Empire Steppingstone

To U.S. business last week came a reasoned and challenging statement of what British Liberal opinion believes may be the economic future of the British Isles and Britain's Colonial Empire.

Free of the sound & fury which has recently characterized debate in this country about the British Empire, and free too of any trace of jealousy and suspicion which all too often marks Anglo-American relations, the statement is contained in the Dec. 12 issue of the London Economist, noted for its sense-making analyses of political-economic affairs.

Taking as its point of departure the Beveridge report (TIME, Dec. 14), the Economist points out what every U.S. businessman knows, namely that social security legislation is meaningless unless it is combined with the maintenance of tolerably full employment. The maintenance of full employment in turn depends on 1) a high level of consumer buying; 2) a high level of investment; 3) a high level of foreign trade upon which will depend the "British standard of living, the level of national prosperity, and the possibility of social security."

But Britain cannot resume her oldtime trade position which originated in the 18th Century with the steam engine and the power loom. "India does not want Britain's cheap cotton goods, even if Lancashire cotton operatives are willing to accept very low wages; but it will offer them high wages if they are prepared to make and send out wireless sets instead."

The future of Britain in other words depends on her industry's converting to high specialty products; and this, the Economist believes, Britain can do as the result of the war. "During the last three years [Britain] has shown that, when pressed, it can produce many things more cheaply . . . than any other country. . . . British industry has led the world in many new technical developments, such as radiolocation."

If British industry meets this challenge, the Economist argues, it can rely on a huge demand from various parts of the Empire which in 1937 took almost half of all of Britain's exports. Of equal importance is the role of Empire in providing outlets for British investments. "So far it has been too little realized that overseas projects in the colonies and elsewhere have a great part to play in providing the investment opportunities necessary to maintain employment."

From the Economist's reasoned position U.S. business can expect 1) that British Liberal opinion will plump for a world of free trade in which Britain will take her chances against all comers for her share of markets; 2) that whatever the future political status of the colonies may be, British Liberals are as little inclined as Mr. Churchill to write them off as an economic loss. As if in answer to one school of American opinion which brands all colonial development as bad, the Economist replies:

"There has been so much loose talk about Imperialist exploitation that the people of the country have become afraid of colonial development. ... So far from the British Empire being an obstacle to the Brave New World, it can be one of the steppingstones to it."

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