Has British trade a future? (1926)

From the December 1926 issue of the Socialist Standard

(Continued from last month).

“Mr. Suma is to study the business conditions in East Africa, whose ports have never been visited by Japanese mercantile ships. The N.Y.K. and the O.S.K. have opened the new East Africa service in April with a view to promoting the business between Japan and East Africa. The Navy has advised the Foreign Office to send an official to East Africa in order to study customs, local circumstances, and economic conditions there aboard one of the warships, which the Navy Office has scheduled for the cruise along East Africa. The Foreign Office has been selecting the official since. The squadron is to leave Japan early next month, and will come back in January next year.” (“Osaka Mainichi,” 30/5/26.)

The “Bombay Chronicle” of July 23rd, 1926, quotes the “Japan Chronicle” of April 8th, 1926, to the following effect :—

“The “Asaki” reports that the scheme of the Foreign Office to further Japan’s economic development in Persia and the South Seas is making fair progress. The Supplementary Budget for the fiscal year 1926-27 includes an item relating to investigations into trade development in the South Seas involving Yen 24.299, and another item bearing on similar investigations in Persia and neighbouring countries to Yen 56.204. With regard to the investigation into economic conditions in Persia and neighbouring countries, it was started soon after Mr. Obata, Ambassador to Turkey, arrived at his post some time ago, and, judging from the results of the sample exhibition of Japanese exports which was held at Constantinople, it is hoped that it is not altogether impossible for Japanese goods to be exported to the Balkans, Asia Minor, Persia and Afghanistan, to the amount of Yen 100.000.000 a year. At a conference on investigations with trade development, which is to be held at Constantinople for ten days from the 20th inst., it is expected that recommendations to be submitted to the Foreign Office will be considered and adopted. These recommendations will furnish valuable materials for reference for those Japanese traders who wish to export their goods to those countries. In the meantime the Government is contemplating establishing Consulates where they are required for trade purposes.

As regards trade development in the South Seas, the Foreign Office is to call in Tokyo a conference of Consuls appointed to Calcutta, Batavia, Singapore, Bombay, Sydney, Manila, Hongkong, Haifong, Saigon, Rangoon and Bankok, at which will also be present the officials of the Departments concerned and business men chiefly interested in the South Seas’ trade. At this conference matters relating to Japan’s economic development in those districts will be thoroughly studied.”

At the moment, India is feeling very seriously the effect of Japanese competition, and the Bombay Millowners’ Association has submitted a statement to the Muf Board showing how they are hit by the competition of Japan. Extracts from this report are published in the “Bombay Chronicle” for July 20th and 23rd, 1926. The following excerpts are taken from the extract:—

“Japanese competition was severe, and in certain instances Japanese goods were offered at prices lower than the cost price of similar goods manufactured in India. . . .

…. The mill industry is suffering from the unfavourable rate of exchange with Japan and highly organised Japanese competition.

Japan, owing to her larger production of yarn and piece-goods for export has a much better balanced trade than India.

In piece-goods the position is much more unfavourable to India, the value of India’s piece-goods export trade to China being only about one-tenth of what it was ; Japan’s trade has increased forty or fifty-fold.

What strikes one most in considering the growth of Japanese competition is the amazing rapidity with which her imports into this country have gone up. It may be broadly stated that in 1914-15 the total imports of Japanese yarn into India were less than a million pounds, while in 1924-25, i.e., about ten years later, the quantity imported was more than 32 times the figure of 1914-15. Again, in piece-goods, the quantity imported in 1914-15 was about 16 million yards, and in 1925-26 it had risen to nearly 220 million yards.

. . . . . . . . . . . . .

It is this extraordinary rise every year in Japanese imports which fills with dismay the minds of everybody who has a stake in the cotton mill industry of the country. If the Japanese imports go on increasing at the present rate one hesitates to contemplate the plight in which the cotton mill industry of the country will find itself in about five or six vears’ time.

. . . . . . . . . . . . .

It is forgotten that not only is Japan dealing severe blows to Indian manufacturers in Indian markets, but she is making rapid inroads in the export markets. In the words of the Administration Report of the Bombay Presidency for 1923-24, “Since 1917 China has been practically a closed market for Indian piece-goods, owing mainly to the expansion of the indigenous textile industry and to the rigour of Japanese competition.”

