How then are we to cope with this problem of retaining our economic position?  We can only hope to do it if the present financial difficulties and obstructions working through the exchanges, by which international commerce is restricted and constrained, are removed.  We can only do it if and so long as the conception of international division of labour is maintained.  And we can only do it if—­granted that we can induce the world to accept this principle of international division of labour—­we can prove ourselves, by our economic and productive efficiency, to be the best and cheapest producer of those classes of goods in which our skilled labour and fixed capital is invested.

Assuming the financial difficulty is overcome, and that the old regime of international specialisation revives, can we still show to the world that it is more profitable for them to buy goods and services from us than from other people?  Can we compete with other industrial countries of the world?  The actual output of our labour in most cases is far less than its potential capacity, partly because of technical conservatism, and partly for reasons connected with the labour situation.  How are we to mobilise these reserve resources.  I have only space to deal with the second of these problems.  In Germany labour is well disciplined, and has the military virtues of persistence and obedience to orders in the factory.  But we cannot hope to call forth the utmost product of our labouring population by drill-sergeant methods.

In America this problem is a different one, because the American employer is often able to take full advantage of his economic position.  For he has a labouring population of mixed nationality, which does not readily combine, and he can play off one section against the other.  British employers cannot, if they would, deal with British labour on the principle of Divide and Rule.  There is only one method by which we can hope to call forth this great reserve capacity of British labour, and that is by securing its confidence.  If Free Trade is one of the legs on which British prosperity rests, the other is goodwill and active co-operation between the workman and his employer.  How is that goodwill to be gained?

The solution of that problem is only partly in the hands of the politician; that is one of the reasons why it is extremely difficult to suggest an industrial policy which is going to hold out the hope of reaching Utopia in a short time.  But it is obviously essential somehow or another to develop, particularly among employers, the sense of trusteeship—­the sense that a man who controls a large amount of capital is in fact not merely an individual pursuing his own fortune, but is taking the very great responsibility of controlling a fragment of the nation’s industrial resources.  And we have also to develop a conception of partnership and joint enterprise between employer and employed.

STATE OWNERSHIP:  FOR AND AGAINST