Industrial Future of England
QUALITY PRODUCTS AND CONFIDENCE IN FINANCIAL INSTITUTIONS
By BRENDAN BRACKEN, British Minister of Information
Delivered before the Royal Empire Society, London, England, February 21, 1945
Vital Speeches of the Day, Vol. XI, pp. 414-416.
SOME industrialists, economists and bankers in various parts of the world are fearful of Britain's economic and financial future. They say that in waging war we have been prodigal of our resources. Gone are the best of our foreign investments. Our debts are astronomical. The inevitable increase in all costs, caused by war, must accentuate the decline of our basic industries and further handicap our export trade. The strength of the City of London is passing away. Britain's economic future is bleak.
It is not easy to argue with pessimists. One can only disbelieve them. No one with any knowledge of our war effort can doubt our financial sacrifices are staggering. They are surely sufficient to discourage easy optimism. But it is interesting and instructive to recall that many able men who were pessimistic about Britain's future have been proven wrong by the march of events.
Let me recall some prophecies of the last century. Said William Pitt: "There is nothing around us but ruin and despair." Despite his sizable fortune, William Wilberforce declared: "I dare not marry: the future is so dark and unsettled." Wilberforce repented, and bred a family of eminent well-fed ecclesiastics. The brave heart of the Duke of Wellington failed him when he thanked God "he had been spared from seeing the end of the ruin that is gathering around us."
Prophesying woe has often been a national pastime for Britons. We should be unwise to encourage it in the strenuous days which lie ahead of us. It is a pleasure to be postponed until we have restored the ravages of warfare.
I think no harm can be done by answering some of the prophets who say Britain has seen her best days. Let me begin by dealing with the doubters of our industrial future.
There is a widespread belief that British industry and trade stagnated between 1923 and 1937. The truth is that total employment in industry and trade increased by not less than 25 per cent between the two wars.
A lot of energy is wasted in groaning over the state of our "basic" industries. History shows that our "basic industries often shift. Two centuries ago the woolen industry was our prime basic industry. It was also the spoilt child of Parliament. Innumerable acts were passed to protect it from foreign competition. Our legislature believed that if they could prevent the export of British wool, foreigners must buy English cloth. If it was harmful that a bale of English wool be sent abroad, how terrible was the danger of foreigners getting hold of live British sheep.
Parliament tried to meet this danger by making it an offense to shear sheep within five miles of the coast.
Alas, our legislators labored vainly. Foreigners were able to compete successfully with British cloth. And England was not ruined. Though the woolen industry lost its primacy, more "basic" industries were born, and they in turn have seen their position challenged by upstart industries.
Some of the great basic industries of the future may be starting in the laboratories today, in the long run, there can be nothing basic in British industry save the brains, skill, energy, thrift and enterprise,of the British people.
Our economy puzzles foreigners. They find it hard to understand how a population of 47 millions can live well in a small island whose natural resources are trivial by comparison with sub-continents like the U. S. A. and the U. S. S. R. Superficial observers believe that we have been living on the fat stored up by our Victorian forebears. They hold that industries such as coal, iron, steel and cotton, which gave Britain such a flying start in the years of the Industrial Revolution, are sadly shrinking.
What is the answer to the self-appointed coroners of British prosperity? Let us examine their doubts about the future of our coal industry. It is true our coal deposits are trifling in comparison with those in the U. S, A. and the U. S. S. R. It is also true that between the wars coal production shrank, and employment declined by more than one-third. But does any considering person believe our coal deposits are sufficient to provide a perpetual supply of power to British industry?
The industrialist of the 21st century will marvel at our wasteful use of coal. He will treat it as a capital asset, and profit greatly by its valuable by-products, many of which are now wasted. His main industrial power will come from the efforts of chemists and scientists.
There is nothing fantastic in this forecast. Before the war we showed laziness of imagination. Scientists have already shown us how swiftly substitutes can be found for a basic industry created by the development of great natural resources. In 1910, Chile supplied 64 per cent of the world nitrate output. In the following year, a chemist discovered how to take nitrate out of the air. In 1938, Chile's share of the world nitrate output was eight per cent. If this shows the power of scientists to create new industries, it also shows the folly of overestimating our dependence on "basic" industries.