India has practically lost her export trade in yarn, and since this yarn has necessarily to be utilised in manufacturing cloth, it is of the utmost importance to develop the export trade, but here again Japan with the unfair advantages she is enjoying over India is proving a very formidable rival, for not only has she ousted India from the Chinese market, but is rapidly capturing her foreign markets, e.g., Egypt, East Africa, etc.”

There is a pretty kettle of fish for Chiozza Money to stew ! The above quotations only deal with one branch of Japan’s activities, but it must be remembered that she produces the bulk of the world’s silk; that she is conscious of her shortcomings in the coal, iron and steel industries; and is making strenuous efforts to remedy them; that she has a cheap and almost unlimited supply of labour to call upon; and that in the matter of factory legislation, particularly with regard to hours of labour and female and child labour, she lags far behind the other advanced countries.

Japan’s neighbour China is in the industrial melting-pot. China is making strides in the way of producing to meet her own needs, and when she too commences to make a serious attack on the world’s markets— well, there will need to be some “reductions in the cost of production” to meet the twin eastern commercial menace !

To come down to the position from the worker’s point of view, we can see in the struggle for markets a terrific development in machine-production and elimination of human assistance in the production of goods. This would be very acceptable if the workers owned the machines, but as the employers own them, it means the elimination of jobs. Without jobs, no wages; and without wages, no bread—or the workers must decide that it is time they reaped the multitude of advantages accruing to those who own and control the means of production.

Gilmac.

Has British trade a future? (1926)

From the November 1926 issue of the Socialist Standard

A month or two back Chiozza Money wrote a series of articles for the “Daily Chronicle” on the “World Race for Trade.” On May 21st, he describes a visit paid to Sheffield where he inspected Cammell Laird’s works. He found that the efficiency of these works was equal to anything he had seen in America, and yet there is any amount of plant idle, in some instances the works were only working at half capacity.

In dealing with this question of idle plant, he makes the following observations :

It all comes to one word—Markets. There are the Dominions and India, but they are markets not reserved to us. Moreover, in 1926, the world is out of joint. We have to wait for better times. That those better times will come we may rest assured. The world must, sooner or later, need a much greater supply of iron and steel than it now calls for. The efficiency of Sheffield will not always go unrewarded. 

Now it is all very well to “rest assured,” but it is much better to know a little of the possibilities of the assurance being well-founded.

In a further article on June 7th, he says :

Foreign competition is increasing and will increase. The expanding markets for which we may legitimately hope will demand less of crudely manufactured and more of artistic productions. Intense and growing foreign competition will make it necessary for British exporters to increase their efforts, and for British manufacturers to adopt every good economic device.

He then goes on to urge that trade unions should welcome the adoption of the best-known machinery and improvements in methods of work. He tacks on to this the well-worn recommendation for a friendly co-operation in economic endeavour between employers and workers.

He makes three main points : (1) that a world-wide expansion in trade is coming shortly; (2) that if English manufacturers reduce their costs of production they will get a large share in it; (3) that an increase in trade makes it possible for the workers to claim a larger share of the product.

We will take a few quotations from different sources that have a general bearing on the questions raised.

As Chiozza Money has concerned himself very much with America, the following quotation from the “Christian Science Monitor” is very apt. We quote it at length, as the points raised are so interesting.

Absorption of surplus production presents one of the outstanding difficulties of the American manufacturer according to Alvin K. Dodd, of the Department of Domestic Distribution, Chamber of Commerce of the United States, speaking at the thirteenth annual convention of the Society of Industrial Engineers here [Philadelphia].

The former necessity of meeting the existing demand has been succeeded by the question of making a demand for the over-supply, he said. Growth in population, he continued, is only about 16 per cent. above that of 1913, and, if we accept 30 per cent. as the increase in facilities, for manufacture, a capacity exists seriously in excess of what might he called the normal demand on pre-war rate of production.

The result of this is seen, he declared, in exaggerated forms of competition, extraordinary displays in advertising, extraordinary costs, unusual growth in methods of distribution, and. finally, the latest expedient, instalment selling which is not appeased by anything less than the payment of next year’s income for this year’s product.

With the situation of America as stated above, unable to get rid of a large excess of production, and itching to find fresh outlets for her goods, the race for the satisfaction of the possible expanding market ingoing to be keen.

