WOULD PROTECTION BE ABUSED?
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A Safeguard in the Liability to the Removal of the Privilege.
THE argument against any action which might help the home industry to fight competition from other countries is, of course, that anything in the nature of a temporary protective duty, or a temporary limitation of imports, might tend to put up prices to the consumer.
There is, of course, something in this contention, but the whole matter really resolves itself into a question of whether the industry would be likely to abuse the possession of such a privilege. If we could be reasonably certain that it would not do so, then it would be safe to forecast that a temporary rise in prices would be fairly promptly followed by a steady reduction. This would be the certain result of the manufacturer having secure tenure of his home markets arid of his consequent ability to plan substantial output without taking an unduly speculative risk. The increase of output with a fairly certain market available for its absorption would mean a. considerable reduction in overhead charges, which should be reflected in prices within a. very limited period. If, in practice, it were found that the industry was abusing its position of privilege in order to make excessive profits, the remedy would be to. hand, if it were clearly understood from the first that the privileges were only temporary and, therefore, liable to removal, One can imagine another sub-committee of the Central Profiteering Committee sitting, in a couple of years time, to investigate the prices of commercial motor vehicles, these having been, in the meantime, assisted against foreign competitors by a tariff or some other equivalent means. Supposing that this sub-committee ca,me to the conclusion that the current prices were unduly high, this conclusion could not be followed by the plaintive adraission tha. "no immediate remedy can be suggested." The remedy would, be .obvious, namely, the removal of the privileges which had led to the profiteering. This being so, it would clearly be bad policy for the industry to abuse such privileges. Now, let us assume that nothing is done for the home industry, and that the result is to reduce it to comparatively small dimensions, if not to extinguish it altogether. If this were to happen we should become dependent upon import as we are in the case of petrol. There is no reason to suppose that the importer, when he realizes the strength of his position, would fail to take advantage of it He would naturally raise his prices, and the time would probably come when a sub-committee of the Central Profiteering Committee would be again called into being. If the charge of profiteering were found to be justified, the report of this sub-committee would be much the same as that which now deals with the case of petrol. "The prices are unduly high, but we can. suggest no immediate remedy. The only real remedy is to build up a strong manufacturing industry of our own, on the ruins of the industry which we have allowed to decay. This will take years and-involve immense commitments and, in the meanwhile, we must suffer in silence."