PROBLEM IN ECONOMICS

Evening Star, Issue 22450, 22 September 1936, Page 9

PROBLEM IN ECONOMICS

DISTRIBUTION OF INDUSTRIAL PRODUCTS RAILWAY W.E.A. CLASS DISCUSSION There are many people to-day who consider that the world has achieved complete success in the realm of industrial production—that we possess ample facilities to provide comfortably for everyone—but that wo are prevented from availing ourselves fully of this capacity to produce because we are still equipped with an antiquated and inadequate system of distribution. Is there any reliable ground for this contention, and, if so, what remedies or adjustments can bo suggested P This very interesting problem received attention last Sunday afternoon at the Railway W.E.A. Class, when the subject chosen for discussion was the problem of how to distribute the products of industry, three class students having undertaken to speak on different aspects of the question. The class was fortunate in having present as a visitor the director of W.E.A. work in Otago, who opened the discussion by giving a general survey of the subject in a short introductory address. Economics in the past, said the director, had been concerned with this problem of distribution from a point of view which had been purely academic and incomplete, _ and which was to-day causing increasing uneasiness among economists. In the past it had been the custom for economists to criticise the attempts of technologists and “ engineers ” to provide a solution to this problem, on the score that they had insufficient economic knowledge to undertake such a task. One of the main difficulties had arisen on the economic side from the tradition that abstiact deductive argument was adequate, followed by the argument that the assertions of technologists and “ engineers ” were based on a too simple and inadequate understanding or complete ignorance of economics. It w r as now becoming evident that economists must check their theoretical reasonings with the actual facts—that theory isolated from practice was totally inadequate. Consequently there was to-day an increasing demand for collaboration and co-operation between all parties con•cerned with this very important problem, and it was realised that each could learn something from the other. In approaching the subject it should first be ascertained whether the problem was purely one of distribution and also whether industry’s capacity to produce actually did exceed our ability to-dis-tribute the goods. The second speaker, a class student, in supporting our present economic system, contended that all that was required to rectify such slight defects in our distributive system as, it might be asserted, existed to-day, was a process of gradual progressive reform. Of course, Social Credit supporters and Communists would maintain that our entire present distributive system was wrong, but it could be shown that this was not the case, and that no radical change in our monetary or distributive system was required. Such inequalities as existed were not caused through lack of purchasing power. When the opponents of our present system _ stated that our present plan of distribution had outlived its usefulness, they implied that they possessed a knowldege of an infinitely superior system which could not be brought about by the normal evolutionary process of our present system. It should be remembered that our present methods of distribution permitted each unit of society a far higher standard of living than had ever previously existed. Numerous examples were quoted to bear out this contention. The recent depression was merely a result of a cyclical trade fluctuation and not a sign of the collapse of our economic system. The third speaker, a Douglas Social Credit supporter, said that liis policy was based upon two principles; firstly, that poverty should not be tolerated in the midst of plenty; and, secondly, that every child was entitled to its share of the benefits deriving from invention. At the present time a comparatively small body of people could dictate as to when and what we should eat. Under Social Credit this right of control would be taken from a few private individuals and be _ placed in, the charge of the King, his Government, and the people. All would get their share of the goods produced, irrespective of their capacity to work for a living. Consequently those who had the best interests of their fellow-beings at heart could not but support such a movement. At this stage the speaker resorted to several diagrams to illustrate his remarks, outlining through an explanation of A plus B costs, how the purchasing power of the people at any one time could never purchase the woods produced at that time. With t!he increasing mechanisation of industry, it would soon be impossible to employ any but a small portion of the people. The fourth and final speaker, whoso remarks were in support or _ Communism, illustrated most of his remarks by figures on the blackboard. He showed how under the present Capitalist system there was a considerable amount of unnecessary and useless waste in production costs, through management costs, and more especially through the “ profit ” to the owner. All this resulted in the worker getting an insufficient return for his labour. He showed in another diagram how the worker would be much better off under a system of Social Society, where useless costs were deleted and the standard of living of the masses inevitably raised. The Social Credit supporters who railed at the banker, and at finance in general, completely forgot that in many cases the producer was also the financier, as instanced by Mr Rockefeller, Mr Carnegie, and others. The owners in industry represented a reactionary class which could be relied upon not to t t-operate in improving conditions, and the worker, in his attempt to better the conditions of himself and his fellow-men, would inevitably be .attacked by these reaction-

ary forces. The only way to improve the production and distribution of industry was by complete socialisation of industry, The remaining hour was occupied with very warm discussion, and the meeting concluded with a vote of thanks to the director.