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THE

GREATER BRITAIN

BY
OSWALD MOSLEY

'' We cannot muddle through this time."


SJR Osw.,LD MosLLY. (Speech on resignation
from the Government, :\lay, 1930.)

33, KINGS ROAD, CHELSEA, S.W.3.


Second lmjnession, October 1932.
Nww Edition, April 1934.

Printed and Bound in Great Britain bv••


]e!Jcoats Ltd., Church Passage, London, l:V.C.2.
jfascer.) are the emblem which founded the
power, authority and unity of Imperial Rome.
From the Rome of the past was derived the tradi-
tion of civilisation and progress during the past
t\Vo thousand years, of which the British Empire
is now the chief custodian. The bundle of sticks
symbolises the strength of unity. Divided, they
nuy be broken ; united, they are invincible
The axe symbolises the supreme authority of the
or[lanised State, to which everv section an cl
•' '
facti on owes allegiance.
PREFACE TO NEW EDITION.

It is now eighteen months since this book was


first published, but it has not been necessary
materially to revise it for a new edition. Some new
facts and new developments of our detailed policy
have been induded. In particular the structure of
Fascist Government has been defined with greater
precision than in the original book. But the main
argument
.
and policv- remains unaltered. Subse-
guent circumstances have combined to strengthen
the argumen~ and to support the policy. In the
economic chapters it has scarcely been necessary to
make any alteration at all. The analysis which I
first advanced in my speech of resignation from the
Labour Government in May r930 is now very
widely accepted, although at the time it was
regarded as unorthodox, if not fantastic. In parti-
cular, the fallacy of seeking to cure unemployment
solely through a revival of export trade is now
almost entirely discredited.
The Economic policy, too, now finds a far wider
acceptance, but only a very partial application.
Some of it has been applied in America under
President Roosevelt's attempt to revive industry in
the far easier conditions of that country without the
overriding energy and authority of an organised
Fascist Movement behind him.
The policy of this book is also reflected in the we should evoke ; we could not anticipate the full
recent attempts of several countries to constitute measure of the support we should secure. The
vv hat are now called " Autarchic " organisations publication of this book launched a hazardous
which I originally described as National " Insu- adventure on an uncharted sea. The outcome de-
lation ". It is also reflected in recent speeches and pended upon the will and determination that
\Vritings in this country which attempt to persuade remained to the British people. Our great confi-
the Old Parties to abandon the old policies from ) dence has been justified to a greater extent than we
I
which the logic of events is driving them. '
'
could have dared to hope. In eighteen months a
'
I small handful has grown to a mighty organisation
J::Ialf~~earte~ and partial attempts to apply a stretching through the length and breadth of the
pohcy w1th reluctance under the stress of necessity land. In this early period of Fascism in Britain.
are seldom successful. Nettles which are not we have advanced far more rapidly than any other
grasped are liable to sting. Recent events only con- Fascist movement in the world. Great struggles
firm the original contention of this book that in I await us and from time to time in the future as in
face of the grave problems which confront this the past no doubt we shall experience our reverses.
country Fascism without Fascists will not work. These things do not matter. What does matter is
The task before us is nothing less than the creation that a spirit has been created in Britain which in
I
·'
of a new civilisation. Before we can really begin '
the end cannot fail. The inspiration of the spirit
that task we must create a new spirit. The Old of Fascism eludes the description of the written
Parties may imitate in belated and ineffective word but to-day in Britain it is a vital fact which
.
fashicn our policies ; they can never imitate or , < • is felt and lived by thousands .
acquire our spirit. This is the supreme mission of i
,I
Fascism in the world to create a revival in the spirit Thousands of men and women have dedicated
of man which is prerequisite to a revival in material themselves with selfless determination and sublime
environment. In the brief space of eighteen months passion to the salvation of this land. A religious
that spirit has been created in Britain. The fury enthusiasm carries forward the creed of the modern
with which it has been assailed was anticipated in world to predestined triumph. These are the real-
the original Introduction and Conclusion of this ities of Fascist civilisation, for Fascism is a thing
1'
book, which I have left practically untouched to of the spirit. It is the acceptance of new values
afford at least a proof that we knew what we were and of a new morality in a higher and nobler con-
doing. ception of the universe. The individual in his
< <
fusion with the ideal of service finds a greater
We anticipated the bitterness of the oppos1t10n personality and purpose. The corporate entity of
I
I
I

'
Fascism embodies the finest aspirations of the human
mind and spirit in superb sacrifice to a sacred CONTENTS
purpose.
In an age of decadence and disillusion when ail BOOK ONE
o1d values fail, the new flame purifies and inspires
FASCISM AND THE STATE
to loftier ambitions ::md mightier ends. The
achievements of Fascism will be many in Britain, PAGE
INTRODUCTION
but the greatest has already be~n accomplished • • •
• •

Breakdown Fascism, th~ Modern Movement


althou2h
eo
t._l}e effects cannot yet
'
be measured in '
' -Misrepresentation Consistency.
terms of national policy. The spirit lives ; the rest CH.'I.P.
u:i/l folJOUI. I. CREED AND SYSTEM • • • • • 23
Stability and Progress ·-- The Farce of 1931 -
Parliament -- Liberty -·- Organisation o£ the
Modern lv1ovemen t.

II. THE CoRPORATE STATE • • • • 34


Rationalisation of Government Producer as the
Basis of the State Loyalty to the Crown, but
Revolution in Methods of Government Occupa-
tional Franchise.

IlL THE STATE AND THE CITIZEN • • • 49


Hag-ridden Britain Public Service, Private Liberty
---Fitness and Happiness Women's Work.

BOOK TWO

TI-lE FOUNDATIONS OF POLICY

IV. THE BASIS OF THE TROUBLE • • • 59


(i) Tlze World's Output--The Problem of Under-

consumpuon.
(ii) Britain's Particular Problems.-- Industri~lised
Markets New Competitors Science
and Mass Production Self-imposed
Handicaps: The Banking Policy Con-

ven;wn.

' '
CONTENTS
P:\.Gr
V. THE 0Ln GANG's ANSWER • • • •

'' Relatively Favourable " -The Political System

VI. BurLDI!\G Ur THE HoME MARKET . • • gS


The ~eed for Scientific Protection Scientific
Protection versus Conservative Protection Our
Conditional Protection Machinery of Protection.

VII. THE ExPORT TRADE • • • • • rr~


I
\Vages, Production and Costs-The Trade Balance BOOK ONE
--Agriculture and Autarchy-- Autarchy The
Export Trade assisted by Corporate Organisation. FASCISM AND THE STATE
VIII. THE EMPIRE • • • • • •

lndia---Colon;es---The Empire and World Peace.

IX. FASCISM AND ITS NEIGHBOURS • • • rsr


Armaments--Security.

X. Fe;ANCE, INDuSTRY AND SciENCE • • •

Finance and Industry--Science, Invention and


Research.

XL THE N.uroN's FINANCE • • • •

Taxatio•1 and Economy Industrial Reconstruction


----Incrca>c of Revenue.

CoNcu:sroN • • • • I~~-;

'
,I

E'-JTRODUCTION

The F!;~eakdown
IN Great Britain during the past ten years there
have never been less than a million unemployed,
and recently unemployment has fluctuated over a
two million figure, which does not include a very
'
large number of salaried and uninsured men and
women at nresent unemployed. In r929 a year
L •

v;hich is now rer-arded as the peak of industrial c.J

prosperity British trade ·vvas slack, large industrial


areas vvere almost derelict, and only the stock
1' . d
marKets enwye a semo,ance o,_ oom conmtwns. 11 fb , ..
T.··,'e have tragic proof that economic life has out-
grovm cur political institutions. Britain has failed
t"V [i'-(''c'!f>1'
_ ._ _, u V "'__ frcn·J- 1h
..... ~. = 11[ar
-'-'-~
.. 1...- ' 1r)eriod '. and this · result'~ '
howc;••.:r comnlicatcd bv) sDecial ~ .1
causes, is largelv I

··yst'"m f GO'!ew'1tll=~t c 1esJ"gned 1Jy


C l",, ·:·.-
;'.'.-~\,.~
L''",: ,,
<:-<- .:.~ r· .__. •• .
\_)_,__ · , ' l
.
l..~t' fill
Lll~
~
dl·_~l
A

for, the nineteenth century.


Setting aside any complaint of the conduct or
capacity of individual Governments, I believe that,
~ '

under the existimr svstem . Government cannot be Ll .I '

efficiently conducted.
The object of this hook is to prove, by analysis of
the present situation and by constructive policy, that
the necessity for a fundamental change exists. Our
politiCJ.l system dates substantially from 1832. The
intervening centurv has seen the invention and
u '
development of telegraph, telephone and wireless.
At the beginning of the period, railways were a
novelty, and a journey of a dozen miles v7as a
serious undertaking.
Since then, railway transport has risen and pros·
I7
THE GREATER BRITAIN
INTRODUCTION

pered, only to yield place to the still greater revolu~ and to harmonise individual initiative with the
tion of motor transport on modern roads. The wider interests of the nation. Most men desire to
whole question of power production is less than a work for themselves ; laws are oppressive if they
century old and electricity is a recent development. prevent people from doing so. But th<::re is no
The mode;n processes of mass production _and r.oom for interests which are not the State's interests;
rationalisation date only from the War penod. taws are futile if they allow such things to be. Wise
Within the last century science has multiplied_ by laws, and wise institutions, are those which harness
many times the power of_ man to r:ro~uce. Bankmg, without restricting ; which allow human activity
as we know it to-day, did not exist m 1832 ; even full play, but guide it into channels which serve the
the Charter of the Bank of England and the mode:n nation's ends.
Gold Standard are less than a century old. Social
opinion has developed alm~st _as rapidly as econ- Fascism the Modem Movement
omic possibilities. Well Withm .the_ last. century Hence the need for a New Movement, not only
children worked twelve hours dally m mmes and in politics, but in the whole of our national life.
workshops. Men were transported for picking The movement is Fascist, (i) because it is based on
pockets, and hanged for stealing_ sheep. Leisu~e a high conception of citizenship ideals as lofty as
and education have enormously widened the pubhc those which inspired the reformers of a hundred
interest in matters of Government concern. The years ago: (ii) because it recognises the necessity for
huge expansion of commerce has mad~ u~ depend an authoritative state, above party and sectional
more and more on one another ; the bmldmg-up of interests. Some may be prejudiced by the use of
popular newspapers has organised and formulated the word "Fascist," because that word has so far
popular opinion. been completely misunderstood in this country. It
From the standpoint of a century ago, all these vvould be easy for us to avoid that prejudice by
chano-es are revolutionary. The sphere of govern- using another word, but it would not be honest to
ment has widened and the complications of govern- do so. We seek to organise the Modern Movement
ment have increased. It is hardly surprising that in this country by British methods in a form which
the political system of 1832 is wholly out of date is suitable to and characteristic of Great Britain.
to-day. "The worst danger_ of th~ mo~e~n world," We are essentially a national movement, and if our
writes Sir Arthur Salter m his bnlhant book policy could be summarised in two words, they
Recovery, "is _that the_ specialised act~vities _o~ ma~ would be "Britain First." Nevertheless, the Mod-
will outrun h1s capac1ty for regulative w1saom. ern Movement is by no means confined to Great
Our problem is to reconcile the ret,olutionary Britain ; it comes to all the great countries in turn
changes of science with our system of gotJernment, as their hour of crisis approaches, and in each
20 THE GREATER BRITAIN
INTRODUCTION 21

country it naturally assumes a form ~nd a character


British Union of Fascists will without a doubt be
suited to that nation. As a world-w1de movement,
it has come to be known as Fascism, and it is there- misrepresented by politicians of the older schools.
The movement did not begin with the wiseacres and
fore right to use that name. If our crisis had b~en
the theorists. Itwas born from a surging discontent
among the first, instead of among the last,. F~se1sm
vvith a regime where nothing can be achieved. The
would have been a British invention. As 1t 1s, our
task is not to invent Fascism, but to find for it in Old Gang hold the stage ; a'ld, to them, misrepre-
sentation is the path of their own salvation.
Britain its highest expression and developme~t:
Fascism does not differ from the older pohttcal Such tactics may delay, but they cannot prevent,
movements in being a world-wide creed. Each ~f the advance of the movement. Nevertheless, every
the o-reat political faiths in its turn has been a um- incident in every brutal struggle, in countries of
vers~l movement : Conservatism, Liberalism and completely different temperament and character,
Socialism are common to nearly every country. An vvill be used against us. Vve are also faced by the
Englishman who calls himself. a Conserv~tive or a fact that a few people have misused the name
Liberal is not thereby adoptmg a fore1g~ creed " Fascism " in this country, and from ignorance or
merely because foreign political parties be~r the sam: :in perversion have represented it as the " White
Guard of reaction." ·
name. He is seeking to advance, by Enghsh met~od
and in English forms, a political phi~osophy w_luch This is indeed a strange perversion of a creed of
can be found in an oro-anised form m all nat10ns. dynamic change and progress. In all countries,
In this respect the Fascist occupies pre~isely .the} Fascism has been led by men who came from the
same nosition : his creed is also a world-w1de fmth. · " Left," and the rank and file has combined the
Howe~er, by very reason of the national nature of ; Conservative and patriotic elements of the nation
his policy, he must seek in the r;ne~od and f~ri? of . · with ex--Socialists, ex--Communists and revolution--
his oro-anisation a character w h1ch 1s more distmct- aries who have forsaken their various illusions of
ivdy British than the older political moveme~ts. progress for the new and orderly reality of progress.



Quite independently, we origin~lly devised a poky In our new organisation we now combine within
for British needs of a very natwnal character. In. our ranks all those elements in this country who
the development of that policy, and of a perma~ent have long studied and understood the great con-
. political philosophy, we have re~ched concl~swns structive mission of Fascism ; but we have no place
·. which can only be properly descnbed as Fasc1sm. for those who have sought to make Fascism the
lackey of reaction, and have thereby misrepresented

A;fisrepresentatton its policy and dissipated its strength. In fact Fascism
All new movements are misunderstood. Our is the greatest constructive and revolutionary creed
in the world. It seeks to achieve its aim legally
22 THE GREATER BRITAIN

and constitutionally, by methods of law and order ;


but in objective it is revolutionary or it is nothing.
It challenges the existing order and advances t~e
constructive alternative of the Corporate State. To
many of us this creed represents the thing which CHAPTER I
we have sought throughout our political lives. It
combines the dynamic urge to change and progress Creed and System
with the authority, the discipline and the order
without which nothing great can be achieved. Stability and Progress
This conception we have sought through many In the ranks of Conservatism there are many who
vicissitudes of oarties and of men ; v;e have found it are attracted there by the Party's tradition of
"
in the Movement which we now strive to introduce loyalty, order and stability- but who are, none the
to Great Britain. That pilgrimage in search of this less, repelled by its lethargy and stagnation. In the
idea has exposed me, in particular, to many charges ranks of Labour there are many who follow the
of inconsistency. I have no apology to offer on the Party's humane ideals, and are attracted by its vital
score of inconsistency. If anything, I am disturbc:d urge to remedy social and economic evils but who
by the fact that through fourteen years of political are, none the less, repelled by its endless and incon-
life, and more than one change of Party, I 1-_ave clusive debates, its cowardice, its lack of leadership
pursued broadly the same ideals. For what in fact and decision.
does a man claim who says that he has always been These elements comprise the best of both Parties:
consistent ? He says that he has lived a lifetime and to both Fascism ~ppeals. The two essentials
without learning anything ; he claims to be a fool. of Government arc stability and progress; and the
In a world of changing fact ;md situation, a man is tragedy of politics is that the two, essentiaHy coinci-
a fool who does not learn enough to change some ?ent,. are organised as contradictions. Stability
of his original opinions. nnphes order and authority, without which nothing
The essence of Fascism is the power of adaptation can be done. It is regarded as belonging to the
" "
to fresh facts. Above all, it is a realist creed. It has " ~R"1gh. t. " u . J.1es t he urge to reform
_._ rogress 1mp
no use for immortal principles in relation to the facts withotlt '.vhich society cannot survive. It is regarded
of bread-and-butter ; and it despises the windy rhe- as. ?elongi?g to the " Left." Stability is confused
toric vvhich ascribes importance to mere formula. Wlth reriCtlOn and a stand-pat resistance to change:
The steel creed of an iron age, it cuts through the progress with ill-considered changes, or with the
verbiage of illusion to the achievement of a new futile and paralytic discussions so characteristic of a
• 1 •
reality. t1morous aemocracv. As a result, netther of these

CREED AND SYSTEM

essentials is achieved. This is a dynamic age. ployment benefit, but was too weak to do this
Stability cannot exist without progress, for it implies without elaborate publicity. The country most of
the recognition of changes in the vvorld which no all, the Unemployed had to be frightened: and
political system can alter. Nor can progress exist the lvhy committee soon produced a report fit to
1 "1" d d
• ., i . . 1" 1 1
'Witnout stam rty, 10r 1t 1mpJ1ts a oa1ance ano or er-l 1 ···1···,, ·• 1" ~a··; on
1
··d..:._c:;i_lLlll'Ll.Lr-l.i.'-.L.
y __ T.l1e ecnno, 1'Til.es called for were
..._.. ~

ly view of the changes vvhich b:rvc taken olace. The


• ~ l
duly re:1lised, even though the achievement demand-
" Right " seeks stability, but denies the power of ed ~·, rcgrouping of political complexions. The
adaptation vvhich makes stability an active force. LaLmr Government might have successfully pur-
'The~ " Left " seeks pro~::ress, but reJiects all ef-fective
, ' j• 1 . h
clnscd a tltLe respite at t e expense o · 1ts supporters, f.
- u
ins~ruments and robs authority of the power to make had it not been that foreign financiers had read the
'"
jecisions. The result of both systems of the two l'(;q 1·eport and taken it in deadly earnest. The
great organised Parties of the State is in the end the report had been circulated to secure public approval
same. Stability confused with reaction and a resis- ..::or
f actwn . w h'1ch was " necessary to save t he pound . "
tance to change, toFether with nr'-~rogress confused But it exposed our weakness, and thus started the
•j ~ •
<l
dl ::> ..
1
.
• • •
w1tn oostructlVe eoatc ana comm1ttee lrresponsl- stream of foreign withdrawals from our banks
bility, end alike in chaos. Both are instruments for which, in spite of £130 millions of money borrowed
preventing things being done, and the first requisite in support, forced us off the Gold Standard in Sep-
of the modem age is that things should be done. tember. A Government with a constructive policy
vvould have averted the whole situation ; a Govern-
The Farce of I93I rnent with authority would have reformed without
The final caricature of our present system may be apology : had even this been done, it is more than
found in the events of I93L Th.e country, wearied possible that the crisis might have been avoided.
by five years of parliamentary stagnation, had rebel- \1\Te are faced to-day with the results of govern-
led from the Conservative slogan of " Safety First," ment by indecision, compromise and blether. Both
and installed a Labour Government in office. For political Parties, and the remnants of Liberalism as
eighteen months, progress, such as it was, came well, stand bound by the great vested interests of
under the ;:egis of dissentient committees and the ' " Rip-ht" 0
and " Left " which created them. In
dictation of discordant interests. As time passed, Opposition, there is the same profusion of promise;
the Government fell under the spell of trade depres- in office, the same apathy and inertia. In post-War
sion which it had done little to create, but which it England, their creeds have become platitudes; they
was powerless to remedy. In the absence of any consistently fail to grapple with the problems of the
constructive policy, the Government came to the time. Their rule has led, with tragic inevitability,
conclusion that it was necessary to reduce unem- to the oresent chaos. Therefore our Fascist Move-

THE GREATER BRITAIN CREED AND SYS1'EM 27

n:ent seeks on the one hand Stability, which en- country during the tenth anniversary of his Govern-
vtsages order and authority as a basis of all solid ment he was accorded probably the greatest pop-
achievement ; we seek, on the other hand, Progress, ular reception ever given to an individual in the
which can be achieved only by the executive instru- history of the world. Equally fatuous ~s _the sug-
ment that order, authority and decision alone can gestion that Hitler frogmarched forty m1l~wn Ger-

g1ve. mans to the Poll to vote for him, but by a shght over-
sight omitted the three millions wl~o ret~ined and
Parliament exercised perfect liberty to vote agamst htm. T~e
It is customary to describe Fascism as Dictator- plain fact is that modern Dictatorship is Leadersh1p
ship, a term which leads to some confusion of resting on the enthusiastic accepta~ce of the peop~e
thought: Fascism is not Dictatorship in the old and could not endure without thetr support. It 1s
sense ot that vvord, which implies Government true that measures have been adopted in these
against the will of the people. Fascism is Dictator- countries more rigorous than \Ve hope will be neces-
ship in the modern sense of the word, which imolies l
sary here The reason was that these nations had
Government armed by the people with power to drifted so far tow:1rds collapse a1.1d anarchy before
solve problerns which the people are determined to Fascism came to power. The rigour of Fascist
overcoroc. Modern Dictatorship implements the Government is in very exact proportion to the degree
wi11 of the people to action which cannot be imple- of ch::ws which precedes it. For that reason we
"
mented without the power of action being entrusted aopeal to Britain to return Fascism to power before
to Govc:mment. In this sense we accept the word the situation has so far deteriorated. Britain is
~ict,~torship but we do not accept it in the sense great enough to adopt Fascism because it. wants it
rmp11ed by our opponents. By Dictatorship we befnre it has to adopt it by reason of nattonal col-
T 'J• b
mean ,_,earlersmp ; y Dictatorship they mean
1 " laose. But whatever measures a Fascist Govern-
tyranny. x' asnsm 1s r·~ea dersmp
T:' •• l'
orr t 1J.e peop 1e w1t'h.· m"ent employs must depend on the enthusiastic
their \villing consent along the path of action which acceptance of the people and must emanate from
they have long desired. Leadership is a term which thei; demand for action. Fascism is not a creed
cannot be misrepresented or misunderstood and for ' . of Governmental tyranny. But it is definitely a
that reason we prefer to use it. creed of effective government in strong contradis-
An exceptional amount of nonsense is talked tinction to the present decadence of the Parhament-
about the term " Dictatorship ". We are solemnly arv system, Parliament is, or should be, the mouth-
assured that the Government of Mussolini is a pi~ce of the will of the people; but, as things stand
Dictatorship against the will of the Italian people, at present, its time is mainly taken up with matten
but when he aopeared before them in his tour of: the
.c -
ot -vvhich the nation neither knmvs nor cares, It
THE GREAfER BRITAIN {
'-'' l\..
., .l._',
G .,:;
_..___, D A IN D c
.._, V
.i c .•.
,_)i E- u
_ , ln 29

. l -
~s aosu!d to su~pose that anybody is the better for and women indulging in detailed debate of every
mtermmable d1scussion of the host of minor technical measure, handled by a non-technical assem-
~11~asures which the Departments and local interests bly in a vastly technical age. Thus only shall we
?nng be~ore Parliamen_t to t~1e exclusion of major clear the way to real fulfilment of the Nation's
:ssues. _ ()uch matters, m wh1ch the public interest desire, which is to get things done in modern con-
.~ sm~~l, ta~e up far ~oo much Parliamentary time. ditions.
~}~e dls~usswn, t~o, 1s usually f~tile i ~ost of the
I)t,Js berore Parhament demano techmcal know- Liberty
'
ledge ; but they are discussed, voted on, and their Vvhen we propose an effective system of Govern-
fate decided, by men and women chosen for their ment we are, of course, charged with the negation
• "l • • •
ass1_ou;ty m openmg local charity bazaars, or for of liberty by those who have erected liberty into the
their !ung power at street corners. This is by no negation of action. Liberty, by the definition of
n:-e~ns an over-statement; when a young man asks the old Parliamentarians becomes the last entrench-
h1s Party Executive for a constituency they do not ment of obstruction.
• " "11 1
ask w1 ne be a good member?", but '
" will he \Ve hear so much glib talk of liberty, and so
be a good candidate?" liti:le understanding of its meaning. Surely nobody
In a practical system of o-overnment our political can ima£Yinc
0
that the British, as a race.• are free.
-: "l ' b
phllosophy comes to these conclusions. Whatever 'fhe essence o£ liberty is freedom to enjoy some of
movement or party be entrusted with Government the fruits of life, a reasonable standard of life, a
m~st be _given absolute power to act. The people decent house, good wages, reasonable hours of
will retam thro~gh the machinery described in the leisure after hours of work short enough not to
next chapter a d1rect control over Government. On leave a man exhausted, unmolested private happi-
the other hand, the power of obstruction the inter- ness vvith wife, children and friends and, finally,
minable debate of small points within ;he oresent the hope of material success to set the seal on
Party _system which today frustrate the natio~'s will private ambition: these are the realities of liberty
to actwn, must b~ abolished. The present Parlia- to the ordinary man. How many possess this
ment~ry system 1s not the expression, but the • .. ,
lmcrty ' y :' H ow can t h~e mass possess sue h
tona
negatiOn, of the people's wilL Government must freedom in a period of economic chaos? Many
have powe~ to. legis~ate by order to carry out the will unemployed, the remainder living in the shadow of
of th_e m.a!orzty wzthout the organised obstruction unemployment, low wages, long hours of exhaust-
of mznorztzes who at pre~ent use Parliamentary pro- ing labour, bad houses, shrinking social amenities,
cedure to frustrate the wzll of the nation. We must the uncertainty of industrial collapse and universal
eliminate the solemn humbug of six hundred men
~
confusion : these are the lot of the average man ~
THE GREATER BRITAIN CREED ANll SYSTEM

today. ~Vh_at hum~ug, then, to talk of liberty! the form and leadership which it desires. Beyond
The. begznmn g of lzberty is the end of economic this it cannot go. In complicated affairs of this
chaos. Yet how can economic chaos be overcome kind, somebody must be trusted, or nothing will
without the power to act? ever be done.
. By our very. insistence upon liberty, and the This is the kernel of our Parliamentary proposals.
Jealous rules w1th which we guard it, we have I To some it may seem to imply the suppression of
reached a point at which it has ceased to be liberty liberty, but we prefer to believe that it will mean the
at all. We must preserve the nation's riaht to suppression of chaos.
decide how, and by whom, it shall be gov~rned ;
we must provide safeguards to ensure that the ORGANISATION OF THE MoDERN MovEMENT
powers of government are not abused. But that The same principles which are essential to
is far from necessitating that every act of govern- Government apply, with even greater force, to a
ment must be subject to detailed and obstructive j political movement of modern and Fascist structure.
debate, and that in an assembly with little experience Here we are dealing, not with the mass, but with
or knowledge of administrative problems. This the men who believed in the cause, and are devot-
fantastic system, begun in good faith as the origin ing their energy to its aims. We have seen the
of freedom, has ended by binding the citizen in a political parties of the old democracy collapse into
host of petty restrictions, and tying the hands of futility through the sterility of committee Govern-
each successive governments. Even in debate, the ment and the cowardice and irresponsibility of their
orators of Parliament no longer hope to convert one leadership. Voluntary discipline is the essence of
another, as they did in the days of Sheridan. The the Modern Movement. Leadership in Fascism
Party Whips are in attendance ; a member who may be an individual or a team, but undoubtedly
disobeys will soon find himself cut off from the single Leadership in practice proves the more effect-
P~rty ":'hich, inci~entally, paid the expenses of ive instrument. The Leader must be prepared to
l11S dectwn and lm chances of keeping his seat shoulder absolute responsibility for decision and
will be _of the smal~est. The only useful purpose of must be surrounded by a team equally prepared to
debate 1s to advert1se each member in his constitu- take responsibility for the functions clearly allocated
ency. to them. For the only effective instrument of
It is quite obvious. that this system creates bad revolutionary change is absolute authority. We are
government and hampers the individual citizen. organised, therefore, as a disciplined army, not as
Constitutional freedom must be preserved ; but a bewildered mob with every member bellowing
that free~om is expressed in the people's power to orders. Fascist leadership must lead, and its disci-
elect Parhament and Government and thus to choose pline must be respected. By these principles, both

