Soluble Problem

Hawke's Bay Herald-Tribune, Issue 172, 7 August 1937, Page 15

Soluble Problem

CANADIAN'S VIEW \\ ' j l Kesponsibilities and ; Hopes ( WEALTH DISTRIBUTION 1 - > In an address on capitalism in - ■ ( democracy deiivered before the ^ Chamber of Cominerce of the Unlt- ( ed States of Aanerica at Washing- ' . ton, Sir Edward Beatty, chafrman ^ and president of the Canadian Paci- ' iic Rafrway, said that the great problem of dlstrihuting wealth wouid not be inaoluble lf etforts ■ were dlrocted towards maklng the ' wealth of the world greater. It is in the Euglish-speaking com-. * munities that industry and commerce 1 have reached their greatest develop- 1 ment; that science applied to idle ( naturai wealth has accomplished its ' greatest wonders; and that the spirit ' of individual ambition for gain has ' done most to add to the wealth and I privileges of all the human race, he ! said. * ^ It would be idle to deny that we 1 have now come to a point at whiclv 1 this careless and lavish process of xnultiplication of wealth by industry ar '' commerce faces new problems. * would be idle to assert that all that we 1 have to do is to continue as our fathers did — to build more cities and factories, to bring more land under the plough; to find n^w markets for our produce, and new sources of naturai wealth. Only a blind optimist could fail to see that we have come to a time when men question the validity of that simple faith in added production as the first duty of man. It is clear that we face social unrest and discontent on a great scale. It is evident that the whole theory on which we have built the progress of our society for a century is .undej question. This is not a state conflned to tho English-speaking nations of the world. The whole human race is in ferment. The whole world is disturbed. It was in the English-speaking couutries, however, that we first established mdustrial democracy and set up the system of endless increase in productive power. . It in is the Englishspeaking countriea that there has boen created precisely that mass of auibitious and educated workers, trained to hope for a high standard of living, who are least willing to accept a statie world, or to tolerate the existence of poverty and misery - — merely becauso i they have always esisted. Modern Discontent. Of one thing we can be certain. If it is possible to discharge the discontent of the day, not in wrecking our system of society, but in adjustiiig it so as to remove social friction and unrest, then, in my opinion, it will be in the English-speaking communities that we shall find the answer to the problem. Of what does this discontent consist? There are those who, whelher sincerely or not, insist that our whole system of society is wrong, and that it must be replaced by one in which the state is all-powerful. Some of the advocates of this change choose to call themselves by one name, and others by another. In the end, their programmes seem to lead to the same fesult. In addition, however, to these extremists there are a vast number who, willing to continue our social and econornic system in its present geueral outlines, still urge that it includes such inequalities and injustices ae to mhke it overdue for a change. The advocates of reform base their case very often on the existence of great wealth concentrated in the hands of a small number .of individuals. Against the innumerable calculations to prove this might be set the compututions which show how little would be the increase in the average reward of workers Were all in the income of our nations, in excess of such a figure as almost everyone would admit to be a reasonable one, to be divided equally among all reeeivers of income. In Canada our conditions are, on a smaller scale, not much unlike those which exisfc in this great country. It has there been caleulated, on the basis of figures prepared and issued by so* cialist propagandists themselves, that, were all incomes in excess of 3000 dollars a year to be divided equally among all reeeivers of incomes, the average income would b0 increased by about 10 dollars a month. So great would be the economic disruption produced by such a? measure that it seejns improh able that any conceivable beneficial re■iults would compensate for it. ' In so many words, those who would edistribute wealth seem too often to •xaggerate the amount of wealt.h which is available for redistribution. rallacy Bxposed In the second piace, advocate, nf adical reform by redistribution of v'ealth seem to exaggerate the ease .ith which it might be accomplished. Wealth is a word which, from its verv t'orm. should lead us to realise that it is not a naine for things, but a namo for a coudilion. Things may be dividi ed— -conditions cannot. r It i« as use- (

