The Dollar Crisis, Causes and Cure: A Report to the Fabian Society

The Dollar Crisis, Causes and Cure: A Report to the Fabian Society

The Dollar Crisis, Causes and Cure: A Report to the Fabian Society

The Dollar Crisis, Causes and Cure: A Report to the Fabian Society

Excerpt

The present essay in international economic co-operation grew out of a lecture to a Fabian conference which was to have been printed as a pamphlet. It was written in the conviction that only the most searching self-criticism and a thorough change in mentality and consequently in policy can rescue the Labour Movement in Britain, indeed in the West, from its present loss of initiative and prevent its ultimate self-stultification despite electoral victories. The weakness of the case of its opponents will not produce results in reaching its goals.

The writing was completed in July 1949; since then much has happened. But the recent events and incidents merely illustrate and strengthen the main conclusions. There is no reason, in particular, to withdraw or modify the arguments against (even a general) devaluation of the non-dollar currencies. The basic principle that economic policy is supposed to aim not merely at an increase of total production but also of the equality of distribution seems to have been completely lost in the welter of abstract nouns. Faced by the Communist challenge, the West must not lose sight of the basic strategy of its resistance. The new 'solution' devised at Washington--the sole important operative point being the devaluation of the pound--cannot be considered, as we shall argue, as more than yet another of those 'shots in the arm' which provide a questionable temporary relief for the unbalance in international payments; but in this case--unlike the Loan to U.K. or Marshall Aid--at the cost of the poor both nationally and internationally. It does not tackle the fundamental problems of the Western World and provide a firm basis for the resistance to Communist advance. Nor should we be complacent about the repercussions of what has happened, and how it happened, on the prospects of that closer co-operation in Europe upon which ultimately Britain's fate as much depends as that of the Western Continental countries.

We shall try to relate these events to the conclusions arrived at in the main body of the present essay.

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