TIIE GREATER BRITAI~ CREED AND SYSTEM 33

in the structure of our own movement and in the dismayed may rally. The modern movement, in
sugge~ted s?·~~ture of ~over~ment, we pr~serve the struggle and in victory must be ineradicably inter-
es~ent1als 01 lhe popular w1ll and combme them woven with the life of the nation. No ordinary
w1th the power of rapid decision without which the party of the past, resting on organisations of old
nation will ultimately be lost in chaos. No man women, tea fights and committees, can survive in
ne~d join a Fascist n:ovement and accept its leader- '
such a struggle. Our hope is centred in vital and
~hip _who does not Wish. to do so an? the subsequent determined youth, dedicated to the resurrection of
J:<ase1st Government w1ll be subm1tted to a direct a nation's greatness and shrinking from no effort
vote of the people as a whole. - and from no sacrifice to secure that mighty end.
The immediate task is the firm establishment of We need the sublime enthusiasm of a nation, and
the Modern l\1ovement in the life of the British the devoted energies of its servants.
nation. Ultimately, nations are saved from chaos
not by Parliaments, however elected ; not by Civil
Servants, hm,vev~r ,instructed: but by the steadv
.. -,-.; '111 f . 1
v, •• 1 o. an orgamsen movement to victory.
~
A v.rhole oeoole may be raised for ., tl.mP to th-~
.1 .1. •o.-1. L
£_ J ..lv

entlm~iasm of a ~reat c and dcci~ive effort, as they


w~re m the dectwn or the Natwnal Government.
That ent?usiasm. and effort may be sustained for a
long penod, as 1t was in the war by the externa!
pr.essure of a foreign threat to our existence.
H1story, however, provides few cases in which the
enthusiasm and unity of a whole Deople have been
' r l '
s? ~ustame': tnrougn a long struggle to emerge from
1_ L

(tlST:tegraticn
,, - ~
and collapse.
- '

• 1
ror such mupose is needed the bl_
• .L , - - ,
crrio of an orcran--
(:"';-
lSCC! _and d1sC1phned movement, grasping and per-
:ineatmg every aspect of national life. In everv
town and village, in every institution of daily 11£;.
the will of the organised and determined mir10rit,;
p ~ 1 11'
.._il.USL oe s.::rugg 1IJ_g :tor susta1x1cd er1ort. In T11o-
I" • ., ('( I

ments of difficulty, dissolution and despair it must


be the hard core round v1l1ich the ~v,veak and the
THE C0 RP 0 RAT E ST AT E 35

of the whole, performing its separate task, and yet,


by performing it, contributing to the welfare of the
CHAPTER II. whole. The whole body is generally directed by
the central driving brain of government without
The Corporate State which no body and system of society can operate.
This does not mean control from Whitehall, or
Rationalisation of Government. constant interference by Government with the busi~

THE main object of a modern and Fascist move- ness of industry. But it does mean that Govern~
ment is to establish the Corporate State. In our ment, or rather the Corporate system, will lay down
beli~f, it is the weatest constructive conception yet the limits within which individuals and interests
dev1sed by the mmd of man. It is almost unknown may operate. Those limits are the welfare of the
in .~ritain ; yet it is, by nature, better adapted to the nation not, when all is said, a very unreasonable
Bnt1sh temperament than to that of any other nation. criterion. Within these limits all activity is en-
In.psy~h_ology it ~s bas~d on team-work; in organis- couraged ; individual enterprise, and the making of
atzon tt ts the ratzonaltsed State. We have rational- profit, are not only permitted, but encouraged so
ised industry and most other aspects of life, but we long as that enterprise enriches rather than damages
have not rationalised the State. Yet the former by its activity the nation as a whole.
makes the other the more needful, lest the economic But so soon as anybody, whether an individual
power of man should pass beyond the power of his or an organised interest, steps outside those limits,
control. so that his activity becomes sectional and anti-social,
Sir Arthur Salter has said that " private society the mechanism of the Corporate system descends
has developed no machinery which enables industry upon him. This implies that every interest)
as a whole to contribute to the formation of ~ whether " Right " or " Left ", industrial, financial,
general economic policy, and secure its application trade union or banking system, is subordinated to
~hen. adopt~d ". It is this machinery of central the welfare of the community as a whole and to the
.d1rectwn whiCh the Corporate State is designed to over-riding authority of the organised State. No
supply and that, not as a sporadic effort in time State within the State can be admitted. " All
of crisis, but as a continuous part of the machinery within the State ; none outside the State ; none
o! . government. It is essentially adaptable ; no against the State ".
ng1d system can hope to survive in a world of
quickly changing conditions. It envisages as its The Producer as the Basis of the State
name implies, a nation organised as the human The producer, whether by hand or brain or
body. Every part fulfils its function as a member capital, will be the basis of the nation. The forces
34
THE GREATER BRITAIN THE CORPORATE STATE 37
••
which assist him in his work of rebuilding the nation activity. Instead of being the general staff of
will be encouraged ; the forces which thwart and opposing armies, they will be joint directors of
destroy productive enterprise will be met with the national enterprise under the general guidance of

foroe of national authority. The incalculable powers corporatzve government.
of finance will be harnessed in the service of national The task of such industrial organisations will
production. They will not be fettered in their daily certainly not be confined merely to the settlement ot
work ; but they will be guided into the channels questions of wages and of hours. They will be
which serve the nation's ends. called upon to assist, by regular consultation, in the
This is the true function of finance, intended, as general economic policy of the nation. The syndi-
Sir Basil Blackett has insisted, to be " the handmaid cates of employers' and workers' organisations in
of industry ". There will be no room, in our particular industries will be dovetailed into the
financial organisation, for the unorganised oper- corporations covering larger and interlocking spheres
ations which have led to such enormous complexities of industry. These corporations in their turn will
and have rocked the structure of British industry to be represented in a national corporation or council
its foundations. In our labour organisation there of industry, which will be a permanent feature in co-
will be no place for the trade union leader who, operating with the Government for the direction of
from sectional or political motives, impeded the economic policy.
development of a vital service. But there will be The idea of a National Council was, I believe,
an honoured place for the financial organisation first advanced in my speech on resignation from
which joins in the world of British reconstruction, the Labour Government in May 1930. The idea
and for Trade Unions which co-operate with such has since been developed by Sir Arthur Salter and
reconstruction, in the interests of members who are other writers. A body of this kind stands or falls
also members of the national community. by the effectiveness of the underlying organisation.
Class war will be eliminated by permanent It must not consist of casual delegates from un-
machinery of government for reconciling the clash connected bodies, meeting occasionally for ad hoc
of class interests in an equitable distribution of the consultation. The machinery must be permanent-
proceeds of industry. Wage questions will not be ly functioning and interwoven with the whole
left to the dog-fight of class war, but will be settled industrial and commercial fabric of the nation.
by the impartial arbitration of State machinery ; The machinery must not be haphazard, but system-
existing organisations such as Trade Unions and atic, and continually applied. Sir Arthur Salter
employers' federations will be woven into the fabric envisages such machinery in the following passage :
of the Corporate State, and will there find with " In industry and trade, banking and finance, in
official standing not a lesser but a greater sphere of the professions, there are institutions which are

THE GREATER BRITAIN THE CORPORATE STATE 39

capable of representing more than merely sectional mechanism of the Corporate system.
interests. They may have been formed primarily
for defence of a common interest against an op- Loyalty to the Crown, but Revolution in Methods
posing organisation or against competitors of the of Government.
public ; but they have, or may have, another aspect ; ·whatever is good in the past we both respect and
that of preserving and raising the standard of venerate. That is why, throughout the policy of
competence and the development of traditions which the movement, we respect and venerate the crown.
are in the gePeral public interest." This latter is Here, at least, is an institution, worn smooth with
precisely the aspect which the corporate system · the frictions of long ago; which in difficult experi-
develops into a smoothly-working structure of in- ence has been proven effective and has averted from
dustrial government. To this end, no other con- this Empire many a calamity. We believe that,
crete policy has yet been developed. under the same impartial dispensation, the greatest
The first principle is to absorb, and use, the constitutional change in British history may yet be
elements which are useful and beneficial. In this peacefully achieved. While the position of the con-
respect Fascism differs profoundly from its op- stitutional monarchy is unaffected and indeed is
ponent, Communism, which pursues class warfare strengthened by Fascist policy the remaining instru-
to the destruction of all science, skill and ments of government will be drastically altered by
managerial ability ; until, when it begins to feel the legal and constitutional means to which we
its feet, it has to buy these same qualities at adhere, in order to provide the effective instru-
enormous cost from foreign nations. This precisely ments of government and of action which modern
descibes the course of events in Russia. The first problems demand.
task of Leninism was to destroy, to root up every In the first instance Fascism seeks power by the
tree in the garden whether good or bad mere- winning of a parliamentary majority at a general
ly because it had been planted by the enemy. Then, election. That majority will be used to confer
when destruction had brought chaos on the heels upon government complete power of action by
of famine, there, came a five-year plan of American order. Parliament will be called together at regular
conception, implemented by a nucleus of German intervals to review the work of the Government.
and American technicians hired at immense In the intervals Fascist members of Parliament will
expense. be employed as executive officers in the areas whence
Such is not the method of Fascism, its achieve- they are returned to Parliament. By this means
ment is revolution, but not destruction. Its aim Fascism will overcome an anomaly which at present
is to accept and use the useful elements within the paralyses effective government. Many measures of

State, and so to weave them into the intricate government have to be implemented by local author-
THE GREATER BRITAIN THE CORPORATE STATE

ities which are often opposed to the government of would provide an ·executive instrument to imple-
the day and concerned only to obstruct its work. ment the nation's demand for rapid action while
The team of government pulls one way in White- retaining the principle of elected representation in
hall and the team of local authorities pulls the other every element of national life.
way in the various localities. The result is a dead- Together with this reform of the House of
lock familiar to all concerned with national adminis- ' Commons and Local Government Fascism would
tration, which would not be tolerated for a moment replace the present House of Lords by a Second
in any business concern. It is difficult to imagine Chamber of specialists and men of wide general
the head office of a business pursuing one policy know ledge. The House of Lords is one of the
while half its branch offices pursued another. Yet unworkable anachronisms of the present system.
this is precisely the situation which for years past In days gone by the Members of the Upper Chamber
has often reduced the mild efforts of successive were in some ways exceptionally endowed with the
governments to a tragic farce. Consequently Fasc- qualities of government. Their position had secur-
ism would replace the present local authorities with ed them education and their wealth had enabled
executive officers who would be the Fascists M.P's., them to travel in these, and a multitude, of other
which the various areas had returned. The elective ways they had the advantage of their contempor-
principle would thus be combined with executive aries. They were hereditary land owners on a
efficiency and the will of the national majority large scale, in days when the ownership of land was
would prevail over obstructive minorities. They the only serious industrial responsibility which
would be assisted by locally elected Counsels from economic circumstance had created. Thus they
which would be selected executive officers to be spoke with authority in many matters with which
heads of the various departments of local govern- others were less fitted to deal ; and, so long as this
ment. The present committee system would be went on they were a fitting and indispensible branch
swept away under which each Councillor is liable of the law giving body.
to serve on several committees as a " jack of all Their position was derived from the social
trades but master of none ". Each departmental inequalities of the period ; and there is no social
chief would be responsible to the local officer or factor which time has more radically changed. As
Fascist M.P. who in turn would be responsible to individuals, the Members of the House of Lords are
National Government. The Fascist principle of neither better nor worse, richer nor poorer, wiser
individual responsibility and clearly allocated func- nor more foolish than their colleagues in the
tion would be maintained throughout and for the Commons. Their only function is interfer·ence
first time it would be possible to assess responsibility without responsibility. They have become here-
for failure and success. By these means Fascism ditary automata, whose powers successive govern-
THE GREATER BRITAIN THE CORPORATE STATE 43

ments have found it necessary to trancate. Origin- fare will come to an end in a technical and non-
ally the House of Lords represented in some degree political Parliament which will ?e concern~d not
the main industry and interest of the Country which with the Party game of obstructwn, but w1th the
was agriculture. To-day they have largely ceased national interest of construction. Thereafter the
to represent that interest and scarcely can be said to life of the o-overnment will be dependent on a direct
represent any other. It is therefore only natural I
vote of th~ whole people held at regular intervals,
and in keeping with British tradition and constitu- which in any case will not exceed tl:e lifetime of a
tional practice that they should be replaced by a present Parliament. In the event ot a governm_ent
Chamber which represents in a specialist sense every being defeated it will be the duty of the c~n~tltU­
major interest of the modern State. The type of tional Monarch, as at present, to send for ffilillSters
interest which would there be represented would be in whom he believes the nation vvill show confidence
as follows : Representatives of the Dominions, in a fresh vote.
Crown Colonies, India, religious thought, the fight- The nation as a whole will, therefore, exercise a
ing services, Civil Service, education, authorities on more direct control over government than at present
foreign affairs and those who have rendered the in that the life of government will depend on a
State conspicuous service. In addition, of course, direct vote of the people instead of upon the
the National Council of Corporations composed intrio-ues of a Party Parliamentary system, which
b~th of Employers' and Trade Union represent~ usuallv have no relation to the issue on which
atlVes would be thoroughly represented in the parlia~ent was elected. The people also will
reconstituted Second Chamber. I secure in this parliament which assists government
with technical and instructed criticism a truer repre-
Occupational Franchise sentation in that they will vote within their own
Such a combination of new and effective instru- industries and occupations for candidates whom
ments in Government will enable Fascism in the they know well on subjects with which th~y are
lifetime of the first Fascist Parliament to carry familiar. An engineer shall vote as an engmeer ;
through the immense changes in the national life and thus bring into play, not an amateur knowledge
requisite to the entry of the new civilisation towards of foreign and domestic politics, but a lifelong
which the compelling facts of the modern age impel experience of the trade in which he is engaged, he
every advanced nation. At the end of that Parlia- will vote in common with others of similar experi-
ment a new election will be held on an Occupational ence, and will give the reasoned decision of a
Franchise a steel worker will vote as a steel technician in his particular trade in a choice between
worker ; a doctor as a doctor, a mother as a mother, members of that trade. Is not this a truer repre-
within their appropriate corporation. Party war- sentation of the individual and of the complex corn-
44 THE GREATER BRITAIN THE CORPORATE STATE 45

ponents of the life of the modern State than prevails This is a travesty of democratic law-giving.
at present? The original conception of the present Parlia-
As things stand at present, there is nothing to mentary system was that free and full discussion in
prevent the electorate, supposedly all-wise, from Parliament and at elections would instruct public
electing a parliament composed entirely of sugar- opinion in the great issues of the day and thus
brokers. Each might be an excellent candidate for I
would enable a reasoned verdict to be given by the
whatever party he chose to represent. He might electorate. In the degeneration of that system it
well be affluent, genial and docile ; a firm supporter has become a game of very sharp practices with the
of charity bazaars, a pillar of local football elevens, sole object of replacing the set of men in Office
a regular contributor to the party funds of his con- with another set of men who obtain their places by
stituency. If, with all this, he kisses babies with a any panic cry which may serve the purpose of the
pretty grace, and promises reforms enough to moment however dishonest or however irrelevant
1mpress the electors, he may well find himself in j it may be to the real issues before the Nation.
Parliament. If enough sugar-brokers did it, there Opposition no longer serves the purposes of
is no reason at all why the whole of Parliament reasoned criticism and analysis of the Government's
should not be sugar-brokers: but this would policy which exposes weaknesses and elicits the
scarcely fit them for the task of discussing a Bill verities of National problems. Modern problems
dealing with the complexities of unemployment are too technical by their very nature to be handled
administration in a northern industrial town. In effectively by such an assembly. Debate, therefore,
fact, the unemployed might expect to fare rather ·•• is no longer constructive but purely destructive and
badly. concentrated on transient issues of popular passion
This is an exaggeration ; but the like of it, in which tend yet further to obscure the real issues
miniature, happens at every election. Electors vote which should receive the attention of Government.
on general considerations of policy, which they New personalities emerge and Parties come to
cannot understand, since the facts are not fully power not by virtue of their constructive gifts but
before them. The truth is, simply, that the issues by reason of their skill in the purely destructive art
behind every political decision are far too compli- of discrediting the existing Government on small
cated to set before the public. The result is that and jejune points which have no bearing upon real-
elections are fought in a welter of journalistic catch- ity. New men do not emerge as they will do
words "Three acres and a Cow" ; "Tax For- withir1 the technical Fascist system by the strength
tunes, not Food " ; " Safety First" ; " Hang the of a new and constructive idea. They emerge in
Kaiser -" ; " The Red Letter " and " Save the the slapstick comedy of Parliamentary debate as
Pound " as a prelude to depreciating the Pound ! adepts in the pastime of getting jobs for themselves
THE GREATER BRITAIN THE CORPORATE STATE 47

and their Party by any means fair or foul which cussion in the turmoil of a General Election?
smart advertising and meaningless slogans may The ordinary man would greatly resent such
assist. Once the game is won and the jobs secured treatment of the facts of his daily industry and life.
they settle down to the respectable lethargy of If someone strolled into an engineering shop and,
Office. after five minutes' cursory examination of an intri-
The danger of our present system is the fact that cate process which the engineer had studied all his
it brings itself too easily into contempt. Nobody, life, proceeded to tell him how to do it, the engineer
nowadays, expects election promises to be fulfilled. would quickly send the intruder about his business.
Governments are elected on the strength of their Yet these are the methods which our present elect-
appeal to passion and to sentiment. Once in office oral system applies to that most intricate and
they promptly resign their effective power in favour technical of processes, the government of a civilised
of the great interests within the State, but yet State.
superior to the State, who exercise their power in The Rationalised State, as well as rationalised
secret. The increasingly technical nature of all industry, has become an imperative necessity. The
problems in an economic age has made it difficult Corporate State provides the only known solution
or impossible to explain the real issues to the elector- to the problem. Our electoral system has become a
ate as a whole. The division between daily politics farce, worse even than in the days of bribed elections
and the reality of Government has become ever and pocket boroughs. As it is organised at present,
greater. The technician has become ever more our system of government lacks the calibre to carry
us out of trade depression and set Britain again on
enchained by the passion, the prejudice and the
folly of uninstructed politics.
• top of the world. As time goes on, the world
By such a system as we advocate, the technician, crisis may possibly diminish ;* but even in that
who is the architect of our industrial future, is freed * Since these lines were written in 1932, we have witnessed one
for his task. He is given the mandate for that of those " recoveries , within the present system which \vere antici~
pated throughout the economic argument of this book. According
task by the informed franchise of his colleagues in to the "Economist" of October 2rst, 1933 "Excessive seJf.gratificati0n
his own industry. A vote so cast will be the result should, however, be stilled by the reflection that at this rate of
recovery we shall not rejoin the "projected " trend of 1924-29-
of experience and information. Is not this in fact I
itself a disappointment until some time in 1939 ''. The same bulk
I'
the rationalised State? Is not this system prefer- of production in 1939 as in 1929 would of course involve a larger
figure of unemployment than the I ,2oo,ooo of that period, owing to
able to the solemn humbug of present elections, a larger supply of labour and new means of rationalisation. The
which assumes that the most technical problems of " recoveri.es " of the present svstem tend to be ever slicrhter and
shorter: the ''depressions'' tend to he ever longer and l11(~re severe.
modern government, ranging from currency We have no evidence that stable and permanent recovery can come
management to the evolution of a scientific protect- from the present system with its alternating depressions and booms.
On the contrary, present evidence strongly supports the original
ive system, can be settled by a few days' loose dis- argument of this book.
THE GREATER BRITAIN

event we are not organised to emerge in a position


comparable with our former prosperity. After
the crisis of 1921 a crisis far less severe than that
of 1932 we did not recover even the semblance CHAPTER Ill.
of our old prosperity ; government must be ration-
alised if we are to avoid a repetition of the last The State and t!J.e Citizen
'
decade of unhappy history. On the other hand,
if the clouds of depression do not lift, and the State Hag-ridden Britain
remains unrationalised, there is a very real danger
that the farce will be recognised as such, and that THE moral and social law and convention of
the country will turn and turn violently to the Britain provide the most startling of all contrasts
catastrophic remedies of Communism. ,,vith the Briton's strange illusion that he is free.
The plain fact is that the country is hag-ridden.
In no other civilised country, except perhaps in the
United States, has the individual so little freedom
of action.
We live on public anarchy and private repression:
we should have public organisation and private
liberty. We are taught that it is an outrage to
interfere with the individual in his public capacity
as producer, financier or distributor though, if he
l uses his powers badly, his anti-social conduct may
I
' damage tens of thousands of his fellow-citizens.
But we are taught to interfere with every detail of
his private life, in which sphere he can damage no
one but himself, or at most his immediate surround-
ings. A man may be sent to prison for having a
''
shilling bet on a horse-race. But he can have a
'
I tremendous bet on the stock market, and live
honoured and respected as a pillar of industrial
finance. Be may damage the whole life of the
nation in the capacity of capitalist or trade union
leader, but he may not even risk the slightest
D 49
50 THE GREATER BRITAIN THE STATE AND THE CITIZEN )I

damage to himself by obtaining a drink after the Obligation in public life. In his public capacity
appointed hour! a man must behave as befits a citizen and a member
We are treated as a nation of children ; every of the State ; his actions must conform to the
item of social legislation is designed, not to enable interests of the State, which protects and governs
the normal person to live a normal life, but to him and guarantees his personal freedom. In
prevent the decadent from hurting himself. At private he may behave as he likes. Provided he
every point the private liberty of the individual is ({oes not interfere with the freedom and enjoyment
invaded by busybody politicians who have grossly of others his conduct is a matter between himself
mismanaged their real business which is the public '
and his own conscience.
life of an organised nation. But there is one condition. The State has no
It is, of course, a simpler task for limited intelli- room for the drone and the decadent, who use
gences to keep public-houses closed than to keep their leisure to destroy their capacity for public
factories open. The politician, conscious perhaps usefulness. In our morality it is necessary to " live
of his own limitations, turns naturally to a sphere like athletes ", to fit ourselves for the career of
with which he is more familiar. The result is the service whic.h is the Fascist idea of citizenship. To
creation of a political system which is precisely the all moral guestions the acid test is first social and
reverse of what a political system should be. In secondly scientific. If an action does not harm the
the public affairs of national life we have disorder State, or other citizens of the State, and if it leaves
and anarchy : in the private affairs of individual life the doer sound in mind and body, it cannot then
tue have interference and repression. be morally wrong. It has been suggested that this
It is scarcely even anarchy ; it is a laughable form test conflicts with religious teaching. The contrary
of organised humbug, which has made us the mock is the case, for it coincides with every tenet of real
of every civilised country. T !1e whole system is the religion. Any Fascist is free to add to this test any
.child of that same mentality which has transformed other moral consideration which his private con-
Parliament into a bleating of ineffective sheep ; science or religious belief dictates. Our aim is not
which blundered into the War, the Peace, the Debt- to conflict with religion, but to indicate the Fascist
.Settlemmt, and the Financial Cri.1is. It is the bv- conception of citizenship which is in every way com-
'
product of age, struggling 'Nith a problem for which ')atible with religion. The Fascist is expected to
it feels itself unequal ; and, as such, it is a supreme live a dedicated life, but it is the dedication of man-
challenge to youth and realism. hood to a fi o-hting cause not the dedication of a
monk to withdrawal from the world and its pro-
Public Service Private Liberty.
blems.
The Fascist principle is Liberty in private life. We detest the decadence of excess as much as we
52 THE GREATER BRITAIN THE STATE AND THE CITIZEN 53

despise the decadence of repres.sion. An order.ed squander his health or his resources. I~ many
athleticism of mind and body 1s the furthest a1m things the distinction is between relaxatwn and
of justlv enforceable morality. And even for the indul o-ence. The latter becomes decadence, but the
enforce{nent of this we would rely on the new form~ contributes to healthy enjoyment, which in
social sense, born of a modern renaissance, rather its turn contributes to efficiency and to service.
than upon legislation. The law arrests the. occas- Therefore, in asking our members to " live like
ional drunkard ; but it does not touch the t1ppler, athletes " we do not advocate the sterility of Puritan-
the weakling and the degenerate. . ism and repression. We want men in every sense
In our ordered athleticism of life we seek, m fact, of the word in our ranks, but men with a singleness
a morality of the Spartan pattern. But when the of purpose which they order their lives to serv.e.
Fascist State is won this must be more than tempered We expect our members to keep fit, not only m
with the Elizabethan atmosphere of Merrie ~ng­ mind, but also in body, and for that reason we have
land. The days before the victory o~ Puntan often been attacked as organising for physical vio-
repression coincided with the ~ighest ach1evements lence. We shall certainly meet force with force ;
of British virility and construct1ve adventure. The but this is not the motive of these activities. No
men who carried the British flag to the furthest man can be far sunk in degeneration so long as he
seas were far from hag-ridden in their private l.ives. excels, or even performs competently, in some
The companions of their leisure hours were ne1ther branch of athletics. It is a part of the dedicated
D.O.R.A. nor Mrs. Grundy. . life of a new movement to maintain that constant
training in mind and body which is readiness to
Fitness and Happiness . serve when the time comes. In our own move-
We know that happiness, no less than fi.tness, 1s ment in fact we seek to create in advance a micro-
a social and a political asset. The more ga1ety a~d ' '
cosm of a national manhood reborn.
happiness in the ranks of those who grapple Wlth Such is our morality, which we claim is the
the tasks of to-day, the better is it ~or the ~chieve­ natural morality of British manhood ; and from it
ment of their mission. But all ga1ety of hfe and follows hostility to the social repression and legis-
happiness in private things must contribute to, and lation of to-day, and to every achievement of
not diminish, the power to serve the State. In our hag-ridden politics which is summarised in
practice we are glad to see a ~a~ on race-c~mrse, on D.O.R.A. We seek to create a nation-wide move-
football stand in theatre or m cmema dunng well- ment which will replace the legislation of old
earned hours ~f leisure ; and we do not mind in the women by the social sense and the will to serve
least seeing him in a public-house or club, provided of young men. Every man shall be a member of
that he is not there to excess, and does not there the State, giving his public life to the State, but
54 THE GREATER BRITAIN THE STATE AND THE CITIZEN

claiming in return his private life and liberty from of the highest callings, and of the utmost importance
the State, and enjoying it within the Corporate to the State ; why, therefore, should women not
purpose of the State. be accorded representation and organisation as
mothers? Normal women have hitherto suffered
Women's Work greatly from the absence of representative organis-
ation. Their representation has drifted into the
Our organisation began as a men's movement hands of professional women politicians, irreverently
because we had too much regard for women to described as the "Members for No Man's Land".
expose them to the genialities of broken bottles and Such women are perhaps adequately qualified to
razor-blades with which our Communist and some represent certain aspects of women's life, but few of
of our Socialist opponents conducted the argument them have any claim to represent the mothers of
until the Blackshirt movement was strong enough the nation. Why should not the representation of
to overcome these tactics. Now women play a very motherhood be an organised force in the counsels
important part in our organisation and will be of the State? The care of mother and child is an
increasingly valuable in our work as we develop integral part of the Fascist State, which regards
our electoral organisation. The part of women in itself, not only as the custodian of the present, but
our organisation is very important but different in also, in far greater degree than the Old Parties, as
some respects from that of the men ; we want men the custodian of the future.
who are men and women who are women. There are many questions which are of primary
In the political organisation of the Corporate interest to women, and which an organisation of
State we envisage a highly important part for this kind would go far to solve. Questions of
women. Professional women and those engaged housing, health and education in their widest appli-
in industry would, of course, find their natural cation, come naturally within its sphere And
representation in the corporations which cover their there remains matters of still wider political and
industry and their profession. The greater question social significance on which the counsels of
remains of the representation and organisation of womanhood must be of first importance.
the great majority of women who seek the import- The great majority of women do not seek, and
ant career of motherhood, and who have never yet have no time for, a career of politics. Their
been represented as such in any organisation. interests are consequently neglected, and their
To many the idea may seem fantastic, but the nominal representation is accorded to women whose
logic of the situation seems to demand some Cor- one idea is to escape from the normal sphere of
porate organisation and representation of mother- • women' and to translate themselves into men .
hood. It is a tmism to say that motherhood is one That process in the end is never very effective, and
THE GREATER BRITAIN

the attempt makes such women even less qualified


than the average man to deal with the questions
of home and of children.
Consequently, the representation and organisation
£or the first time of normal women, on whom the
future of the race depends, are a practical political
necessity. Fascism, in fact, would treat the wife
and mother as one of the main pillars of the State,
and would rely upon her for the organisation and
development of one of the most important aspects
of national life.
BOOK TWO