Doubters of Britain's future have been so busy analyzing the advantages we have lost since the end of the Industrial Revolution of the 19th century that they have not noticed another industrial revolution is with us. If we are sufficiently enterprising and energetic in managing our affairs, we will derive as many benefits from the new as we received from the old. And it is the essence of the new industrial revolution that it can have no place for the sweated labor and other social evils which disfigured the expansion of industry in the 19th century.
The new industries which owe so much to chemists and scientists made remarkable progress before the war. I shall only mention a few of them.
The output of rayon yarn rose from 46,992,000 pounds in 1930 to 116,000,000 pounds in 1939. The output of staple fiber in the same period increased from 1,782,000 pounds to 60,000,000 pounds. At the end of 1923 the number of wireless sets was 600,000, and is now 10,000,000. The output of synthetic and organic dyestuffs increased from over 23,000,000 pounds in 1922 to over 60,000,000 pounds in 1937.
A few years ago, plastics was regarded as a gadget industry. It now employs about 100,000 workers and uses annually 4,000,000 tons of raw materials derived from the coal and gas industries alone. This infant may alter the future of many industries and become a vast earner. There are great possibilities in developments in the use of power alcohol. Food processing is an industry of unlimited possibilities.
These are but a few examples of the alliance between industrialists, scientists and chemists. If research, risk-taking and enterprise are not discouraged, there is no reason for pessimism about the future of British industry.
Having said a good deal about the importance of research, I should like to say something about risk-taking, which is at least as important. In any economy such as ours, it is dangerous not to take risks. If our industry became static, much unemployment and its consequent miseries would come upon us. And so we must always experiment with new processes. We must be prepared to give wide liberty and much financial encouragement to industrial designers. We must be forward to expand sales everywhere. We must be ruthless in scrapping plant and equipment if better machines and tools are developed.
In modern industry, the good-enough is always the enemy of the best. And in our industrial equipment we can only afford the best. For having a few raw materials, we must live by sound and attractive manufactures, by an infinite variety of products, by greatly improving our methods of selling abroad and, above all, by pulling down prices to encourage popular spending.
Low prices are an encourager and not an enemy of full and well-paid employment. If, through the best of industrial equipment, one man can do the work of two, the country will be twice as rich. And so we can steadily improve the standard of living in Britain. To do this we must keep an ever-watchful eye on the people who believe that there can be a curse of plenty. These restrictionists are to be found among unenterprising leaders of employers and employees. Timidity makes them lay their hands on the brake. They see salvation in an eternity of restrictions and controls. Britain's salvation can only be found in expansion and freedom.
The great lake of British industry and trade is fed by numerous small springs. Many of our smaller trades and industries have no superiors in any part of the world. In pre-war days they had faithful customers everywhere, who relished their quality. War scarcities and shoddy substitutes have whetted the appetites of those customers. Our smaller trades and industries have a great future. And if they will but follow the example of the ancient businesses, such as Wedgewood's, in steadily increasing the production of fine quality goods, they will increase the strength of our economy.
Before I turn to the problems of our financial future, I must say a few words about our shopkeepers, who may be called the "service" industry of Britain. Some of our cranky planners say they are parasites. What a trashy notion! I do not know whether the cranks believe that Napoleon was defeated by British shopkeepers. But they certainly want to make sure that Hitler defeats our shopkeepers. When peace comes, do we wish to lug our meat, groceries and vegetables from some distant depot? Won't one of the minor blessings of peace be the laundry which collects and delivers on time? Who wants to live forever on a standard dietary of utility foods or sleep in a utility bed or walk about in utility clothes.
The manifold services rendered by our shopkeepers are essential to the variety of the British way of life. Their existence is an advantage to the community in which they dwell. They are shrewd buyers and distributors of sound goods. They are a great barrier against the monopolists. And monopolists are mortal foes of progress. May shopkeepers prosper and may their numbers increase! Farms, professions and factories cannot employ everybody.
