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COLLAPSE OF THE LAISSEZ-FAIRE SYSTEM
The main purpose of the White Paper, and the Motion, is to declare war on unemployment, and to indicate how our resources should be harnessed for that purpose. Our monetary system, our commercial agreements, our industrial practices, indeed, the whole of our national economy, will have applied to them the acid test—Do they produce employment or unemployment? Under the system which governed our economic life from the industrial revolution onwards, unemployment and deflation were regarded, in the main, as automatic correctives for the lack of equilibrium in our financial and economic position. Incidentally, it was just 100 years ago, after the passing of the Corn Law Act and the Bank Act, that that automatic control was introduced. This meant that industry and human beings had to adapt themselves to the working of the financial system, instead of the system being adapted to the needs of the individual. The need for adjustment was thrown at industry. Revisions of rates of wages or production had to be made from time to time, very suddenly, and as a result the two sides in industry were set in conflict. Strikes and lockouts followed, there was lowered production and the national income was cut down still further. We had, moreover, to buttress the old system with our social services, as I have already indicated, and directly this was done, the automatic adjustments which were the basis of the old system could not be made in the way intended under the doctrines of laissez-faire. The stronger the trade unions became the more the resistance to change in money wages. With the buttress of the social services, the weapon of starvation and bankruptcy did not operate at all quickly enough to make the old system work, and it was doomed from the day when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced his social services into this House.
It is worth while briefly to call attention to what had to be done between the two wars, leaving out the temporary boom, and beginning with the time when the first adjustments under deflation were made. These are very striking figures. From 1922 to 1939 we lost 250,000,000 days of production, through strikes and lock-outs alone. Over 6o per cent. of those disputes arose from the need for adjustments due either to deflation or Gold Standard adjustment, and were outside the control of industry. Therefore, you set two parties to settle a dispute that someone else had created but which they had no power to settle. That is a most unfortunate situation to create, and the way things work in arriving at it, is unjust.
I may be forgiven for referring to the General Strike, for which I have never apologised. What happened? In 1921 there was an adjustment of 40 per cent. Many of us trade union leaders had to spend three solid years in making new agreements and, when we had made them, within a year we were thrown out by 12½per cent. No industrialist in this House will get up and say that you can adjust industrial efficiency to make up 12½ per cent. in one year. No one can do it, however he may try. Yet that was thrown at us. And how was it proposed to deal with it? It was sought to take 2s. 6d. a ton off coal, which meant so much off steel, and so much off other things, all the way up through industry. And so, the people who suffered were one class of the community. I make the assertion, and this is a basic principle of this White Paper, that if either exchange or financial adjustments have to be made, they must be made over the community as a whole, not singling out one particular industry or class. [An HON. MEMBER "And by this House."] And by this House, certainly; but if the House had understood it, we should never have had the General Strike.
What happened? With all that loss of 250,000,000 days, wages went down, wages went up, went down again and went up again. What was the net result at the end? The change in money wages over the whole field of sheltered and unsheltered industries, which I admit did not suffer equally—the unsheltered trades suffering more than the sheltered trades and professions—was only five points. In the 17 years from 1922 to 1939, we had all these fights and struggles going on throughout the country, with all the consequent difficulties, and the adjustment was five points. I suggest that the House ought to find some better remedy than that. There will be strikes, there will be disputes, but they ought not to be on this issue, which those concerned cannot settle of themselves.