THE FOUNDATIONS OF POLICY

I
'

CHAPTER IV
I

The Basis of the Trouble

(i) THE wORLD's OUTPUT

BEFORE proceeding to examine the detailed econo-


mic machinery of the Corporate State, it is first
'

necessary to discuss the economic analysis which
leads us to the conclusion that the present order of
industry, and consequently of society, must be re-
placed by the economic policy in which we formu-
late our constructive alternative.
It is the common form of old gang economics to
assume that the present crisis is a temporary pheno-
I menon which, in the end, will pass away automatic-
I
ally without any particular effort of man or any
drastic reorganisation of society. One of the leading
exponents of that view once argued with me on the
following lines: "You are a young man who
cannot remember previous depressions; they have
'
I'
often occurred before in my lifetime, and have
' passed away. All these things to which you refer,
such as the rationalisation of industry and the dis-
placement of man's labour by machinery, have been
I
going on for long past. They were met in the past
I

!
century by a gradual raising of wages which increas-
' ed the power to consume, and by a gradual
\' shortening' . of hours which reduced the .power to
' ''
THE BASIS OF THE TROUBLE 6I
6o THE GREATER BRITAIN

produce. Above all, in due time fresh markets world-wide financial strength of the City of London
opened overseas to absorb our surplus production. was largely founded. Foreign investment, through
~or instance, when I was a boy, negroes did not the ~edium of such sales abroad of our surplus pro-
nde bicycles; now they do ride bicycles, and workers duct:lon, became one of the chief aims of British
are employed in Coventry to make those bicycles." financial policy, and was largely the origin of the
It was useless to point out to him that these great school of Liberal-Labour thought which holds
crises of over-production in relation to effective that the sole criterion of British prosperity is the
demand had usually been temporarily overcome by amount of goods which we can send abroad for
such fortuitous events as the discovery of the foreigners to consume.
Rand Goldfield, which led to a world inflationary Be this as it may, the system worked at least
movement. Although at the time he was in charge sufficiently ':ell to prevent a ,~ollapse of industry
'

of the nation's finances, our protagonist of the old


I
and of so~Iet~. But ?ur negro-and-bicycle "
economics had but slight acquaintance with J statesmans!up, 1~ surveymg ~ith complacency its
monetary problems. past expencnce, Ignores certam new factors of the
Apart, however, from these complexities, the real modern age. In the first place, during the course
and simple answer to the " negro-and-bicycle "
I
I
of the last generation the scientific adv3l" :c has been
school of thought can be briefly stated. It is true I ~ore sudden and disconcerting than ever before in
that during the course of the last century greater history. As a great scientist once put it to me
producti?n was roughly adjusted to demand by the " During the course of the last twenty years scienc~
auto~atlc processes ju~t described, albeit wid1 great has advanced more than it did in the previous two
suffenng to the workmg class, and with struggle hundred years, and the only minds not to register
and dislocation of the industrial machine. It is that change are those of the senior politicians."
true, also, that we managed largely to dispose of In other words, science, invention, technique have
our surplus production by the sale of manufactured
'
' recently increased the power to produce out of the
goods to countries not yet industrialised. Repay- range of a!l previous experience. In the meantime,
ment of that surplus sale could of course never be our mac~mery of _distribution and of government
made, without dislocation of British industry, by the has remamed practically unchanged, with the result
acceptance of goods or services in return to an that ~e production of industry greatly outstrips
amount equivalent to the surplus which we had effective demand. . In the second place, the foreign
thus alienated. Payment consequently took the mar~ets of count~Ies not yet indust~ialised are daily
form of foreign investments from which the bond- ceasmg to be available. Our previous markets are
holder drew a small annual tribute in the form of the~selves b~ing in?ustrialised, and are sheltering
interest, and on the manipulation of which the thetr nascent mdustnes behind prohibitive barriers.
'
!'
!
'
THE GREATER BRITAIN THE BASIS OF THE TROUBLE

These two simple facts- (I) the new scientific too late were actually applied. Let us assume that
advance; and (2) the artificial closing of our former th: world price-level was stabilised, in agreement
markets provide a sufficient answer to the " negro- w1th other nations, by the international regulation
and-bicycle " theory without research into com- of gold, or even by the agreed management of cur-
plexities such as monetary theory hitherto regarded rencies. Let us assume that the limpid intelligence
of the present Prime Minister, in conference with
as outside the sphere of statesmanship. On that
side, only this need be said for the present. If
• Mr. Roosevelt resolved the world's monetary
any fortuitous event occurred to-day, such as the problem, and that the substitution of that happy
chance discovery of goldfields which temporarily word " reflation " for " inflation "makes the pro-
Stived the economic system in the past, the effect of cess at last respectable. Let us also, if you will,
that happy 2ccic!ent vvould be rendered negatory by assume that reparations and inter-allied debts were
the deliberate policy of certain great countries in wiped out by clear-cut decision of an international
sterilising gold. It is true that a powerful move- I conference, and further, that national tariffs were
ment now exists for monetary reform, and few universally reduced to a minimum.
things are more comical in the face of modern Even if we make the immense assumption that
politics than the spectacle of politicians solemnly all the problems which are now so much canvassed
drawing the attention of Parliament to the existence as barriers to trade were surmounted by the states-
of a monetary problem who previously denied its men who are now discussing them, we should still
existence with all the indignation of outraged have to overcome certain bedrock facts for which
orthodoxy. the existing political system and existing statesman-
\
\Vhile we welcome this belated conversion, we ship offer no solution whatsoever. We should still
nevertheless suggest that monetary reform, unaccom- be faced by the fact that the industries of the world
panied by far deeper measures of national rational- can to-day produce, without running at nearly their
isation, is in itself entirely inadequate to meet the full pressure, far more than any conceivable effective
present situation. I myself have a consistent public demand of the present system can absorb. That is
record, extending over the last decade, of struggle the central fact which neither talk nor conference
for monetary reform against the combined effort I
has yet escaped, and which, indeed, has not yet been
of Old Gang politicians and bankers to resist seriously considered by statesmanship.
it. Nevertheless I believe that the importance of I
Tllis proposition will to-day scarcely be disputed
monetary reform (vital as it is) is to-day out of
I
l on the evidence available, but in all discussions of

proper perspecttve. the unemployed problem it is almost always ignored .
Let us assume that all the policies which our It is ignored because it involves a fundamental
older statesmen have resisted too long and studied change in the machinery of the government and of
I
THE BASIS OF THE TROUBLE
THE GREATER BRITAIN
I
industry. So the ostrich brigade of Old Gang employment stimulated, while the new market was
politicians and econo~ists plunge th~ir heads yet tapped and satisi-ied; then, as the large profits of the
deeper in the sands of 1mportant but mmor problems pioneers attracted more tardy adventurers, an excess
which should have been tackled years ago, but the of capacity to produce over the power to consume.
solution of which would bring us now but little There comes a point, in all commercial expansion,
nearer to world stability. where the output of bicycles increases faster than
The following figures show the actual increase in the ingenuity of those who seek negroes to set upon
I
industrial productions between 1927 and 1929:-- ' them.
Per cent. The process of rationalisation, advanced as it is,
The United Kingdom . • • 4-0 has still far to go. Broadly speaking, it is furthest
Germany . . !.9
United States of America


• I2.4 advanced in the United States. Twenty American


France • • • • 27.1 i families working on the land, Mr. Hubert Blake
Sweden 17.6 I
Austria







• 1!.7 1 has estimated, can produce the food needed for
Poland • • • 12.5 themselves and eighty other families; in France, it
Canada • 23.6
• • •
takes fifty families to produce the food needed for
The following figures show the physical volume themselves and fifty others.
of output per worker in the United Kingdom The process of competition, national and inter-
( 1924 = IOO ) : - natianal, forces a tendency towards more and more
- rationalisation. However much wheat there may
1924· 1927. 1928. 1929. be, the tendency of the future will be for French
-· cultivators to struggle towards greater output per
Coal-mining • • • 100.0 I22.4 I26.2 12/· I head, rather than for American cultivators to do the
Iron and Steel • • • IOO.O II4·3 II0.2 !20.6 reverse. In industry, as well as in agriculture, the
Engineering and Shipbuilding IOO.O 112.2 II5-7 rrs.6
Textiles • • • • !00.0 94·7 95·5 94·8 movement is the same. In the case of boots and
Food, Drink, Tobacco • IOO.O 95·5 97·8 !0!.4
ro6.9
shoes, where there are a multitude of separate pro-
Leather and Boots roo.o ro6.7 II0.4

Chemical and Allied Trades



100.0 !00.4 99·9 I00.8 cesses and where rationalisation is therefore more
All Industry • • • IOO.O ro6.6 ro6.9 I1 I. I I difficult, the Czechoslovakian workman, in the
.
- .. ... --·- ·--·- - highly mechanised factories of the late Herr Bata,
The above figures show, in a simple form, the produces twice as many boots per day as does the
significance of the modern movement t~war?s workman in British boot factories. The movement
rationalisation. The process has been apphed m of the future will be towards a higher world average
every field of production. In every case the result per workman, and thus to increasing rationalisation
has been the same products at first cheapened and in Britain.
66 THE GREATER BRITAIN THE BASIS OF THE TROuBLE

It has been calculated by Mr. Fred Henderson tin, with supplies accumulating in warehouse, had
that, in the United States, sixty-seven men can pro- new schemes of expansion, and vast mechanical
duce the goods which roo men were needed to pro- installations, becoming productive month by month.
duce before the war. A third of America's work- In face of this evidence, it is quite clear that the
men would, therefore, be permanently idle with- power to produce has far outstripped the mechan-
out even sporadic employment had not a higher ism of distribution. The relatively slow increase in
standard of living contributed towards absorbing productive capacity during the last century gave
the surplus. This is a world-wide tendency; and time for the automatic adjustment of demand to
it is vital for Britain, as for other countries, that supply ; this has now given place to a sensational
living standards should be raised so that the greater advance in science, technique and productive paten- .
output should be consumed. tiality, which makes irrelevant all hope of the auto-
One of Britain's chief industrial difficulties has matic adjustments of the past.
been the lack of :fluidity of output. Our productive Only by a new structure of governmental organ-
energies flow in established channels; neither labour isation can we hope to meet the consequences of
nor capital willingly seeks for new forms of enter- industrial organisation. Nothing but the rational-
prise. This has been the result of our childish faith ised State can hope to overcome the problem created
in the huge markets for our export industries, in our by rationalised industry. It is idle to denounce
capacity to recapture markets in which our goods rationalisation, becauseit simply means the modern-
were no longer wanted. We can produce more isation of industry, and industries which are not
bicycles than we can find negroes wh01 wish to ride modernised cannot live at all in present conditions.
them; and a multitude of countries, which used to Further, to prevent rationalisation is to prevent any
buy from us, are making their bicycles (and other reaping of the fruits of science which, in any
things) themselves. rationalised society would vastly benefit mankind.
Even in 1929, at the height of the industrial boom, The way to meet industrial rationalisation is not to
the world was far from consuming as much as it put back the hands of the clock, but so to organise
could produce. There were a million unemployed society that its effects are constructive rather than
in Britain, whose output nobody would buy. The destructive. That organisation is described in a
American steel industry, admittedly running on later chapter, but to arrive at that solution we must
optimistic estimates of consumers' needs, was never first face the situation created in the present system
working at its real capacity. There was already a by rationalisation.
surplus of the staple crops. Among primary raw It cannot be denied that every day new processes
materials, copper and zinc outputs were already of rationalisation displace fresh labour. The dis-
restricted ; rubber was grotesquely in excess ; and placement of labour creates more unemployment,
68 THE GREATER BRITAIN THE BASIS OF THE TROUBLE

reduces the number of those earning wages, and eight years of recovery she never regained her old
thus yet further reduces the market for which position, or absorbed her unemployed into produc-
industry produces. The power to produce goods tive industry.
increases, but the power to consume goods does not This consideration appears to be even more valid
increase at least in anything like the same propor- in the present " recovery ". The usual Stock
tion. If the power to consume increased in any- Exchange " boom " has been accompanied by an
thing like equal ratio to the power to produce, the even slmver process in absorbing the unemployed
labour displaced by rationalisation would of course into industry. The facts of the present situation
be absorbed in industry again, by the greater justify up to the hilt the Fascist theory that booms
demand for goods. As no machinery of govern- of the present system will tend to get shorter and
ment or of industry exists to secure this end, the slighter in effect while depressions tend to get longer
labour thus displaced is not re-absorbed. The and more severe. Within the system, boom and
effect of rationalisation, in fact, is not to increase, depression will alternate as before but underlying
but rather to diminish, purchasing power by the all these transient phenomena is the crisis of the
increase in unemployment. Yet we need at the system which arises from the factors set out in this
present time an increase in purchasing pov:'er, not chapter.
only sufficient to provide a market wh1ch can We are faced with a crisis of present civilisation
absorb the labour at present unemployed, but also partly world-wide and partly peculiar to ourselves.
adequate to create new labour for those whom the So far, Great Britain is one of the few great countries
future processes of rationalisation will throw into which has made no serious effort to meet its
unemployment. . . permanent implications.
This is the problem of under-consumptlOn wh1ch
remains when all the temporary dislocation and (ii) BRITAIN's PARTICULAR PROBLEMS
disturbances, on which the attention of politicians
is now exclusively concentrated, have been resolved. \Ve have so far examined only those consider-
It is a problem which makes irrelevant all calcu- ations of industrial crisis which apply to the world
lations based upon the trade-cycle theory of the past. as a v-1hole, and which account, at least in part, for
We are so often told that the present world depres- the world crisis. It is necessary, however, also to
sion is all part of a recurring trade cycle which consider the peculiar difficulties of the British
moves continually from boom to slump and back position, which, even if these world factors were
again. The protagonists of the trade-cycle theory absent, would involve a fundamental revision of our
argued in the same way in r92r, and they were industrial organisation.
wrong. Britain revived, certainly ; but throughout It must never be forgotten that Britain is the
70 THE GREATER BRITAIN THE BASIS OF THE TROUBLE 7I

greatest exporting nation, dependent more than any du~e at _home an ever greater quantity of the goods
other country on the markets of the world. We whiCh It consumes. Further, the backward and
were the first nation to pass through an industrial unde:elope? areas of the world, which we previously
revolution, and for long we enjoyed something supph~d w1tl~ manufactures for their consumption
approaching a monopoly of the world trade in and w1th capital goods for their development, have
manufactured goods. Long before the War, that mostly reached a point of development in which
monopoly had passed away, and under the stress they ne?d such services in ever lessening degree.
of war and post-war development the process has The capital goods have borne fruit. We sold them,
been progressive and accelerated. Nevertheless, our for example, textile machinery ; now they both spin
export of manufactured goods still amounts to and vveave, and Lancashire has lost its markets.
nearly 30 per cent. of our total production. In \Ve_ have to face a situation very awkward for the
relation to the new and special difficulties of our nat1?n most dependent on foreign trade that our
position, the first fact to note is the rapid indus- fore1gn markets are inevitably shrinking.
trialisation of our former markets. Nowhere, ur:fortunately, has this tendency been
greater than m the countries of the Empire.
Industrialised Markets Between 1914 and 1924, the Balfour Committee
In the great Free Trade theory of the last century, calculated, the rates of duty on British goods in
which, like other beautiful dreams, has broken South Africa increased on the average by 20 per
under the hard test of actual experience, all nations cent. In other Dominions and parts of the Empire,
were to produce the products which they were fitted ho-vvever, the increase was still more remarkable ; in
by nature to produce, and to exchange them with Australia, the rates increased by 56 per cent. In
the corresponding products of other nations. India they increased by nearly 300 per cent.
In actual fact, each nation is striving hard to . A typic~l example of the tendency may be found
make itself as nearly as possible a self-contained m Austraha, and more especially in the treatment
economic unit. Behind every kind of artificial of -vvoollen manufactures. In 1922 the Common-
barrier, they seek to create a variety of trades to wealth Bureau of Commerce and Industry stated
supply them with as large a proportion as possible th~t. the ~a~ifl was intended " to admit goods of
of the goods which they consume. No matter Bntlsh ongm on the most favourable terms possible
whether the goods thus produced cost their con- consistent with the development of local manu-
sumers more than if they were purchased from us ; tacture<' The High Commissioner, in a pamphlet
no matter if the processes of the new industries be Issued m London, stated officially that " if the
economic or uneconomic ; we have to face the fact present rates do not provide duties sufficient to
that nearly every civilised nation is striving to pro- protect new industries, consideration will be given


~2
/
THE GREATER BRITAIN ' THE BASIS OF THE TROUBLE 73

to providing sufficient protection on the first revision This is a glaring example, but it is typical of
of the tariff after the establishment of new much which has been happening in almost every
industries.'' country. Our former markets are being rapidly
Australia produces raw wool in great bulk and, industrialised, and are making for themselves goods
for the most part, of fine quality. In the past, which we formerly supplied. Brazil, awake to her
most of this has been sent to Yorkshire, where the vulnerability as a producer of little else but coffee,
climate has proved extraordinarily favourable to the has developed the textile trade, the manufacturer of
spinning and weaving industries. To spin worsteds boots and shoes, and a number of other trades with
in Australia is, and always will be, far more expen- a total output valued at about £45 millions a year.
sive than in the West Riding. Australia was un- Argentina has more than doubled her industrial
deterred by this. In their textile mills, at great production. Chile has replaced with home produce
expense, they manufacture a damp atmosphere ; much of her former imports ; in cement, for
and they are content with a low output from highly- example, more than three-quarters of her imports
paid operatives working in an unhealthy moisture have been dispensed with. In the East, too, the
to which they are unaccustomed. In spite of these same tendency has been at work. Just before the
handicaps, a press and pamphlet campaign success- War, India, China, Japan and Australia were pro-
fully urged the establishment of spinning, weaving ducing steel at the rate of 36o,ooo tons a year ; t.~is
and the manufacture of hosierv, blankets and other
)
output has since been nearly trebled.
woollen products. The avowed object was, to This is no passing phenomenon. " The general
quote once more from the Bureau of Commerce tendency towards the growth of local manufacture,"
and Industry, " that Australia shall manufacture wrote the Balfour Committee, " . . . is based on
eventually practically the whole of her wool clip the inevitable desire of progressive countries to
into woollen and worsted goods." achieve some degree of diversification in Lheir
The result was inevitable. The following figures industries." Therefore, they infer, ' it is impossible
show our exports of wool manufactures to Australia
~
to expect that the general tendency will be reversed,
in 1913 and 1933:- or slow down."
'' In other words, much of our export market is
H)
. I).
. '933·
Woollen and Worsted Yarns (l bs.) • 1,7os,ooo 107,400 lost for good. It is no longer merely a question of
Woollen Tissues (sq. yds.) • • 9,6G8,ooo 7II,200 regaining it by lmvering our own costs of produc-
Vvorsted Tissues (sq. yds.) • • 6,223,IOO 235,100
tion. These markets are closed against us by
In Bradford there are workers unemployed ; while artificial barriers, no matter what the cost of our
at the Antipodes, Australians are expensivdv
.
dressed )
production or how low the price of our goods. It
in cloth of uncertain quality. is the fixed determination of foreign nations to-day
L •
74 THE GREATER BRITAIN THF BASIS OF THE TROUBLE 75

to build industries of their own, and to exclude our to buy goods, and consequently the progressive
products. To this end they are not only employing reduction of the home market.
tariffs of ever-increasing severity: they are rationing, In fact, we are invited to drop the solid reality of
and even forbidding, imports; and they are obstruct- the home market which we hold in our own hand,
ing purchases of foreign currency, so that goods, under our own control, in order to grasp an illusory
once imported, cannot be paid for. Some nations I
I export trade which must elude us, for the si~ple
restrict imports from each country to the amount reason that foreign markets are now closed agamst
which those countries buy from them. In other us, whatever our cost of production.
countries there licences, quotas and embargoes, to The dilemma of our export trade in relation to
say nothing of a veto on dealings in foreign necessary imports, together with the whole complex
exchange. of trade balance, will be dealt with in another
These countries have fostered, within their own l
I
chapter. It is only necessary, for the purpose of
borders, small local industries which, at a price, the present analysis, to point out that the hope_ of
can and do satisfy local needs. These industries, solvino- our unemployment problem by an expans10n
0
having been artificially created, depend on continued of our export trade, which has long dominated the
support. The Governments concerned cannot, in Old Gang mind, is one of the most grotesque of
all fairness, break faith with their own people and their illusions. 1

remove a protection upon which big money risks Apart, even, from the exclusion of our goods frcm
have been taken, and by which substantial employ- foreio-n markets, the extent of that illusion may be
ment has been afforded.
Thus we are no longer contending with sur-
'
J b
"udcr~d by ficrures
b
from official sources which.
I gave
.
in a House of Commons speech on my res1gnat10n
mountable tariffs. We are dealing with trade in May, 1930, which were never challenged in
barriers which, though they may change in form, debate and which apply with even more force to
are permanent in effect. Our goods are not dis- subsequent developments. I examined :first the
couraged and taxed: they are definitely and ho1:.1e of reducing the unemployment problem by an
designedly excluded. Yet we are frequently told exoansion of export trade to be achieved by lower
that the only way out of our troubles is to lower costs of production consequent upon the rationalisa-
our cost of production in order to recapture our tion of industry. In four big groups of rationalised
foreign trade. Two ways are suggested to that trades between 1924 and 1929 an average increase
end: (r) rationalisation, the effect of which on our of 20 per cent. in production was achieved, but at
unemployment problem has already been discussed;
(2) the reduction of wages, which means the pro- r Mr. Thomas, on 25th February, 1931 (Hansard), said: ':The
gressive reduction of the power of our own people problem, difficult in some respects, is boiled down to the SJ,n;ple
proposition 'How can the Government help our export trade?
THE BASIS OF THE TROUBLE 77
THE GREATER BRITAIN

the same time an average decline of 4 per cent. New Competitors


was shown during this period in the number of In addition to all this industrialisation of former
worke~s e~plo_yed. If by corresponding measures markets, we have to face, in whatever markets
of ratwnahsatwn we had increased our export remai.n, an in~ensity of co_mpetition without preced-
trade by £2oo millions per annum (which was ent m. prevwus expenence. Many of these
necessary to make good the then shrinkage of our ·j competitors, too, are nearer than we to the markets
export trade), with a corresponding result on the
!
'
for ~he goods concerned, and better fitted to ap-
employment afforded by the trades effecting that preCiate the problems of manufacture and sale aris-
expansion, the nett reduction in the number of ing from geographical and racial differences.
those employed in these industries would have America in relation to our South American market
and Japan in .relation to our Eastern markets, pos- '
amounted to 5 per cent. If, on the other hand, we
had achieved such an increase in our export trade sess geographrcal and other advantages so obvious
merely by participating in a natural expansion of that they need not be stressed. In addition, a
world trade over a period of four years without country like America, which hitherto has disposed
any new methods of rationalisation or displacement ?£ only some 8 per cent. of her surplus production
I m ~xport trade, has a clear advantage in a price-
of labour in the industries involved, we should have I
put 9oo,ooo people in employment during a period cu~u~g scra;nble for .markets over a country such as
in which the normal increase in the working popu- Bntam, whrch has drverted a 30 per cent. margin of
lation was one million; thus, at the end of the her total production to export trade.
period, we should be back where we began. A country, like a business, may dispose for a time
It was not necessary to say much more in disproof of a small proportion of its total output at a loss in
of the easy belief that the unemployment problem order to invade further markets and to crush c~m­
in Great Britain could be solved by an expansion petitors. There is another point. Protected indus-
of export trade, whether achieved by the rationalisa- tries, such as those of the United States, provided
tion of our industries or by a natural increase in that they have a substantial market at home, can
world markets. Even such calculations, however, charge prices which allow them to pay overhead
are now rendered irrelevant by the simple fact- charges and the interest on all their capital by selling
which I anticipated in the same speech that our the bulk but not the whole of their output. It
export trade cannot be greatly expanded, and will the~ pays them to sell the rest, for export, at prices
probably shrink yet further, because our foreign whrch pay merely for the labour and materials used.
markets are being rapidly closed by artificial but A business, or a nation, can do this with 8 or ro
insuperable barriers erected against us by nations per cent. of its output; but Britain, in order to
determined to foster their own industries. corn pete would have to adopt the same policy

THE GREATtR BRITAIN ' THE BASIS OF THE TROUBLE 79

with 30 per cent. in many industries more of her tendency has been more than ever noticeable. The
industrial production. To attempt such a course is iI following table, shows the extent to which Britain
the direct road to bankruptcy. It would involve is losing ground : -
either the extinction of profits, and thus the slow
death of commercial enterprise ; or else the drastic U.K. and U.S.A. Percentages of Canada's Imports.
reduction of wages, which, by diminishing pur~
'

1 I '
I' From United \ From United
chasing power at home, would finally extinguish I Kingdom • •States of America •

the one market on which industrialists can rely. !