Let us take another quotation.

Walter T. Layton, Editor of the “Economist,” makes a contribution to the discussion in the “Manchester Guardian,” of April 20th last, from which we take the following extract :—

In these circumstances are we most likely to find the much-needed expansion of our foreign trade in the markets of Europe or of the Empire? It must be admitted that the prospect of attaining free trade within the Empire or of making it self-sufficient is not very promising. India, which is much the largest of the Imperial markets, is evidently determined to maintain some measure of protection against British manufactures. Canada, whatever may happen in the political field, is destined to come increasingly within the economic sphere of influence of the United States—a significant sign of which is the fact that Canadian enterprise is no longer financed mainly from London, but from New York. Even Australia is determined to foster her iron and steel, textile and other industries and to keep out British goods as fast as she can replace them at home. The ties of Empire are very real and lasting ones, but no one can look at the map of the world and truthfully say that the British Empire is a natural economic unit or that Great Britain. can find a complete outlet for her economic activities in the Empire.

According to the above, and the source should be authoritative, the Empire does not hold out much hope to the English manufacturer in the event of a general expansion of trade.

Let us go farther afield. Let us probe into the condition of the Eastern lands of mystery and hope, and see what prospects for the European manufacturer exist there.

Japan has learnt much from the West, and turned her knowledge to good account. The “Osaka Mainichi,” June 30th, 1926, has an article on Japan’s growth in prosperity from which we take the following information :—

In 1887, eighty-four per cent. of the foreign trade of Japan was handled by foreign merchants. Of the imports, eighty-five per cent. was handled by foreign firms. During 1894-5, the native firms commenced to increase in activity, and by 1900 they handled thirty-five per cent. of the exports and thirty-nine per cent, of the imports. The Russo-Japanese War of 1904-5 was a great impetus for an enormous expansion of the foreign trade of Japan, and the increasing influence of Japanese traders. But the Great War of 1914-18 was the real opportunity of the Japanese merchants.

Taking advantage of the world demand for silk and cotton piece goods, more than 10 Japanese firms went to the extent of establishing their branches in Wall Street and Madison Square, where almost prohibitively high rents were demanded, and conducted their business, paying high cable rates. The activities of the Japanese merchants then alarmed the Americans, who may be generally classified as amateurs in foreign trade.

The Japanese view of the American foreign traders is worth noting. “Amateurs” ! !

Of late years there has been an enormous development in trustification. The slowing down of European manufacture for foreign markets and for ordinary products in the home markets gave Japan her chance. There was an enormous expansion in Japanese manufacture and trade, and a wild scramble among the producers. Small firms grew rapidly and joined with large corporations.

The post-war panic and the following years of depression caught many of the Japanese corporations in the swirl. Some were driven into bankruptcy along with many private firms. Later, when things were on the mend again, the tremendous earthquake gave them a further set-back. Since the earthquake, things have steadily improved, and Japan is turning greedy eyes abroad for an outlet for her surplus population and surplus goods. At the present date the bulk of Japanese foreign trade is handled by native merchants. The trust companies have greatly developed, and are preparing a stronger attack upon the markets outside of Japan.

The Japanese have learnt other things, besides manufacturing and trading, from the West. They have learnt how to cover commercial aspirations with a halo of sanctity, as witness the following quotation from the Editorial in the paper mentioned above :

We repeat here that the object of overseas expansion of a nation is to open up the natural resources of the undeveloped lands, and to spread the civilisation in uncivilised regions. Any country which contravenes this common principles of humanity should at this opportunity realise the fundamental mistake of shutting the doors of the country to foreigners.

Japan’s neighbour, China, could say a lot on the first part of the quotation, while the last part is a knock at Russia, for “In Asia, there is a vast undeveloped territory of fertile soil in Russian Siberia” !

The harbour facilities of Japan have been greatly improved lately, and the number of ports open to foreign trade increased up to forty-one, of which by far the most important are Yokohama, Kobe and Osaka.

The way the Japanese set about capturing foreign trade is German in its thoroughness. The following quotation will illustrate how they do it :—

The Foreign Office has decided to send Mr. Vakichiro Suma, one of the administrative officials belonging to the Office, to East Africa by either the Asama or the Yakumo of the Japanese Training Squadron, which is to cruise along the East African coast via Turkey, Malta, Marseilles, Barcelona, and Cape of Good Hope, for the first time.

