may have produced the goods, but it has not yet delivered the goods. Hitherto, the machine has either been jammed or racing, and even when it has been racing it has not benefited the great majority of men. The truth is that the wealth produced by the Industrial Revolution has always been, and still is, an enchanted wealth. It would be hard to say what society or class of men has yet been able to lay hands on it. What good habits or sturdy virtues has it developed? Where are the men, where is the class of men, whom it has made more happy or more wise or more dignified?
The problem, then, is an old one. Neither have varied remedies been wanting. The magicians of the Manchester School said the password was “patience.” If men would only wait the enchanted wealth would, by its own weight, eventually burst the castle walls, and pour out and bring its blessings to the humblest in the most remote corner of the landscape. Unfortunately, men got tired of waiting. Then the Socialist came forward with quite another password, “the State.” The State was the only power that could break the spell; let the State come along and take control and dole out the wealth and then it would be really wealth. That, too, is a password which is waxing somewhat faint in our admiration. Experiments in State control do not seem to have made the wealth any more accessible. Moreover, men are becoming to have a dark suspicion about the Socialist concerning the matter of freedom. Will he lead us to the enchanted wealth and then stealthily lock us in the enchanted castle? Anyhow, the problem remains.
I knew an old lady who, after the introduction of paper money, could never understand why men made such fuss about the problem of poverty. The solution seemed to her to be elementary. When she read about the tragedy of unemployment she would say, “What does it matter whether they’re employed or not (she did not survive to the Beveridge Age)—what does it matter if they have money? And why can’t the Government print a few more notes and give them some?” I did try to explain to her why it would not do, and, lo! I had hardly finished my explanation, when I turned to find the Credit Reformer at my elbow saying it was exactly what was needed.
I trust the Credit Reformer will forgive me the pleasantry. There is, of course, a lot more in his case than that. His explanation of the way in which money has been exalted, from its proper use as a medium to facilitate the exchange of commodities, to its present dominating control over the production, distribution and exchange of those commodities, is valuable, and, so far as I have seen, unanswerable. I think that the root cause of this evil exaltation is that too small a proportion of men have any direct control over the production of commodities. But I am here not discussing my own solution but the Credit Reformer’s, or rather, considering how his can be related to mine, and I repeat there is a lot more in it than merely printing more paper money. In fact, there is so much in it that you are apt to get tangled in details of producer-credit, consumer-credit, equating effective demand with supply, and so on, but I think it is fair to say that their password is “more token money.”
And it is here I come to my difficulties.
A correspondent asks me when I am going to enlarge on the sentence with which I closed a recent article, a sentence expressing doubt about the remedy of the Credit Reformers.
As a matter of fact, I had not meant to enlarge upon it. I regard the subject much, as I regard the game of chess, that is, I find it fascinating, but I have always been too busy (or too lazy) to give it that close attention which I feel it requires. Hence my doubt is instinctive rather than informed; the doubt of the ordinary man to a new, wonderful, cure-all drug, or universal Morrison’s Pill. Not that the best of the Credit Reformers make any such claim for their remedy, but the best of them will, if they reflect, admit there is a suggestion of this about it. It seems so simple, and alas, our affairs are so involved! However, there are so many excellent men among the Credit Reformers with whose general outlook I agree, and, when you go into it at little, the thing is so very far from simple, that anything I write at the moment should be regarded not so much a criticism as a groping for a better understanding.
There are many phases of the subject, and some advocates stress one and some another, but I think all of them will agree that the movement had its origin in that age-old problem, which may be briefly described as “starvation in the midst of plenty.” I want to emphasize the fact that it is an old problem, because many of our contemporaries talk as if it were a new bone, the product of the development of mass production and so on, since the last war. But men who talk like this are forgetting the past. This problem has been an outstanding one since the dawn of the Industrial Revolution. The able champions of Credit Reform certainly make our present day economy look ridiculous, but none of them comes within miles of Carlyle and his savage irony about numberless bare-backs alongside a disastrous over-production of shirts. The Industrial Revolution may have produced the goods, but it has not yet delivered the goods. Hitherto, the machine has either been jammed or racing, and even when it has been racing it has not benefited the great majority of men. The truth is that the wealth produced by the Industrial Revolution has always been, and still is, an enchanted wealth. It would be hard to say what society or class of men has yet been able to lay hands on it. What good habits or sturdy virtues has it developed? Where are the men, where is the class of men, whom it has made more happy or more wise or more dignified?
The problem, then, is an old one. Neither have varied remedies been wanting. The magicians of the Manchester School said the password was “patience.” If men would only wait the enchanted wealth would, by its own weight, eventually burst the castle walls, and pour out and bring its blessings to the humblest in the most remote corner of the landscape. Unfortunately, men got tired of waiting. Then the Socialist came forward with quite another password, “the State.” The State was the only power that could break the spell; let the State come along and take control and dole out the wealth and then it would be really wealth. That, too, is a password which is waxing somewhat faint in our admiration. Experiments in State control do not seem to have made the wealth any more accessible. Moreover, men are becoming to have a dark suspicion about the Socialist concerning the matter of freedom. Will he lead us to the enchanted wealth and then stealthily lock us in the enchanted castle? Anyhow, the problem remains.
I knew an old lady who, after the introduction of paper money, could never understand why men made such fuss about the problem of poverty. The solution seemed to her to be elementary. When she read about the tragedy of unemployment she would say, “What does it matter whether they’re employed or not (she did not survive to the Beveridge Age)—what does it matter if they have money? And why can’t the Government print a few more notes and give them some?” I did try to explain to her why it would not do, and, lo! I had hardly finished my explanation, when I turned to find the Credit Reformer at my elbow saying it was exactly what was needed.
I trust the Credit Reformer will forgive me the pleasantry. There is, of course, a lot more in his case than that. His explanation of the way in which money has been exalted, from its proper use as a medium to facilitate the exchange of commodities, to its present dominating control over the production, distribution and exchange of those commodities, is valuable, and, so far as I have seen, unanswerable. I think that the root cause of this evil exaltation is that too small a proportion of men have any direct control over the production of commodities. But I am here not discussing my own solution but the Credit Reformer’s, or rather, considering how his can be related to mine, and I repeat there is a lot more in it than merely printing more paper money. In fact, there is so much in it that you are apt to get tangled in details of producer-credit, consumer-credit, equating effective demand with supply, and so on, but I think it is fair to say that their password is “more token money.”
And it is here I come to my difficulties.