The effect of the geographical advantages of other
-----------~----1 ,
I 1912 n\1923-24 19'2-331912-13 1923-2411932-33
_________
- ..I --- . -- ----- -1 - -
I

countries may be seen in our trading position with


~ ~

i
Per Per Per I Per Per II Per
the United States. Before the War, we supplied I cent. cent. cent. I cent. cent. cent. 1

r6~ per cent. of the goods imported to the United Manufactures of I



l
Cotton • • 61 50 29 28 42 60
States, and were some way ahead of Germany, our Paints and I
I
I I
'
Varnishes 35 19 25 I 52 68 59
nearest competitor. Now, though the total trade Machinery
•I '
7 lj 12 93 90 84
is much larger (in a normal year), our share in it Glass and
• • I
' •
'
.
I

I
I I

Glassware 28 I 16 lZ '• 40 41 57
has fallen to a little over 10 per cent., and we have Electrical
• I
I
!

lost first place in the trade to Canada, whose share Apparatus I 13 7 12 84 88 85


. I i '

has risen from 7 to II per cent. Soap • .' ; 111 8 ! 12


M
/6 I '
i-\6 74
Manufactures of
In the meantime, the United States, themselves Silk I 15 3 1s 23 I
'
67
• .I 43 1
I
highly industrialised, are exporting their surplus in --~------ '
-------------------------- --------- -------- -----'-

competition with our main production. A smaller What is true in the West ern hemisphere is true
proportion of their total is actually sold in Great also in the Eastern. Cotton yarns and manu~
Britain, though the amount bulks large in relation factures have for long been one of the mainstays of
to British trade. But in Canada, and in South the British export trade: even in 1931, they
America, spheres of influence are being established, accounted for £56.6 millions, or nearly a fifth of
and American manufacturers have rapidly gained the manufactures which we sell abroad. But we
ground against our own. In Argentina, the British have lost our yarn export trade to Japan ; and Japan,
share of the import trade has fallen from 31 to 24 finding increasing competition from India and
per cent., while the United States share has increased China, has turned her serious attention to piece-
from 14~ to 21 per cent. In Brazil there is the goods. Since the War, the number of cotton
same tendency ; though Britain's share is slightly spindles in the Far East has increased by 8o per cent.,
increased, that of the United States has risen from the number of power-looms having also risen by
r6 to 22 per cent. In Canada, too, the same 40 per cent.
I
~0 THE GREATER BRITAIN I THE BASIS OF THE TROUBLE 8r
I
'

We are faced, in fact, with a new and intensive I


'
of gravity, for example, has been flouted by the
competition for foreign markets. The intensity of ·aeroplane : the Marxian law that, under capitalism,
the struggle for foreign markets is further increased all wages vvould be reduced to a subsistence level,
by the shrinkage of all home markets, which drives has been set aside by a variety of artificial means.
the industrialists of every nation ever more desper- ln just the same way, it is fair to suppose, a well-
ately to seek a foreign outlet for their surplus pro- governed nation can avoid the disasters incidental
duct£on. The shrinkage of home markets is, of to the vvorld's present industrial over-capacity.
course, in turn aggravated by the race in wage What has been done by accident and by a rough
reduction, in order to lower costs and capture foreign I and crude method for a period, can be done
markets, which sets up a vicious circle of shrinking ! permanently under scientific planning. But those
home markets and greater pressure to sell abroad. tendencies will not be defeated by lettin things
It is now the declared aim of every great nation alone ; and it is here that Conservatism fal s down.
to have a favourable balance of trade. Every Some of the Marxian laws do actually operate if
nation, in fact, seeks to sell more to others than it mankind is not organised to defeat them, and they
buys from them an achievement which, it is clear, are operating to-day in the inchoate society which
all nations cannot simultaneously attain. So a dog- t.~ey envisage. If we rely on the instruments of the
fight for foreign markets ensues in which the weaker Stone Age, we shall be subject to the laws of the
nations go under, and their collapse in turn reacts Stone Age and overwhelmed by its forces. In
upon the victors in the struggle by a further shrink- '
I'
other words, if we rely on Conservatism to defeat
age of world markets. A continuation of the i
Marxism, we shall be defeated by Marxism.
present world struggle for export markets is clearly
the road to world suicide, as well as a deadly threat II SciENcE AND MAss PRODUCTION
to the traditional basis of British trade. I Underlying all these phenomena is a deeper
These phenomena appear at first sight to support sociological fact, which destroys for all time the
Marxian theory. " In the decline of capitalism, illusion that our old supremacy can be regained
all nations must strive increasingly to dump abroad in the old way. In the past, British goods gained
their production which is surplus to the power of their ascendancy, partly because they were first in
home consumption. A world scramble for markets the field, but also because they were the best.
ensues, with competitive industrial rivalries which Mass production has altered the criteria ; the skill
lead inevitably to collapse and to war." Marxians of the handcraftsman is no longer the leading factor
overlook the fact that certain natural tendencies, in industry, and buyers are increasingly influenced
and even natural laws, can be and have been cir- by- the .price.
cumvented by the will and wit of man. The law Here we are at many disadvantages. In the past,
THE GREATER BRIT.-\JN TilE BASIS OF THE TROUBLE

export has been our main problem, and we cannot the output of crude products was growing at the
afford to sell goods abroad except at a full economic rate of 2.6 per cent. In manufacturing industry
price. In each market we are apt to encounter the rate of increase was obviously faster still, the
some near-by competitior, who is simply getting rid main incentive, to quote the League of Nations
of his surplus at any price which will pay him to report, The Course and Phases of World Economic
keep his mass-production machinery running. Depression coming " from an extraordinary ad-
Again, most of our workmen are of a good type, vance in industrial technique rationalisation in
capable of rising to the heights of skill which earned agriculture as well as in the manufacturing indus-
them their reputation in the past. For modern, tries." The output of a man-hour or a man-day
cheap mass production, such labour is unnecessary. has increased to a colossal extent, both here and
No limits are new set to the exploitation of the back- abroad. If it had occurred merely in this country,
ward labour of the Orient in competition with the the displaced labour might have been absorbed in
skilled labour of the West. An Oriental can work an expansion, through cheapness and commercial
for ten hours a day in exchange for a few bowls of enterprise, in the export trade. But, in view of the
rice, provided that such labour does not exact too problems outlined above, it is clear that such a
much from his fragile physique or from his unde- course was impossible.
veloped intelligence. To press a button at regular
intervals in the simplified processes of mass produc- Self-imposed Handicaps the Banking Policy
tion while he dreams of other things, is to him So far only natural barriers to British trade, which
most appropriate and congenial labour. He is · have latterly arisen or remarkably increased, have
actually, in some ways, better suited for the mono-- been examined. In addition to natural handicaps,
tony of mass-production tasks than is vvhite labour, hovvever, we have subjected ourselves to self-
which often cannot endure that monotony, at any imposed burdens unequalled in the history of any
rate for more than very short hours. The develop- other nation.
ment of Oriental labour for mass-production pur- In the post-war period, almost every industrial
pos~s is only in its early stages. That tendency is co\lntry (except the United States) devaluated its
bound to increase and to become a deadly menace currency. This meant that old debts, fixed in
to the whole white standard of life, and indeed to terms of money, became very small in relation to
the whole structure of Western civilisation. the goods which that sum of money would buy.
In addition, even in our own market, scientific Most industrial companies had debenture-debts,
methods of mass production raise. very serious which they were able to pay off at absurdly little
problems. In the period 1925-29 the world's popu- effort to themselves. And governments also re-
l8tion was increasing by I per cent. each year, but deemed all their redeemable internal debts.
THE GREATER BRITAIN THE BASIS OF THE TROUBLE

The result of this course of events was that foreign industrial losses and bankruptcies, but also a reluct-
nations emerged from their crises with a lightened ance to manufacture for stock which, by making it
burden of taxation and with industries unencum- impossible for British manufacturers to make quick
bered with prior charges. This, in effect, amounted delivery, resulted in the loss of business. Every
to a reduction in costs. In Britain, however, the worker was faced with a demand for lower wages
reverse was happening. to be enforced by the lash of widespread unemploy-
Most nations, by a crude infl:o.tion, escaped the ment created by the artificial restriction of credit
burden of national debt, debenture charges upon in pursuit of a deflationary policy. The only classes
industry and other fixed interest-bearing charges I
' to benefit were the rentier class and the big finance
and burdens ; we chose to pursue a policy of acute houses with large overseas interests. The rentier
deflation. class benefited because, by the halving of the price-
The result of that policy was roughly to halve the level, the fixed number of pounds per annum which
price level, and consequently to double the real they were paid in interest on their gilt-edged
burden of the National Debt since 1920, and corre- securities were made to buy double what they had
spondingly increase the burden of every dead- bought before. The big finance houses were assisted
weight charge on industry. In addition, by the by the financial prestige in the international money
policy of artificially raising the exchange value of market accorded by the portentous fact that Britain
the £, the selling price of our goods in fore~gn had returned to the Gold Standard at pre-war parity.
currencies was continually raised and the sellmg To serve them, the producer, whether employer or
price of foreign goods in our currency was contin- worker, received blow after blow ; the whole
ually lowered. Conservative, Liberal and S~c.ialist industrial fabric of Britain was rocked to its found-
Governments alike went one better than tradltlonal •
at10n.
Free Trade by erecting artificial barriers against That policy came to an inevitable and ignoble
British exports and giving artificial bonuses to failure in August r93r, when the formation of a
foreign imports. National Government combining all the men who,
The effect was a constant disequilibrium of British in their several Parties, had been most responsible
prices with the rest of the world, and consequently for that policy, failed to preserve the artificially
a constant demand for lower production costs in the supported £ from collapse.
shape of lower wages, which led directly to a series I They failed despite the borrowing of a large sum
of devastating industrial struggles. Every employer of money abroad intended to support the exchange,
had to sell his finished product in a world of lower '' and used in fact in a losing gamble for which the
prices than that in which he ha? ~urchased his raw ,I
' taxpayer had to foot the bill. The only effective
material and labour costs. Thts mduced, not only purpose of that borrowing was to hold up the £
86 THE GREATER BRITAIN THE BASIS OF THE TROUBLE 8;

long enough for foreign interests to transfer enrich Britain and to provide work for our own
their money abroad. The same statesmen who people would jeopardise our whole financial struc-
previously borrowed to support the £ have re- ture .
cently borrowed another £rso millions (Exchange . O~e of the main factors in my long struggle
Equalisation Fund) to keep low the £ which their w1thm the late Government, which led to my
Gcwernment was formed to keep high. In the resignation, arose on this very point. Ministers and
circumstances, the latter transaction was right ; the City were so busy helping every country except
but what a confession of imbecility it presents, in their own, with the results that are now so familiar,
the light of their previous efforts to maintain our th~t. any_one who dared to raise the forgotten flag of
exchange far above its natural level ! Bnt1sh mterests became a pariah in our political
At the same time that our older statesmen were system.
pursuing this policy in national finance their Can we then be surprised at the present con--
intimate friends and trusted colleagues in the great dition of Britain, when to all our natural handicaps
finance houses were borrowing short from America in the new world was added this additional burden
and lending long to Europe on highly profitable by Governments who acted with the customary
terms. Instead of bending the energies of British subservience of all political Parties to the alien power
finance to the sadly-needed re-equipment of British within the State?
industry, they were very busy re-equipping against • • • • •
us our industrial competitors in the rest of the
world. They were caught in this profit-snatching Conversion
process by the collapse of large areas of Europe in The series of conversion operations has been
werld depression. ~ailed as the excuse for, and the triumph of, our
Their loss was the nation's loss in the shock to our I
' fi~~ncial policy. On this subject only this need be
financial structure. Throughout this period, all sald. Broadly, conversion may be achieved in two
who suggested the intervention of Government, v.rays ( r) Through the inherent strength of a
either for the assistance of British industry in nation's industrial and financial position, when the
re-equipment or for the provision of useful and Government's credit will stand high and will be
economic work of national importance for the un- reinforced by a proportion of current profits seeking
employed, were dismissed as financial lunatics. a safe, gilt-edged, investment. (2) conversion may
Loans might be raised in London to give work in ~lso be. sec:u·ed by the simple process of making all
the Argentine or Timbuctoo, to enrich those mdustnal mvestment so unprofitable that the in-
countries and to provide work for their inhabitants ; vestor is driven to gilt-edged securities. If invest-
but we were told that loans raised in London to P"ent is concentrated on gilt-edged stock, the
88 THE GREATER BRITAIN '

Government may profit by the competition for such


securities to reduce the rate of interest. In fact our
financial policy made industrial investment unprofit-
able by a remorseless deflation, which greatly
benefited the bond-holder. By this latter method
the conversion operations have been achieved. Con- CHAPTER V
version was made possible by discrediting British
industry, rather than by making the Government's The Old Gang's Answe:r
credit sound. Throughout a period of conversion,
when the English market was supported on a 3~ per "'Relatively Favourable"
cent. basis, British Government stocks were available IF our trade position had been really sound when
in New York at prices showing a yield of over 5 per we suspended the Gold Standard we should have
cent. Some millions per annum have been saved experienced a considerable trade boom and reduc-
to the Exchequer at the expense of one small class of tion in unemployment figures. Such was the ex-
bond-holders. The remaining holders of Govern- perience of nearly every other country in the first
ment Stock and of all gilt-edged securities, have effect of currency depreciation. For that reason
enjoyed, by reason of these operations, an appreci- the suspension of Gold, which our Government had
ation of their capital amounting to hundreds of spent J~ r 30 millions to avoid, was hailed as the good
millions, and the dead-weight charge on industsy news for which industry was waiting. Since then
and the Nation has been correspondingly increased. we have participated in no very marked degree in
Conversion, in fact, has been secured by the methods a partial world revival in which our position was
of deflation and of credit restriction, ·which have greatly assisted by the artificial and temporary ex-
resulted in enormous industrial losses. pedient of currency depreciation. The consequent
slight decline in our unemployment figures was
gathered to the credit of our rulers despite their
strenuous efforts to prevent the currency depreciation
' to which it was almost entirely due. In particular
we are informed that Britain's position is relatively
more favourable than that of other countries
although other great nations have achieved a greater
percentage reduction in unemployment figures with-
out the assistance of currency depreciation.
Such arguments are little more than a drug ; the
89
THE GREATER BRITAIN THE OLD GANG'S ANSWER

reasoning is not only deceptive, but dangerous, as by other temporary factors in general price tenden-
it lulls the nation again into false security and dulls cies, we have, in fact, achieved by accident the posi-
the sense of action and of effort. tion of a low exchange rate without an increase in
In fact the most alarming feature of the present the internal price-level.
situation is that unemployment figures have not In these circumstances it is effrontery to claim
sensibly decreased in our present position of abnor- that our position is improved. The only shred of
mal and temporary advantage to British industry advantage lies in the fact that our goods in the few
occasioned by a 30 per cent. depreciation in our countries where they are welcomed, are cheaper to
exchange without any corresponding rise in our the foreign buyer ; and that, at home, foreign goods
internal orice level. The effect of this situation is have become more expensive. Our vast unemploy-
L
'
that we enjoy a large bounty upon our export trade, I ment, our reduced industrial profits, our mania for
and that we are sheltered from foreign imports by economy in productive public works, and our
an effective exchange barrier to which we have re- I
general loss of spending power all traceable,
cently added a protective tariff. We shall enjoy directly or indirectly, to the deflationary policy of
these advantages so long as our price-level does not successive Government have gravely detracted
rise in proportion to the depreciated exchange. At I
from the advantages which might have arisen from
present we still enjoy them, but our unemployment the exclusion, for currency reasons, of foreign goods.
problem is unaffected. In the export markets, restriction has increased and
In other countries, where the exchange has been multiplied ; there is scarcely a country where the
depreciated, there have invariably been industrial ·British industrialist can be sure of getting his goods
booms until the price-level was readjusted. British in, or of receiving payment after he has done so.
experience has been unique. We had no boom The advantage, such as it is, is temporary and
before the slump ; we have had no boom after the fortuitous. At any moment one of our great com-
currency was devalued. This phenomenon in- petitors may suffer currency depreciation,* and our
dicates in fact, a deeper-rooted industrial malady momentary advantage will be wiped out. In
than the most pessimistic have yet diagnosed. It nearly every country controversy concentrates on
may weB be that in the present depression of world th~ possibility of inflation and of currency depreci-
prices our internal price-level may show no sign of atwn, and one or more of these countries may at
rising in proportion to exchange depreciation for
a longer period than the usual time lag ; and even ·' Since these lines were written both Japan 'md America have gon~
off Gold in the established sense. Most nations now are alive to
when a rise in internal prices does occur, it will pro- the temporary advantages of currency depreciation to which attention
bably be not nearly equivalent to the exchange de- was drawn in these pages. They are striving to achieve by the design
of deliberate policy the advantageous position which our Government
-preciation. By.
our failure to maintain the ,£, and achieved by an '' unfortunate'' accident.

i'

I

'

THE GREATER BRITAIN ' THE OLD GANG'S ANSWER 93


I
any time re-enter that phase. So far, therefore, a better place ; but by an oversight they omit to
from regarding our relatively favourable unemploy- tell us how to get from one to the other.
ment figures as a reason for taking things easily, we The old position of evolutionary Socialists such as
should regard this accidental respite as a breathing- I the Webbs, w~ich was relatively logical, has long
space in 'vvhich to reorganise our industries and been rendered 1rrelevant and untenable by modern
j

strengthen our commercial defences. conditions. In their thesis, society would evolve
No 2-reater disservice to national interest can be peacefully and gradually to Socialism. Industries
~

performed at the present time than the twisting of woul~ be nationalised one at a time by cautious
facts which in reality are unfavourable, to the expenments ; no fresh step would be taken until
service of the dope machine. The Old Gangs have the last was confirmed. So, by gradual stages of
not only reduced industry by their policy to its natural evolution and development, mankind would
present plight ; by their soporific propaganda, with arrive at the Socialist Commonwealth with universal
its artificial sunshine of " relative improvement ", acclamation, as the reward of his experimental
they have deceived the public and h;ve paralvsed successes.
the national will to action. - · This thesis assumes a static society during the
course of the evolutionary experiment ; such an
THE PoLITICAL SvsTEM assumption has been roughly confounded by the
In the more permanent field of political recon- hard facts of a dynamic age. Collapse and uni-
struction, the leaders of the old parties have nothing versal disintegration now threaten unless action,
to offer. Theoretical Socialists saw the solution and universal action, is taken. In an 3ge of urgent
of their fancy in a Socialist commonwealth, c~~mge, v~e ?ave no time for evolutionary process.
where production is for need and not for profit, I1 Pala:ohthlC man were brought to life to-day,
where every law of present economics is set -aside. he would be killed by the traffic long before he had
They describe their goal with a certain precision : time to evolve into a modern homo sapiens. He
but none of them, so far, has even attempted would have to think of something quicker than
seriously to describe the road by which they reach it, I
evolution. The Socialists of the old school are in
or how they will bridge the interval between the much the same position as Pala:olithic man. They
collapse of all present machinery, consequent on the can only advance by evolution, and the ao-e they
adoption of Socialist measures which are incom- live in has no time for that. Before th~y had

patible with it, and the establishment of the alter- socialised half a dozen industries, the fabric of
native machinery of State and of industry which society would have succumbed to the depression.
they envisage. They tell us, in fact, that we live Their theories, therefore, are by now of no more

in hell. and that the heaven of Socialism would be '


'' than academic interest .
'
I
94 THE GREATER BRITAIN THE OLD GANG'S ANSWER o-
>)

The Independent Labour Party, on the other The more realistic Communist, on the other hand
hand, seeks " Socialism in our time " by methods does not shrink, in theory at any rate, from the con~
which would entail the scrapping of all existing l sequ.ences '.vhic~ his proposals involve. He points
machinery. In the period of transition, there could to ~1s Commumst goal and frankly informs us that
be nothing but the most thorough anarchy: and he 1s prepared to wade to it through the blood of
thus they would precipitate the collapse and the class war ~y the overthrow of existing society.
struggle which their benevolent pacifism seeks to Tr~e that m a . d~veloped and highly technical
avoid. Their living-wage policy seeks to secure a society such as Br~tam, la~gely dependent on foreign
vastly higher standard of life in this country than supphes and the mteractwns of world trade some-
prevails elsewhere, without any protective measures thing like half the population miaht starv~ or be
to prevent the under-cutting of that standard by destroyed in a protracted civil ~ar before the
cheaper foreign labour ; presumably this will per- Communist purpose was achieved. These minor
sist until the sweet light of reason has invaded the : considerations do not deflect the Communist from
darkest recesses of Africa, and every Hottentot has his steady purpose to achieve a solution which he
been persuaded to join the I.L.P. beli~~es t? be the only escape for humanity. The
Whatever germ of sense may be latent in these posltwn IS at any rate clearer-headed and more
proposals is destroyed by clinging to the Free Trade honest than the performances of the theoretical
fetishes of an obsolete Liberalism with which the Socialists of Labou-r and the I.L.P., who gallop up
I.L.P. is riddled. But apart from this Liberal to the f~nce of class struggle and then stop short of
obsession, the proposals of the I. L.P., in brief but ~he logJCal conclusion, leaving the nation to fall
not unfair summary, become an attempt to trans-
I mto the Communist ditch.
form society by measures which would immediately These posturing Girondins with the heads of
precipitate its collapse, in the roseate belief that the Communists and the chicken hearts of Social
lions of the great vested interests will learn in our Democrats have no place in the realities of the
time, by peaceful persuasion, to bleat the Inter- modern age. No more than Socialist and CDm-
nationale in happy harmony with the lambs of the n:-unist can. stand-pat Conservative or Liberal pro-
I.L.P.* VIde a solutiOn. The stop-gap measures of unscien-
'' The same arguments apply to the policy of the New Socialist
tific tariffs, borrowed from the programmes of the
League which apply to the policy of the I.L.P., from which it does last century, allow the same chaos to operate behind
not differ in essentials. The onlv novel contribution of the Socialist
~
the protective barrier that operated before.
League has been the borrowing without acknowledgement of proposals
for the reform of Parliamentary Procedure outlined by the author A later chapter will show why Protection, un-
before the Select Committee on Procedure on Public Business in the
House of Commons in June 1931 which represented the first pale supported by National Planning and the rational-
i'
>hadow of the now developed Fascist policy. isation of the State, takes us no further than before,
l
THE GREATER BRITAIN I
THE OLD GANG'S ANSWER 97
!

as our experience of National Government begins achievement, would have allowed things to drift so
to prove. There is only one alternative to our far if its I?ind and its will had not been paralysed
I
present steady drift to collapse and the anarchy of I
''
by the opiate propaganda of bewildered politicians,
I'
Communism: that alternative is the ordered politi- who steadily refuse to face facts which they and
cal economy of the Corporate State. The economic I !
~eir sy~tem ar~ not strong enough to overcome.
machinery of that State will be described in the I Like children m the dark, they put their heads
next chapter. For the moment it is only necessary I under the bed-clothes rather than get up like men
to note in our economic analysis that the dilemma r and grapple with the danger.
of rationalisation, of science and of modern tech- I'

nique applied to industry, adding to unemployment


and national distress, remains unanswered by any
political party, and that failure to answer that
di1emma must lead in the end to collapse.
It may be that small boom periods of ever shorter
duration and of ever more hectic character may
precede that collapse. When for a time demand '
I

is almost at a standstill, monetary stimulants and


similar measures may temporarily increase demand
in order to satisfy the elementary needs of the world.
The ineluctable fact remains that the power of I
modern machinery and production can so rapidly '
satisfy any demand of that character that saturation
and clogging must soon again ensue. Each fresh
seizure of that nature is likely to be more severe as
the pressure of the modern machine increases, until
at last its power of output leads to something
approaching universal apoplexy. '
!
This analysis is simply the facing of facts. This
is the pre-requisite for action, and the gloom of the
outlook must not be taken as a signal for despair.
Had facts been faced before, we should long ago
have had a policy of constructive action. No
nation of such virility, and so great a tradition of
BUILDING UP THE HOME MARKET 99

CHAPTER VI rialists, he is merely reducing the purchasing power


I
of the market for which his industry produces.
Building up the Home Market But the industrialist also knows that, if he does not
I reduce wages, he himself will be undercut and
IF our economic analysis has any validity, we I driven out of business, in an unregulated compet-
must found any constructive policy on the basic fact itive system, by rivals who do reduce wages.
that present consuming power is inadequate to A Government may know that by reducing the
absorb the production of modern industry. Con- wages of its employees and by reducing its service
sequently, the economic solution is not the reduction to the community, it is merely further reducing the
of our standard of life, but the raising of that market, the poverty of which has created the serious
standard to a point at which the increased purchas- industrial situation which is reflected in declining
ing power of the home market can absorb the revenue returns. But the Government also knows
increased production of modern machinery. How that in a period of declining revenue it must reduce
to raise wages, salaries and the standard of life to expenditure or be faced by Budget deficits ; the
that point, without the dislocation of industry latter may, indeed, be temporarily supported, but,
I
which such a process would involve under the if indefinitely continued, they will lead to financial
present system, is the problem to which the Corpor- I collapse.
ate machinery alone provides an answer. So industry and Government alike are forced to
That the power of consumption is inadequate to measures which yet further reduce the market, and
absorb production is at present scarcely denied in yet further aggravate the industrial evils from which
any quarter ; yet every policy of the moment seeks both are suffering. Each fresh reduction of pur-
yet further to reduce that consuming power by the I
chasing power deteriorates the situation, yet every
reduction of salaries and of wages, and by an all- instrument of national life in the grip of the present
round decrease in the standard of life. Our doctors ,chaos is compelled to pursue that policy. At last
all diagnose the malady as a lack of markets, which the Government and the nation are reduced to the
are simply the power of the people to buy goods ; I absurd and impotent position of a dog chasing its
yet the treatment which all prescribe by a reduction I
own tail in whirling circles of accelerating futility
of the standard of life is a further inoculation of the I
I and disaster. How to break that circle is the major
germ which has caused the disease. It must at once -question of the age, and to it the Corporate system
be admitted that in the absence of Corporate alone provides the answer. We have to establish
organisation, much truth exists in their argument. ,a machinery of Government and industry in which
.
An industrialist may know that, by cutting the I it is possible, not only to maintain, but to raise, the
wages of his workers in common with other indust- ·standard of life without dislocation of industry and
98 I
IOO THE GREATER BRITAIN BUILDING UP THE HOME MARKET ror

of Government. the scope of present-day statesmanship not for


Italian Fascism, in early and tentative experiments lack of personal capacity, but because there is not
in the Corporate system, has often intervened the necessary machinery. In a Parliament of
effectively to prevent wages being reduced. It obstruction, discordant committees, talk and inertia,
has so far failed to provide a system by which the problem is insoluble. Nothing but strong
purchasing power is provided at all adequate to executive government can bring it to a successful
absorb the power of modern production. Such a conclusion.
task, of course, is exceedingly difficult of achieve-
ment in a country of small natural resources and The Need for Scientific Protection.
little tradition of organisation ; it involves at least a The first essential of a stable and enlarged home
measure of temporary "insulation" from world econ- market is, of course, a scientific protective system.
omy as a whole. That task in that country has It is impossible to have stability without some
not yet been really attempted, and its comp_rehen- immunity from the chaos of world conditions and
sive conception has scarcely yet. been co~sidered. fluctuations described in the previous chapter ; and
Italian Fascism has succeeded m pres·ervmg the it is impossible here to raise wages and salaries to
economic situation of Italy in a world situation in the point where increased purchasing power will
which without Fascism, it would undoubtedly have absorb modern production in the home market,
collapsed ; it has also succeeded in raising the unless those wages and salaries are protected
standards of the working-class in these adverse from cheap foreign competition. It is impossible to
conditions ; but in a small country it has not proved maintain, let alone to raise, the present standard of
possible to advance in the Corporate system towards life if that standard is subject to the under-cutting of
the policy which will now be discussed, ~nd ind~ed lower-paid foreign labour and to the subsidised
such conceptions go far beyond anythmg which dumping of the great foreign combinations. It is
Italy has yet worked out. . . inconceivable that the home market and the econ-
It is by no means an easy task to absorb, Withm omic life of these islands can be reorganised if they
the purchasing power of the home market, the are subject to every factor of the world chaos which
swollen output of mod~ern manufacturin~ mac_hin- '
.I
was examined in a previous chapter as responsible
ery. It is even more difficult to relate this achieve- for our present declining position in the markets
ment, which may have dangerous effects o.r: pro- of the world.
duction costs in its initial stages, to the necessity for The Free Trade argument, in present circum-
carrying on an external trade to pay for _our stances, has gone almost by default, but still finds its
essential imports of food and raw matenals. advocates in economists and politicians who seek
Viewed in the aggregate, it is a task entirely beyond escape exclusively by way of international action
----- --.

