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ESSAYS IN PERSUASION

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have reduced this annual surplus to about£225,000,000; i.e. this is what our surpluswould be to-day if our export trades were asflourishing as in 1913. Let us suppose thatas the result of our relatively high level of in-ternal prices we have lost £200,000,000 of ex-ports gross, namely, about a quarter of thewhole, or (say) £150,000,000 net, i.e. afterdeducting that part of the lost exports whichwould have consisted of imported raw material,and that we consequently have unemployed(say) 1,000,000 men who would otherwise,directly or indirectly, have been producing theseexports. All these figures are, of course, veryrough illustrations of what is reasonably prob-able, not scientific estimates of statistical facts.

How does our international balance-sheetthen stand? We still have a surplus of£75,000,000 per annum. Provided, there-fore, we do not invest abroad more than thissum, we are in equilibrium. We can continuepermanently with our higher level of shelteredprices, with a quarter of our foreign trade lost,and with a million men unemployed, but alsowith some surplus still left for the City ofLondon to invest abroad, and, as the crown ofall, the gold standard entirely unthreatened.The gold standard may have reduced thenational wealth, as compared with an alter-native monetary policy, by £150,000,000 ayear. Never mindl “Our economic reservesof strength,” as Mr. Leaf puts it, “are fargreater than any of us supposed.” “We are