The house of Industry : a new estate of the realm

CONSUMPTION AND CO-OPERATION 57

been transmuted into effective demand, they can take no scientific cognisance of it. The economists of the Manchester School were in fact concerned with the problem, which they partly solved by the aphorism “‘ Supply creates demand.’’ No doubt the manufacturers can command the credit necessary to supply; but the problem is how to command the credit required to give the vitalising touch which transmutes natural into effective demand. In my ignorance, it has always seemed to me a subject well worth research by political economists.

I do not mean scientific or technical research as pursued to-day. This, of course, is immensely valuable and Great Britain has achieved many notable victories in its laboratories and technical shops. The results of this research have been to enrich mankind in general or to strengthen this country economically or commercially ; what we need, however, is to examine, with an eye to credit, every possibility of enabling consumers to buy commodities which are now beyond their purse. The essential thing is to expand effective demand and not to transfer demand from one commodity to another. A little reflection will convince us that any such expansion of credit creating an equivalent expansion of effective demand is only possible where the community has control of credit and the power to co-ordinate industry. The Capitalist system has, in the past, successfully provided credit for production (although this is showing signs of exhaustion, in