HIGH PRICES

Dominion, Volume 13, Issue 225, 17 June 1920, Page 6

HIGH PRICES

SOMETHING ABOUT CAUSES

AND THE ONLY REMEDYWORK THEORIES AND PLAIN TRUTH The Eight Hon. the Prime Minister, on,- tjie evo of his retirement fiom the Position of President of tho Board of 'rade—a position which he has occupied for over four strenuous years—stated yesterday that one of New Zealand's most important needs was a right understanding of the much-used pliraso "cost of living." Many theories wero current about tho causes, but the most important factors of a'/.—the havoc of v.ar and the slackening of industrial effort— seemed to be overlooked by the general public. Throughout the Dominion there was a demand for "pre-war conditions" nnu "pre-war wages," which made it necessary to review briefly the effects cf the great war, in relation to cost of living. "What were the conditions in ■NewZealand five years ago? All classes here were employed in the works; of peace. In tho main, tho strength of the country's manhood was used for production. Then came the war for the saving of civilisation against Germany's scheme of enslavement to a military despotism, and the floiwer of New Zealand's manhood was diverted from the constructive, productive arts of peace to tho '-asks of war. New Zealand's help in saving the world from Germany's domination cost the Dominion more than sixteen thousand lives of stalwart young men; wounds and sickness changed many othera from producers to dependants; others lad their productive power greatly diminished, and are thus partially dependent on the State. Tho sequel to this sad toll of the men has been tho granting of State help to many thousands of women and children whoso bread-winnera have lost their Jives or their productive power in defence of their country. In addition to the heavy destruction of man-power, there was ft huge consumption and destruction of wealth in the operations of war. One effect of this diversion of materials to the needs of war has been th© doubling, of New Zealand's public debt since the' year 1911 "What is the position hero to-day? New Zealand, with a seraras reduction of productive power, has to bear enormously increased burdens. How, then, is it possible to have suddenly the 'prewar conditions' and the 'pre-war nages'? Who can work the miracle of increasing tho real wages (tho needs of people with a comparatively high standard of "living) per head of population when the production per head tends to decrease? "Obviously, when tho war came to an end, the people were faced vith the need of working harder and producing more in order to assure fair living conditions for tho disabled and for (ho dependants of the dead and disabled. There was also the burden, of the vnrwinning as reflected in immense ireiease of public debt. -Yet what is the plain truth, which no fair-minded observer can deny? Instead of increased effort to meet the Dominion's urgent need there is a widespread slackening, nnd seme of this has been due to tho strain of extra exertion during tho war, nnd some to other causes only too w«!l known. Whatever tho cause, the effect is the same. There is a loss of production, which' must reduce the share of products per head of population. In other words, there is an automatic reduction of reoJ wages. Nominal vjages, ns measured by money, the mere medium of exchange, may bo increased for groups of workers, but it is obvious fnat taking tho population as a whole, if the community produces less it has loss to oensume; therefore, the average of real wages for the whole population must be Cess. Thero is no possible artificial method of making the average worker's position bettor in real wages unless tho production is increased.

"This slackening of effort. is worldwide; many countries are troubled with the temporary madness which lies in tho desire to produce less and consume more. There can ho only one end to that kind of lunacy—universal poverty and chaos. Mr. ArcMbnld Hurd reviewed this 'go-slow' folly in n recent issue of the 'Fortnightly Beview.' He showed that in shipping the efficiency rato had declined in the proportion of 100 to GG. A similar decline has lieen noted in other industries in Great Britain, as well as in New Zealand and other countries. Thiis decrease means an inevitable increase in the cost of living. "While this slackness continues various theorists seem to believe that tho 6haro of goods per head of population can be immediately increased by a rearrangement of tho currency. Prices may lie affected by an unsound system of currency, but the Teol solution lies in work, more work, and still more work, steady, conscientious work. The instinct of self-preservation sbiould induce the community to work harder. Tho case is crystallised in the following passage of TDclipse or Empire,' a book in which Samuel Turner and H. B. Gray have presented plain, solid commonsense on the question of work and wages: 'The nation is a great co-operative society. Some men make boots, some make clothes, some produce fuel, and some raise food. The workers engaged in making boots, clothes, etc., get certain wages, which they spend in buying boots, clothes, fuel, arid food. Now, if all workers limit their output to the utmost, they may conceivably receive high wages, but there will bo little food and fuel and few boots and clothes. There will be too few to go round, and the result will be that the workers are ill-clad and ill-nourished, whatever their money wages may be, for one cannot eat money.' "In another very helpful book, 'Prom "War to Work/ Mr. Turner remarks: 'Money is the medium of exchange,, but the only real wealth is commodities. If employers and workers in each industry produce with; steam shovels instead of hand shovels, it is obvious that that industry will have vast quantities of goods to exchange, and will ultimately receive vast quantities of other goods in return. Commodities, that is to say, ,will be cheap. It is inevitable, There is nowhere else for the. goods to go. . . . The main issue is production. Given that, it goes without saying that wages will be good and ample, for under such conditions thoro is no reason on earth why they should not be; in fact, such wages are a necessary element in the process.' "Mr. Turner's point is, of course, that large consumption goes with large production, and largo consumption requires sufficient purchasing power; that is, real wages increase with increase of production. One word summarises 'Eclipse or Empire' and 'From War to Work,' and all other books, pamphlets, newspaper articles, and' speeches that are worth while on the subject of cost of living— and that word is 'Work.' While many thousands of people aro deferring the return to tho pre-war willingness to work and aro thus increasing the cost of living, the Board of Trade and tho Price Investigation Tribunals are working hard to minimise tho exploitation of the public by the charging of excessive prices for commodities. The officers entrusted with this work are doing their duty earnestly and conscientiously, as the evidence available, will prove to any unbiased citizen."