94 SECTIONAL ADDRESSES 
competitors in India and Japan ; and Irish Free State workers come to the 
Midlands for afew months’ training and return home to operate factories for 
hollow-ware, gloves, hosiery, and many other commodities in little centres 
selected at random which never before had an industry of any kind. When 
industries are thus set up in new environments adaptation of size of unit to 
the market for the product is possible to a greater degree than in older 
industrial areas ; for imports can be rationed or prohibited and the permitted 
extent of the industry strictly controlled by the government. It frequently 
happens, therefore, that such new concerns, unhampered by evil traditions 
of management or by restrictions imposed by labour, succeed in producing 
at reasonably low costs per unit within the closed national boundaries. 
Thus, the policy appears to be justified by its early results, although the 
situation of industries in isolation from the main centres of their activity is 
likely at a later stage to create difficulties not easy to surmount. But 
even if justification on purely economic considerations were not so easy 
to discover as it is, cogent reasons of a social or political nature can readily 
be offered for a policy of self-sufficiency in as many industries as possible. 
Diversification and actual increase, even if small, of employment may 
well be worth some sacrifice ; and in a world overwrought and nervous 
concerning armaments and the future of peace the fact that every industry 
is or may be important for war adds much to the responsibilities of states- 
men when they are called upon to outline the appropriate policies in trade 
and industry for the countries they govern. 
Price movements and currency troubles, too, have not been without 
their influence on this trend in the direction of closed or self-contained 
economic systems ; for it is only within the limits of such a system that 
even a partial measure of success can be attained in attempts to maintain 
a stable level of wholesale prices, much less of prices in general. Apart 
from the detailed control on the monetary side of the volume of credit, 
the destination of credit, velocity of circulation, volume of saving and 
investment and so on which need not be touched on here, it is necessary 
to control the volume of production and of imports as well as many 
individual prices of goods and services, and the volume of exports if stable 
price levels are to be secured. ‘Thus, quotas, foreign exchange regulations, 
occasional prohibitions of certain imports and certain exports are inevit- 
ably part of such a scheme of money management. Moreover, the con- 
sequences of attempts to keep price levels stable are such as to encourage 
or provoke further measures of repression in the field of foreign trade ; 
for a stable price level usually conceals several different movements and 
a fall in the prices of such commodities as are exported may be accom- 
panied by a rise in the prices of foodstuffs and materials which it is 
imperative to import, a definite worsening of the terms of trade which 
stimulates demands for further restriction or control. This was the 
experience of Sweden when she succeeded in keeping her wholesale price 
level stable between 1930 and 1934. ‘The other significant example of 
an experiment of this kind, that in the United States of America, especially 
between 1925 and 1929 when the general price level was kept stabilised, 
led ultimately to conditions of monetary inflation. Subsequent events 
there give little encouragement to those who looked for an end to the policy 
