QUOTE OF THE MONTH [bonus]

‘In Britain the interests of industry and the interests of finance have never been as closely intertwined as they are in France, Germany, were in the United States. As the decline of British manufacturing became evident, the competitive strength of foreign industry weakened somewhat the enthusiasm for free trade previously displayed by British manufacturers, but British financiers were still doing well out of financing the trade of the world. When, at the turn of the century, Joseph Chamberlain tried to rally the manufacturing interest in the Conservative Party behind the cause of protection for domestic industry, in the hope of launching a manufacturing revival, he was bitterly opposed by the financial interests. He and the manufacturers were decisively defeated.

The full extent of the victory for finance was to be demonstrated much later, in 1925, after the First World War had finally destroyed the edifice of British economic superiority. During the war normal free financial relations had been suspended, which had been the basis of the international monetary system guided from London. At the end of the war the City, in the interests of sound finance and the restoration of its position as an international centre, pressed the Chancellor of the Exchequer, Winston Churchill, to return to the gold standard, even though this would mean raising the value of the pound against the dollar and damaging the competitiveness of the export industries. Again the victory was won by finance, in the person of Montague Norman, Governor of the Bank of England; and the gold standard was restored.

In a bitter polemical pamphlet entitled The Economic Consequences of Mr Winston Churchill, Keynes argued that this decision would lead to disaster. He was right. The export industries - coal, shipbuilding, textiles - virtually collapsed. In 1926 there was a General Strike. Britain’s slump was well under way five years before the depression was to engulf the rest of the world.’

Lord Eatwell, writing in 1982.

The failure of Joseph Chamberlain’s campaign was referred to in the English Rights Campaign item, dated the 12 March 2005.