hostile hands of an instrument that could sever vital arteries.

The fact shows how impossible it is to divide off into watertight compartments the ‘economic’ from the political or moral. To preserve the capacity to feed our people, to see that our children shall have milk, is certainly an economic affair—a commercial one even. But it is an indispensable condition also of the defence of our country, of the preservation of our national freedom. The ultimate end behind the determination to preserve a preponderant navy may be purely nationalist or moral; the means is the maintenance of a certain economic situation.

Indeed the task of ensuring the daily bread of the people touches moral and social issues nearer and more intimate even than the preservation of our national independence. The inexorable rise in the cost of living, the unemployment and loss and insecurity which accompany a rapid fall in prices, are probably the predominating factors in a social unrest which may end in transforming the whole texture of Western society. The worker finds his increased wage continually nullified by increase of price. Out of this situation arises an exasperation which, naturally enough, with peoples habituated by five years of war to violence and emotional mass-judgments, finds expression, not necessarily in organised revolution—that implies, after all, a plan of programme, a hope of a new order—but rather in sullen resentment; declining production, the menace of general chaos. However restricted the resources of a country may have become, there will always be some people under a régime of private capital and individual enterprise who will have more than a mere sufficiency, whose means will reach to luxury and even ostentation. They may be few in number; the amount of waste their luxury represents may in comparison with the total resources be unimportant. But their existence will suffice to give colour to the charge of profiteering and exploitation and to render still more acute the sullen discontent, and finally perhaps the tendency to violence.

It is in such a situation that the price of a few prime necessaries—bread, coal, milk, sugar, clothing—becomes a social, political, and moral fact of the first importance. A two-shilling loaf may well be a social and political portent.

In the week preceding the writing of these lines five cabinets have fallen in Europe. The least common denominator in the cause is the grinding poverty which is common to the peoples they ruled. In two cases the governments fell avowedly over the question of bread, maintained by subsidy at a fraction of its commercial cost. Everywhere the social atmosphere, the temper of the workers, responds to stimulus of that kind.

When we reach the stage at which mothers are forced to see their children slowly die for lack of milk and bread, or the decencies of life are lost in a sordid scramble for sheer physical existence, then the economic problem becomes the gravest moral problem. The two are merged.

The obvious truth that, if economic preoccupations are not to dominate the minds and absorb the energies of men to the exclusion of less material things, then the fundamental economic needs must be satisfied; the fact, that though the foundations are certainly not the whole building, civilisation does rest upon foundations of food, shelter, fuel, and that if it is to be stable they must be sound—these things have been rendered commonplace by events since the Armistice. But before the War they were not commonplaces. The suggestion that the economic results of war were worth considering was quite commonly rejected as ‘offensive,’ implying that men went to war for ‘profit.’ Nations in going to war, we were told, were lifted beyond the region of ‘economics.’ The conception that the neglect of the economics of war might mean—as it has meant—the slow torture of tens of millions of children and the disintegration of whole civilisations, and that if those who professed to be the trustees of their fellows were not considering these things they ought to be—this was, very curiously as it now seems to us at this date, regarded as sordid and material. We now see that the things of the spirit depend upon the solution of these material problems.

The one fact which stood out clear above all others after the Armistice was the actual shortage of goods at a time when millions were literally dying of hunger. The decline of productivity was obvious. It was due in part to diversion of energies to the task of war, to the destruction of materials, failure in many cases to maintain plant (factories, railways, roads, housing); to a varying degree of industrial and commercial demoralisation arising out of the War and, later, out of the struggle for political rearrangements both within States and as between States; to the shortening of the hours of labour; to the dislocation, first of mobilisation, and then of demobilisation; to relaxation of effort as reaction from the special strain of war; to the demoralisation of credit owing to war-time financial shifts. We had all these factors of reduced productivity on the one side, and on the other a generally increased habit and standard of expenditure, due in part to a stimulation of spending power owing to the inflation of the currency and in part to the recklessness which usually follows war; and above all an increasingly insistent demand on the part of the worker everywhere in Europe for a higher general standard of living, that is to say, not only a larger share of the diminished product of his labour, but a larger absolute amount drawn from a diminished total.

This created an economic impasse—the familiar ‘vicious circle.’ The decline in the purchasing power of money and the rise in the rate of interest set up demands for compensating increases both of wages and of profits, which increases in turn added to the cost of production, to prices. And so on da capo. As the first and last remedy for this condition one thing was urged, to the exclusion of almost all else—increased production. The King, the Cabinet, economists, Trades Union leaders, the newspapers, the Churches, all agreed upon that one solution. Until well into the autumn of 1920 all were enjoining upon the workers their duty of an ever-increasing output.

By the end of that year, workers, who had on numberless occasions been told that their one salvation was to increase their output, and who had been upbraided in no mild terms because of their tendency to diminish output, were being discharged in their hundreds of thousands because there was a paralysing over-production and glut! Half a world was famished and unclothed, but vast stores of British goods were rotting and multitudes of workers unemployed. America revealed the same phenomena. After stories of the fabulous wealth which had come to her as the result of the War and the destruction of her commercial competitors, we find, in the winter of 1920-21 that over great areas in the South and West her farmers are near to bankruptcy because their cotton and wheat are unsaleable at prices that are remunerative, and her industrial unemployment problem as acute as it has been in a generation. So bad is it, indeed, that the Labour Unions are unable to resist the Open Shop campaign forced upon them by the employers, a campaign menacing the gains in labour organisation that it has taken more than a generation to make. America’s commercial competitors being now satisfactorily disposed of by the War, and ‘the economic conquest of the world’ being now open to that country, we find the agricultural interests (particularly cotton and wheat) demanding government aid for the purpose of putting these aforesaid competitors once more on their feet (by loan) in order that they may buy American products. But the loans can only