Stop Tiptoeing Around Russia
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SEVERAL prominent leaders of opinion in the British Commonwealth are convinced that a mass transfer of population and industries from Britain to the Dominions is desirable on economic as well as strategic grounds. On the one hand, it is held that Britain's stamina has been so weakened by two world wars that she can no longer support a population of 50,000,000 at anything like the prewar standard of living. On the other hand, it is argued that, even if the island could look forward to renewed prosperity, its security has been completely undermined by the grim possibilities of atomic attack.
One of the leading advocates of strategic dispersal is Mr. Calwell, Australia's Minister of Immigration, who would like to see as many as 20,000,000 people moved from England to other parts of the Commonwealth. Some of the military planners in London are thinking along similar lines. When the Prime Ministers of Britain and the Dominions met in April and May 1946, they had before them a memorandum by the British Chiefs of Staff suggesting a radical redistribution of the manpower and the military and industrial resources of the Commonwealth. Since then the international situation has become critical; and at the Conference of Commonwealth Prime Ministers held in London in October 1948 there seems to have been a new emphasis on the regional responsibility of each member of the Commonwealth to maintain adequate armed strength within its own geographical sphere.
In considering the problem of emigration we must distinguish between the economic and the strategic aspects. The first question is whether, on strictly economic grounds, Britain must now become a country of emigration. Has she reached a phase of her economic evolution in which an overflow of population is both necessary and desirable? Secondly, we must inquire whether the necessities of defense in an atomic age dictate a mass transfer of British manpower to less vulnerable parts of the Commonwealth. To phrase it bluntly, is Great Britain facing a supreme dilemma, a fundamental conflict between Defense and Opulence?
We may begin by noting some facts about the heyday of international migration. Between 1836 and 1900 Great Britain and Ireland experienced a net loss by migration of 8,250,000, whereas the net inflow into the rest of the Empire was 2,330,000. The outstanding feature of that period was not the peopling of the Dominions but the overflow of 5,900,000 people to the rest of the world. Of the 10,000,000 emigrants who left Britain in the half-century 1845-1894, 68 percent went to America, 16 percent to Australia and New Zealand, and 12 percent to Canada.
There were three main forces tending to promote emigration from Britain during the nineteenth century. First, there was the difference between the marginal productivity (and, therefore, wages) of labor in the thickly populated old world and in underpopulated new countries. Secondly, thanks to Britain's primacy in the new technique of the industrial revolution, she was the predominant source of investment funds and capital goods required overseas. Thirdly, the class barriers in Britain's stratified society presented a sharp contrast to the equality of opportunity in the expanding American Republic. If there had not been obstacles in the old country preventing workers from improving their lot through "vertical mobility," the volume of emigration would probably have been less than it was. It is this last consideration which helps to explain the direction of British emigration. Under the influence of the ideas of Edward Gibbon Wakefield, British colonizers in mid-century had thought it desirable that the overseas dependencies should develop a class structure similar to that of the homeland. This policy, with its emphasis on the sale of land at a price which would keep it out of the reach of immigrant laborers, was doomed to fail. The rules of the Empire, in planning to build colonies which, as Wakefield said, would be "so many extensions of an old society," were running counter to a force far stronger than they knew. Their zeal might have borne more abundant fruit if they had realized that the only way to compete with frontier democracy was to admit the necessity of emulating it.
The last great burst of overseas settlement coincided with the opening up of the Canadian west in the early years of this century. It was the turn of Canada to be drawn into the vortex of international specialization, and British capital exports as well as emigration showed a sudden increase in the decade 1905-1914.
The change in the determinants of international migration which had begun to reveal itself before 1914 culminated in the drastic restrictions imposed by the United States in 1924. This practically stopped the inflow from the crowded countries of Southeastern Europe; and the difficulties of adjustment in the old world were seriously intensified. One direct result was the spread of agricultural protectionism in Europe. The damming of the main stream encouraged new channels of emigration, e.g. to South America and Canada. In the field of capital movements the American Immigration Act had a most disconcerting effect. Since European labor was not allowed to come to the United States, there was a strong incentive for American capital to flow to Europe. The sudden interference with the natural course of migration set in motion new movements of capital which carried with them the seeds of future trouble. The excessive American investment in Europe in the twenties, through its influence both on the boom in the United States and on the artificial expansion in Germany, helped to bring about the great world depression. Little did the American Congress realize that in passing the Immigration Act of 1924 it was helping to lay the foundations of a precarious and ill-fated edifice of foreign lending, the collapse of which was to have the most devastating consequences for the whole world.
