IDEAL NEW DEAL

Gisborne Herald, Volume LXVI, Issue 20133, 30 December 1939, Page 8

IDEAL NEW DEAL

PROFESSOR’S PROPOSAL EFFICIENT PRODUCTION BETTER LIVING STANDARD The is often made llnu a redistribution of national income is necessary to stave off a lower standard of living'. Professor Gustav Cassel, a noted Swedish economist, points out that, especially in the United States, national income is lower than it was in 11)2!), and argues that what is wanted is a, more efficient production. Then there would be a raising of the standard of living of all people in the country concerned in that more efficient production. Professor Cassel develops this argument in an article, “Must There Be An Knd of Pi-ogress, 1 ' published by the quarterly review of the Skandinaviska Banken Aktiebolag of Sweden, The author of the article, in referring to the great collapse of the

United States following 1929, will give not the slightest support to the theory that the collapse was consequent upon development proceeding at an abnormally rapid pace up to 1 <iwith an inordinate accumulation of capital assets. That view of the collapse, ho declares, is quite devoid of foundation, as, indeed, is proved, , he considers, by comparing the period in question with previous booms in the United States. Setback Not A Necessity That, the setback which occurred was a necessity he denies. A con- ! tinned increase of American production at the previously normal rate ’ would undoubtedly have been’quite | possible. In the United States, there ’ was a sufficiency of man power and of most other factors of production What raw materials had to he imported could easily have been procured, seeing that the United States has what is commonly called a favourable balance of the payments, which might have been utilised for something far better than an enormous importation of gold. : The conclusion is thus forced that tho immense loss sustained by the American economy after 1929 must l have been due to errors in organisa- i

tion. If a determined effort is to be made to remedy these errors, the view that, after 1920, all idea of continued economic progress is impossible. must be recanted. Social Welfare Policy The figures which he cites, Professor Cassel states, show that nothing of any real value is to be gained for tin, masses by a hotter distribution of tin- unduly reduced income, but that, on tho contrary with continued progress, vast resources would be available for raising the standard of living of the entire population. A rational social welfare policy has undoubtedly it great mission to fulfil, but much work still remains to be done in this field, a work which lies chiefly in the direction of enhanced efficiency of labour, or rather in the spread to all parts of the national economy of the high standard of efficiency already reached in some lines, A mere reshuffling of the national income, which, in itself, i s quite insufficient, would, ho concludes, evi- , dently be an ineffectual remedy. Conceived in this sense a “new deal” i would be a most misleading pro- J gramme, ;