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A TRADE REVIVAL Sit,—May 1 comment on your article under the above title, an article whose tenor is to welcome the incipient &perlure of this country from the realm of international trade as its main preoccupation ?
I write as an economist and so entitled to speak with authority on the matter. To anyone who is at all conversant with the mode of life of Great Britain, the chief feature is the inability of the country to supply anything like its nseds in the sphere of foodstuffs and raw materials. Cut off our imports and we die The geographers tell us that
• 'normally England produces one-quarter of her total food supply, and she could mukr maximunz pressure produce between
one-third and one-half. . . ." And, of course, in raw materials the situation is much worse. Cotton we do not and cannot grow at all, wool we can produce a little, rubber not at all, oil seeds not at all, iron ore a good part of our requirements but not all, and other ores very little. And so on. These are the things which, together with the foodstuffs, enable us to live and move and have our being. And they all come from other countries!
Now, other countries, like ourselves. are not very keen on giving away these things free of all repayment. They want something from us. What can we give? Of natural resources, nothing but coal. But we have other things available—an industrial organisation, shipping facilities, banking and insurance mechanism. So we have become an industrial and commercial nation: we take the raw materials and foods from the other areas; some we keep for ourselves, others we alter in shape, form, etc., and send them back. Not necessarily to the same place, of course, but anyhow out of our country. In short, we must export, otherwise we shall not be able to import, and then where should we be?
But beyond this absolutely simple and somewhat superficial justification of international trade, there is the deeper and more scientific argument from basic
economic principles. To attempt to go into that here and now is obviously quite impossible, as it needs some explanation of the basic principles on which it must rest.. Even to-day, it hardly deserves the blur of being called a " superstition." . . . Scientific economic analysis shows beyond dispute that if a country (and the doctrine applies equally to any " regions" or groups) devotes its productive energies to that line or those lines in which it has the comparative advantage in terms of unit cost of output and obtains other items by means of exchange of goods with countries similarly engrossed in their specific " best " lines, then there will be the best utilisation of the factors of production.
Great Britain finds her comparative advantage—or, rather, would find it if she made certain readjustments in her structure which have become imperative owing to the development of world conditions in recent years—in catering for the supply of industrial products and commercial service to the world at large. Economic opinion is fairly _well agreed that (to quote Professor Robbins) " important as arc the new industries catering fur the home market, there can be no full restoration of prosperity for this country without a considerable restoration of international trade and international investment." Dr. Rankin is equally emphatic. . .
And, finally, from another point of view. It so happens that this country has a good deal of money. equ'pment, service, etc., dedicated to the calling of international trade and the export market. Areas have become derelict, and their people with them, only because their international trade has fallen off. Surely, . • •
by way of improvement, however difficult that may be, than to readjust downwards. one is not going to think of scrapping them completely when the carrying through of certain readjustments would make them once again profitable? These adjustments may be big ones. but it is sounder policy to readjust upwards, i.e., verso Bean,. I.. Be,