Gilmac.

(To be concluded next month.)

Austerity and Exports (1945)

From the November 1945 issue of the Socialist Standard

One of the tragedies resulting from the advent of a Labour Government is the large number of workers who quickly become disillusioned by the capitalistic arguments vouchsafed by the new rulers and their spokesmen. Take, for example, the September Record, organ of the Transport and General Workers’ Union, wherein the workers are treated to a full article on why they should support "Full Speed Ahead in the Great Drive for Exports, written by the Acting Secretary, Arthur Deakin. No Liberal or Tory would disagree with the main points of Deakin’s article, which reiterates the historic capitalist case for bringing "backward” countries under the capitalist regime. But where the capitalists of old covered this operation under the ideology of spreading civilisation and Christianity abroad, Deakin would seek markets for Britain’s industrial products under the guise of the recommendations of the "United Nations Conference on Food and Agriculture,” which aims at "raising the standard of living and health throughout the world; more efficient methods coproduction will have to be introduced in the economically backward areas of the world.”

The Labour Government, he adds, cannot effect this policy without it is "backed by the utmost output of the workers in the export trades,” and offers a word of warning that "In our great drive for the production of goods for export we must for some time be prepared to live under the same conditions of austerity us applied during the war.” 

All this is contemporary capitalist policy, discreetly stripped of any reference to the paraphernalia of tariffs, spheres of influence, monetary juggling and power-politics based on the military might possessed by the contestants for the world’s markets, on which are, dumped the surpluses filched from the workers by the seekers of profit—the world capitalist class.

Britain’s place in this capitalist "power” scheme has declined owing to the increased independence through industrialisation of the members of her "British Commonwealth and Empire,” typically Australia and Canada, whose native capitalists now jealously guard their own home market. Further, even with Germany put out of the way as a competitor, Britain the one-time "workshop of the world,” will find difficulty in competing with such huge units as America whose magnitude of production makes each commodity cheaper even with increased wages and shorter hours.

This is not to say that Britain cannot win a share of the export trade in a world denuded by war of consumer and capital goods, though the amount depends on how soon she can stop off, plus the ability of her rulers to withstand her own internal demand for consumer’s wants by priorities, savings drives, and rationing, aided maybe by the purchase of bare necessities abroad via a negotiated foreign loan. Britain in the words of the new Director of the “National Union of Manufacturers,” representing 2,000 firms—must “export or expire.”

Thus the Labour Government is faced with the dilemma of administering capitalism with its mechanism of markets and profits while attempting to placate the workers who want something of the promised “New Order” now.

Therein lies the harm done to the socialist aspirations of the workers by the Labourites who, like Deakin, write of “our” export trade and "our” industries, when in fact the workers stand dispossessed of any of these things and where the only market they appear in is the labour market in which they sell their ability to work to the capitalists, whether these be organised in private firms or in nationalised industries. Having bought the worker’s labour-power the capitalists use it to produce commodities whose value is over and above the wage outlay—a surplus for which the capitalists have paid nothing. It is not, and never will he. therefore the motive behind the export, trade to "raise the standard of living throughout the world,” but to realise this profit either directly by payment from foreign customers, or by the return of equal values that can be sold on the open market. A failure to continue this process through lack of buyers or “overproduction” results in the sellers of labour power crowding the labour market in their unemployed millions, a recurring crisis which forces on a trade war, without guns to its conclusion in actual wax with guns—or atom bombs.

In conclusion, socialism is not a lahour-controlled-capitalism, but a new civilisation in which men stand in dignified relation to each other, not as buyers and sellers in a class society, but where the common effort to produce the means of living entitles all to equal access to society’s products and services. A complete transformation which ends traders and money power and replaces international capitalist conflict by international co-operation.

The Labour Party having no mandate to lay even the foundation of such a change must inevitably fail to solve the social conflict; thus fulfilling Laski’s fear of "other men and other methods,” a warning that has been writ large by "Labour’s” prototype in Germany’s Weimar Republic and by the rise of dictatorshipss. The one and only bulwark against such a calamity is an understanding socialist working-class.

Frank Dawe