And now let me say something about those much abused institutions classified as the "City." I shall begin with our banks. Unless a country has a sound banking system, itsindustrialists and traders cannot hope for any long-term prosperity. During this century, a succession of bank failures has caused great business and personal disasters in America and Europe and many other parts of the world. No bank in Britain has failed in the present century and long before it began.
We have taken too much for granted the merits of our banking system. How greatly it is envied by foreigners. The opportunities and profits gained for Britain by our banks and merchants' institutions like Llyod's and our insurance companies can hardly be computed. The pre-war invisible "export" value of the City was not less than £30,000,000 a year.
The City is not infallible. Indeed it must sometimes make losses if it is to do its job. Some of its smaller houses have erred in their foreign lending policies. Some of our governments have made much worse errors in lending. If the machinery of the Stock Exchange for dealing with sharks and super-optimists, who appear and disappear with a bonus, was inadequate before the war, it is so elaborate today that it may occasionally deter some honest and wise enterprisers.The City of London contains the best and most flexible financial machinery in the world. It is a vital asset to every thrifty citizen and an indispensable piece of machinery for every trader. It has representatives or correspondents in every part of the world who can help to obtain much business for our exporters.
It is said that the City can never again be the financial center of the world. Time only can prove the truth of such a prophecy.
War has narrowed some of the City's resources. But it has not harmed what is perhaps its greatest asset, although intangible: Confidence. This asset has been built up by generations of bankers and merchants whose reputation for wisdom and fair dealing has spread far and wide.
If confidence in London's financial institutions is the growth of many centuries, remember that it can be shattered in a day. I believe that in post-war days, confidence in the integrity and judgment of our bankers will bring much business to London. It is, therefore, unwise to declare that London will never again be the financial center of the world.
We hope that by hard work and enterprise, we shall be able to repair the ravages of war, maintain a high standard of living for our people and establish what is called a system of social security. But there can be no security, nor any high standard of living in this country without a sane currency policy. If we ever allow the people who govern us to return to the worship of the golden calf, or the people who would turn the pound sterling into confetti money to gain control of our affairs, we shall have neither the social security nor the decent standards of living.
The war has created enormous problems for Britain. Our astronomical overseas debts can only be liquidated by years of hard work, by showing the highest financial prudence in handling our affairs, and by creating the largest possible home and export trade. The British have always been ardent believers in what I might call the live and let live economy. We know that there can be no isles of prosperity in an ocean of economic misery—more than 2,000 years ago the Elder Cato gave this advice to the Roman agriculturists: "Always sell and never buy." It is incredible that the arrant nonsense contained in this remark is still fashionable in some parts of the world.
After the war our prime purpose must be to assist in the expansion of trade everywhere. Two centuries ago, the world was haunted by the fear of starvation. Between wars many nations were plunged into chaos by the abundance of food and other good things of life. What a commentary on the intelligence of this generation! Perhaps this war has shown us the depth of our past follies.
Some foolish advocates of class warfare would have us believe that the history of British trade is a record of greed, ruthlessness and selfishness. Nothing could be more untrue. There is a spirit of British trading which has never been dominated by gain. Trading is the most fascinating of all occupations. It requires daring, intelligence and ceaseless energy. Men take pride in building up a business, be it big or small. After all, it is a large part of their life's work and their contribution to their country's welfare. The wonderful expansion of Britain was largely due to her roving active traders.
England's future prospects depend upon a great increase in trade. Let us, therefore, do nothing to discourage the spirit of trading which helped make us great and let us also remember that if enterprise is chained, our trade must stagnate. If that should happen, hundreds of thousands of skilled workers will hear the worst sentence in the English language: "There is no work for you." Never let it be forgotten that in our economy, wastage of labor is the worst of waste.
War never left a nation where it found it. We have the best reasons for knowing the truth of this statement. The war has consumed much of Britain's accumulated wealth, We have become a debtor nation. Our burdens look very heavy. The war has also dislocated our home and foreign markets and we have a tremendous job of reconstruction to do.
Surely, we, who by our faith and courage in the darkest year of human history, saved the world, will, by our courage, brains and skill, restore the prosperity of Britain and play our part with other nations in securing victory over poverty. That is our duty and opportunity.