ECONOMICS IT’S CAPITALIST ANARCHY—OR A REAL

Tue Economist review of prospects for 1958, the reports _ of the chairmen of the big banks and the Commons debate provide ample but conflicting evidence of how business and financial leaders are looking at the problems ahead.

No doubt they do not speak with the frank taste for gain fcund in the letters produced at the Bank Rate tribunal. But even from the guarded language they employ on public occasions some of their hopes and fears can be gauged.

World capitalism, as everyone can now see, is facing a more uncertain prospect than for-a long time. The hectic boom of the 1950s is shuddering to a standstill. ‘You've never had it so good’ is being transformed into ‘watch out for what is coming’.

Dewnward plunge will continue Despite the optimism of Ejisenhower’s economic report the evidence is piling up that the U.S. economy will continue its downward plunge, perhaps for the whole year.

A falling U.S. market means a growing dollar shortage.

Industrial capacity built up in the boom in all countries: will seek an outlet in a strenuous struggle for a shrinking volume of demand. The competition will be keen. British exports may be threatened. And the gold and foreign exchange. reseryes, already depleted by speculation, may fall to.a critical level.

That means devaluation, slashing cuts in imports—the coming home to roost of all the problems of the British economy which have just been kept at bay since 1945 by American aid and then the world market expansion.

As Sir Oliver Franks, chairman of Lloyds. Bank, pointed out ‘a succession of sterling crises has taken place during a decade of general prosperity and almost continuous expansion in world trade’.

What happens to the external position of British capitalism if recession and stagnation become the order of the day?

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