With the outbreak of war in 1914 the internationalists in the Liberal and Labour parties, already losing credit, seemed to go into intellectual bankr… - Correlli Barnett

I am dismayed by the RSA's change of institutional Schwerpunkt from hardnosed concern with education and training for personal and national capability to generalised small ‘l’ liberal do-goodery, or, in the words of your chief executive, the driving of "social progress". While we waste time and effort on this right-on idealism, poor old Britain is confronting ever tougher competition from old rivals like Europe and North America, and new ones like India and China. You would hardly guess from the contents of your Journal that it is a ruthlessly hard world out there, and getting harder every decade.

Of course I entirely agree...that the British plight consists in a low-wage, low-investment, low-productivity economy. I suggest...that the peculiar structure, history and attitudes of British trades union is—and has been for a century—largely, although not wholly, responsible for this dismal cycle. You cannot pay high wages unless you have already achieved high productivity. You cannot achieve high productivity unless the workforce is prepared to operate modern machines to the utmost of the machines' capacity. Yet for all the glib talk by trades union leaders about improving productivity, everyone knows that British industry is fettered by demarcations and other restrictive practices aimed at preserving somebody's "property right" in a particular task. This in turn must affect British industry's attitude to investment; for what, it may well think, is the point of investing vast sums in advanced processes if it is not to be permitted to work them to their full potential. Surely, therefore, the necessary switch to a high-wage economy cannot be achieved in isolation, by the process of "free collective bargaining" (ie, extortion of money by menaces or force), but only in step with a parallel switch to high productivity and investment. Are Mr Scanlon's members—and other British workers—prepared to match the efficiency, flexibility, cooperativeness and zeal of German workers—or do they really simply want more money for going on as they are?

Between 1950 and 1952 the volume of British exports fell by 5 per cent (rearmament again), while German exports rose by over 50 per cent and American exports by about 20 per cent. In just those two years Britain's share of world trade in manufactures dropped from 26 per cent to 22 per cent. By the end of 1954 it was down to just over 20 per cent. In 1955 American exports of manufactured goods rose by about 9 per cent by value, Germany's by 18 per cent, Japan's by 27 per cent – and Britain's by 7 per cent.