TTJJS T A B L E T , November lTth, 1951

THE TABLET A WEEKLY NEWSPAPER AND REVIEW

PRO ECCLESIA DEI, PRO REGE ET PATRIA

VOL. 198, No. 5817

FOUNDED IN 1840

LONDON, NOVEMBER 17th, 1951

N INEPENCE

PUBLISHED AS A NEWSPAPER

“THE LATENT POWER OF THIS CONFEDERACY”

How Asia and Africa can Follow America NATIONALISM IN THE SOVIET UNION A Change Since the October Revolution. By Victor S. Frank

THE POSITION OF CATHOLIC NURSES

Thoughts on a Present Controversy

FANATICISM IN EGYPT

A Campaign Against AH Christians

A PARIS LETTER

Problems of the Coming Winter

KOSSUTH IN ENGLAND

By Bela Menczer

EPISODE IN AREZZO

By W. A. Purdy

ON MARRIAGE AND CHILDBIRTH The Full Text of the Recent Papal Allocution : Continued

It is a most painful dilemma for any Government, and the election which has just taken place showed how very far the industrial electorate is from understanding the desperately difficult predicament into which the nation has been allowed and encouraged to drift. The Common Ground

THE BATTLE WITH INFLATION T HE essential difficulty facing the Government now is how to reduce the consumption of goods and services inside Great Britain by something like £500 millions a year. Everybody, on an average, must for a while consume about 5s. a week less, or £1 a household ; and, so seen, this should not be regarded as catastrophic or impossible. It is certainly not impossible. It is, on the contrary, certain to happen, if not by any policy of the Government, then by an increase of prices to the point at which a new equilibrium is established. Merely to cut imports, without reducing the internal spending power of the community, is to leave the same amount of money in competition for fewer goods. If internal prices are allowed to rise because of this pressure of money, the difficulties we are already experiencing in selling our exports will grow worse, because our internal costs will be higher—so much higher that we shall only be able to sell by further devaluing the pound, which means paying more again for essential food and essential raw materials.

The only small beginning which the Government has so far made in restricting and contracting money incomes has been to raise the bank rate by one half per cent. Under present conditions this is not likely to have any particular effect, except insofar as it is taken as a signal for a restriction of bank credit. Here the banks find themselves in an ambiguous position, when the Government tells them it pins all its hopes of getting the country out of its difficulties on policies of expansion. Many, if not most, of the people who come to the bank to borrow have a very good economic case. They want money, if not to improve, at any rate to preserve assets which it is nationally vital to preserve and improve. Landlords and farmers come wanting money to improve or preserve farm buildings, industrialists to make new ventures in new lines. The money pressure, in short, is a demand for things and labour, of neither of which we have enough ; and if money is granted for constructive and capital purposes that will improve wealth later on, the goods and services which are to be so employed have to be diverted from immediate consumption.

The great bulk of this consumption is consumption by the artisan population, who are not saving today, for small savings are not holding their own against withdrawals. They feel strongly that they have not got enough money to spend. Where they belong to strong trade unions they are thinking all the time in terms of obtaining increases which are wanted, not to save or invest, but to spend immediately in the shops.

The recent debates in the Commons have established a number of basic propositions, but no politicians have cared to draw conclusions from them. It is common ground that we must export to live, although it is less emphasized than it should be that while we import essentials we pay for them by cleverly exporting inessentials, things that, while they are not luxuries, are equally not necessaries of life. We have been exporting under boom conditions, to a world starved of goods and not particular about prices. It is also clear that any people which refuses to admit the exports of other countries must expect the same treatment, not from any spirit of retaliation, but simply because those who are not allowed to sell cannot then be asked to buy. The British Government’s action in abruptly banning imports to the value of £350 million, largely from Europe, must diminish the volume of international trade and contract the market for British exports. Mr. Thorneycroft frankly recognized this. The cuts are emergency first-aid, not a treatment for recovery. I t is also clear that the world into which we are passing is one in which other countries are also restricting credit in their home markets. Canadian restriction has already injured the sale of British cars. We are faced with stiffer competition, notably German and Japanese, and the signs are that the Japanese prices will be even further below our own than they were before the war.

That, broadly speaking, the ultimate employer of the British worker is a foreigner, outside the reach of British political action, is the most fundamental of all the facts governing what is and what is not possible in this island. Either the politicians or the harsh facts impressing themselves through inflation will in the end bring about an equation which will find a real price-level of exertion, skilled, semi-skilled and unskilled. It will be an equation which will yield appreciably less, in the way of the consumption of goods and services, for semi-skilled and unskilled physical exertion performed in this island than the mass of people have been encouraged to believe and hope and assume. It has been very easy for a long time to foster the comfortable and flattering idea that, merely by being born on this island and into this community, the