FALLACIES

Press, Volume LXVI, Issue 20092, 22 November 1930, Page 14

FALLACIES

XIV.—rHAT ALL OUR WEALTH Cftii. FROM COWS AND SHEEP,

UrECTALLT -ffßlrtEs; TOa TKB r .„ w ,

By Processor G. B. Fisher University of OtagoQ

Which industries contribute most to the economic welfare of New Zealand, and are therefore most worthy of esteem and respect? Many people believe that there is no ground whatever for argument here, and that the predominance of pastoral production in New Zealand is clearly overwhelming. Probably they are right, but a good case is often damaged by faulty and exaggerated presentation, and it does no real good to the interests of New Zealand farmers to pretend that they are practically the only real producers in the country.

equally Lue that the fan»„. • pendent on all the rest of Even people, however, the fallacy of looking only ports sometimes make a , same kind in drawing the annual estimates of the material production. There ft that the primary producing I* seem to be responsible for anA* than one-half of the total. 3%'*®' portion, is smaller than that qua J? the people who are ' ports, but the impression they Zt to convey is the same. As one financial authority put it " One primary producer does motit the material welfare'of the than four engaged in" seconding other industries." We be living in a crazy world'iithifc! true; in drawing such cohdnaeaW ever, the important fact that the aggregate value of and dairying products only what the dairy ■farmer]!' directly produced, but. also the of the work of the butler fseto»s ployee, the motor-lorry drivijr, way porter, the clerk, side worker. Where possible the fc of valuation is the wholesale or 4 clai-ed export value, and tHe fsns obviously cannot claim to" be t* sonally responsible for the wfcok'j this. Without his work. | railway employees and'the res tof ft) would have been in a without their aid the fanner also«g have been in a bad way. The aajjj of the. clerk and the. transport*#! are a real addition to national hunk and not a deduction from the of what the fanner .has duced. All are entitled to ke deseij as producers. Further, the total® mate covers material and not the value of peißmal a professional and many trarapoii distributive services.

Sometimes a definite statistical estimate is offered, and it is said that 94 i per cent, or some such proportion of New Zealand's wealth comes from her pastoral industries. The precise figure used does not matter very much, but it is important that the faulty foundations of such estimates should be exposed. What is really meant is that 94J per cent, of New Zealand's exports is supplied from pastoral production. In a sense this is true enough, but that is quite a different thing from saying that 94i per cent. 01 our wealth is derived from the same source, or that dairy and sheep farmers themselves produce 94J per cent, of our national income. It must not be supposed that the exports, or the imports which we get in return for most of them, have any significance for our national wellbeing which is fundamentally different from the significance of the goods and services which are produced and consumed at home. Rabid protectionists sometimes talk as if imports were essentially evil things, and it were a matter of the highest importance to organise our industry so that everything that we need could be provided in New Zealand. This is happily quite impossible, but we should beware of going to the other extreme, and talking as if the export trade were the only thing that mattered. New Zealand's external trade is indeed relatively more important than the external trade of most countries, chiefly on account of the smallness of our population, but the greater" part of our national income is still both produced and consumed at home. Our exports for the year ending March 31st, 1930, were worth about £49 millions, but our aggregate income for the same period was probably nearer three times than twice that figure. Everybody who produced something that other people wanted to buy, whether a farmer, a teacher, a carpenter, a doctor, or a taxi-driver, made his corresponding contribution to the national income, and the incomes which the teacher, the carpenter, the doctor, and the taxi-driver received in return for their services were not in any intelligible sense a deduction from the wealth produced by the farmer. Sometimes rash farmer partisans reply to this: " Ah, but what would these other people have done without the farmer?" The correct answer is, as the partisan hopes it -vrill be, " They would have done very badly"; but it is also true that the farmers would do very badly in the absence of the other people. All the rest of us are dependent on the farmer, but 'it is

The aggregate income of the eao try is made up of the servises«f4 of us, not merely of those .irin jB duce for export or of thoseTrhoUbt, 011 the land. We can, if we lie, t range our industries in onJijr t£ a portance of their prodnete, jast might arrange our time in order 1 importance of the uses to which-itu to be put. But to labe3 • or a use of time as essential'(fceiij justify us in supposing thsi iim tribution to welfare, is greater that of all the others'.'. Only tksen are rather unfortunate hare Wqa the whole of their time on yrak& is absolutely csscntiali Thsgodtoi can get that work over the betteMi

videdis arid ■we can .then" turn; our 'stufl to other arid" perhaps more egp9 occupations. Aid apart considerations -of general -reason! the. appeal ■to statistic? doaciat M port;, the view mfli ofasmalland almost negftgiMe frt&j practically, the whole of our adraJ wealth is directly duo to &e the farmer; It may periaps I*4 case that the farmer is worat.efft*! some other sections ofihe eonfflmi<| but the only satisfactory way mining whether this is 1» j to look at his - income and eomptni with the incomes of o&er people."