In this new setting Great Britain tried to carry out a large-scale program of Empire settlement, but the results were disappointing. The Dominions were lukewarm and much preferred imperial preferences to assisted migration as a means of securing Commonwealth solidarity. The net amount of emigration from Great Britain to the Empire fell from 113,000 to 1922 to 63,000 in 1929, and the proportion that had to be assisted rose from 25 percent to 68 percent. During the thirties Britain actually received an inward balance of 126,000 migrants from the Dominions.
The advocates of Empire settlement failed to realize the significance of the declining power of Britain to export capital and the growing importance of internal savings in the Dominions. In the late twenties and the thirties it needed between £50 and £60 million to repair the annual wastage of British interest-bearing assets abroad; but Britain was not investing enough to meet this replacement. Between 1925 and 1932 Australia availed herself of only one-sixth of the inexpensive funds put at her disposal to finance settlement under the 1922 Act.
An outstanding feature of the inter-war period was the change in the economic relationship between agricultural and industrial countries. As the peoples of the advanced nations became richer, they tended to spend proportionately less of their income on foodstuffs. The margin for miscellaneous expenditure on personal services, distribution and entertainment was growing, and consequently a relatively larger proportion of productive effort was being devoted to these things and a relatively smaller proportion to providing foodstuffs. Despite this unmistakable trend, the policy of Empire migration clung tenaciously to the idea of extensive land settlement in the Dominions.
England in the thirties began to pay heed to the warnings of the demographers who emphasized that if the net reproduction rate continued well below parity it would not be long before a decline in population would set in. People began to be skeptical of an emigration policy which would bear heavily on the lower age-groups. In response to this concern over the unwelcome implications of a low rate of natural increase, the British Government in 1944 set up the Royal Commission on Population.
This brief survey of the inter-war period makes clear that the main determinants which had brought about the extensive and beneficial redistribution of population in the era ending in 1914 had ceased to operate. On the contrary, new forces were at work curtailing the scope and distorting the direction of migration movements.
The marked revival of interest in emigration since the Second World War is reminiscent of what happened after 1918; but the problems facing England now are very different from what they were then. Today there is full employment, with a keen scarcity of labor in the industries which used to be depressed: in 1922, when the Empire Settlement Act was passed, the country was in the throes of a severe depression, with its mounting toll of unemployment. Since 1944 a Royal Commission (which owes its existence to fears of underpopulation) has been making exhaustive inquiries into demographic trends. But in the early twenties, thanks to the high birth rate before 1914, Britain's population was relatively youthful -- though the grievous casualties of the First World War had left their mark. No one at that time saw any reason to worry about the prospect of too few people.
It is difficult to give a reliable estimate of the number of British people who are anxious to emigrate. The Secretary of State for Commonwealth Relations stated in the House of Commons on June 4, 1948, that the names of 200,000 potential settlers were recorded at Australia House and about 35,000 other prospective passengers were registered with shipping companies. There were 90,000 waiting to go to South Africa and 42,000 to New Zealand. Shipping and housing accommodations were the main factors limiting the movement, but the Minister was assured that migrants for Canada were able to obtain passages without undue delay.
There can be no doubt that austerity and frustration are making some young people eager to settle overseas where the future seems to hold out a richer promise than at home. Others whose service in the forces took them to Australia, New Zealand, South Africa or Canada -- to countries where a prolonged spell of sunshine is not a topic of conversation -- are apt to shudder at the thought of spending the rest of their days listening to the gloomy monotony of the English weather forecasts. To the extent that the policy of the Labor Government has been detrimental to the interests of the middle class, there has been a tendency for young men, particularly those with business or professional ambitions, to look to the expanding Dominions where they hope there will be wider scope for individual enterprise. One of the effects of nationalization is to force large firms to seek new business, and this often means a wide extension of their activities abroad, thus enabling them to place key men in attractive posts overseas.
It would be wrong, however, to exaggerate the number suffering from a sense of frustration. The big battalions are on the side of the Labor Government. The millions of trade unionists, who after all comprise the nation's skilled manpower, feel that they have acquired a new status; the future of the country is being shaped by men of their own choice; and the welfare state which is being created at home, with its emphasis on equality of opportunity, compares favorably with any El Dorado overseas. Moreover, while there may not be much flag-waving, there is deep love of country still.
A fact of major importance since the war is the change in the attitude of the Dominions toward immigration. With the exception of South Africa, they are now anxious to recruit skilled urban workers as well as capital from Britain. Under an agreement for free and assisted passages which came into force in April 1947, the Australian authorities announced that they particularly welcomed applications from groups such as welders, sheet metal and foundry workers, boot and shoe, textile and clothing operatives, machinists in the clothing, textile, printing, canvas and leather trades, doctors, dentists and nurses. A recent statement of the attitude of the British Government was made by the Under-Secretary for Commonwealth Relations on June 18, 1948. He said that
the Government wanted to encourage and facilitate the flow of emigrants to various parts of the Commonwealth, but they did not want to force anyone to go. There was only one proviso, that they reserved the right to check too great a flow of certain types of highly skilled workers, but there was no intention of applying generally in this respect the Control of Engagements Order.
