PRACTICAL ECONOMICS

Dominion, Volume 11, Issue 227, 13 June 1918, Page 6

PRACTICAL ECONOMICS

AN INTERESTING SURVEY

SCIENCE FOR BUSINESS MEN

Many business nten, in addition to members of the Wellington Accountants' Students' Soeiely, attended a lecture delivered by Ah. B. E. Murphy, M.A., 8.C0m., in tho Accountants' Chambers last night, on tho subject "The Scope and Method of Economics and Its Significance for tho Business Man." The president of the society, Air. Tl. W. Hunt, presided. Ho introduced tho lecturer, and emphasised the importance of tho subject, of which Mr. Murphy had made a life-long study. Air. Alurphy said that economics was concerned with tho needs of man. The human race modified its environment fo meet its necessities, and fho science of economics dealt with man's efforts in that direction. Those efforts wero of increasing complexity as man grew and ' developed. The ceaseless attack of man : on hi; environment meant the produc- , lion of wealth; and the production of wealth was tho basic fact of economics. . Labour, working on raw material with the aid of capital, was the subject matter of political economy. Wherever the supply was less than the demand, thoro was an economic question. ~ Land, lahour, capital, organisation, wages, rent, and interest were all economic questions, springing from the fundamental fact that man had to exercise effort in order fo live. There was no other science that touched the daily life of the people so closely, and every man was an economist because he had to be. But his views on the subject wero not always sound or scientific, and many fallacies wero nursed because their weak points were disguised by the ambiguity of such common wordß as "wages" an A "profit!" The scientific economist collected facts relating to social life, classified cheni, defitied their terms and endeavoured to deduce laws from the facts collected; ho generalised wisely and cautiously, and tried to test his views in the light o; experience, j »f all people would tohow tnese nicuiui.s, ■puny of the common differences of opinion on economic subjects would disap-

ear. liufc unfortunately there was a ,popular belief that anybody could under: stand economic questions and that it' was not'necessary to pay any attention to scientific, liiiowledge at all. That was why New Zealand had been involved in a vicious system of increasing protection and rising wages that simply pushed up pi ices and gave no real benefit to any of tho interests concerned. Referring to tho connection between business and economics, Mr. Alurphy said lie did not suggest that a knowledge of economics would bring success to tho man who did not possess the elements of political success; but tho man who could succeed in business would bo helped materially by a study of economic science. A scientific knowledge of any business would be hound to* further its practical operation; it would bo particularly valuable from the national point of view, since it would assist the .individual to broaden his horizon and see his part in the State organir.itiou. Business success depended on qualities which could not be analysed or , zunmuuicated. It depended on knowledge of the article handled, on moral qualities (or immoral qualities), on luck and character and reputation. He did. not believe that any of the 'popular panaceas for human ills would give the results expected by their advocates. He looked for no really useful results from such ventures as Socialism and- co-partnership. The basis of far-reaching social reform must be the enlightenment of the people, tho general adoption of a habit of enlightened social thought, and the effort of the individual to act in the interests of the community and to understand how his actions would react on i' his fellow-uicn. - Air. Alurphy said that democracy was on trial at the present time. It had to prove that it was as efficient as autocracy had proved to be, and if democracy was to succeed it must act with knowledge. New Zealand was going to need legislators who understood economics, and it was going to suffer if it did not discover them. One problem was obtruding itself already. The Dominion had now an inconvertible paper currency. It had increased its note issue by some i' 5,000,000, and gold had gone out of circulation. It needed no great knowledge of political science to understand why there was lots of money to .go through the totalisator and why prices were rising. In conclusion, the lecturer emphasised that the .laws of political economy were not absolute, they were rather statements of tendency, and they could be altered or even reversed by changes in human motives or human environment. .Political economy was relative, and its truths depended on time and place. These were points to k be noted carefully when legislative attempts to effect social reforms were being considered. It was also a fact that economic solutions of a problem were not final, but tliat was no reason why economic science should he disregarded by practical men. Political economy was a practical subject. It assisted its students to understand tho social effect_ of actions and to appreciate the social point of view. It w;ould help the public men and the business men to solve problems that: could not be solved solely by political science b\il; that certainly could not be solved without it. In answer to questions, Mr. Alurphy said he did mot believe New Zenland would ever manufacture for export. Its workers had a -high standard of living. it lacked any tradition of manufacturing industry, and it was very far from the world's markets. Its present, industries lived behind a high protective tariff, but the iflJintry would gain financially' if it abandoned tho protective tariff and pensioned all tliei men at present makinc their livings in the protected industries. The rise in prices might continue until the system broke down of its own weight owing tn the fact that the bellieerents were finnncing themselves with pnvr money. This had happened after other wars. The increase of naper money raised prices automatically. The war lin'd removed the normal checks to inflation of money, and an excess of piiner money always produced a rise of prices. Lincoln hart said that before tho Civil AVar lie went to the market with his money in his poclcet, and brought liis goods home in a sack on his back; but after the war he toot his money to market in a sack on his I>Rek. and brought home the goods in his pocket. After some spnen\l discission, the meeting accorded Mr. Murphy a hearty vote of thanlw for his lecture.