Abstract
IN a pamphlet entitled The Next Step Capt. Harold Macmillan, M.P., advances the proposition that prosperity is conditioned by equilibrium in production. If the forces of production are properly distributed in the production of consumptive goods, and if the rate of saving is equalled by the rate of capital investment, then the total products will exchange against each other and prices and employment will be stable. This is the ideal production balance, but the difficulty of maintaining it becomes evident when it is visualised as a continuous rather than a static balance. Fluctuations are inevitable, and the balance may be Upset by financial, political, or industrial forces. Capt. Macmillan therefore argues that it is necessary to create an organisational structure which will guide the flow of capital investment, secure the production of commodities in the quantities which scientific market study directs, and maintain stability of prices as the governing principle in credit policy. To attain these ends, he advocates the following programme: (1) a scientific system of selective protection of our home market; (2) the establishment of representative national councils for each industry, to co-ordinate purchasing, production, marketing, and research; (3) the creation of an investment and development board representing the Government, industry, and finance, to direct investment into the correct channels, to influence credit policy, and to direct the efforts of the councils of industry so as to achieve a new internal production balance in relation to the most scientific estimation of market requirements; (4) reflation to the 1928 price level.
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National Prosperity and Control of Production. Nature 130, 15–16 (1932). https://doi.org/10.1038/130015b0
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DOI: https://doi.org/10.1038/130015b0