122 SECTIONAL ADDRESSES 



particular type of industry, major or minor, new or old, that they are due 

 neither to the special prosperity in the Far East (or West) nor to the 

 chaos in Europe which is passed, neither to inflation nor to deflation, 

 that our successful competitors are drawn from all quarters of the globe 

 and have pursued currency policies wholly dissimilar. Disorder and 

 prosperity, depreciating and appreciating exchanges, tariffs, and dumping, 

 subsidies and prohibitions may all in fact have proved damaging ; but 

 there must surely have been some special reason connected with our 

 internal economy which rendered them more disastrous to the United 

 Kingdom than to other countries. But this view is too rarely expressed.' ^ 



The basis of this statement is the examination of international trade 

 statistics from 1924 to 1929, which indicates that in a period of general 

 prosperity, Britain's rate of advance was relatively much slower than that 

 of any other important trading country. It is not so much the depression 

 of the depressed industries as the failure of the new industries to grow 

 adequately which Loveday deems serious. The trade of the world had 

 increased but Britain's share had diminished. Mr. Loveday goes on to 

 suggest that the Rueff ^ diagram, showing the numbers of unemployed 

 and their relation to the ratio between wholesale prices and wages, leads 

 one to think that a lack of adjustment of wages to prices is a serious cause 

 of disequilibrium. This evidence seems hardly adequate as an analysis 

 of labour costs ; Mr. Cole ^ has worked over wages rates in different 

 countries without finding that British wage levels had gone notably out 

 of line with those of other industrial countries; and the question of labour 

 costs raises broad issues of technical efficiency in industry. As the 

 Macmillan Committee ® have pointed out, several of our important 

 industries are not among those which have been showing, of late years, 

 the most rapid technical advance ; they state that ' in 1929 our exports 

 of manufactured goods, though declining, were still greater than those of 

 any other country in the world. At the same time our real wages, whilst 

 comparing unfavourably with those in the United States (which country, 

 however, is unable to compete with us in world markets in our principal 

 staple exports such as coal or textiles and many iron and' steel products), 

 were much higher than those paid by any of our chief European com- 

 petitors.' The maintenance of so great an export trade makes it unlikely 

 that British technical efficiency is much behind that of her chief com- 

 petitors. On the other hand, they blamed the return of sterling to pre-war 

 parity in 1925 as a cause of the difficulties in export, while indicating that 

 the organisation of British industry as distinct from its technique was 

 often defective, and that we had been slow in applying ourselves on an 

 adequate scale to certain of the newer industries. 



Those who offer the above explanation of the export trade difficulties 

 arrive, therefore, at the conclusion that it is the relatively high costs of 

 certain British industries which have weakened their hold on old markets, 

 and that the remedy is to reorganise output and reduce cost until it 



^ Loveday, Britain and World Trade, pp. 170 -171. 193 1. 



* Jacques Rueff, Les Variations du Chumage en Angleterre. 1925. 

 ^ G. D. H. Cole, British Trade and Industry. 1932. 



* Report of Committee on Finance and Industry, p. 53. 1931. 