What would be the effect on Britain's economy at the present time if there were enough transport and housing accommodations to enable the Dominions to take a large outflow of migrants? To become viable, Britain must increase and redistribute her productive power so that she can sell abroad enough to close the gap. In a nutshell, the immediate postwar task is to bring about this internal redistribution of labor and resources within the time set by the Marshall Plan. Would large-scale emigration help or hinder the achievement of this goal?
The Dominions now want young skilled workers: in the past the vast majority of those who emigrated have always been in the lower age-groups. The loss of this productive power must undoubtedly weaken Britain's effort to eliminate the external deficit. A large outflow of migrants would tend to be accompanied by an export of capital, and this too would accentuate the difficulties.
Let me illustrate this point from what has already happened. It is noteworthy that in 1947 capital amounting to £181,000,000 migrated from England to the sterling area, and, in addition, the debts owed to sterling countries were reduced by £135,000,000 (after allowing for the gifts of £30,000,000 received from Australia and New Zealand). A good proportion of that £181,000,000 consisted of money taken out by emigrants and funds invested in Dominion securities by British citizens. In a year of severe crisis in the balance of payments, nearly a third of the toll on British reserves was caused by this export of capital. Why did it happen? I cannot help thinking that is was partly due to the Government's refusal to admit that emigration is an expensive and dangerous luxury for Britain at the present time. Up to April 1948 even emigrants to dollar countries were allowed to take with them £5,000 a head. At that date Sir Stafford Cripps partly recognized the error by reducing from £5,000 to a maximum of £1,000 the amount which each emigrant would be allowed to take to countries outside the sterling area (the country mainly concerned being, of course, Canada).
Large-scale emigration now would strengthen inflationary pressure. The supply of labor in essential trades would become even scarcer, and there would be a greater temptation for trade unions to ask for higher wages which, in turn, would increase the cost of exports. As buyers' market became more prevalent, the export gap would widen. In one breath the Government would be exhorting the trade unions to keep wages where they are, and in another it would tell the Dominions that they could have as many workers as they could carry. Whatever other interests this policy might serve, it could hardly be called a promising method of overcoming inflationary pressure.
It is unfortunate that Britain is obliged to make profound changes in her economic structure at the very time when the tide of new recruits to the labor market is at a low ebb. Such adjustments were much easier to make when a high rate of natural increase brought a relatively large number of juveniles into industry every year. And, to make matters worse, the industries now crying out for manpower, e.g. coal, textiles and agriculture, are those which were cursed by instability and unemployment between the wars. In these circumstances what better lubricant could the British labor market receive than a strong inflow of foreign workers? A high rate of immigration makes up for a low degree of internal mobility. The workers of a free society cannot be ordered about; but there is nothing unreasonable in stipulating that alien immigrants should enter specified occupations. Even the Dominions are careful to state the categories of British migrants they are prepared to welcome.
It is sometimes argued that immigration has its debit side which might well outweigh the advantages; the new workers have to be fed and clothed, and that means adding to the country's imports. Moreover, the addition to the population leads to a disproportionate increase in the demand for capital equipment, such as houses. These arguments are not convincing. The foreigners are to be absorbed in the industries on which the whole program of recovery depends, and they are not reluctant to enter these jobs. Every immigrant taken on in the pits, or in textile mills, adds far more to essential output than he consumes of imports; and there is probably a good margin left over even when he brings a family with him. The essential point is that immigrants can be employed immediately to increase the types of output which are the limiting factors; the value of their marginal product is much greater than the quantity of hard-currency goods which they consume.
Nor is there any substance in the assertion that the country's capital outlay has to be expanded disproportionately in order to make room for these newcomers. In the first place, it would be rather farfetched to suggest that the aliens have added to the pressure of demand for new houses. Existing premises have been improvised in order to accommodate them, and young men have found homes as lodgers. Secondly, it is only recently that British trade unions have begun to drop their aversion to admitting foreign workers. If a willing attitude had been shown immediately the war was over, the immigrants would by now have made a valuable contribution to the battle of production in exchange for what the taxpayer spent. Would it not have been good economics -- to say nothing of good strategy -- to have welcomed thousands of skilled Czech workers to English shores before the dark shadow of the prison house came down on that unhappy country? What is required as an aid to attaining international equilibrium is immigration rather than emigration of young workers. Figures issued by the International Labor Office in October 1948 show that there are 2,500,000 workers available for emigration in Western Europe, a large number of whom are in Italy and the zones of occupation.