102 THE GREATER BRITAIN BUILDING UP THE HOME MARKET 103

rather than by national organisation. Two fallacies a _moder-?- and scientific form of industrial organis-
are involved in these Old Gang economics, one of atwn, ~~11 le~d more rapidly to a world order of
practice and the other of theory. In practice, it is economtc samty than _all the_ l'esounding appeals to
demonstrably an illusion to believe that all nations our common humamty wh1ch have echoed in a
can be persuaded to act effectively together. In- variety of languages through the halls of Geneva and
numerable confer·ences on tariff barriers, monetary Lausanne.
problems and international co-operation have been Le~ ~s now examine the fallacy in theory of the
held for the past decade, with the practical result remammg adherents of the Free Trade school, who
that the barriers became greater and the co-operation seek salvation in international action at Geneva
less. Our politicians have attended conferences La~1sanne and elsewhere rather than in taking off '
at Geneva and ad hoc conferences at every other thetr c?ats at horn~ a~d squaring up to the problem
Continental watering-place, cap in hand as suppli- of natwnal ~rgamsatwn. Their theory is derived
cants to the rest of the world to be reasonable in from the penod of pover~y economics. In the past
order that Britain may live. ~entury we were faced wzth the problem of poverty;
In hard and bitter experience, their policy simply zn thzs century we are faced with the problem of
has not worked. Other nations, by very crude and plenty. Then the question was how to eke out
old-fashioned methods, have merely tried to protect ~e meagre resources of mankind ; now the question
themselves in the general sauve qui peut of Europe. 1s how to release for consumption the vast resources
The international policy implies by its very nature with which science has endowed mankind. In the
that more powerful and intelligent nations must period of poverty any barrier to the thin trickle of
wait on the advance of the less intelligent and international trade was obviously bad; in the nine-
enlightened. The march of every nation is reduced teenth century the Mancheste~ school of Free
to the pace of the slowest. We have to wait unti~ Traders had much reason on their side. Barriers
the gentle charm of Socialist and Liberal persuasion to international trade, goods produced in countries
has penetrated the darkest corners of the earth unsuited to their production, were all factors liable
before we can begin to maintain, let alone to to result in distress and starvation in a world com-
advance, the British standard of life. munity whose resources barely satisfied the needs
Surely the time has come to save ourselves by of life. ·
scientific measures of protection at a time when But to-day we have entered the period of potential
lesser nations are busy trying to save themselves plenty, and these factors are largely irrelevant.
by unscientific measures? Practice is a greater To-day, in organising production, we have to think,
force than precept in the modern world. The first not so much of maximum output, as of maximum
nation which sets its house in order, and discovers consumption. Modern industry and science can
THE GREATER BRITAIN BUILDING UP THE HOME MARKET 105

produce more than enough to satisfy the needs of immune from the painful process of fresh thought,
man, provided that political organisation enables the Conservative party has advocated it ever since,
the machine to work. The advance of science has and has now applied a policy which is by that
been the decisive factor in the change from poverty margin out of date.
economics to the economics of plenty. Let us, in As a result, we have, not a scientific plan, but a
the name of reality, have done with the economics rapid and inefficient improvisation. They have
of poverty I handed over the fiscal system of the country to
Hitherto no solution has been found because the a struggling committee of appointed business men
more incisive brains of the old school are obsessed who are vested with wide powers, but are endowed
with the idea of international action. They cannot with inadequate information and with no mach-

imagine any way of escape except by international mery. .
agreement. They cannot conceive a nation This abdication of the function of government of
organised with the technique of modern science to course imposes upon that committee a superhuman
supply the vast majority of its own requirements task to which it will prove inadequate. In that
from its own resources. Consequently, their bottle-neck will probably be clogged the life-blood
attention is continually diverted from the real task of of industrial organisation. Apart altogether from
national organisation to a pursuit of the interna- the question of machinery, which we will deal with
tional will-o' -the-wisp through the quagmire of con- later, no vestige of scientific protective policy has
flicting politics and confused economics among all yet been adopted, except very inadequately in one
the more backward nations of the earth. In pursuit instance. The whole basis of modern and scientific
of that policy, meanwhile, they have exposed to all Protection is lacking. No machinery whatever is
the shocks of world chaos the struggling remnants provided for raising, or even for stabilising, the
of our industry which cater for the demoralised present standard of life, which is the main justifica-
home market. tion for a protective system. Protection is not made
conditional upon industrial efficiency, upon good
Scientific Protection versus Conservative Protection wages to the workers or upon low prices to the con-
The Government has now been driven, by the sumers. Our standard of life is in some degree
hard pressure Of fact rather than by any process of protected from the competition of foreign employers
reason, to the adoption of a half-baked Protectionist who pay low wages ; it is in no degree protected
system. Without further thought, or consideration from the competition of British employers who pay
of modern conditions, it has taken over the Pro- low wages.
tectionist policy which Mr. Joseph Chamberlain The same wage-cutting dog-fight, which means
first advanced some thirty years ago. Happily an ever-diminishing home market, may rage behind
ro6 THE GREATER BRITAIN BUILDING UP THE HOME MARKET ID/

the P!otective barrier in the absence of any State and rationalise their output, and thus, while paying
machmery to make Protection conditional on good high wages to the worker, nevertheless preserve low
wages and decent conditions. Every British em- prices to the consumer ; in other words, the rate
ployer who uses Protection to raise the standard of production rather than the rate of wages is now
of life in his industry, and thus to contribute to an the main factor in the cost of production.
enlarged home market, may find himself under-cut Those assurances should be translated into
by less patriotic and less scrupulous rivals. administrative facts. It is clearly necessary to do
Thus the purpose of the enlarged and stable home this, because no individual manufacturer, however
market, which is the sole justification for Protection, well-intentioned, can maintain or raise wages if he
will be defeated ; in fact, the same chaos will exist is exposed to the undercutting of less scrupulous
behind the protective barrier that previously existed rivals. However much he is protected from wage-
outside it. One of the main objects of modern cutting from abroad, he is still exposed to wage-
Protection is the diversification of production, the cutting at home. It is here that the Corporate
establishment of new industries catering for the system begins to operate. Protection should only
home market in competition with products hitherto be given in return for definite conditions as to wages
imported from abroad industries employing, and '
' and prices over the. various groups of industry-
adequately remunerating, potential consumers of conditions which will later be considered in the
one another's products. administrative machinery of the Corporations.
Such an object necessitates a national plan of It is known and proved that modern industry,
scientific Protection. In its turn that plan entails, properly organised and working at full pressure, can
not the appointment of yet another committee, both raise wages and reduce costs. But this cannot
but the establishment of a comprehensive n1achinery happen unless the manufacturer is protected from
to secure its application. wage-cutting competitors at home as well as
That plan and that machinery are wholly lacking abroad. Hence the necessity for Corporate organis-
from the policy of the Government. ation, which will regulate wages and prices by per-
manent machinery. Protection must protect organ-
Our Conditional Protection ' isation, and not chaos. Behind the protective
It is submitted in our policy that Protection must barrier, the home market must be stabilised and
be conditional upon industrial efficiency. That enlarged, and the consumer must be safeguarded.
efficiency we define, broadly, as low prices to the These results can only be achieved within the
consumer and good wages to the worker. All structure of the organised system which is the Cor-
industrialists impress upon the public that, if they porate State.
are given an assured home market, they can expand Protection without Corporate organisation is no
ro8 THE GREATER BRITAIN B U I L D IN G UP THE H 0 ME MAR K E T ICJ9

bulwark against unemployment. In countries long The " philosophy of high wages " succumbed to
protected, such as Germany and the United States, the first serious test.
we have witnessed the finest result of a Protective It failed chiefly because it was never a philosophy,
system followed by the inevitable collapse resulting nor yet a conscious policy. Under the pressure of
from a lack of Corporate organisation. In defiance credit restriction designed to check Wall Street
of all Marxian laws, wages rose under capitalism I speculation, one manufacturer after another began
to heights dizzily above the subsistence level. By to curtail his wages, and competitors were compelled
happy accident, America achieved for a time the to follow suit. There was no industrial planning :
fruits of planning ... Protective duties afforded com- th~ system was unsupported by Corporate organis-
parative immunity from the competition of foreign atiOn. Its success had been adventitious ; it had no
low-paid labour. At the same time, stringent resources to withstand a strain. Added to this,
immigration laws created a shortage of labour in the credit which should have been used for industrial
I
relation to demand, and afforded labour a strong ' development and the financing of reasonable con-
bar~~ining position on the market. That strong sumption was devoted to the uses of Wall Street,
pos1t10n, even more, perhaps, than the enlighten- where shares were bid up out of all relation to any
ment of American employers, led to a steady rise in conceivable real value. The Federal Reserve Board,
wages and consequently to a steadily increasing de- within the limits of their system, were able only to
mand for goods in a home market rapidly ex- check credit expansion in a quantitative rather than
panding. a qualitative manner. It paid speculators to borrow
The whole expanding system was supported by money at ro per cent. in order to buy stocks yielding
the policy of the Federal Reserve Board, and yet only 3 per cent. on the purchase price. They were
further extended by the hire-purchase system which willing to do this, because their experience encour-
turned every trader into a banker. Even so, it is aged them to hope for capital profits of, perhaps,
interesting to note that, even at the height of the 50 per cent. They were speculators, and their
boom, competent authorities considered that the action at that time was detrimental to every serious
market " was insufficient to absorb the potential interest. But no machinery existed for discrimin-
production of American industry." It is a grave ation between social and anti-social use of credit,
mistake to point to the high wage and expansionist only for a general policy of restriction. By restric-
system of America as responsible for the evils which tion of credit, the genuine producer was hit long
it served for a time to stave off. The crash came before the Wall Street speculator, who summoned
because that great system was unsupported by European short-term credits to his aid.
national organisation and regulation of a Corporate In an effort to check the frenzy of a few irre-
character. sponsible individuals, the whole great structure of
IJO THE GREATER BRITAIN BUILDING UP THE HOME MARKET III

American industry was shaken to foundations which "The task is not to find a middle way, but a new
did not rest on the reality of Corporate organisation. 1!-'a~, _to fashzon a ~ystem in which competition and
Had private enterprise been acting in accordance tn~zvzdual enterprzse on. the one hand, and regu-
with a reasoned national policy, the trouble might latz_on and general planmng on the other, will be so
well have been avoided. In the stress of internal adtusted that the abuses of each will be avoided and
competition on a sagging market, and in the absence the benefits of each retained. We need to con-
of any State machinery for the maintenance and cor- struct such a framework of law, custom, institutions
relation of wages, the high wages and the hire- and planned guidance and direction that the thrust
purchase system began to crumble, and with them of individual effort and ambition c~n only operate
the whole structure of American industry. Never to the genera~ advantage. We may find a simile
was more notable the absence of a coherent national f?r our task zn the arch of a great bridge, so de-
plan designed to check forces inimical to the stability szgned that. the stress~s and strains of the separate
of the State, and to encourage the genuine forces of blocks. whzch_ constttute it e<~:ch pushing and
production and exchange in which national welfare thrustzng agaznst the other support the whole
must rest. America made a god of unregulated structure by the interaction of their reciprocal
anarchy in private enterprise. This, she falsely pressure."
believed, was the only alternative to Socialism. The words are those of Sir Arthur Salter, a fore-
Both in her success and in her failure, in her dizzy most product of the greatest Civil Service in the
prosperity and in her cataclysmic depression, there w?rld, experienced without equal in the organis-
is an instructive lesson. Throughout the boom she atiOn of war and of peace. The sense of those
achieved, on a basis purely temporary, what words is the finest description yet produced in
organised planning and Corporate institutions can g;neral terms of the structure of the Fascist State.
set on a permanent footing. The very energy of He has not yet reached that conclusion, but he
American libertarianism is the best argument for app~ars t~ have but a short road left to travel.
Fascist institutions.* Possibly, hke many ?th~rs, he may for the present
be deterred from takmg It by the fact that this great
* America in the present effort under President Roosevelt has
entirely abandoned the old " Libertariani>m " and adopted much of st~ucture ~f Corporate organisation can only rest
the policy advocated in this book. Although the President is vested wrth certamty upon the iron reality of modern
with dictatorial powers it is still doubtful whether he can overcome
the problems confronting him without the support of an organised
political organisation.
Fascist movement. The size and resources of America make the
problem immeasurably easier than in the case of European countries.
He may, therefore, be largely succe>sful in applying a Fascist policy Machinery of Protection
without Fascism in America, whereas such a task would be impossible It remains to consider the administrative machin-
in face of our greater problems and more deeply entrenched interests
.and conventions. ery by which scientific Protection would be secured
II2 THE GREATER BRITAIN II BUILDING UP THE HOME MARKET IIj

within the Corporate system. Under the original governing the Protective system. The dual objective
1
New Party proposals for scientific Protection, self- of our .Protective system, which is good wages and
governing areas of industry were to be constituted lo:N pnces, would thus be ensured by the represent-
for this purpose under organisations called Com- atiOn of both workers and consumers in the Protec-
modity Boards. tive n1achinery. Scientific Protection would shelter
Such Commodity Boards were to advise the efricient indmtries caterin o- for an enlarged home
Minister, with whom ultimate power must rest if market. By this system, Protection was to be lifted
the authority of Government is not to be abrogated, out o~ tl~e do~ain of White?all a~d the haphazard
on the measures of Protection to be adopted. functwmng or ad hoc commrttees, mto the sphere of
Representation on the Commodity Board was to be a permanently functioning machine of industrial
accorded primarily to workers and employers in the self-g:ov.ern~ent which continually harmonised the
industries seeking Protection ; secondarily, also, confi1ctmg mterest~ of the industrial system.

to the industries affected by the Protective system These Commodity Boards, each of which was to
and also to the general consumers' interests. Thus cover . appropriate areas of interlocking industries,
within self-governing areas of industry directing were m turn to be represented on a National Plan-
scientific Protection, we should not only have re- ~ing C?uncil wh~ch formed a more comprehensive
presentation of producers' interests, both for workers mdustnal synt~esrs, and whose purpose was to plan,
and employers, but also of users' interests and those regulate and duect the general Protective system of
of the final consumer. the country.
For instance, in the case of the Protection of an Such a system was, of course, an immature
industrv such as steel, those who use steel as a raw
J
at~umbration, reached quite independently, of the
material for a further stage of production are w1der s\ructure of a complete Corporate system. The
affected, and also the general public who consume conceptw~ of Co~~odity _B~ards representing
the final finished article. ·producers and users mterests m mdustry, and those
In a scientific Protective system all these interests of the general consuming public, can be quite
must be harmonised if industrial peace and the naturally transformed into the organs of the Corpor-
stability of the system are to be secured, together ate sy~tem. The Commodity Boards would be
with the interest of the nation as a whole. Also it co.mpn;ed ~f the e~ployer~' and workers' organis-
is necessary that the workers should be assured that atwn~ rormmg ~he mdustnal Corporation, the full
they will share in the fruits of Protection in the functwns of whrch have been described in an earlier
shape of better wages and conditions ; they, too, chapter ; t? _these would be added representatives of
must therefore be represented on the organisation consumers mterests.
1 " A National Policy " (Publisher: Macmillan. March, 1931). The same areas of industrial self-government in
THE GREATER BRITAIN BUIL D IN G UP THE H 0 ME MARKET IIS

matters such as wages, conditions of industry and National Corporation.


the general direction of regional industrial govern- In the National Corporation itself would be in-
ment, would also logically cover the Protective volved and represented the major questions of
system which sheltered this area of industrial organ- I banking and financial policy, and their relation to
• •
1satwn. I industry, which will be dealt with in a later chapter.
In the more developed conceptions of the Fascist How otherwise can the transition from an old
Movement, consequently, the Corporations would parliamentary system to a modernised industrial
embrace all these varieties of function and would structure be undertaken? The opponents of this
find their national synthesis, not merely in a conception must either resort to government from
National Planning Council to deal with the Protect- Whitehall of the absolute Socialist variety, or revert
ive system, but in a National Corporation acting to the laisser-faire of the Victorian school. It is
directly under a Minister of Corporations which manifestly absurd to claim that Parliament on the
would in practice amount to a parliament of present model, or ad hoc committees appointed by
industry. that Parliament, can fulfil such a task. We must
The function of the National Corporation would either establish logical areas of industrial self-
be to plan, to regulate and to direct the whole government and planning, which are synthesised
national economy, under the guidance of the in a national machine for the planning of general
Minister, who himself would have to account for his national policy ; or we must drift from crisis to
work in Parliament ; which, in the reconstructed crisis with the sporadic, ill-informed and tardy
system, would be largely elected on an industrial effort of the Cabinet and Parliamentary system to
and occupational franchise. protect us.
The consequence of such organisation is not, as '¥hat other escape has been suggested except the
in Socialist organisation, to submit industry to the Corporate or Fascist system The words" national
government of Whitehall, but rather to provide for planning," first used by the New Party, have since
the self-government of industry, within a series of been subject to many vicissitudes. They have been
self-governing areas or Corporations of industry, made hideous by every long-haired theorist who
• which find their national unity in the National Cor- shrinks from the hazardous and arduous corollary
poration, and th~ir u~timate subordination and I of planning, which is action in modern political
relation to the nattonal mterest as a whole. organisation. How can the scientific re-planning
Within the sphere of the Corporate system would of national economics be reconciled with the control
fall the re-planning of our industrial organisation- of an old parliamentary system the membership of
from detailed questions, dealt with by the various which is recruited by competitive promises to pro-
industrial Corporations, to the general policy of duce in five minutes a new heaven on earth at the .
national economic development handled by the I taxpayers' expense?
n6 Tl.-lE GREATER BRITAIN

Future organisation is a matter for technicians,


with the ring kept free for the operation of science
and organisation, by the universal authority of an
organised and disciplined modern movement That
is the real function and purpose of the politician in
the modern age. Thus can be achieved the great CHAPTER VII
necessity of steadily and systematically increasing The Export Trade
the power to consume as science and rationalisation
increase the power to produce. IN a previ~us chapter I. hav~ outlined a Corporate
Thus, and thus alone, can be adjusted the infinite s!ru~ture of mdustry whtch, m a continually func-
complexity of modern economic organisation to the ~lOnmg syste.m, not only adjusts the difference of
difficulties of political government. He who talks mterests m mdustry, b~t also provides machinery
of planning within the limits of the present parlia- for the general plannmg of our economic lives
mentary and political system either deludes himself, and for the ra~sing of the. standard ~f life. By
or physically shrinks from the effort and the danger the. same machmery, a flex1ble and scientific Pro-
of real and fundamental reorganisation. tectlVe sy~tem is ?evi.sed by those :engaged in industry
At this stage nobody should attempt to describe and cogmsant w1th 1ts facts, subJect to the continual
every detail of a system which can only be achieved check and safeguard of the industrial interests
by experiment and that practical use of experience aff~cte~, and also of consumers' interests, so as to
which is the essence of Fascism. But we can at mamt.am that machine in national equilibrium.
least advance, in more than broad outline, a system ~111S plan, as already explained in detail, seeks
which by scientific Protection in return for industrial dehberately to insulate the economy of Britain from
efficiency (meaning good wages and low prices) the shock of present world conditions and to raise
can insulate this country from the present world the standard of life in these islands far above the
chaos and can provide a permanently functioning world level, as the only practical means now avail-
machinery for the raising of standards as this may able ?£ finding an outlet for the vast productive
be justified by the march of science and the increase capactty of the modern industrial machine.
of productive capacity.
The adjustment of that insulated economy with Wages, Production and Costs
the rest of the world on which, after every measure We now reach, admittedly, the most difficult part
of internal reorganisation, we must depend to some of .the scheme, wh~ch is the adjustment of that
extent for supply of certain foodstuffs and raw ~atwnal .e~ono~y with world economy. The intel-
material, will be, discussed in the next chapter. hgent cntlC w1ll say, "Let us assume that you can,
IIJ
n8 THE GREATER BRITAIN THE EXPORT TRADE

by your Corporate machinery, raise the standard of rationalisation consists in replacing human labour
life and the purchasing power of the people to a with . mech~nis~d processes. At each step new
point adequate to absorb the surplus production of machmery 1s mstalled, and expenditure out of
present industrial machinery in the home market ; rev~nue for labour is replaced by expenditure,
and that you can, by your Corporate system, so mamly ?ut of capital, for machinery. But, whereas
regulate industrial conditions internally as to pre- labou~ 1s o?ly paid .for when it is employed, the
vent under-cutting in wages, which would lead to ~achmery 1s a standmg charge whether it is work-
the collapse of that structure. Even when you rng or not. Thus the following schedule repre-
have achieved this, you will still be faced by the sent_s a possibl~ costing schedule of a factory pro-
fact that we are more dependent than any other ducmg roo umts of goods before and after a given
nation on the markets of the world, and that it is measure of rationalisation : -
always necessary for us to maintain a large export ~----------. ~------- "---- -------- -----; ----------~---·· ·- -~~----
~ --
trade in order to pay for essential foodstuffs and , Before '
! After
raw materials which we cannot produce at home. I Rationalisation. Rationalisation.
By raising wages and standards internally, you will Raw M~~eri;ls . . L - £so --~l---£-so_ __
Labour . . . . 20 ro
raise the cost of production, and thus will jeopardise Heat, Light, Power . 5 6
that export trade ; while even if that were not the Depreciation . . . 5 6
Interest on Value of Plant,
result of your internal measures, you still have to etc. . . . . 20
show how you will maintain our essential export -- .. -- --" --------- -------~--

Total cost . £ £
trade in face of all the adverse factors which you ~ ----- ----- ______•__ _'_.!_ - ___ _roo ---· ---- 97 ___
have already described, and which you have stressed
to a greater extent than any other political move- This table shows the possible effect, on the basis
ment." of full outr:ut. The cost of producing the articles
Such very legitimate and reasonable inquiry may concerned IS reduced, by rationalisation, from £1
well be raised at this point. Our first answer, in to about 19s. 5d. each; the labour element is reduced
general terms, is that it is a mistake to assume that from. 2? to a little over ro per cent.; the capital
the raising of internal standards will raise the cost cost 1s mcreased from 20 to 25 per cent., and there
of production and thus will jeopardise our export are small increases in the amount spent in deprecia-
trade. It has already been pointed out that the tion and heat, light and power.
cost of production in rationalised modern industry If, n_ow, we assume that the factory goes on to
is determined, not nearly so much by the rate of ~hort time, and produces only 50 units of goods
wages, as by the rate of production. mstead of roo units, the existing schedule would be
This is easily demonstrated. The process of made up as follows : -
120 THE GREATER BRITAIN THE EXPORT TRADE 121

~- ---~-~ -----------·-·---- ------ ------- --·· -··-· ..... ·---


. I
I Before ' After folly of relying on the uncontrollable hazards of the
1 Rationalisation. Rationalisation. export trade.
--------~- -- -~ ------- - .

Raw Materials . • bs £25 The genius of a Ford in America has already


Labour . . . . , IO 5
Heat, Light, Power . 3
proved that it is possible to pay the highest wages
3 12$.
Depreciation . . . 3 3 I2S. in the world, and at the same time to put on the
Interest on Value of Plant,
etc. . . . . 20
market the cheapest article in the world. The
------ ----- -~ - --- -- - ----- genius of a Morris at home has already travelled
Total cost . £6I
---- ... · - · · - - - - - - - -

- ~

~--·--------------·--··--- ~---- . ---~-------- --~
far in the same direction. The limitation of the
Englishman was the absence of so large and so
In this case the cost of production, instead of assured a home market. The real point is that, if
being lowered by rationalisation, has actually been industry is given a large and assured home market,
increased from 24s. 5d. to 24s. IO~d., the reason which it can be given by the combination of scien-
being that in the latter case there is a larger element tific Protection with the organisation of a higher
of fixed charges to be spread over the reduced standard of life, it can work at full pressure, and by
output. its great rate of production can bring down costs
In other words, although the measure of rational- even if it has to pay .high wages.
isation was by no means a big one, the reduction Anyone who has given serious attention to the
from full to half-time operations raises the rational- facts and figures of mass-producing industry is
ised costs by 28 per cent., as against 22 per cent. in aware that it is scarcely an exaggeration to say that
the case of non-rationalised costs. It is obvious granted a certain rate of production for an assured
that the further the process is carried, the greater market, the rate of vvages becomes almost irrelevant.
will be the discrepancy ; and that, therefore, the Consequently, it is a proven fallacy to assume that
further rationalisation is carried, the more important a high rate of wages in these islands need generally
is the operating rate and the less important the rate raise the cost of production in our export trade. If
of wages. Most industrialists are forced, by com- our industries are working at full. blast on the safe
petition, to sell their goods at prices based on the basis of an assured home market, they may even
cost of full, or almost full, production. The more be able to reduce production costs in an effort to
effectively an industry is rationalised, the smaller is reach out for the caoture of the world's markets.
the recession in demand needed to turn profit into "
In fact, the measures we have suggested for
loss, and the more rapidly does that loss become internal organisation should assist, rather than
unmanageable. The more, therefore, that industry handicap, our export trade. Each industry will be
is rationalised, the greater is the need for a stable exporting a surplus rather than the bulk of its pro-
and established market ; and the greater, too, is the duction. It will be able, even should its costs be
122 THE GREATER BRITAIN THE EXPORT TRADE 123

high, to meet the terms and prices of its overseas we can send abroad for foreigners to consume, that
cot_n.peti~ors. Like American industry in the past, we are disposed to accept any reduction in our
Bnush mdustry will be assisted in disposing of its export trade as a sign of ruin. This facile assump-
export surplus, by the existence of a large home tion is made without any analysis of the facts and
market which enables it to increase the rate of figures, and without any inquiry whether it is possi-
production, and consequently to lower its costs. ble to transfer a large measure of our production
The Trade Balance from an export to a home consumption basis, and
"But," the objector will reply, "you previously yet to maintain sufficient exports to buy essential
argued that foreign markets are closing against us, foodstuffs and raw materials. Let us submit to the
whatever our cost of production, by reason of the test of statistics the belief that any threat to our ex-
determination of foreign nations to bar our goods port trade spells the ruin of this country. The
from their markets, which they desire to serve from following figures show our imports over the past
industries which they are themselves creating. How four years, after allowing for goods re-exported
do you get round the fact of local industrialisation without further manufacture : -
and abnormal competition, and all the other factors (In £ millions.)
which you have enumerated as undermining our " I
I 1930. 193!. I 1932. 1933·
position in foreign markets?" -- -- --- ·--· -- I

- ~--------·-----"I

Food, Drink & Tobacco . I' 45!.36 328.5r


Here we reply frankly that of course our industry Raw Materials . .

