CHARLES DICKENS
It would be madness to let the purposes or the methods of private enterprise set the habits of the age of atomic energy.
HAROLD LASKI
We must now take a closer look at the British economy as it is today. This is a big subject, one well worth a long book. It is my purpose in this informal estimate of our ally to sketch the fundamentals of the present economic situation and to deal briefly with some of the factors in it. Earlier we have encountered the Trades Union Congress and the emergence of a new working class. We have seen that Britain is changing behind the mask of tradition. In this chapter we will see that the change in the national economy is progressing perhaps even more rapidly than the change in the structure of society and politics. And, of course, all three changes are closely related and interdependent.
The British Empire, which half a century ago stood at the apex of its economic power, was built on coal. Largely because of the extent of her coal resources, Britain got a head start in the industrial revolution, which originated in England. An organized coal-mining industry has existed in Britain for over three hundred years, or three hundred years longer than in any European country. Not only was there enough coal to make Britain the world's workshop, but until about 1910 British exports dominated the world export market. In the peak production year of 1913 the industry produced 287,000,000 tons, exported 94,000,000 tons, and employed 1,107,000 workers. Contrast these figures with those for 1955: 221,600,000 tons produced, 14,200,000 tons exported, 704,100 workers.
Three centuries of mining means that the majority of the best seams are worked out. Each year coal has to be mined from deeper and thinner seams. Each year the struggle to raise productivity becomes harsher. There are huge workable reserves; one estimate is 43,000,000,000 tons, which, at the present rate of consumption, is more than enough to last another two hundred years. But this coal will be increasingly difficult to mine. Moreover, certain types, such as high-quality coking coal, will be exhausted long before 2157.
In the reign of King Coal all went well. Britain built up a position in the nineteenth century which made her the world's leading manufacturer, carrier, banker, investor, and merchant. By the turn of the century, however, other nations, notably the United States and Germany, were challenging this position. Nevertheless, Britain was able to withstand competition up to the outbreak of World War I through her huge exports of coal and cotton textiles and through her ability to take advantage of the general increase in world trade.
Coal and the industrial revolution, it should be remembered, gave Britain something more than a head start in production: they enabled her to train the first technical labor force in the world. The traveler in Eastern Europe, the Middle East, and Asia will soon realize that the British Empire and British influence of half a century ago were built not on gunboats and redcoats but on the products of British factories and on the bewhiskered expatriates, many of them Scots, who tended locomotives in Burma and sawmills in South America. They, too, as much as the booted and spurred heroes of Kipling, were builders of empire. This advantage, at least, Britain has not lost. Today she still possesses a large force of highly skilled labor.
The economic problems that developed into a whirlwind in the forties of this century first became serious in the years after the close of World War I. British textiles had to compete in Asia with textile products from India and Japan which were produced at a much lower cost because of low wages. Oil and coal from new European mines challenged Britain's lead in coal exports. At the same period there was a fall in the demand for many of the heavy industrial products that British factories had supplied to the rest of the world; locomotives, heavy machinery, cargo ships. The politico-economic dogma of self-sufficiency developed in nations that for long had been British customers. They began to protect their own growing industries with tariffs, quotas, and other restrictions.
But the effect on the British economy of this decline in exports was cushioned by income from investments overseas and by a substantial improvement in the terms of trade. During the twenties and early thirties British industry began to contract for the first time in centuries. Unemployment averaged 14 per cent between 1921 and 1939. By September 1939, however, the economy, stimulated by the armament program, increased production, and greater industrial investment at home, began to improve. Britain faced the Second World War on a secure economic basis. Indeed, there were persuasive gentlemen in the London of that Indian summer of peace who tried to persuade you that economic strength alone could win the war.