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barrow-load of stuff he pushes through the streets; the man whose daily dealings run into thousands of pounds sterling can do very well for himself if his average profit is even as low as one per cent. But neither of these profiteers can do just what he likes. If the coster holds out for higher prices than his public is willing to pay he will be left with his stock on his hands; exactly the same danger threatens the Chicago wheat-dealer. In the coster's case the stock perishes and the earnings of a whole week may disappear. The wheat that the Chicago dealer tries to hold up will not perish ; but while he is holding it he is losing interest every day on his capital, and he is risking the chance of a fall in prices that may leave him a bankrupt. For these reasons the coster and the wheat-king both tend to take a moderate profit as soon as they see it.

Similar considerations affect all the other persons in the long chain between the farmer who grows the food and the housekeeper who buys it. No one in that chain can-except for a very brief period—by his own action force an arbitrary rise in the price of a staple commodity. It has to be remembered that every man in the chain between producer and consumer is quite as much interested in buying cheap as in selling dear. When the external forces are in favour of cheapness each person in the chain uses his power to squeeze the person from whom he buys, and in turn is squeezed by the person to whom he sells. On the other hand, when the external forces make for dearness, the direction of the squeezing is reversed.

What, then, are the forces which finally determine the tendency of prices ? They are the primary facts of supply and demand. If the world enjoys a bountiful harvest at a time when there is no special growth in the general scale of consumption the farmer will be squeezed by the dealer to whom he sells, and so right on through the chain till the housewife is reached. She will obtain her loaf or her flour at a low priceperhaps even below the cost of production—through the action of those very profiteers whom socialist orators love to abuse. If, on the other hand, there should be a partial failure of the world's harvests at a time when the general scale of consumption has been enormously enhanced, then the farmer will stand out for the maximum price he can squeeze from the local dealer, and he in turn will squeeze the dealer next beyond him. Each person in the chain will seek his profit by selling dear rather than by buying cheap, and the consumer at the end of the chain will have to pay the price piled up against him.

The distribution of the increased price among the various persons in the chain will depend upon their relative skill in the art of bargaining and upon external factors, such as the difficulties of transport. But this distribution is a matter of indifference to the ultimate purchaser. There is no reason to believe that he would obtain his food cheaper if one or other of the persons in the chain voluntarily accepted a lower rate of profit. The benefit of that act of forbearance would only accrue to somebody else in the chain. Or, conceivably, it might accrue to some person who, tempted by the offer of goods below the market price, stepped in to buy up all he could, to sell again at a profit. There is, in fact, no way of escaping from the eternal law that when a commodity is scarce and the demand for it active the price will rise.

It does not follow that all measures to prevent a rise in the price of food-stuffs are to be condemned. What does follow is that those measures must be so framed that they will harmonise with the essential conditions of the law of supply and demand. An engineer who attempted to design á bridge in defiance of the law of gravity would be laughed at by the whole world ; but a politician who pretends that he can design a scheme for lowering food prices in defiance of the law of supply and demand is applauded by the House of Commons and by three quarters of the nation.

The two factors which are now forcing up food prices are, first, a reduction in the world's supply of food in consequence of the diversion of millions of food-producers to the work of war, and secondly an increase in the world's demand for food because many men, who as civilians could only afford to eat sparingly, are, as soldiers, able to eat heartily; while in addition-in Great Britain, at any rate—the majority of the civilian population is also eating more. Either of these factors would alone have caused a rise in food prices ; added together they inevitably produce a great rise. If, then, we wish to secure a reduction of food prices we must approach the problem through these two factors. We must try to increase the supply of food-stuffs ; we must try to diminish the present rate of consumption. Very tardily the Government of this country has begun to consider the first point ; its dealings with the second have been ludicrous. The late Government made frantic appeals to the general public to eat less, while simultaneously stimulating them to eat more by arbitrarily lowering prices where—as in the case of sugar-it has had the power to do so, and by raising the wages of vast numbers of fairly prosperous people. Moreover at the end of its career the late Government was clearly leaning towards a general policy of restricting prices by legislative or administrative action.

