Economists of the modern school will no doubt protest that I have said nothing of the use of budget deficits or surpluses for the control of the econ… - John James Cowperthwaite

I have three objections to my honourable Friend’s wider proposal that exchange control powers be used to require the fixing of exchange by merchants on entering into both export and import contracts. The first is that I think it excessively paternalistic to require a merchant to protect himself against a risk he is prepared to take. Secondly, I think it wrong to impose a condition which is likely to cause one group of merchants a loss, for the purpose of providing the other group with protection at no cost to them. Thirdly, I do not think it is in fact practicable to enforce such a system. I am sorry to be so negative, but I am sure that the solution to my honourable Friend’s problem should not depend on compulsion but on the provision of voluntary protection on insurance principles.

If one accepts that in general social services should be made available to all on the basis of ability to pay, one has the choice of two opposite principles of action, although they need not be mutually exclusive—either progressive taxation and free services or fees covering costs with remission for those who cannot afford them. The former method is appropriate, in my view, in rich developed countries where the principle of progressive taxation can be applied without unduly adverse economic or social results, and the wastes inherent in full and free services can be afforded. In less advanced or poorer countries, where neither economy nor society is geared to progressive taxation and waste cannot be tolerated, fees remittable in case of need seem to me clearly more appropriate.

I largely agree with those that hold that Government should not in general interfere with the course of the economy merely on the strength of its own commercial judgment. If we cannot rely on the judgment of individual businessmen, taking their own risks, we have no future anyway.