II
INFLATION AND DEFLATION
165
View” in its most extreme form. Not only ispurchasing power to be curtailed, but road-build-ing, housing, and the like are to be retrenched.Local authorities are to follow suit. If thetheory which underlies all this is to be accepted,the end will be that no one can be employed,except those happy few who grow their ownpotatoes, as a result of each of us refusing, forreasons of economy, to buy the services of anyone else. To raid the Road Fund in order tomaintain the Sinking Fund is, in present circum-stances, a policy of Bedlam.
Finally there is the problem of the Balance ofTrade, which, after all, is the main point so faras concerns the emergency. Broadly speaking,the cost of production is left unchanged. Cut-ting the school-teachers’ salaries will not help usto recapture the markets of the world. Thosewages and the like which are within the Govern-ment’s direct control happen to be just thosewhich it is most useless to cut in the interests ofthe export trade. We are told that it is a wickedmisrepresentation to say that all this is a pre-liminary to a general assault on wages. Yet ithas less than no sense unless it is. But mean-while the Government have noticed that there isjust one point where their activities raise the costof production, namely, the employers’ insurancecontribution, which is, in effect, a poll tax onemployment. So, in order to prove for certainthat they are quite mad, the Government havedecided to increase it.