|Subject:||[socialcredit] The Question of Exports|
|Date:||Saturday, September 30, 2006 08:45:39 (-0700)|
|From:||MODERATOR <socredus @.....com>
*The New Age*
December 1, 1921
The Question of Exports.
By C. H. Douglas.
The editor has passed on to me two letters which seem
to indicate some confusion of thought as to the
bearing of a modified credit system on export Trade.
Both these letters quote statistics of wheat
production and consumption with a view to throwing
some doubt on our capacity to grow our own food.
Now, ultimately, statistics are indispensable to sound
practical politics, but to the writers of these
letters, as well as to others who may be tempted to
attack the problem on the basis of official
statistics, it may be emphasised that it is nearly
irrelevant to the primary issues whether this country
can feed it’s population off its own acreage or not.
It is quite arguable that it can; and it is also
arguable that it would be bad business for it to try.
These issues are:
(I) Are there inducements operating towards the best
use of the land we have?
(2) If we export services (i.e., the energy element of
production) do we get the best real price for them?
In regard to (1), and leaving out of the argument, for
the moment, the indisputable fact that the acreage
under wheat is steadily decreasing decade by decade,
consider the position of the farmer. He, like everyone
else at present, is in business to make money, not to
deliver goods. It is quite true that he makes money by
selling things, but he can easily make more money by
selling less goods at a higher price, than vice versa.
Now wheat is one of a fairly small group of
commodities over the price of which the individual
producer has practically no control whatever. It is a
graded homogeneous product bought in bulk by experts
who have a strictly finite demand for it, and the
price paid is under existing conditions purely fixed
by supply and demand whether unfettered or
artificially stimulated by rings, and is not directly
based on cost.
Normally, a given amount of foreign wheat is
contracted for in this country-bought on “futures” by
grain brokers whose price fixes a datum line for
home-grown wheat. So long as wheat is in short supply
as compared with the demand, the price rises and
everyone engaged in the grain trade, either as
producer or dealer, may benefit, although no doubt
most of the benefit goes to the dealer.
The relation of the farmer to this situation must
surely be plain. The one situation he must avoid at
all costs is that produced by throwing grain on the
market in any quantity which will bring down prices,
that is to say, slacken the demand or competition to
buy. His criterion of a satisfactory output,
therefore, bears no relation to what amount of wheat
the public requires, or what amount the land will
produce, but rests fundamentally on, firstly, the
operations of the grain brokers and, secondly, an
estimate of what margin of profit can be extracted
from the market by keeping it short of wheat without
causing a secondary movement of grain from other
As transportation facilities improve, the proposition
becomes less and less attractive to the farmer who is
driven more and more to the production of perishable
goods, such as eggs, butter and milk, whose nature
enables him to control the local market, or to the
raising of stock on which the transportation charges
and risks are heavy.
The first prime question can therefore be answered
quite confidently in the negative.
In regard to the second point, let us assume that the
magnitude, at any rate of our imports of foodstuffs,
is a reasonable subject of discussion and policy. It
is evident that there is a point at which it is
debatable whether we should grow the last few million
quarters of wheat required on land which may not be of
the most suitable description, or whether it is sound
business management to obtain this wheat by the
exchange for it of manufactured goods-that is to say,
by an export of economic energy.
It does not take much consideration to see that the
answer to this is purely quantitative: how much wheat
are we to get for a given energy export?
It is true enough, as our super-industrialists and
orthodox economists are always telling us, that
imports are paid for by exports, but, on the whole,
they are content to leave it at that. They do not
explain, for instance, how a population which most
certainly cannot, and does not, buy its own total
production for cash (if it could, there would be no
necessity either for home or export credits, and no
“unemployment” problem), can become able to buy the
imports which are exchanged for the unpurchasable
They do not, again, explain how a textile worker, paid
wages for converting a bale of raw cotton worth, say,
into goods worth, say, can benefit if in return for
these manufactured goods two more bales of raw cotton
at are received-a condition common to Trade booms. Nor
do they generally publish the fact that English
machinery is often sold to export agents abroad at far
lower prices than those at which the same machinery
can be obtained at home, or that it is possible to
buy, in the bazaars of Bombay, a shirt made in
Lancashire for a quarter the price at which the same
shirt can be bought retail in Manchester.
The simple facts are that, under existing
arrangements, our principal pre-occupation is the
provision of employment--the making of work. On this
simple canon hangs the Law and the profits.
When, therefore, a locomotive is required for the
Argentine, and assuming for the moment that it is in
any sense sold in the open market, there is a
competition, open to the industrial nations of the
world, to sell locomotives and to buy wheat, with the
usual and logical result that wheat appreciates in
price in terms of locomotives, the industrial
exporting country continually gives more, and the
exporting agricultural country continually less,
economic energy in every bargain.
In order to make a bargain which is Just, i.e.,
judicious, the industrial nation must be restored to
the position of a free, not a forced, seller, just as
to restore social equilibrium inside the nation the
individual must be put in the position of a free, not
a forced, worker. The arrangements which would fulfil
these desiderata are already sufficiently familiar in
principle to readers of *The New Age.*
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