••
212.08
396·57
147·32
357·78
J40.88 154·70
I
must pass through a great transition from produc- Manufactures, etc. . .
I

II 283·34 244-30 145·95 I 139·96


Miscellaneous . . 9· 17 6.02 I

tion for foreign markets to production for the home •

•'
!0·34
---------~-
.- ·-~- ..
3·59•

-I ------ ~

market. In our future economy it is very improb- Totals • •


'I' 957 · 12 797·36 659·63
I
626.76
able that so large a proportion as 30 per cent. of
.
' ----- ------------ - - - - -·---- ----- .• - - - - - --- ---·- --~~

We have paid for these imports by means of


our total manufactured products could find an out-
goods exported, but the total of these is not enough
let in world markets, nor is it necessarily desirable
to meet the whole bill. The deficiency in the past
that they should.
three years has been as follows : -
We must admit that the arbitrary and artificial 1931 . . . . . £4o8 millions.
interference of foreign nations with the flow of trade 1932 . . . . . £287 ,
1933 . . . . . £264 ,
will probably confront us in any circumstances with
a dwindling volume of exports. To shirk this fact For these amounts and for any foreign invest-
is to be unrealistic, but the facing of the fact is no ments, we habitually pay throug~ the "invisible "
occasion for despair. We have for so long been items of the trading account. Foreigners paid us
taught by the Liberal-Labour school that the chief £ros millions last year in excess of our payments
criterion of British prosperity is the amount of goods to them for shipping, insurance, banking and similar
I 1HE EXPORT TRADE 12)
THE GREATER BRITAIN

services. In a??iti~n, some £155 millions was paid for £365 millions of our goods, as against £730
l~st. year to Bnt.lsl~ mvestors by way of interest and millions in 1929. With rationalised and planned
d1v1dend on the1r mvestments in the Dominions and production it seems unlikely that we could fail in
Foreign countries. These items, as a general rule, the future to find outlets for £250 millions, especially
not only pay for our ex.cess of imports over exports, as the Empire alone took £I6~ millions of our
but leave a surplus available for further investment ' experts in 1932. In fact, the statistics available
abroad. potnt to the remarkable conclusion that we could
Of our imports, the foodstuff and the raw mater- nearly achieve a " balance of trade '" with our
ial group. ~ust be regarded as necessities, subject to present exports to the Empire alone, provided that
the cons1c~erations concerning Agricultural policy we excluded foreign manufactured goods from this
adva.nced m the next section. A substantial pro- country. If in addition we can produce even £roo
portiOn of these are needed for re-export after man- millions of foodstuffs in this country which we now
ufacture; but the same, or greater quantities of the import from abroad we could secure our " balance
same, , or simil~r, materials :vill subsequently be of trade " within a self-contained Empire without
needed to keep mdustry runnmg for the diversified any dependence on foreign markets for our exports.
dema?ds of the home market. It is impossible, It will be seen from the next section on Agriculture
thererore, to rnake any allowance on this head ; on that it is the aim of Fascism to produce £2oo
the basis of 1930 figures, £675 millions must be set millions of foodstuffs in this country which we now
?mvn as the approximate value of our necessary import from abroad and we are confident that this
Imports. On the basis of 1933 figures, the amount end can be secured.
(b~t.little diminished in volume) is less than £soo
It will be observed from this simple analysis of
mtlhons. available figures that we have a long way to go in
This, then, is the necessary bill which must be the diminution of export trade before this country
met each year to serve the needs of our population runs the danger of any inability to pay for essential
and of our maufacturing industries. The actual foodstuffs and raw materials.
figure is a fluctuating one ; but, as our investment These figures and this argument are advanced,
income fluctuates, broadly, in the same sense as '
not in any sense to indicate that we are prepared
the pri.ce ~evel of raw materials as do the payments to let our export trade slide ; but rather to combat
for s~1ppmg and other services, it is fairly safe the slovenly and alarmist fallacies of the Inter-
to. est~mate that son::e £250 millions of imports national school, who have long concentrated the
will still fall to be pa1d for out of the visible export attention of the nation exclusively on export trade,
trade. to the detriment of all serious effort at National

Even in 1933, we succeeded in finding a market reconstruct10n.


126 THE GREATER BRITAIN THE EXPORT TRADE 127

Agriculture and Autarchy who intervene between the farmer and the house-
wife to. take their toll of both: (2) By raising the
It will be observed from the foregoing statistics purcha~mg po_wer of t~e town population through
that we are very far from being unable to pay for I the umversal mcrease m wages and salaries which
necessary foodstuffs and raw materials once we the Corporate system secures. The power of Fascist
decide to exclude the manufactured goods from I

Government to eliminate profiteering in food and
abroad, the bulk of which can perfectly well be to. increase the market through the Corporate system
manufactured in Britain. It is the settled policy will overcome the present problem of an " economic
of Fascism to build a Britain as far as possible self- price " for the farmer. The assured market can
contained and to exclude Foreign goods which can only b~ .given by exclu?ing undercutting Foreign
be produced at home. If that policy was adopted competitiOn. Both Tanffs and Quotas still permit
we should run little risk of an unfavourable trade the Foreign goods to come in and consequently do
balance even if we lost the whole export trade with • not benefit the farmer or permit the industry to be
the rest of the world, exclusive of the Empire to stabilised. Tar:iffs tax the consumer and quotas
which we supply at present £r64 millions (1932 en~ble the foreigner to charge a higher price, but
figures) of exports per annum. But the great con- I neither benefit t~e British Farming industry whose
ception of a Britain nearly self-contained and an products are d1splaced: The salvation of Agri-
Empire entirely self-contained can certainly be culture c~n only be achieved by the clear-cut policy
secured by the possible increase of British agricul- •
of excluswn.
tural production. At present we produce £280 .1
. Conservatism. always rejects that policy because
I
millions of foodstuffs per annum in this country It would admittedly affect the position of the
and import £r4o millions per annum from the Foreign. investor. Socialism rejects that policy
Dominions and £220 millions per annum from because It cuts clean across their International con-
Foreign countries. Fascism, under a three years ceptions and affiliations. The Conservative Party
plan, would exclude Foreign foodstuffs and would has long ceased to be a Party of the countryside and
develop agricultural production to take its place. has become a Party of the City of London dominated
Few competent judges will deny that it is pos- J by its great alien and International interests. The
sible nearly to double British agricultural production City has advanced large loans to countries like the
once the conditions are created in which that Argentine which pays the interest on its loans by
development can take place. Those conditions are the export of Beef to Britain If the Beef is excluded
-an assured market at an economic price. The the interest is jeopardised and for this reason the
farmer can be given an economic price ; (r) by the inactivity of the ~onservative Par.ty is very easily
elimination of the horde of unnecessary middlemen understood Fasc1sm alone combmes a policy of
!28 THE GREATER BRITAIN THE EXPORT TRADE

national reconstruction, putting foremost the interest under this head should not be very great. No
of the British Producer, with a revolutionary doubt exists that we stand to gain in our " balance
challenge to the alien and international interes~s. of of trade " from such development of our Agri-
Hio-h Finance to which the interest of the Bntlsh culture, even if it involves some diminution of other
Prgducer has been ruthl.~ssly sacrific.ed by all Parties sources of income. It is clear that the " balance of
of the State. trade " will be favourably affected by a £200
It is necessary for us to choose between the inter- millions reduction in our imports of foodstuffs
ests of those who have invested their money abroad which are replaced by Home production, even if
and the interests of those who have invested their this reorganisation results in some slight reduction
lives and money in the land of c_;rca~ Britai.n.. . in the income of approximately £roo millions per
Fascism alone has no hesitatwn m deCidmg m annum which we derive from services to or invest-
favour of the Home Prcducer. \Ne will deliberately ments in foreign countries.*
create the conditions in which British Agriculture
can increase its production by £2oo millions per * It is impossible to estimate with complete accuracy the Income
'
• which we derive· from Services to and Investments in Foreign
annum, if necessary, at the expense of the Foretgn I countries, but the figure of £1oo millions may be taken as approx-
imately accurate.
investor. The future uses of British Finance will The capital values of Investments in Empire and Foreign countries
be the equipment of B.ritish indus.try and ?ot the were £2,187 millions and £1,538 millions respectively in December
1930 (Sir Robert Kindersley, "Economic Journal", June, 1933).
equipment of our £:)feign_ competitors" agamst us. The total income derived from Investments in Empire and Foreign
Repercussions of thts pohcy on ou~ balan~~ of countries in 1933 was £155 millions (Board of Trade Journal,
22/2/1934). Figures are available with regard to the division between
trade " can be judged with suffiCient prec1s10n. Empire and Foreign countries of the capital sums involved in these
On the one hand, we shall be saved from the Investments. but not of the Income derived from them. If the
income from these Investments is divided in the same proportion
necessity of importing some £200 millions of food- between Empire and Foreign countries as their capital value, it would
stuffs. On the other hand, we must expect some appear that we derive £91 millions from Empire Countries and £64
millions from Foreign countries. Since December 1930, when the
diminution of our income from Foreign invest- capital values given above were computed, however, considerable
ments, which now amount to some £so millions default has taken place in countries outside the Empire. It is there-
fore fair to estimate that a larger proportion of the 1933 income of
per annum, exclusive of income from investments £155 millions is derived from Empire investments as opposed to
within the Empire, which amount to some £ ro.s Foreign investments than is indicated by the capital values of 1930.
In fact, it should be safe to assume that our income from investments
millions per annum and :vould be unaffecte~ by thts in Foreign countries does not now exceed £so millions per annum.
policy. Some of the mcome from Serv1ces we Even less official data is available concerning the Income derived
from Services Rendered to Empire and Foreign countries respectively.
render to the world, exclusive of the Empire, might The total income derived from these sources in 1933 was £105 millions
also be affected. But as many of these services are (Board of Trade Journal, 22/2/34). It is a conservative estimate to
allocate half this income to Empire sources. In fact we should be
highly specialised, such ~s ~nsurance,.etc., for which well within the mark in giving the total income derived from Invest-
other nations are not stmllarly eqmpped, the loss ments in and Services Rendered to Foreign countries as £roo millions
at the present time.
THE GREATER BRITAIN THE EXPORT TRADE

The development of Agriculture considered in paid for by the products of British Industry, while
conjunction with the analyses of figures given in the at present For·eign foodstuffs are largely paid for
preceding section indicate that Great Britain her- by interest on Foreign loans. In the second place,
self can approach very closely to the self-contained British industry in supplying the new market
or Autarchic ideal, while the conception of a self- afforded by the Farming population will not have
contained Empire is actually within our grasp. to face the unfair foreign competitors which it has
Even without Agricultural development we can to meet in the shape of cheap Japanese goods, etc.,
nearly balance our trade within the Empire if we in such markets as the Argentine. So far from
exclude Foreign goods from these Islands. A real British export trades, such as the cotton industry,
policy of Agricultural revival can make that great suffering from the exclusion of foreign foodstuffs in
conception an accomplished fact. favour of British products, they stand greatly to
But it will be argued that these imported food- benefit. The only interest which stands to lose is
stuffs are not paid for entirely from the interest on the alien finance of the City of London which has
Foreign loans or even by Services rendered to other I been the most consistent enemy of the Home Pro-
I

countries, but are partly paid for by the export of ducer and the most constant threat to the stability
manufactured articles. To that extent it is sug- of the nation ever since the war.
crested that our export trade will suffer if we do not
permit the entry of Foreign foodstuffs with which "A utarc h y "
Foreign countries pay for our manufactured exports. The policy at which we aim is Autarchy, or that
But to a far greater extent the industries affected of the self-contained Nation and Empire, which I
will benefit from the increase of the Home Market described as " Insulation " in my speech of resig-
consequent on the increased purchasing power of nation from the Labour Government in May 1930.
the Farming population. If Agriculture nearly It is based not on the economics of poverty but on
doubles its production for a profitable market it wilt the economics of plenty. It recognises that modern
also double its purchasing power for Farming, raw nations can produce almost any goods they require
materials and manufactured goods for normal use. with present machinery. Variations in production
The net effect of this transaction is to transfer pur- costs between nations in modern conditions are
chasing power from Foreign farmers to the British negligible in an age of potential plenty. The
farming population. To the extent that markets problem is no longer whether the goods can be pro--
dose abroad markets will open at home, and this duced at the least possible cost, but whether they
argument is strengthened by two further consider- can be produced at all. The confusion of our
ations. In the first place, the whole supply of present economy prevents their production owing
British foodstuffs for the Home Market must be '' to the reduction of the standard of life and the
THE GREATER BRITAIN THE EXPORT TRADE 1 33

diminution of the Home market consequent on the industry. It is idle to hope that such a standard
anarchy of external and internal competition. To can be attained if our civilisati<?n is exposed to every
enable goods to be produced we must plan and shock . of world chaos rangmg from subsidised
regulate the industrial area covered by our own race, du~pmg to cheap oriental competition in the
which is capable of supplying in abundance all the foretgn market and a wage-cutting dog-fight in the
goods we need. Horn~ market. The impossibility of carrying on
Once we can free our economic system from the o~~ highly developed industries under present con-
disruptive forces of world competition and can d~twns of world comretition has been partly recog-
release the full power of our own potential pro- ~lsed through the logiC of facts by the Old Parties
duction for a regulated Home market we can enjoy smce I n:st_ adumbrate~ the policy over four years
a standard of life far higher than we have known in ago and It Is reflected m the piece-meal legislation
the past without any dependence at all upon the of the present Government. It has been my con-
chaos of world markets. We must first free our stant ~,Ubmis~ion that we sh~uld develop the " Insu-
minds from the extraordinary illusion that inter- lat~d Natwn and Emptre by conscious and
national trade is necessarily more valuable than de~tberate plan rather than by hurried improvisation
national trade and that without foreign markets it a~, mdustry_ af_ter industry is threatened with collapse.
is impossible for this country to live with a high Vv e have 1t _m our power to restore prosperity to
standard of life. That illusion originates from the the countrys1de and there to revive the vital breed
poverty economics of the last century in which the of men ~n . whom our past greatness has rested.
world could only produce with difficulty sufficient Vle have It m our power also to build an industrial
for the maintenance of adequate life. Modern ~ivili~ation incomparably higher than has yet existed
science has altered the whole premise of the argu- m thts country within an area under the control of
ment by changing our industrial system from a low our own race which will be an example and an
production to a high production system and thus inspiration to tl1e rest of the world. We have the
confronting us with a totally different problem. Power, but Fascism alone has the Will.
Once this fact is grasped we are led inevitably to
the conclusion that we can only solve our problem Export Trade assisted by Corporate Organisation
by finding a market for the goods we can produce Trade agreements with the Empire will be
and we can only find that market within an Insu- ass~sted under "Autarchy" by the Corporate System
lated and planned system of National Autarchy. ow~ng to the. u~ification of industrial buying and
Thus we aim deliberately at creating within the s~ll~ng orga:-usatwn. Corporate organisation will
Nation and the Empire a standard of civilisation so ~Im1larly assist our Export Trade to hold their own
high that it can absorb the production of modern m world markets during the period of transition
I34 THE GREATER BRITAIN THE EXPORT TRADE

to Autarchy. Corporate system, to unify and to consolidate both


We have already examined the general effect our purchases and our sales, so we can use the power
of internal reconstruction on export trade ; by in- of the buyer to promote the interests of the seller.
creasing the home market, and consequently We can adopt as our trade motto ; ((Britain buys
increasing the rate of production to serve that fr~m those who buy from Britain." The trans-
market, it would assist rather than handicap export latwn of that slogan into the practical machinery
trade in its struggle for foreign markets. Certain of the Corporate system would give us enormous
further advantages of a Corporate system in relation power to f_orce our manufactured products into
to export trade must now be examined. markets wh1ch are now closed against us. Several
The whole structure of a Corporate organisation great countries are ~ependent to a large degree on
involves a greater degree of industrial unity, and our purchases of the1r foodstuffs and raw materials.
consequently facilitates the pooling of resources and I~ the present ~ondition of over-production in rel-
the strengthening of our hands in the struggle for atwn to effectlVe demand by all the primary
foreign markets ; such arrangements as centralised producing countries, they could not contemplate the
selling organisations, which have been widely transfer of these purchases elsewhere without the
canvassed and in part adopted, even within the approach of ruin. Economically, such countries
limits of our present inchoate system, are an obvious are at our mercy once we learn to use our great
means of attack. po':'er as a buyer. . '!he barbed-wire entanglements
In the intensified struggle for markets, British which confront Bnt1sh products in their entry to
industrialists are constantly driven to reduce over- for_cign markets can be blown away by the powerful
heads and to pool resources and to combine for artillery of Corporate organisation.
selling arrangements in foreign markets. That ten- From the adoption of the Corporate system will
dency the Corporate machine would naturally grow that industrial and economic unity, both in
consolidate. Further, directly areas of productive our_ buying and in our. sellin~ arrangements abroad,
industry can begin to speak with one voice, national wh1ch for the first tlme w1ll make effective the
bargaining on their behalf becomes far more pract- ?argaining strength of the greatest buying nation
icable anc:T much more effective. It is then possible m the . world. That strength we shall use vigor-
for the nation to use, on behalf of British export ously m the markets of the world durino- the
trade, the immense leverage of our foreign pur- tr~~sition to autarchy. _In every sphere e~erges
chases of foodstuffs and raw materials. With ev~r r_nore compelhX:g .necessity the urgency
The Big buyer has a great advantage as a seller of subst1tutmg the organrsatwn and the unity of
if he is organised to use as a seller his power as a the Corporate System for the chaos of a system
buyer. As we tend more and more, under the which is not organised as a planned and directed
• •
economiC entity.
• THE EMPIRE 1 37

To this end, we believe it is of the utmost import-


ance that the Dominions should constitute with
us ~ permanently functioning machinery of econ-
CHAPTER VIII omlc consultation and planning in place of hap-
hazard and occasional conferences. We shall
The Empire invite them for this purpose to send representatives
to our Second Chamber of Specialists which can
IN the previous chapter on the Export Trade our advise both British and Empire Governments in the
aim of building a self-contained or Autarchic formulation of an Imperial plan. No effort should
Empire was outlined. be spared to weld together by consent into a great
Here the ground is already prepared, not only economic entity the largest and most economically
by kinship, but by economic conference over a self-contained area in the world, bound together as
long period which the timidity of statesmanship it is by a common loyalty to the Crown.
has hitherto failed to translate into an effective and If this can be achieved, we are indeed on the high
comprehensive Imperial policy. Further, national road to an insulated system which could be immune
economic conditions assist trade relations between from the chaos of present world conditions. No
the Mother country and the Empire. Great matter what happened in the rest of the world, this
Britain is primarily a producer of manufactured great structure of economic and political interests
products, and the remaining countries of the Empire could weather the storm. The more we examine
are still primarily producers of foodstuffs and raw the potentialities of Empire and the present tend-
materials. A natural balance of exchange exists encies of trade the more practical and imminent
which could and should be exploited. appears the great ideal of a self-contained or Aut-
It is not suggested that countries such as the archic Empire ; already we have travelled far in that
Dominions will be prepared to close down their direction, and can approach to that conception more
nascent industries for our benefit, but it is suggest- rapidly than most people imagine.
ed that in the realm of future development, inter- The examination of figures in the preceding
Imperial planning can arrange, by a variety of chapter has shown how much of our export trade
methods, for production in the various parts of the is already safe if we can even preserve and stabilise
Empire according to suitability for production. In our Imperial trade. Some 44 per cent of our
fact, by general agreement on economic policy present export trade goes to Imperial markets.
among the Governments concerned, the future of Those markets have been, and can be again, the
the Empire can proceed on some form of pre- most rapidly expanding in the world. In natural
determined plan. resources and potentialities it dwarfs even the vast
THE GREATER BRITAIN THE EMPIRE 139

powe! of the United States. It would be folly not the Argentine, which represent interest payments
to selZe every opportunity to advance its develop- on forei 0ern loans rather than payment for our
ment. In this case, of course, we are dealing with exports. Such goods evoke no British exports in
an area not entirely under the control of the British '
return and benefit only the foreign investor to the
'I
Government, in which the susceptibilities and pre- detriment of British industries such as Agriculture
conceptions of different Governments have to be whose products they displace. These goods would
considered very carefully. We shall never seek in be the first object of our exclusion policy, together
any way to interfere with the right of the Dominions with the goods of foreign countries which provide
to choose their own methods of Government and no adequate market for British goods in return.
develop their own policies. That right will be as Purchases from such countries would be replaced
carefully preserved as the complete autonomy of either by greater British production or by purchases
other Fascist Movements in the Dominions with from the Empire in return for a greater market fo:r
which we are related and which now develop rapidly ' our goods.
throughout the Empire. An examination of purchases and. of sales to all
. I countries of the world would show a very consider-
In weaving the fabric of Imperial unity, we must I
be prepared to employ an infinite variety and flexi- able margin of purchase existed from countries
' which take in return no corresponding amount of
bility of method and approach. Before the actual
stage is reached of grappling with the administrative British manufactured products. In such cases, pur-
problem, we can only declare our goal of economic chases could be transferred to Empire countries with
unity within the Empire, and our unyielding advantage at a very early stage.
opposition to that curious school of thought which In the development of Empire economic unity,
would prefer economic alliance with any foreign the existence of a Corporate State in Great Britain
country rather than vvith a member of our own would be of the greatest value. Again, the unity
I and solidarity of industrial organisation under the
Empire.
In general, our policy would be to transfer Corporate system, the natural tendency to pool and
immediately our purchases of necessary foodstuffs l to c-entralise both buying and selling arrangements
and of raw materials from countries which at the ability of large regions of industrial organisation
present afford us little or no market in return, to to speak 'Nith one voice would facilitate the: repre-
Empire countries which afford us a large market sentation of British industry by government m deal-
in return. It is clear to us in the development of ing with the Dominions. Also, if the Corporate
a Britain and Empire policy that it is necessary to system succeeded in Great Britain, it would un-
face at once, with clear cut determination the import doubtedly be reproduced in the Dominions, like
of goods from foreign countries, such as beef from other of our successful institutions ; and in an
qo THE GREATER BRITAIN THE EMPIRE

Empire of Corporate organisations dealing direct and destruction. Thus we claim the same historic
with each other no limits could be set on the extent right to be in India as those " Indians " who de-
or the rapidity of future development. '
I nounce us with a difference that our right is forti-
! fied by the humane spirit and constructive achieve-
INDIA ment of the modern world.
The problem of India presents a record of muddle A consideration of our duty is equally clear.
and betrayal. All the old parties are equally guilty India is not one nation but many nations ; not one
of this surrender. Vv e challenge them all whether community but many communities. Over 250 differ-
they accept this " White Paper " of the White Flag ent languages and dialects are spoken by the peoples
or disturb the slumber of Conservative conferences of that sub-continent, and few of them can under-
with minor amendments. Fascist policy is clear stand each other unless they have learned to speak
cut. We have a right to stay in India and we English. Internally India is rent by communa}
intend to stay there. We have more than a right ; differences, which in the absence of British control
we have a duty to stay there. We have a right I lead directly to massacre and crime. Externally
I
because modern India owes everything to British I and even within her borders India is menaced in
rule. Irrigation, railways, schools, universities, the north by war-like tribes only too willing to
hospitals, impartial justice, every amenity which repeat the long record of Indian history by a destruc-
makes modern life possible far any section of the tive descent on the softer peoples of the Southern
inhabitants of India was conferred by the energy of Sun.
British Government. Any withdrawal of British authority can only
These achievements are denounced by a tiny result in wide-spread destruction of life accompanied
majority of professional agitators as alien rule. The by unthinkable atrocities and ending in a relapse
forefathers of those who thus denounce us descended into barbarism. In such conditions the duty of
on India in successive waves of Northern conquerors. Britain is as clear as her right ; that duty is to
They brought not the constructive and beneficient remain and to govern.
achievements of British rule but the atrocities and Thus we challenge fundamentally the premise of
rapine of the conqueror to the original inhabitants all the old parties of the State which contemplates
of India whom they practically obliterated. There- by varying stages and degrees the surrender of
fore our historic right to be in India is the same as British authority. Under Fascism, law and order
the historic right of all our predecessors ; the power will be vigorously maintained by British Govern-
of original conquest. The difference is that we ment. Authority in administration will not be
have used that power for the purposes of humanity diminished but increased. For that authority is
and construction and not for purposes of oppression necessary to solve the real problem of India, which

'
THE GREATER BRITAIN THE EMPIRE

is economic. In the past Britain's contribution to the idols, looted the temples and enslaved the
Ind~an development has been largely economic population. Britain will preserve inviolate and
achievement. In recent times that work has slowed intact the sacred realities of Indian religion but will
~P. by reason of t~~ political struggle. The bene- override custom and convention where it is neces-
nct~nt pow_er of Bntrsh Government has been largely sary to release the people from poverty. Such
abdicated m favour of one small class of Indians reorganisation demands not weaker but stronger
whose t~eatme~t of _the In?ian masses, socially and government. It means that government must
economiCally, m pnvate hfe and in factory, com- cease to argue with lawyers and must enlist the
pares most unfavourably with British treatment. services of economic technicians.
We have failed to promote the development of Here lies the real outlet for the energies of
Indian a.griculture and village industry in place of patriotic and educated Indians in constructive
the herdmg together of the Indian masses in virtual economic works and in overcoming by an enlight-
slavery. in t?e new industrial cities, the chief object ened propaganda the forbidding prejudices of their
of whrch 1s to undercut Lancashire goods with less educatea countrymen. In fact the energies of
chea~ ~abour for the benefit of International Capital. India as the energies of Britain must be transferred
Brttzsh Government has been too busy answering from the political sphere of talk to the economic
the lat:t'yers' p_oints of profe~sional politicians to get sphere of action. If India must look to the West
on wzth the ;ob. Economzc construction in India in place of developing her own traditional culture,
depends absolutely on strong government. At let her at least acquire not the old clothes but the
every point it is held up by religious superstition new clothes of the West.
and custom. The fertile Indian plain is cultivated Let us end this ridiculous conspiracy of English
by archaic wooden implements because the heredi- ' and Indian lawyers to foist on unfortunate Indians
tary land system maintains as sacred the landmarks Ii western parliamentary institutions at the very
of the individual cultivator. Steam ploughs are
I
moment that the West discard them. At the
needed t~ _cut through the Indian plains and pro- moment when every advanced nation in Europe
duce fertrhty, but they would also cut through a is turning from the old parliamentary institutions
tangle of hereditary landowning interests, and pro- in order to live and to prosper in a scientific age,
duce prejudice and agitation which the present our little professional talkers of both nations try
British government would not dare to face. to persuade all Indians who can understand their
At every turn the economic reformer is inhibited arguments to adopt a proved failure.
by religious custom and convention which condemn What a sorry end to the great record of Britain
an illiterate and superstition-ridden population to in India to sell them, as the price of our surrender,
direst poverty. The conquerors of the past broke this old broken down machine, just as we discard
THE EMPIRE
THE GREATER BRITAIN
the West will be linked with the spiritual urge of
it. That would indeed be an act of treachery for the East in building an India released from the
which future generations of Indians would bitte.rly present horrors of poverty and suffering.
hold us responsible. We pay the new genera~10n In no country in the world is it more urgently
of India the tribute of believing that their new mmds necessary to establish the reality of economic liberty
will not so easily be deluded. We invite them to in place of the illusion of political liberty. The
join us in building in India a corporat: system as strong hand must be not negati~e but positive.
we build it in Britain. That system 1s far more Fascism alone can release the Indian masses from
suited to Indian history and tradition than the the grinding slavery which .they suffer tod~y.
western parliamentary system even at ~ts zenith. Nothing but the will of man 1s necessary to r~Ise
In the countryside it will rest on the Ylll~ge P~n­ India from the depths to the heights. In Fasczsm
chayat in an election of universal franch1se m which the will of man, proudly conscious of. th~ past at;d
all Indians, literate or illiterate will be represented. facing the future wit~ an .iron deterf!Zmatton to rtse
Thus the voice of India will not be confined as to greater heights, wzll brzng to Indta a pe~ce and a
under the White Paper proposals to a tiny liter~te prosperity within which she_ n:ay pursue wt~k a new
class but will include the vast masses of the lndzan tranquility, her age-old mzsszon of the Spzrtt from
population. From that basis w.e will .build s~c­ which the West still has so much to learn.
cessive tiers of Indian representatzon untzl the votce
of India is heard in the inner councils of govern- CoLONIEs
ment. The Colonies would, of course, be comprised
In the towns, representation will rest on both within the scope of Empire development as a u~it.
an occupational and communal basis, an~ aga~n the I'
Foreign goods would b~ excluded from. t?em w1th
voice of the industrial minority of Ind1a will be immediate and substantial benefit to Bnt1sh export
heard and represented .. The ~a-operation ?f all industries. The Colonies owe everything to Britain
Indians capable of servmg their c?untry will. be and it is only right that they sho~ld m~ke in return
sought in the great work of economic regeneratwn. the contribution of trade concessiOns m a compre-
With such assistance strong government can cut hensive Imperial plan. This does not mean that
through the labyrinth of int~rests to an .immense the native populations of those Colonies would be
increase in the standard of hfe. The gnp of the exploited for our ends. On the contrary, t?e
moneylender who holds down the .peasant will ~ regulation and planning ~f a Corporate Empue
broken and agricultural banks will replace h1s would prevent the exploitatiOn of these populatwns
power. Co-operative marketing will . follow ex- which at present is in process. If we do not develop
tended irrigation in the sale of produce mcreased by the backward areas of the Empire by deliberate and
modern methods of production. The science of
THE GREATER BRITAIN THE EMPIRE

