Evening star., 1945-08-05
Britons Look to Labor
To Solve Problems
But Observer Anticipates Change
and Disappointment
BIZ ODen L. Scott

By O,0en L. Scott
Socialism is not likely to solve the
problems that Great Britain faces after
this war. The British people, worried
about those problems, have turned to a
Socialist government to deal with them.
The results probably will be disappoint-
ing.
Britain Is confronted with situation
almost exactly opposite to that confront
| ed by the United States. The British
| government must find ways to deny the
British people things they want in order
| to produce goods to export so that the
| raw material imports upon which Brit
ish economic life depends can be paid
| for. The government of this country,
on the other hand, is confronted with
| the problem Of assuring such high
level Of domestic consumption that the
American people not only will use the
bulk of the products of American in
dustry, but will need such a large
amount of goods from abroad that
Britain and other nations can pay for
what they need to buy here.
The British problem calls for a solu-
ton that is far less popular than the
solution of the American problem. In
Britain, the government must restrain
strong impulse toward higher stand
| ard OF living for the people. In the
United States, the Government needs to
/ encourage a sharply higher living stand
| ard
Britain's basic trouble is that she is to
come out OF the war owing large amounts
Of money abroad. Even if all the lease
lend debt Is written off the books, as it
will be except for possible token pay
ment, the British still owe the equivalent
of $4,000, 100000 to India and Egypt and
Argentina and other nations or colonies.
Much Of that debt will be placed on a
long-term low-interest rate basis, but it
complicates matters. The complications
are aggravated by the fact that the
income from British investments abroad
will be much lower after the war than
before Income from shipping services
and insurance may be lower Then the
continent Of Europe, which had been a
very large customer of Britain and Of
the British Empire through channels in
Britain, no longer is to offer quite the
same profitable market that it once Of
fered.
At home, the British people after six
years OF war; will want to enjoy the
things that have been denied them dur
ing the war. Their need for housing and
better food and for all kinds of goods is
immense. Yet, inside Britain there are
not the materials and the labor with
which to provide all the things that
Britain needs. To get those things, the
British either must borrow more abroad
or find way to increase exports to
very high level in order to find the
means of payment. To increase exports
means that the people at home-at least
emporarily-cannot have the things
to which they think themselves entitled.
The problem posed by this situation
will not be solved merely by socializing
some of the basic industries, such as
coal. power, transport and steel II
socialization increases efficiency of Brit
ish production. then some gain may re-
suit. Any gains from socialization, if
there are any, at best will be slow in
appearing. Likewise, merely to ma
tionalize the Bank of England and to
say that money Is to be the servant and
not the master of the people will not
solve any problem. Imitation of money
supplies to deal with internal situations
may affect the value of the British
! pound sterling in relation to other cur
rencies. 1t Is imperative, however, to
maintain that pound value because OF
the need to buy raw materials from
abroad A cheap pound complicates the
| problem of importing.
In the light of this situation, So
cialist government in Great Britain Is
likely to be far less important for what
it accomplishes in the way of socializa-
ton of domestic means of production
than for the way it handles foreign
trade relations.
The Socialists will turn TO a rather
tightly controlled and planned econ
omy. Government controls will be
maintained over exports and imports.
The government probably will engage
in program of bulk buying" abroad.
using the power of the state and the
advantage that goes with being a big
customer, to get the best possible deal
in purchase of materials. There will be
a tendency to build a bloc of nations
whose needs are complementary so
that difficulties of exchange can be
eased. Instead of becoming more of a
free-trade nation, the British are likely
to move in the direction of a closed
trade In which Britain can sell the ad-
vantage of her position and her expert
ence to the best effect.
The United States on the other hand,
Is striving to induce the world to turn
in the direction of freer trade This
country is prepared to 60 in for large
scale foreign lending, and 1t plans to
reduce tariffs In the hope that this will
make 1t easier for foreign buyers to
pay for their purchases The Interna-
tional Monetary Fund. which now has
been approved by Congress, is designed
to get away from exchange restrictions
and export and import controls. The
Socialist government in Britain is likely
to be wary of commitments that will
bind 1t to free-trade policy.
It now remains to be seen whether
| the British people viii turn back to-
ward conservative policies or will try
even more socialism and more and
| tigher controls when the Socialist group
now in power runs into trouble as it in
evitably will in the years just ahead.
| The official view here Is that Britain