The strategic argument is the one which has played a decisive part in making the Dominions keen on immigration. There are broadly two ways in which strategic dispersal could be carried out: either by a planned transfer over a period of years of, say, 20,000,000 people comprising a cross section of the British community, or by large-scale promotion of spontaneous emigration. The former method smacks of regimentation and could hardly be regarded as compatible with the free way of life. It is strange to see ardent democrats lightheartedly proposing a gigantic plan for intercontinental direction of labor when it is quite obvious that even the mildest form of compulsion of this kind is anathema within England herself.
The only tolerable way of dispersing Britain's population is for the Government to give every inducement to people to decide for themselves to go and live in other parts of the Commonwealth. All experience tells us that the vast majority of the settlers would come from the most vigorous and productive section of the population. If 2,000,000 men of all ages were to emigrate from Britain at the present time and their age-composition were the same as that of the emigrants of the twenties, the country would lose no less than 1,300,000 men between 15 and 30 years of age. At a time when the lower age-groups are showing gaps due to the low birthrate of the twenties and thirties and the casualties of the war, a further large outflow of young men would have a crippling effect on the nation's economy. Mass emigration over the next 10 or 20 years would gravely weaken the incentive to make capital goods. The maintenance of full employment depends on the rate of investment: if year by year the population were falling at a rapid rate, the secular trend would be downward and the system would be highly susceptible to unemployment and external disequilibrium.
Some of the military theorists aim at creating in the Commonwealth four almost self-sufficient defensive zones based on the United Kingdom, Canada, South and East Africa and Australia. Now, it is clear that if the population of Britain is to be reduced until it is only slightly dependent on overseas supplies, it will be very small indeed. The surest way of ensuring the impotence of the island is to "pastoralize" it. What a grim joke it would be if the British, after saving the Germans from the Morgenthau plan, were obliged to take that medicine themselves!
Strength in war entails, among other things, having a national income which gives a relatively large margin over and above the minimum level of consumption which the people will tolerate. In this respect England was comparatively strong in both World Wars: by the same token the United States is now immeasurably more powerful than any other nation. Any attempt to buttress the combined power of the Commonwealth by stimulating mass emigration from Britain will weaken the heart far more than it strengthens the rest of the body.
Perhaps the most damaging weakness of this concept of Commonwealth defense is that it is out of date. The whole point of the plan is to rearrange Commonwealth resources so as to make aggression unprofitable. Can anyone seriously claim that a potential aggressor is going to think twice merely because the British Commonwealth has reshuffled its population? To devise a plan for the defense of the Commonwealth as if it were a viable unit is to be dangerously unrealistic. Surely the only power bloc which has a chance of deterring a potential aggressor is a world coalition of free nations led by the United States. Whether or not atomic bombs are going to rain down on England depends on the deterrent effect of that coalition and not on any narrow scheme of Commonwealth defense.
Of the sectors on which the security of this bloc depends, none is more important than Western Europe. This is a compelling reason why Britain should be strong: she has a dual rôle to perform, as the motive force behind Western Union and as the leader of the Commonwealth. She must be prepared to contribute her full quota to the land and air forces of Western Europe. How can she possibly perform these tasks which are vital to her very existence if her strength is going to be drained away by mass emigration? The most effective use of Commonwealth resources, from the point of view of defense, can be determined only on the wider canvas of the western world. The only hope of securing a permanent settlement with Russia is to convince her in realistic terms that Western Union, linked closely to the power of the free world, is impregnable. This implies a division of function both within the continent of Europe, including Britain, as well as between Western Union, the United States and the Commonwealth.
Thus, when we consider security in this wider setting, the dilemma regarding migration disappears. By pursuing the policy which best suits her economic recovery, Britain is at the same time doing what is vitally necessary for her own survival.
There is no reason to be too pessimistic about Britain's long-run economic prospect. It is true that the terms of trade are likely to be unfavorable. The principle of "fair shares" in food allocations between rich and poor nations will no doubt mean dear food for the British people. Two world wars have left Britain impoverished, and the average level of living for most people is likely to be less comfortable in the future. However, this need not lead to mass emigration. If the people respond to the challenge by carrying out the necessary adjustments, there is no reason why a new equilibrium cannot be found for a population of 50,000,000. A free society will not prevent any of its citizens from settling overseas if they want to do so; nor will it compel anyone to go as part of a plan for the removal of a cross-section of the population.
The determinants of overseas settlement which held sway in the period before 1914 were rudely shaken after the First World War and have by now been replaced by forces of a different order. The source of capital for the undeveloped countries and to a large extent the British Dominions will be the United States, under whose auspices may arise a new international economic order within which the traditional pattern of Empire settlement may not be appropriate. In such a world the Dominions will best serve their own economic interests as well as those of Britain if they decide to widen the scope of their immigration policies to include people of non-British stock.