systematic plan ; they will be developed in the chief among such races we are not afraid to number
chaos of uncontrolled private enterprise. Capital our own.
other than British will often jostle for their develop-
ment and exploitation, with all the dangerous THE EMPIRE AND WoRLD PEACE
possibility of exploiting backward labour which the In the foregoing section we have envisaged the
arrival of mass-production methods has created. development of Empire to a point where it becomes
The chaos of unregulated exploitation of cheap an economic entity which is Autarchic or self-
labour may invade the Empire as much as other contained. Some will see in any such conception
regions of the world if the development is not a menace to world peace. They assume that a
subject to a systematic plan. · highly-organised Empire must be jingoistic and
In the interests of the native population, as well must pursue a policy of old-fashioned and aggres-
as in th~ interests of the white standard of life, it sive Imperialism.
is essential that the Colonies should be developed In fact, we claim that the economic organisation
on Imperial plan. Much loose sentimentalism is of Empire will lead to results precisely the reverse.
poured out by those who in theory would hand over It is true that such highly developed organisation
the earth to backward races in political self-govern- would place in the hands of this Empire, and in
ment, but who in practice leave them an economic the hands of those directing its destinies, an enor-
prey to predatory and alien capitalism. Vve will mous power. It is equally true that any develop-
certainly pursue the steady course of British Col~n­ ment of science or organisation puts greater power
ial practice, which seeks by every means to ra1se I in the hands of man, which he may use for good
native populations to a higher standard of life ; but or bad purposes. Give a man charge of a steam
we wi.ll not pursue the illusion that great and pro- roller, and you equip him with great power. He
ductive areas of the world should be kept as a close may use that power to build a road or to knock
preserve for races who are unable or unwilling to down a house. The possibility of a man being so
develop them. mad as to use that power for the latter purpose does
If that theory had been accepted and applied not provide a conclusive argument against the use
in the past, the great American continent would I of steam rollers.
to-day be a hunting ground for nomadic tribes of
Red Indians, with its vast resources untapped by It is true that if those controlling an economically
science for the benefit of the world. The age of organised British Empire, and the nations support-
sentiment has gone too far, and is producing its ing them, were mad or bad enough to use that
own logical absurdities. 'fhe earth can and will power for destructive rather than for constructive
_be developed by the races fitted for that task, and purposes, the consequences to the world and to
ourselves would be very disastrous. But the possi-
r48 THE G R E A T ER B R I TA I N
THE EMPIRE
bility of the whole British race going mad is not
really a reason for continuing to labour in the subject to international competition, and the com-
chaos of present organisation and economics. In paratively small remaining area of international
fact, a British Empire powerfully organised as an markets which were subject to the intensive compet-
economic entity would be a factor on the side of itive struggle for those markets. ;

world peace and stability rather than the reverse. The iron realism of Fascist government in several
The first race which puts its own house in order great countries which have struggled through the
will lead, by force of the example which is worth collapse of their political systems to the construction
so much persuasion, to other nations doing the of Corporate organisations, would hardly be likely
same. If all went mad, the fact that other nations to wreck the world in a Gadarene plunge to world
followed our lead might result in the highly organ- war and suicide. Rather, confronted by similar
ised and belligerent commercial rivalries which our organisations in political character and govern-
pacifists foresee. ment, they would settle down together in a practical
On the other hand, it is fair to assume that the and business-like way to solve whatever problems
same spirit of reason, science and serious construc- still led to international! friction. The areas of fric-
tive effort which is necessary to the construction of tion. "':ould the~selves be greatly reduced by the
such economic organisations would still be employed prehmmary achievement of largely self-contained
in external relations when that internal construction national organisations.
was complete. In that event, the existence of such " What a strange economic process !"' our objec-
great Corporate organisations throughout the world ~or may. retort. " In fact, your method of settling
would enable for the first time the economic affairs mternatwnal trade is largely to eliminate it."
of mankind to be subject to world rationalisation. Once again we must tell him that he is still
It would be possible to end the anarchistic gripped by the school of poverty economics ; that
struggle for markets of an unorganised capitalism, to-day the problem is not how to eke out the
leading again, as it has often done in the past, to exiguous resources of mankind by a free flow of
the entanglement of governments in the commercial the thin trickle of international trade ; rather the
rivalries of their nationals. In place of that explo- problem of to-day is to release within each nation
sive chaos, rational discussion of the world economic the vast resources of modern industrial production.
problems would supervene. Nations which, in There.by .we shall approach as near as possible in
their internal organisation, were largely self- orgamsatwn to the self-contained, and will with-
contained would find it a comparatively smaller draw in large degree from the mad scramble to
problem to settle the allocation of the relativdy dump surplus production on the markets of the
small remaining area of raw materials which were world, which will then find an outlet in the home
market.
rso TH E GREATER B RI TA IN

If our objectors must persist in their poverty


economics of the last century, let them in practice
continue for the next ten years, as they have in
the last, constant and humble attendants at inter- ·
national conferences, begging an impoverished CHAPTER IX
world to throw a few pennyworth of concessions
into the outstretched palm of a down-and-out :Fasc£sm and its Neighbours
Britain.
For our own part, we prefer the effort of self-help Our foreign policy should also be the subject of
and of national reorganisation, which at a later a book in itself, but the main principles may here
date will lead to Britain's reappearance in the be stated very briefly.
conclaves of the nations, not as a supplicant, but The measures of national reconstruction already
desc~ibed ,i_nvolve automatically a change in our
as a world leader.
fore1gn po11cy. We should be less prone to anxious
interference in everybody else's affairs, and more
con_ce~trat~d on the resources of our own country
and Emp1re. Wherever opportunity arose for
furthering the interests of British trade, we should
seize t_hat cha~ce, and to that end would reorganise
the D1plomat1c and Consular Service. Henceforth
their acti~ities w~uld be more directed to practical
commercial questiOns, and less to the tangled skein
of European politics and animosities. The mere fact
of our international concentration would tend to
r~l~eve_ us _from some of our anxiety over, and par-
t1e1pat1on m, the troubles and turmoils of the Con-

tment.
This does not by any means imply that we
would withdraw from the world scene and not
exert ourselves in the cause of World Peace. We
would certainly use all existing machinery to that
end: including the machinery of the League of
Nat10ns. 'l.fe do not believe that this machinery,
ISI
THE GREATER BRITAIN FASCISM AND ITS NEIGHBOURS 1 53

as at present constituted, is effective. But the solubly united by their determination to prevent a
Fascist method is not to destroy, but to use and trans- catastrophe which can only lead to the triumph of
form existing machinery for different ends. their common enemy, Communism. A quarrel
It must never be forgotten that the League of between Fascist Governments would be a betrayal
Nations is a piece of machinery, and not a human of our cause to the enemy and any Fascist contem-
entity. Like other machines, it is subject to the plating war is a traitor to Fascism as well as to
will of those who operate it. Hitherto the drivers humanity. Fascist Governments united in the great
of that machine have driven it in a direction, and Brotherhood of Fascism could and should build the
worked it in a way, which we consider to be enduring peace of Europe on a stable basis.
usually futile and often dangerous ; but, as realists, It is necessary to reconstruct the League of
we are not prepared on that account to seek the Nations in accord with the requirements of reality,
destruction of the machine. Rather we seek, by which predicate the effective Leadership of the Great
different methods and direction, to use it for differ- Powers. To deny that Leadership is to deny both
ent purposes. Above all, in the deliberations of the spiritual and material realities of modern
that body and in other international affairs, we Europe. Yet it has been denied in the present
should call a halt to the flabby surrender of every procedure of the League where a host of small
British interest which has characterised the past Powers and interests in the final frenzy of dem-
decade, and has reduced this nation to the position ocratic ideology have been permitted to paralyse
of a meddlesome old-lady holding the baby for the effective action. The effective Leadership of the
world. We should seek peace and conciliation with Great Powers must be established within a re- •

every nation, but we do not believe that every bad constituted League of Nations in which the small
debt of mankind should be liquidated with a cheque Powers will have effective representation, but will
signed by Britain. not be able to obstruct the necessary measures of
The future of European peace must depend on European reconstruction.
the co-operation of the Great Powers. To this end It will be the task of Fascist Europe to eliminate
it is of importance that the Great Powers should be the risk of war by removing the causes of war. The
of like mind. The existence of Fascist Governments economic causes of war, which are by far the most
in all great countries is the surest guarantee of powerful factors in that disaster, will be reduced to
European Peace. In the first place, they will be the vanishing point by the policy already described
composed of men who know what war means from in the previous chapter. It will be necessary further
experience of the last war and are, consequently, to revise at least economic boundaries which have
determined to prevent a recurrence of that cat- constituted uneconomic units in Europe with a
astrophe. In the second place, they will be indis- constant tendency to disturb the peace. All nations
154 THE GREATER BRITAIN FASCISM AND ITS NEIGHBOURS I))

also must be granted adequat-e supplies of raw mat- It is true that nations can still fight whether
erials and a full opportunity to build an economic armed or unarmed and that in the event of Disarm-
life of their own. This will not be difficult in a ament the best equipped nations have the advantage
world which is producing a super-abundance of raw if war should occur. But this consideration should
materials and is vainly seeking a market for them. not unduly disturb a nation with leading chemical
In this respect, as in many others, the problems of industries, the largest merchant fleet in the world
plenty are easier of solution than the problems of and a pre-eminent aptitude for the Air which, under
poverty once the will and the power is present to Fascism, would be developed into a leading place.
grapple with them. That will and power can only Disarmament itself is no guarantee of peace. For
come from a Fascist Europe united by the Brother- that we must rely on an entirely new psychology and .
hood of Fascism and the common determination to we may well ask where Europe can discover that
preserve and to elevate European culture in a new psychology except in Fascism. But Disarma-
higher and greater world morality. I
ment, if universal, is a definite step towards Peace
and we should strenuously strive to secure it both as
ARMAMENTS. a contribution to Peace and as a relief from a heavy
Disarmament has so far proved impracticable and unoroductive burden. We should, therefore,
owing to the sense of universal insecurity which a be prepared to take the lead in Disarmament pro-
Fascist Europe alone can overcome. Nations have posals, provided they were universal, and not con-
been divided by different psychologies and methods, fined to this country. But we would not consent to
and still more by commercial rivalries and memories a unilateral reduction which would render Britain
of that " triumph " of Democratic statesmanship, helpless in the menacing dangers of the. present
the Peace of 19r8. Under Fascism the outlook of world · a crime of which all the Old Part1es have
the nevv European generation will be expressed in '
been guilty.
a closer synthesis of nations, commercial rivalries On the other hand, with the best p<?ssible expert
will be diminished and controlled and legacies of advice we would radically overhaul our present
the unhappy past will be buried in a united effort system of defence. It is a stran_ge . mind which
of new European culture to build a new civilisation. meticulously contends for exact panty m every naval
The sense of insecurity will be removed with the category with a friendly power lik.e America, whic~
reasons for insecurity and Disarmament will become is more than three thousand m1les away, but 1s
for the first time a practical proposition. Disarm- willing to accept a two-and-a-half to one inferiority
ament which is universal and proportionate leaves in the Air from another friendly power which is
the relative strength of nations the same and in- only twenty miles away. We would submit to the
creases their real security. analysis of scientific examination, rather than to
F A S C I S M AN D I T S N E I GH B0 U RS 157
156 THE GREATER BRITAIN
In such a study as this, covering much ground
sentiment, the whole question of Imperial defence, that is entirely novel and demanding space for that
which we believe to-day to be guided by vested inter- I purpose, it is impossible to deal with world policy
est and tradition as much as by the ascertained re- in terms other than the general.
quirements of defence in modern conditions. I
In general, we would seek peace and conciliation,
The arrival of the Air factor has altered funda- I
I
and are prepared to take the lead in these subjects.
mentally the position of these Islands, and the con- Too long has Britain, even in this sphere, been a
sequences of that factor have never yet been realised hesitant attendant on other nations.
by the older generation of politicians. We will Our main policy quite frankly is a policy of
immediately raise the air strength of Britain to th~ " Britain First ", but our very preoccupation with
level of the strongest power in Europe. Successive internal reconstruction is some guarantee that at least
governments have criminally weakened our air force we shall never pursue the folly of an aggressive
and exposed this country to the gravest danger. I •
Imperialism. It will never be necessary to stimulate
I
have never ceased to attack this mad policy since the '
the steady temper of Britain in the task of rebuilding
war and under Fascism it will immediately be our own country by appeals to flamboyant national
r~vised. While the armaments of other powers per- sentiment in foreign affairs. We shall mind our
sist, we must be able to defend ourselves both in the own business, but we will help in the organisation
air and. on the sea. There is no greater danger to of world peace, as part of that business.
the natwn than defences strong enough to invite
attack, but too weak to resist it. Socialists have
advocated complete unilateral disarmament which
would leave us at the mercy of an armed world.
Conservatives have pursued the, if possible, more

dangerous policy of pretending to maintain arma-
ments which, in fact, were ill-equipped or inad-
equate. The country has been lulled into a false
sense of security to tolerate a policy which it would
never have accepted if it had been appraised of the
facts. We will certainly seek peace and Disarma-
ment and we will secure these great blessings for
mankind in the Fascist Europe of the future. Mean-
while, we must save Britain from the ignoble and
defenceless position to which the treachery of the
Old Parties has reduced her. ·
FINANCE, INDUSTRY AND SCIENCE 159

recent years, the latter power has been triumphant


to the detriment of the national interest. In fact
'
we have within the nation a power, largely con-
trolled by alien elements, which arrogates to itself
a _F~ower above the State, and has used that influence
to drive flaccid governments of all political parties
CHAPTER X along the high road to national disaster. No State
.
""· --... ..,.
can tol~rate within its body the irresponsible
K< mance, industl·y and Science supenonty of such a power, nor the policy inimical
.~,--, Ji• ~
to every productive interest which it has pursued.
1 HE msa_stro~.s efiects of a financial system unre- Not only has this been the case, but it must also
lated to _nat~onal policy, and indifierent to a national be admitted that financial leadership in the City is
econormc plan, were examined at the conclusion of markedly at a discount. Our Banking system is
o_ur economic analysis. The problem of our finan- based on mammoth moncy-lendinP" concerns, in
Clal system remains one of the most difficult and v:rhic~ the asJ?ir_ing em~ployee's bigge~t responsibility
delicate with which the nation is faced. On the one hes m permlttmg or refusing minor ovetdrafts.
hand,_ that financial system, in the services which it From positions as Branch Managers, with no con-
snpphes to the world, is a source of wealth and of ception beyond that of detail and no vision beyond
revenue to the nation. A traditional and almost the cas~-counter, men are promoted to responsible
~eredita~y skill has been acquired over generations head-ofi1ce appointments in which they haadle wide
m t.he C1ty of ~ondon, ~hich enables it to carry on aspects of the nation's financi~~ policy. A man may
a h1ghly comphcated busmess which no other coun- be excellently equipped to decide whether Jones,
try has _mastered. Only a fool would be anxious Brown & Company shall be allowed an extended
to rush I? from outside_ with rough-and-ready meas- sancti?n for a further th~ee mon.ths ; but this very
ures of mterference ~1th a machinery so delicate. capaoty suggests that he IS unfitted for dealing with
On the other hand, It. 1~~st be recognised that, in ••
maJOr ISSUeS.
recent years,. many act1v1t1es _of the City of London Superimposed upon the head-office staff, which
have been disastrous to the mterests of the nation is the nearest thing to a responsible banking organ,
. In particular, they have shaken to the founda~ each of the joint stock banks supports a board of
twns the great producers' interests on which the directors elected almost entirely for their ornamental
strength and stability of the ~ation must ultimately qualities.
rest, and the.dep:esslOn of which to-day is involving Unfortunately, such a system contributes little to
even the C1ty m the national loss. In every the building up of a constructive financial organism.
:struggle between producer and financial interest in
I 58
160 THE GREATER BRITAIN F I N AN C E , I N D U S T R Y AND S C I EN C E I6r

The publication of the Macmillan Report disclosed realise, are identical if properly considered with
the fact that our banks had advanced to the money those of the State.
and stock markets a volume of credit as great as It is different when we consider the Bank of
the whole amount advanced to the cotton, wool' England, and the power of the private banking
sil~, linen, jute, iron, steel, shipbuilding and engin~ houses. Here we are dealing with a great tradition
eenng trades. They were supporting speculation, of public activity, founded on a policy em~nently
~nd short-term l~nding abroad, rather than assisting suited to the nineteenth-century economics, of
m the constructiVe work for which the financial noverty. During that period foreign lending
system is primarily intended. ~ssumed an enormous importance, through the
Their policy, if policy it can be called, severely necessity for consolidating our position and assuring
dam~g~d the country'_s great producing interests. our supplies of materials. Now all raw materials.
Yet It 1s. ~pon productwn that, in the last analysis, are superabundant ; the necessity is no longer so
our stab1hty must rest. Even now, when bankers vital. But the power of the great private bankers
can borrow at a half of I per cent., and money is continues undiminished.
freely said to be " unusable," " abundant," " plenti- Through these houses was conducted the bulk of
ful," "a drug on the market," industrialists must our foreign lending in the past. One need only
still pay 5 per cent. for their overdrafts. Even now instance the South American Rotations of the house
the necessity for financial support of industry is not of Rothschild to realise how enormous was their
realised. scope. For this purpose a huge connection must
Finance chose the path of least resistance and of be built up, internationally as well as at home, and
easiest reward by lending at high interest to Central '
i the oro-anisation soon became very efficient, but also
Europe. Such a course. promised large profits at I very c~stly. It was desirable, in the interests of
an early date, and the C1ty could not see the effects these financial houses, to keep the machine at work,
o~ the negl~ct of British industry. The bankers to feed the financial connections with fresh supplies
did no~ .reahs~ that they were setting industry in of foreign lending.
compet!twn w1th almost msolvent foreign borrowers, All international banking is founded on the
who would promise uneconomic interest rather maintenance of stable currencies. Already, soon
than go without support. after the War, the supremacy of London was
. It is probable that the bankers would now recog- threatened by the rise of New York as a monetary
mse the fun~a~e.ntal error of their late proceedings. centre. The United States were on the Gold
They acted llllmlcally towards productive industry, Standard, and they had acquired during th·e War
and they were themselves involved in the cataclysm. an enormous potential surplus of payments. The
Their interests, they now have every reason to work of American bankers in Europe was astonish-
THE GREATER BRITAIN FINANCE, INDUSTRY AND SCIENCE r63

ingly able and constructive a fine example was a whole.


Dillon Read's participation in reorganising the steel In adopting this position, for the first time in
industry of Germany. At that time it was not British politics, after the weak surrender of all
recognised that, in all international banking, con- parties to the power of finance, the British Govern-
nections count for more than mere capacity. To ment would have the overwhelming support of the
the London houses it appeared that our currency, mass of the people, both worker and employer,
being unstable, obstructed the recovery of our whose productive efforts have been frustrated ?Y
financial prestige. It is human nature to believe the policy of high finance. The attitude of t?e City
that your own interests are those of the nations at itself will determine the need, or otherwise, for
large. The banking houses concerned are repre- intervention. Indeed, within the City itself con-
sented in great force among the Directors of the siderable support could be found for this position
Bank of England. It is obvious from whence the from genuine British and patriotic elements, who
pressure came for our disastrous return to gold in are not enmeshed in the trammels of foreign finance.
1925. Before and since that time, in the sacred Let us hope that it may prove possible, by co-
interests of a supposedly impregnable currency, operation with such elements in the City, to secure
industry has been sacrificed and the fixed-income the co-operation of British finance in a planr:ed
owner enriched. economy of national reconstruction. OtherwiSe,
Beyond all these forces stand the great interests the Gordian Knot must be cut.
of the money market, the Acceptance and Discount
houses whose interests are wholly and frankly mone- Finance and Industry
tary. In Lombard Street money is bought and sold I Many of our recent troubles have arisen from
'
like a commodity ; there is no consideration of I the fact that our financial system has grown up in
I
whither and whence. Except under pressure, as a tradition of international rather than British
in the early days of War Loan conversion, the finance. The business of the great finance houses
money market can take no heed of other than has been lar(Tely foreign business rather than the
monetary considerations. It has no ear for the supply of fin~nce to ~r~tis~ industry. This t~a?i­
voice of industry, nor yet for any form of national •
tion has a natural ongm 111 the fact that Bnt1sh
interest. Its power is almost wholly international, industry originally itself financed new developments
and it is wielded by hands few of which are British. chiefly from its own resources ~d reserves, and
It must be a fundamental axiom of Fascism that without much recourse to the C1ty.
high finance, like every other interest within the However, that epoch has long passed away, and
State, must be subordinated to the policy of the urgent measures of big-scale rationalisa~ion see~
State, and must serve the welfare of the nation as financial aid only to find the whole practiCe, trad1-
THE GREATER BRITAIN F I N AN C E , I N D US T R Y AND S C I EN C E 165

tion and interest of the City engaged in inter- Central Bank does not seem to be the appropriate
national finance. The big banks have developed instrument for the details of industrial recon-

also a tradition of rigorously refraining from indus- structwn.
trial enterprise, and content themselves with The result, after three years' experience, has so
advances upon collateral security, irrespective of the far produced no noticeable improvement in the
purpose to which the borrower will devote the conditions of British industry. Hitherto the power
credit. These practices are, of course, in strong of finance in industry has been used, not so much
contradistinction to the practice of foreign banks, to produce efficiency and to promote new enter-
notably the German, who have long been partners prises, as to maintain concerns which were demon-
in German industrial enterprise. With traditional strably rotten, long after their economic basis had
aptitude for such business, acquired from long gone, in the hope of ultimately liquidating ill-
experience, they can appoint skilled directors to judged credits which were frozen.
the boards of new enterprises, and are partners and A further necessity of our ~ystem, hitherto quite
participants in all the varying experiences of neglected, is that for intermediate credit. This was
German industry. emphasised by the Macmillan Committee, and was
Such practice, of course, has its dangers. In the intended to cover instalment selling and the pur-
period of industrial depression superimposed, as chase of larger units, such as ships, against deferred
far as they were concerned, upon the problems of payment. In addition, it would cover large con-
reparation, many German banks have found them- tracts, such as the construction of railways, docks,
selves in difficulties. This is no argument against harbours, etc., for which capital is not productive
the system ; it proves, rather, the need for the soon enough to be used as an ordinary investment.
safeguards of Corporate structure in the interests of A system covering this field could also be extended
bankers as well as industrial producers. to cover small companies, the finance of which is
While it may not be possible or desirable to not large enough to justify the cost of a public issue.
translate the British banking system into an indus-- This aspect of finance is neglected by our present
trial banking system, it is vitally necessary to system ; in this respect, as in others, the older
provide a banking machinery for the re-equipment method has failed. Against it we set the systematic
of British industry. Hitherto, Government has plan of Corporate organisation. For the re-equip-
washed its hands of one of the major problems of ment of industry we propose a National Investment
the age, and has abdicated in favour of the Bank Board on which the constructive minds of British
of England, which in equipment, training and tradi- banking and finance would be invited to serve.
tion was manifestly unsuited to the task, while on This Board would also control and co-ordinate for
general grounds of administrative principle the productive purposes all investments which are at
166 THE GREATER BRITAIN F 1 N AN C E , I ND UST RY AN D SCIEN CE 167

present made by Government and local authorities, would at last succeed in relating the activities of
such as the work of the Public Loans Board, the British finance to the needs of British industry. It
investments of the Post Office Savings Bank, and would be faced with an immense task, ranging from
other bodies. the reconstruction of services such as transport, coal,
It would be charged with the development of electricity, power in all forms, to the re-equipment
public works of national importance on an economic of competitive industry on modern lines. Also, in
basis in times of depression and unemployment. co-operation with the Corporative system, which
Such works have been the mark of efficient and would seek to raise wages and the standard of life,
virile government in every period of history. They it would be charged with holding a proper balance
have been continually blocked in England in recent between consumption and saving, which is one of
years by the school of thought which is willing to the more important questions of national policy.
raise loans of millions for the development of At present these things are left to chance ; no
foreign countri·es, but sees financial catastrophe in system of regulation exists in this important sphere,
any effort to divert such loans to the reconstruction with very bad results. It is idle, by saving, to
of Britain and to the employment of our own people. create fresh capital to provide plant and factories
Nothing is more humiliating than to watch the to produce for a market which is already over-
successful efforts of a relatively poor country like supplied ; on the other hand, it is dangerous and
Italy to provide useful work in place of unemploy- uneconomic to raise consuming power at the expense
ment benefit, while the Government of powerful of saving to a point where capital for industrial
Britain stands impotent before the problem, and con- re-equipment cannot be found.
tinues to pay out something for nothing. The The solution of this problem is a matter of con-
details of such works will not be repeated, as I have tinual adjustment of the balance between spending
so often covered this ground, notably at the time of and saving, which can only be done by co-operation
my resignation from the Labour Government. Our between the Corporative system, which seeks, inter
policy would always be to give useful work to the alia, to increase purchasing power, and the financial
unemployed, rather than pay out benefit pending system, which is charged with the task of finding
their reabsorption in reconstructed industry. Fore- fresh capital for industry from national savings.
most among such works must come the re-housing Any such scheme for industrial and financial co-
of our slum population, whose condition to-day is a operation in national reconstruction would probably .
disgrace to our civilisation, at a time when thousands be opposed to the utmost by some interests in the
in the building trade are unemployed. City, whose foreign commitments conflict with
The Nationaf Investment Board working in con- British interests. If their opposition were carried
junction with the National Corporation of Industry, to effective lengths, the active intervention of
168 THE GREATER BRITAIN F I N AN C E , I N DU S T R Y AND S C I EN C E 169