That has been the policy of the German Government since the early stages of the war, and it has hopelessly failed. On the one hand, the German peasant-farmers have hidden their stocks rather than sell at the official price; on the other hand, wealthy consumers have surreptitiously paid five or six times the price fixed by authority. If these things are done in a closed country like Germany, where administrative machinery is all-pervading and the respect for authority is inbred in the people, it is easy to imagine the collapse that must attend any attempt on the part of the British Government to fix maximum prices for a population which draws its supplies from every part of the globe, and has a traditional dislike of government interference. So far as imported articles are concerned, if we refuse to pay the top market price the commodities we want will be sent to other countries or remain to be consumed in the country of origin ; so far as home-grown foods are concerned the attempt to fix maximum prices will only operate to limit production, and thus to diminish future supplies. We cannot begin to deal with the problem of food prices until we recognise that the solution of the problem can only be retarded by any attempt to fix maximum prices. A high market price is in fact the best of all remedies for the diseases of which it is the symptom. On the one hand, it tempts producers all over the world to increase to the uttermost their output; on the other hand, it checks consumption and so makes the available supplies go farther.

To this reasoning there is one plausible answer—namely, that high food prices though they are only a moderate inconvenience to the well-to-do involve cruel suffering for the very poor. That is perfectly true; but the fact of the present suffering of the poor is not an argument for taking foolish measures which will ultimately make that suffering worse. Even for the very poor it is better that food prices should rise than that the nation should be left without food at all.

The truth of the matter is that the problem of the very poor is one which ought to be dealt with by special measures directed to the relief of extreme poverty. In one respect this has been done. The late Government decided to increase old-age pensions from 5s. to 75. 6d. in cases of need. The principle of that decision was perfectly sound; but on administrative grounds it would have been far better if, instead of placing a new burden upon the National Government, the local authorities had been authorised to supplement old-age pensions out of the rates wherever the need existed and to the full extent necessary. Apart from this administrative question the principle of helping the very poor, as represented by old-age pensioners, to meet the increased cost of food in a national emergency is both just and humane.

The principle is capable of very wide extension, and in many cases could be applied without any administrative difficulty. The Government is at the present time the employer of a very large proportion of the population. When food prices began to rise seriously, the obvious course was to deal specially with the worst paid employees. Everywhere the lowest wage ought to have received the largest increase. In the case of the Civil Service this principle was to some extent adopted. In June 1916 a general bonus was granted to all the less well paid grades of civil servants, including postal servants. This scheme gave a bonus of 45. a week to male civil servants earning up to 405. a week, and 3s. a week to men earning between 40s. and 6os., half these rates to women, and 25. a week to young persons of either sex under eighteen. On the other hand, the railway servants of all grades have been given two successive bonuses of 58. a week all round, the well-paid man thus receiving the same grant as the really poor man.

Broadly speaking, the poorer a man is the greater will be the proportion of his income spent upon food; therefore, a measure designed to relieve the hardships caused by high food prices should give the largest grant to the poorest man. Workmen earning wages which bring them well above the poverty line ought to receive no allowance at all on account of the increased cost of food. It is in the national interest that they should be compelled to economise in food as in other forms of expenditure. Yet the late Government by giving men in this category an increase of wages on the ground that food prices had risen was virtually bribing them to go on spending as freely as before to the injury of the poorer members of the community. The comfortable classes, whether manualworkers or brain-workers, ought to be willing to meet the inconvenience of high prices out of their own resources. It is only when real poverty exists that the State is justified in incurring expenditure out of public funds to assist private consumers.

But while it may be necessary to make further provision for meeting the hardships of the very poor the most urgent matter at the present moment is to diminish the general average of food consumption and to increase the supply of food-stuffs. Instead of attempting to limit prices the primary duty of the Government is to increase taxation so as to reduce the spending power of those who are well above the poverty line. Tea, sugar, cocoa, coffee, wine, beer, spirits, tobacco, matches, dogs, motor-cars, petrol, postage rates, male and female domestic servants may be mentioned as a few of the items of private expenditure which the State could further restrict, or alternatively obtain revenue from, by means of taxation. With the possible exception of alcoholic drinks, where the hours of sale can be restricted without serious administrative difficulties, it is in every case better to check consumption by means of taxation than by an official restriction of supplies.

This is a point which is constantly overlooked. On the surface it seems as if a tax on an article of popular consumption, such as sugar, must be more onerous to the poorer

classes than a restriction of supplies based upon the theory that the restriction is to apply to all classes alike. The answer is that in practice these official restrictions never do apply to all classes equally; they fall most severely on the very poor. This general truth has been amply illustrated by the way in which the late Government handled the sugar problem. As soon as a serious shortage of sugar was threatened the Treasury, which had acquired control of the whole supply of sugar entering the country, instead of raising prices to check demand, adopted the policy of restricting supplies. Dealers and grocers were allowed to have a percentage of the supply which they had been in the habit of requiring. This regulation ignored the insuperable difficulty that a grocer who is short of supplies of such an essential article as sugar will consider first the requirements of his best customers. The consequence is that as soon as the shortage began to be felt, the poor found that they could buy no sugar at all, while

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