14

THE ECONOMIC JOURNAL

[JUNE

than a decrease (perhaps a substantial increase a little later on),in South Africa. Moreover, Russia presumably intends to makesome use some day of her presumed large reserves and currentoutput. The most recent report of the Bank for InternationalSettlements estimates the gold reserves of Central Banks andGovernments other than the United States (excluding gold in theUnited States ear-marked on foreign account of which we havealready taken account above) at about $10-4 billion. $2-7 billionof this was accumulated in 1942-45; whilst the total increase ingold stocks outside U.S. after America came into the war wasconsiderably greater than this. It would seem, therefore, that therest of the world could, if necessary, spare upwards of $1 billiona year, for a time at any rate, without suffering great embarrass-ment.

Putting one thing together with another, and after ponderingall these figures, may not the reader feel himself justified inconcluding that the chances of the dollar becoming dangerouslyscarce in the course of the next five to ten years are not veryhigh ? I found some American authorities thinking it at leastas likely that America will lose gold in the early future as thatshe will gain a significant quantity. Indeed, the contrary viewis so widely held, on the basis (I believe) of mere impression, thatit would be a surprising thing if it turns out right.

In the long run more fundamental forces may be at work, ifall goes well, tending towards equihbrium, the significance ofwhich may ultimately transcend ephemeral statistics. I findmyself moved, not for the first time, to remind contemporaryeconomists that the classical teaching embodied some permanenttruths of great significance, which we are liable to-day to over-look because we associate them with other doctrines which wecannot now accept without much qualification. There are inthese matters deep undercurrents at work, natural forces, onecan call them, or even the invisible hand, which are operatingtowards equihbrium. If it were not so, we could not have goton even so well as we have for many decades past. The UnitedStates is becoming a high-living, high-cost country beyond anyprevious experience. Unless their internal, as well as theirexternal, economic life is to become paralysed by the Midastouch, they will discover ways of fife which, compared with theways of the less fortunate regions of the world, must tendtowards, and not away from, external equilibrium.

Admittedly, if the classical medicine is to work, it is essentialthat import tariffs and export subsidies should not progressively

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