Government for their suppression would be neces- Old Gang politics. Not only is scientific research
sary. 'Ne do not seek intervention for inter- inadequately supported in this country ; the indi-
vention's sake, in the manner of the meddlesome vidual inventor is often driven abroad by the total
Socialist. But Fascism will not hesitate to act when absence of financial support to carry a proved
the State interests are threatened, and the action of invention through from the proved experiment to
such a power will be decisive. the open market stage.
In this sphere, as in others, the decisive factor No country produces a greater wealth of inven-
will be the existence of a modern movement per- tive talent, and no country more recklessly squanders
meating and gripping all elements of national life, that talent ; yet no country is so peculiarly depend-
irrespective of class or interest, and uniting them ent in our present position upon the development of
in the Corporate conception. There will be no such aptitude for the advance of new industries.
room in Britain for those who do not accept the Therefore, far more powerful machinery of
principle " All for the State and the State for all." government must be created, not only for the
purpose of scientific research and the fostering of
SciENCE, INVENTION AND REsEARCH invention, but also for the carrying through of new
Allied to our financial and industrial institutions inventions from the proved experiment to the point
will be a greatly extended system of scientific and where public support may be sought. Millions
industrial research. The development of new of public money have been wasted in recent years
industries must rest upon science and invention ; through dubious companies floating doubtful inven-
their development is essential if we are easily to tions on the Stock Exchange an~ fleecing an ignor-
effect the great transition, rendered needful by our ant public unprotected by the examination and safe-
declining exports, from production for export to guards of Government. The public must be pro-
production for the domestic market. tected, and the resources thus wasted must be
A Department of Scientific Research already mobilised for the genuine work of industrial recon-

exists, but its scope is limited and its funds are structwn.
exiguous. Like medical research, which might at We propose, therefore, that the machinery of the
any moment, if properly supported, rid mankind National Investment Board should be linked to
of many scourges, so scientific research, if properly that of scientific research. Thus, for the first time,
supported, might revive great industries such as the science would be properly supported, not only by
mines of this country by the development of such official discrimination between the genuine and the
processes as the derivation of oil fuel from coal. bogus, but also by financial machinery designed to
The great possibilities of science are not deemed support the genuine discovery, and to translate it
worthy of proper support in this curious muddle of into industrial achievement. We must call in the
THE GREA'fER BRITAIN
'

new world of science to redress the balance of the


old world of industry. We must found a Corporate
Sta~e on the wealth of scientific and technical skill
which no othe~ nation possesses in equal measure.
By such machmery we would link the National CHAPTER XI
~orpor~tion, w~ich is not only a synthesis of all I

mdustnal expenence, but also a Council planning The Nation's Finance


under Govern~ent t?e gener.al economic develop-
ment o~ th~ natwn, w1th machmery which mobilised THE question of currency policy has already been
our sc1entlfic res_ources and supported them bv considerably discussed. That question now engages
measures of practical financial assistance. ' the attention of statesmen who have for long neg-
lected it. We believe that only a stable price-level
can predicate the conditions in which industrial
reconstruction can be carried through ; and that
stable price-level, in its turn, can only be secured
by a rational monetary system.
On the other hand, we believe that monetary •

stability is the beginning, and by no means the end,


of the problem ; and that there is no small danger
in the universal rush towards credit quackery on
the part of senior politicians, who, a few years
ago, refused to admit the existence of a credit pro-
blem. Currency questions should be seen in proper
perspective to the whole. Money is as essential to
industrial life as the carburettor to a motor engine,
but it is not the whole machine. The adjustment
of the carburettor will not solve our problems if the
cylinders are still cracked.
Our monetary policy can be defined very briefly.
So long as the deflationary tendency continues in
the Gold Standard countries, we believe in a
managed currency for this country. If we have to
choose, we prefer a fluctuating exchange to a
'YJI
172 THE GREATER BRITAIN THE NATION'S FINANCE

fluctuating internal price~level. We should conse~ The power would rest with us, either to enforce the
quently aim, in present conditions, at a stable price~ rationalisation of the gold system, or ultimately to
level ; but seek, so far as possible, to extend the drive every country off the Gold Standard.
existing area of nations who have attached their It is ti 111e that the latent power of our great
currency to sterling. We should under no con~ strength was used to overcome some of the follies
sideration return to the old Gold Standard nor which are now wrecking the industrial and financial
consider the fixing of our Exchange at the previous system of the world.
parity. The rationalisation of gold supplies
throughout the world may secure in effect a Taxation and Economy
managed currency which may be related to gold but In general we believe, as already intimated, that
aims at a stable level of commodity prices. Such the balance of trade is far more important than the
an arrangement would suit our requirements but temporary balancing of a Budget. Nothing is more
any return to the old automatic Gold Standard futile than to balance the Budget by means of tax~
would be fatal to reconstruction. We must devise ation and economy, without corresponding measures
a managed currency which is designed to serve the to balance trade. It is trite to say that revenue de~
interests of the British Producer and to provide pends on industry, and that the decline of industry
without any measure of inflation the credit neces~ means a decline of revenue; but that fact has been
sary to a high production system. Through the consistently ignored. Nothing is more foolish than
Corporate State new credit would be directed to to pile up the burden of taxation, and by small econ-
productive purposes alone and would be balanced " omy to harass and to bully the unemployed while
by a greater production which would prevent any allowing the industrial situation, which is respons-
tendency towards an inflation of prices. . ible for the financial difficulty, to drift towards a
It should not be forgotten that we have means still more complete collapse. For this reason we
to_ e~force our ends in monetary policy not only have always opposed the policy of "cuts." Incom~
w1thm the confines of our own Nation. Some 70 petent politicians of all parties have tried, by such
per cent. of the annual new gold supply of the measures, to make the poor pay for the failure of
~orld is produced within the British Empire, and Governments to produce a constructive policy. It
1f the gold reserves of the Empire countries were is the duty of Parliament to make them think
pooled, they would amount to some [230 millions. again and think harder.
If Empire countries were willing to pool their o-old
reserves and to establish a statutory monopoly in a Industrial Reconstruction
~entral bank to acquire our annual gold production, The prime necessity of the present is a policy
we should dominate the gold position of the world. of industrial reconstruction, which will increase
'
THE GREATER BRITAIN THE NATION'S FINANCE I75
1 74

revenue returns through the medium of trade re- on the ground of equity it is desirable that they
vival, and will thus make possible both a reduction should bear any additional burden which i:as to be
of taxation and an improvement in working class borne.
standards. We should also turn to hereditary wealth for such
Lord Rothermere states the cold truth in face of purposes. While we regard as part of the legiti-
the failure of all Governments to produce a policy mate urge to private enterprise the desire of a man
of industrial reconstruction when he says that " this to hand on to his children the wealth which he
country cannot support a burden of taxation local himself has created, we do not regard it as desirable
or national of more than so per cent. of what it th~t such weal0 should be handed on from gener-
is at present called upon to bear ". auon to generatwn by people who have contributed
A nation in the grip of our present trade depres- n'?thing to its creation. Such a system is not a
sion cannot support indefinitely the present burden snmulus, but a burden, to private enterprise. It
of taxation without some operation of the law of actually encourages idleness and the development of
diminishing returns, which will lead in the end to a parasitic class.
financial collapse. In fact, we have to choose We are definitely against such transmission of
between the effort of industrial reconstruction and h~reditary wealth from generation to generation as
the passive acceptance of a vast reduction of stand- p1les u~ a ~ead weight of ~nte:est on industry and
ards of living. the ~at~on m order to mamtam a relatively small
We believe that the industrial measures outlined class m 1dleness. It will be necessary to discriminate
already would relatively soon lead to increasing bet~een diff~re~t ~ategories o~ hereditary wealth ;
revenue returns, and the end of financial difficulties. ~or 11:-stance, 1t 1s hrghly undeSlfable ~at heredit::UY
!f, prior to the effects of r.econstruction being felt 1armmg should be broken up by 1mposts wh1ch '

m gr~ate~ revenue returns, 1t was necessary to meet prevent a son, on the death of his Father, from
the s1tuat1on by measures of economy and taxation, \Vorking the land on which he was brought up.
we would lay down certain clear-cut principles to But the general principle of Fascism will be that
that end. When fresh taxation was required, we accumulated wealth may be justified only from one
should turn first to those who have benefited most generation to another. A man should be allowed
from recent policy, namely, the great rentier class, to work not only for himself but for his children.
the owners of fixed-interest bearing securities whose He should be permitted, as at present, to leave a
purchasing power has been doubled in the past proportion of the money he makes to his family.
decade: It 1s. not bey?nd administrative possibility But it is for the State to decide whether trans-
to devtse speCial taxatlon for those who enjoy un- mission to a further generation is justified by service.
earned income from fixed interest bearin<r security · 1£, therefore, a family fortune is to be preserved,
b '
THE GREATER BRITAIN
THE NATION'S FINANCE 177
each succeeding generation must cont~ibute ?Y to-day are usually the fruits of inefficiency. The
national service (not necessarily com!llere1~l) to ~ts power ruthlessly to cut down the redund~nt, and
maintenance. By this principle Fasctsm wtll _retam to resist the consequent clamour of vested mterests,
the incentive of a man to work not only for htmself can only rest with a government stronger in i~s
but for his children, but will rid the nation of the whole constitution than the so-called democratlc
dead weight of usury which distorts the productive governments of to-day.
processes of the country and cripples industrial In the actual administration problem in which
development. . . . economy resides, only such forces of government as
Our aim throughout is to nd productlve mdustry we have described can function with success.
of its financial burden. Successive governments
have paid lip service to this principle and in the Increase of Revenue
De-Rating Act the first pathetic advance was made We indicate the general principles by which we
towards its translation into practical politics. But, believe that economy can be seemed and taxation
if the principle is dearly recognised, the effects ~re should be raised when such measures are necessary :
far more profound. Hither~o the hol~er _of or~n­ but the fact cannot be over-stressed that we are not
ary shares, who is the true nsk bearer m mdustr1al a movement of taxation but of reconstruction. We
enterprise, has been treated as the holder of a?- come to these conclusions, not because we are dema-
" unearned income ", and taxed on the same basts gogues, for we advocate many things which are
as the investor in debentures, bonds and other forms novel, and therefore unpopular ; but our . whole
of moneylending. Private industrialists, too, have economic analysis leads us to the belief that the real
been in the same position ; though they carried the solution is to reconstruct industry, and not to
risk, they have been penalise~ if their incomes in- diminish purchasing power by taxation. We be-
creased ; there has been nothmg to encourage the lieve that an increasing revenue derived from reviv-
salaried man to take the risk of enterprise on his ing industry is the real way out. We shall not win
own account. The whole procedure is illogical, through by putting t~e pa?ent to. bed on a starv-
and calculated to discourage the enterprise upon ation diet, but by takmg htm out mto the fields of
which our industrial future depends. We must effort for exertion and for the rebuilding of muscle
distinguish, in taxing earr;ted in~omes,_ between the and constitution. The former is the remedy of the
enterprising and the cauttous ; m taxtng unearned eternal old woman in government ; the latter is the
incomes, between the producer and the usurer. remedy of manhood.
The only means of enforcing economy is the con-
stitution of strong government. Real economy
means efficiency. The so-called economies of
CONCLUSION I79

Party met with a concentrated attack of organised


misrepresentation and ridicule from the old Parlia-
mentarians and the Press of the great vested interests
by which they are served. As a result, its policy
CHAPTER Xil '•
and aims were never known or discussed by the
I public .
Conclusion It was temporarily overwhelmed in the General
Election of October, 1931, by the last great bluff of
THE case advanced in these pages covers, no~ only the Old Gangs in the formation of a National
a new political policy, but also a new conceptwn of Government. A blank cheque was given by the
life. In our view, these purposes can only be electorate to a government of " united muttons," ·
achieved by the creation o~ a m?dern movement which openly combined, for the first time, every
invading every sphere of nat10nal hfe. To succ~ed, failure of post-war politics. Every Old Gang poli-
such a movement must represent ~e . organ~sed tician deserted his particular variety of sinking ship,
revolt of the young manhood . of B;,1tam agam~~ and scrambled aboard the new lifeboat. Only the

things as they are. The enemy 1s the Old Gang ,'


rump of Labour leadership was left behind a col-
of our present political system. No matter what lection of men whose intellectual calibre was deemed
their Party label, the old parliamentarians have by their late colleagues unworthy of :inclusion in
proved themselves to be all the same ; no_ mat~er the new combination.
what policy they are elected to carry out, the1r pol~cy I The National Government had no programme
'
when elected is invariably the same. That pohcy I
when they started, and they have no programme
is a policy of subservience to sectional interests and to-day. Their leaders had not foreseen the crisis of
of national lethargy. . . . 1931 until it overwhelmed them, and indeed derided
At the end of the War, they found Bntam ra1sed its possibility ; but the public was assured that our
by the efforts of the young generation to a pinnacle troubles would automatically be overcome by the
of power and of greatness. Their rule of fourteen mere fact of the new combination of the old forces.
years has surrendered that position, and has reduced I The crisis, as well as the heart of the electorate, was
this country, at home an.d abroad.' to a low and dan- to melt before the sudden embraces of a few old
gerous condition. Agam we ra1se the standard of gentlemen who had spent the previous half-century
youth and challenge that betrayal. T~e first in abusing each other.
attempt was the formation of the New Party m 1931, Unfortunately, facts are sterner than the emotions
which attracted a powerful body of adherents of democracy. They have soon proved that some
throucrhout the country. From the outset, the New further action was required than has emerged as yet
b I78
r8o THE GREATER BRITAIN CONCLUSION 181

from the Old Gang honeymoon. The first result of crisis in every nation has
In such an atmosphere, every appeal to thought, always been a national combination of "the united
to reason, to effort and to action was naturally muttons." Only after their failure, the modern
defeated. Our constructive programme was de- movement begins its inevitable advance. The aim
rided and dismissed, only later to be adopted in of such a movement must be revolutionary in the
part by the National Government but in so small i fundamental changes which it seeks to secure. But
a degree, so tardily and in such muddled fashion, all these changes can be achieved by legal and by
as to render it entirely ineffective. peaceful means, and it is our ardent desire so to
For all this we make no complaint whatsoever ; secure them. Whether they will be thus achieved
such experience is merely the classic first phase of a depends, chiefly, upon the rapidity with which new
Modern Movement. Actually we fared far better ideas are accepted in this country. ·
at our first attempt than any of the modern move- To drift much longer, to muddle through much
ments which have been founded and which have further, is to run the risk of collapse. In such a
come to power in other countries since the War. situation, new ideas will not come peacefully ; they
The Italian Fascists were more utterly defeated in will come violently, as they have come elsewhere.
the election of 1919, about three years before they In the final economic crisis to which neglect may
came into power. Their leader polled only s,ooo lead, argument, reason, persuasion, vanish and
votes against the 1oo,ooo of his Old Gang opponent organised force alone prevails. In such a situation,
-a result only some 20 per cent. as good as that the eternal protagonists in the history of all modern
which I was afforded by the people of Stoke-on- crises must struggle for the mastery of the State.
Trent in the election of 1931. Either Fascism or Communism emerges victorious;
If we turn to the case of the German Nazis, we if it be the latter, the story of Britain is told.
find that ··they were routed again and again by Anyone who argues that in such a situation the
national combinations of their Old Gang before normal instruments of government, such as police
they approached power. and army, can be used effectively, has studied
It is onlv natural that nations in crisis should neither the European history of his own time nor
'
seek the easy and the normal way of escape. It is the r~alities of the present situation. In the highly
only natural that they should trust the well-known tcchmcal struggle for the modern State in crisis, only
and venerable figures in politics until these are found the technical organisations of Fascism and of Com-
unworthy of trust and unsuitable to a dynamic age. munism have ever prevailed, or, in the nature of
Only then, with the new determination born of the case, can prevail. Governments and Parties
despair, great nations turn to new forces and to which have relied on the normal instruments of
new men . government (which are not constituted for such


182 THE GREATER BRITAIN CONCLUSION

purposes) have fallen easy and ignoble victims to Italian Fascist that he could achieve the renaissance
the forces of anarchy. If, therefore, such a situa- of Italy through the Parliament of Giolitti, or a
tion arises in Britain, we shall prepare to meet the German Nazi that he should cease his struggle and
anarchy of Communism with the organised force of should seek to persuade the opponents whose failure
Fascism ; but we do not seek that struggle, and for I
created the necessity for his organisation. New
the sake of the nation we desire to avert it. Only ideas have never come, in the modern world, except
when we see the feeble surrender to menacing from the new and organised reality.
problems, the fatuous optimism which again and In Great Britain, salvation has not come, in four-
again has been disproved, the spineless drift towards teen years, from the old parties, and it will not
disaster, do we feel it necessary to organise for such come. They are not alive to crisis ; they are not

a contmgency. organised to meet it; and their mind and psychology ·
Action, even now, might avert it ; but can any- are unsuited to it. VI' e cannot compromise with
one, after an experience of post-war politics, hope for them, for " their ways are not our ways and their
such action from existing political parties, from the gods arc not our gods." ·
men who lead them, or, indeed, from the existing It is true that within the old parties and even
political system. The whole constitution, com- within the old Parliament are many younrr . b men
position, tradition, psychology and outlook of the w hose real place is with us, and who sympathise
older political parties inhibit them from facing the with our ideas. The real political division of the
problems of the modern age. Nothing has yet past decade has not been a division of parties, but a
overcome the modern problem in other countries, division of generations. At any time in the past
or in our view can overcome it in this country, few years it would have been possible to form a
except that phenomenon of the modern period, government of broadly homog~neous ideas from
which is the modern movement of organised the men over fifty years of age, and a corresponding
Fascism. government from the men under fifty years of age.
It was often urged strongly upon me that I could lt was left to the older generation to demonstrate
find acceptance for many of the ideas set out in this the truth of this view in the formation of a National
book within one of the existing parties, and that it is ' Government.
folly to attempt the great labour of creating new In the case of the younger generation, the
machinery for purposes which could be achieved machinery of Party Government, which is controlled
by existing machinery. hy the old, has made any such development im-
Such an argument betrays a complete misunder- ~ ><>~sib le. The power of that party machine has
standing of the problem and the history of this crushed all attempts to secure a natural alignment
period. It would have been equally futile to tell an in British politics. Nevertheless, within all political
THE GREATER BRITAIN CONCLUSION

parties potential Fascists are to be found among with a concentrated barrage of misrepresentation, or
young men who are well known in party politics, with a well-organised boycott, as they have opposed
and still more among the rank and file. us in the past and as they oppo~d all such move-
Before we can draw such support, which would ments as this in every country. But we have on our
mean the collapse of the old political system and the side forces which have carried such movements to
achievement of a new national unity, we have to victory throughout the world. We have in unison
advance much further on the road to victory. We in our cause the economic facts and the spiritual
have to discover, as we have already discovered, new tendencies of our age. These are the forces which
men, and we have to create a new force from in so many countries in recent history have smashed
nothing except the will of the mass of people to all the pomp and panoply of the old political systems

v1ctory. and have enthroned new creeds in power .
It is thus that every Fascist movement has ar- [Britain is different, we are told (and certainly
rived at power not by combinations of men drawn we invite Britain to do things in a different way).
, from the old political system, but by the discovery of Germany was different from Italy, they said a
, new men who come from nowhere, and by the short time ago, and they were right in that the
creation of a new force which is free from the tram- gulf between the Latin and the Teuton is greater
mels of the past. Except for a few leading figures , than the gulf which separates either of them from

who broke from the old political system and staked the Englishman. B11~~ig !he . hour of crisis . that
·all on the creation of the new, the makers of Fascism phenomenon of the modern age, which is an organ,
. , , in all countries had never been heard of before the
> .. '
ised, Fascist movement, leapt the gulf between
· arrival of that movement. Latin and Teuton and reappeared in an almost.
'
For our purposes, therefore, we cannot rely on identical formJ .
well-known names and figures. Few of them will i Fascism
! ·-·
~-.~---"•~.-•
to-da~·
O ,-
has become
- ''"
a world-wide move:,
~-·~--•·••••-'" -·~»;,n,«.,- ,_, •.;·• · ' ' '.
,,,,-,-~-----
4 0 I

· take the risks of so great an adventure as the creation i!E~~t,Invadmg e~e!"y fOUntry m t~e hour of cns~s a~;
of a modern movement, and we cannot expect them iJ?.~. ()l}ly aiternatweto a destructlve <:ommumsm. L.
to talce those risks. If we are: to be true to our faith, \Ve must remember that, in the long course of
we must ourselves take risks which most men will history, all great movements which swept the Con-
' not take, and must stake our all on a mission which tinent have come in the end to these shores. They
in its early stages must be lonely. have come, but in very different form and character.
In the coming struggle, we shall have the impos- We, too, seek to create the Modern Movement in
ing things of the world against us, and much of its Britain in a form very different from Continental
material strength. The great names of politics, the forms, with characteristics which are peculiarly
power of party machinery and Press, will oppose us British and in .a manner which will strive to avoid
' -'
r86 THE GREATER BRITAIN CONCLUSION

the excesses and the horrors of Continental struggle. has proved in practice. Already in this country we
Whether these aims can be realised depends upon have a condition in which free speech is a thing of
'

whether Britain will wake soon or late. Can we 'I the past. The leaders of the old political parties
again show the political genius which translated creep in by back doors, under police protection,
the great movement that ravaged the Continent at to well picketed meetings which would otherwise be
the end of the eighteenth century into the sanity \ broken up by the organised violence of Socialist and

and the balance of the forces which later carried the Communist extremists. We have thrown open
great Reform Bill in Britain, and which no other our meetings to the public, and after the meetings
country could have conceived or have produced? we have exercised the Englishman's right to walk
The new order, which was born on the Continent through the streets of our great cities. 'When we
amid a welter of blood, was then brought to birth have been attacked, we have hit back, and as a
in Britain by a method and by a policy which were result I have been subject to the farce of being
characteristic of our ordered greatness. Why then, summoned to a police court for assault by Reds who
we ask, should the arrival and the inevitable came to break up our meetings by force ; and who
arrival of the great forces of the new age in Britain ran howling, when counter force was employed, for
be heralded by violence? Has Britain still the 'I the protection of the police and the law which they
political wisdom and the national determination to had oreviouslv derided.
' - J

avert it? Is the appeal to reason to be all in vain? The great majority of our meetings, even in the
Must we drift helplessly to the arbitrament of force? early days, were peaceful. In fact, although little
For our part, we appeal to our countrymen to else appeared in the Press, only two out of some
take action while there is time, and to carry the I
hundred meetings which I addressed at the Election
changes which are necessary by the legal and consti- ended in a Eght ; and the return visit, even to
tutional methods which are available. If, on the Glasgow, was strangely peaceful.* Nevertheless,
other hand, every appeal to reason is futile in the when v.re are confronted by red terror, we are cer-
future, as it has been in the immediate past, and tainly organised to meet force by force, and will
this Empire is allowed to drift until collapse and always do our utmost to smash it. The bully of
anarchy supervene, we shall not shrink from that the streets has gone too long unchallenged. We
final conclusion, and will organise to stand between shall continue to exercise the right of free speech,
the State and ruin.
We are accused of organising to promote violence. *
At this time, before the organisation of th~ Blackshirt Defence
Force, most of the open-air meetings in " red " areas were broken
That accusation is untrue. It is true that we are up. Indoor meetings were less frequently broken up but organised
organised to protect our meetings as far as possible barracking usually made it impossible to put over a coherent case.
Now we hold meetings everywhere in perfect order with very rare
from violence ; and very necessary that organisation •
exceptiOns
THE GREATER BRITAIN
I ' CONCLUSION

and will do our utmost to defend it. build a movement invading every phase of national
Emphatically, this does not mean that we seek life and carrying everywhere the Corporate con-
violence. On the contrary, we seek our aims by
'I
ception. In the first instance, we probably made
methods which are both legal and constitutional, a mistake in contesting parliamentary elections
and we appeal to our country, by taking action in before we had created such a machine. It is a
I' mistake which we have made in common with all
time, to avert the possibility of violence. If the I
situation of violence is to be averted, the Old Gang new movements which have come to power in
Government must be overthrown and effective I
I
Europe since the War. In all cases the phase of
measures must be adopted before the situation has ridicule and defeat has to be passed ; indeed, it is
gone too far. The enemy to-day is the Old Gang the test of a movement's vitality. In the beginning
of present parliamentarianism. The enemy of the Old Gangs carry the day as light-heartedly
to-morrow, if their rule persists much longer, will as Remus leapt over the half-built walls of Rome.
be the Communist Party. The Old Gangs are the '1 I
Whether our British Union of Fascists will arrive
Architects of disaster, the Communists only its at power through the parliamentary system, or
executors. Not until the Old Gangs have muddled whether it will reach power in a situation far
us to catastrophe can Communists really operate ; beyond the control of Parliament, no one can tell.
so, in the first place, the enemy is the Old Gang, The solution of that question will depend on two
and the objective is the overthrow of their power. incalculable factors: (r) the rapidity with which the
To achieve this by constitutional means will entail situation degenerates ; (2) the rapidity with which
at a later stage a bid for parliamentary power. In the British people accept the necessity for new
a superficial paradox, it will be necessary for a forms and for new organisations. If the situation
modern movement which does not believe Parlia- in develops rapidly, and the public mind develops
ment, as at present constituted, to seek to capture slowly, something like collapse may come before
Parliament. To us, Parliament will never be an any new movement has captured parliamentary
end in itself, but only a means to an end ; our power. ,
obj~ct is, not po~itical place-holding, but the In that case, other and stcrner, measures must be
I
ach1evement of natwnal reconstruction. '
' adopted for the saving of the State in a situation
However, the time for elections and for Parlia- approaching anarchy. Such a situation will be none
ment has not yet come.* First, it is necessary to of our seeking. In no case shall we resort to vio-
'
lence against the forces of the Crown ; but only
. *. We. hav7 now reached a stage at which Fascist electoral organ- against the forces of anarchy if, and when, the
IsatiOn rs berng developed throughout the country. This has been machinery of state has been allowed to drift into
made possible by the extraordinary rapidity of the Fascist advance
and the wide acceptance of its policy. powerlessness. Strangely enough, such an eventu-
I
l CONCLUSION
THE GREATER BRITAIN

ality is probably a lesser menace, when the character pre~isely in advance the road by which we shall
o~ _the British people is considered, than the possi- attam them. A great man of action once observed:
bihty of a long, slow decline which is so imper- "No man goes very far who knows exactly where
ceptible that the national will to action is not he is going," and the same observation applies with
aroused. In crisis the British are at their best ; some force to modern movements of reality in the
when the necessity for action is not clear, they are changing situations of to-day.
at their worst. It is possible that we may not come • • • • •

to any clearly marked crisis: and here arises a still We ask those who join us to march with us in a
I
greater danger. The industrial machine is running great and hazardous adventure. We ask them to
on two cylinders instead of six. A complete break- be prepared to sacrifice all, but to do so for no small
down would be a stronger incentive to action than and unworthy ends. We ask them to dedicate their
the movement, however cumbrous, of a crippled lives to building in this country a movement of the
n:~achine. So l?ng as there is movement of any
modern age, which by its British expression shall
kmd, however !~adequate, there is always a lazy transcend, as often _befor~ in our hi~tory, every pre-
hope. cf better t?mgs. The supreme danger is that cursor of the Contment m conceptwn and in con-
Bn~a:n may s1r:k, almost in her sleep, to the
structive achievement.
pos1t10n of a Spam alive, in a sense, but dead to all Y"( e a~k them to r~-write the greatest pages of
sense of greatness and to her mission in the world. ~nt1~h h1story ?Y ~ndmg f~r the spirit of their age
In a situation of so many and such diverse con- 1ts h1ghest m1sswn m these 1slands. Neither to our
tingencies nobody can dogmatise upon the future. fri_ends nor to. the country do we make any pro-
We cannot say with certainty when catastrophe will mises ; not w1thout struggle and ordeal will the
future be won. Those who march with us will
co.rr:e, nor whether i,t will take the form of a sharp
cert~inly face ab_use, misunderstanding, bitter ani-
cns1s or of a steady ctecline to the status of a second-
rate Po_w~r. All that we can say with certainty is mosity, and poss1bly the ferocity of struggle and of
that Bntam cannot muddle on much longer without danger. . In return, we can only offer to them the
catastrophe, or the loss of her position in the world. deep ~chef that they are fighting that a great land
may hve.
Against either contingency it is our duty to arouse I

the nation. To meet either the normal situation of


political action, or the abnormal situation of catas-
trophe,. it .is our duty to organise. Therefore, while
the ~nnc1ples for which ~e fight can be clearly
descnbe.d m a compre~ens1ve system of politics, of ..
econom1cs and of hfe, 1t would be folly to describe \