for the war. These and other considerations all suggest that we may find
it increasingly difficult to maintain our position as one of the main
suppliers of the manufactured goods of the world. In such circumstances
we shall be hard put to it to maintain, far less raise, the pre-war
standard of living.

How then are we to cope with this problem of retaining our economic
position? We can only hope to do it if the present financial
difficulties and obstructions working through the exchanges, by which
international commerce is restricted and constrained, are removed. We
can only do it if and so long as the conception of international
division of labour is maintained. And we can only do it if--granted that
we can induce the world to accept this principle of international
division of labour--we can prove ourselves, by our economic and
productive efficiency, to be the best and cheapest producer of those
classes of goods in which our skilled labour and fixed capital is
invested.

Assuming the financial difficulty is overcome, and that the old régime
of international specialisation revives, can we still show to the world
that it is more profitable for them to buy goods and services from us
than from other people? Can we compete with other industrial countries
of the world? The actual output of our labour in most cases is far less
than its potential capacity, partly because of technical conservatism,
and partly for reasons connected with the labour situation. How are we
to mobilise these reserve resources. I have only space to deal with the
second of these problems. In Germany labour is well disciplined, and has
the military virtues of persistence and obedience to orders in the
factory. But we cannot hope to call forth the utmost product of our
labouring population by drill-sergeant methods.