“I will tell you what it will shackle us to. It will shackle us to reality. For good or for ill, it will shackle us to reality.
That is the only basis upon which we shall be standing, and I believe it to be the only basis which offers any permanent security for our affairs. That is my first broad reason. The foundation of Great Britain’s economic policy must be, as far as possible, based upon reality.
Now the second reason is one which I think the Labour party, the official Opposition, might consider. We are not a self-supporting country. We have this immense working-class population. We have a population twice as dense as that of France. These people are dependent mainly on overseas food and our industries are dependent on overseas raw material. What is one of their principal interests? It is surely stability of prices. When prices fluctuate violently, as in the year 1919, and when, as in 1920, there is a slump, the real wages of the work-people are continuously affected and almost every step in the wage movement either up or down is attended by industrial fighting. This fighting wastes an enormous quantity of wealth, and injures the whole community.
On the whole, when there is inflation and undue expansion, I believe it to be true that wages follow with somewhat slower footsteps the swiftly rising scale of prices. Great disadvantage is caused in such circumstances by the decline in the value of money. Great strikes occur in the process of adjustment. Then when prices fall, another set of quarrels begins, and serious wage reductions are demanded which it is regarded as a point of honour to resist. There, again, you get friction, disturbance and sometimes the long arrest of production in important industries. Some fluctuations are perhaps inevitable, but we must reduce them to the minimum. We should endeavour to keep as steady a level of prices as possible, and we are far more likely to get that steady level if we are not drawn into over-trading and inflation, and we regulate our arrangements by one common standard of value.
Therefore, I say that what is wanted in the general interest of the wage-earning classes of this country is a steady, trustworthy, honest, and, if possible, uniform standard of value.”
Winston Churchill 1925
Note – In 1925 the British Empire was the main source of the world’s gold supply. 70 per cent, of the world’s supply of gold was derived from the British Empire (Britain and her Dominions).
(6 votes, average: 5.00 out of 5)
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