ESSAYS IN PERSUASION

PART

158

some crude idea that there is a fixed Loan Fund,the whole of which is always lent, so that, if theGovernment borrows less, private enterprisenecessarily borrows more. But they could notbelieve this on reflection, if they were to try totranslate it into definite, concrete terms.

Their proposals do not even offer the possibleadvantages to our trade balance which might en-sue on a reduction of industrial wages. Forthere is nothing in what they propose calculatedto reduce the costs of production; indeed, onthe contrary, they propose to increase them byraising the employers’ insurance contribution.

Let us try, therefore, to write the missingparagraphs of the Report and to make someguesses as to the probable consequences of re-ducing purchasing power in the manner pro-posed.

Some part of this reduction of purchasingpower may be expected to lead to a reduced buy-ing of foreign goods, e.g. if the dole is cut down,the unemployed will have to tighten their beltsand eat less imported food. To this extent thesituation will be helped. Some part will beeconomised by saving less; e.g. if teachers’salaries are cut down, teachers will probablysave less or even draw on their past savings, tomaintain the standard of life to which they havebecome accustomed. But for the rest Britishproducers will find the receipts reaching themfrom the expenditure of consumers (policemen,school-teachers, men on the dole, etc.) reducedby the balance of, say, £70,000,000. They