ess to talk of dividing wealth as it would be to speak of sharing health. A high state of health for all is so lutomatically desirable that no one has ave'r been known to argue against it. No one has yet committed the folly of ■mggesting that improvement in health t'or those who do not "enjoy it at its best could be accoinplished liy taking Ltcalth from those who have it in abuniance. It is, to the best of my knowledge, iqually absurd to talk of imporving the wealth of those who have it not, by taking it fr-om those who have it in ibundance. The illusion that this is possible jornes down the agas from the days when wealth could only be goid, land or iommodities. It is easy to divide these. It is easy to give to the man whis has no gold some of the store of those "who have. It is easy to.share land by taking from those who liave it Eor the landless. It is not easy to do juch things with wealth as wealth is snown in the modern world. In principle and in praCtice the redistribution of wealth, while unquestionably it would add to the power of the poorer members of society to purjliase the goods and services of others, iould only do this by limitiAg the pow3r of the present owners of wealth to Io exactly the same thing. We might xfve to men and women who do not uow possess it the power to buy the product of the farm or of the factory, but only at the expense of limiting the present market for other products of farm or factory. That all use of wealth is wise would be an absurd statement. Were it possible to plan society as an individual plans his own affairs, we might decide that it was better to close pearl fisheries and diomand mines, studios and eoncert halls, and all the places where are produced the goods^ and services which the wealthy enjoy. We might decide that we could better use the wealth. now devoted to the support of such industries and services to increase the market for the produce of wheat farms, or for the qutput of factories making the cJxeaper brands of clothing. I do not argue that this theory of reform by redistribution of wealth is wrong. I merely point out that it involves, not merely a stimulus to certain industnes, and added employment for certain people, but possible fatal limitatiou of the activities of industries and individuals whose estate is bound up with the maintenanee of the present system of society. DivMon Not Possible I assert again "that to divide wealth is impossible. The wealth of an individual is merely a parfi of the condition of wealth of the world in which he lives. The answer to poverty is not to reduce the wealth of the rich. It is to increase the production of all the goods and services of the world, so that they may be enjo^ed, in far greater measure than they are to-day, by the miilions who live below the levels of comfort whicli they might enjoy were all men produetively employed. Antiquated as may seem this philosophy, I still believe that the road to maximum wealth. and contentment in any community is by the simple process of providing to every man and woinan who wishes to eam the opportunity so to do. It is not, to my mind, a fact that we have solved the problems of production and not those of distribution. Tt is far more nearly true to say that the wealth of the world is too little, and that, if we will give our best effort to making it greater, the problem of distributing it will not be insoluble. To those who hold this faith with me; to those who believe with me that society as we know it is not a mere iii-xunctioning machine which can be made -to work better by simple tinkering with its details — I suggest that on them lies the responsibility to show that they are right. Take, for instance, vexed issu0 befween eapital and labour. It may be easy to produce statistics to prove that this or that class of wort crs is to-day receiving as high wages as can safely be paid them; is working as ehort hours as may be conceded; and is enjoying entirely suitable conditions of employment. Let us face the fact that this is not enough. The English-speaking nations are democracies, and in a democracy it is not enough that anything should be true. It is also necessary that men and women should know the truth, and know it to be the truth. If on this Continent the great majority of our people como to believe that labour is underpaid or exploited, then, for all practical purposes of daily life, the people of our nations will nct as though this were true, even if it be not true. If those to whom is committed the conduct of business, tlie administration of industry and the direction of commerce fail to conv'tnee the mass of our people that they carry out their task wisely and well, then for all practical purposes, they have failed in their. duty. JLncorrect Theories Or take the only too general diticontent that prevails among large numbers of the youth of our countries." The question is not whether this is justified, Hatisfied with the essential correctness of our form of society, we have failed to defftnd it. We have permitted young men to be taught, often by other young men with little experience of the world, theories coneeruing 'tho i'tmelionhig of our society which are log-

ically inCorrect. We have allowed freo ' speeeh and free thought — and rightly so. We have, however, too often forgotten that the free speech and free teaching of those who are saying things 1 which are not true is not protected by any sanetity. The system of soeiety which we have inherited, and with all to dissipate. It is a trust from gener- . ation to generation, and with every ' willingness to permit and encourago attempts to improve it, it is our duty to pass on to those who repJace us the liberty for which our fathers fought, It will not do for u's to take refuge in the assertion that economic law is on our side and that economic truth is. great and will pervail. Truth will prevail, but before now it has gone into esclipse for long periods. I appeal to you to remember these things, I appeal to you to realise that it^is not enough for business men to be right — they must also prove to the public that they are right. Business — big business and little business alike — is based on the wisest and best of all human motives — the profit motive. All that the profit motive nieans is that each human being will seek those things which he desires and can gain, and in that lies the only source of motive power for the progress of the race as a whole. What we must remember is that the applieation of the pxofit mOtive must be intelligent. In a democracy, for exampie, it can only be exercised successfully, provided it it exercised m 3 ccordance with the will and conscience of the mass of the nation. If, as sometimes seems possible, the mass of the nations errs in its judgmeut, and tends to n^sunderstand what the business world is trymg to do — eoniuses an intelligent search for profit with blind greed, or believes that intelligent efforis to add to human wealth are stupid attempts to ensiave workers for the benefit of capitalists — then the responsibility lies on business' to correct the errov of public opinion; to plaCe its case clear ly before the public and to gain the public confidence. Industriai Progress. In a decade and a half we have seen the greatest period of industriai progress in the history of the human race, iollowed by the greatest dopressiou that has ever been known. That discontent has been widespread is so naturai and norxnal that the only reason for surprise is tliat anyone has expressed surprise. That thjs alternation of prosperity and depression results, to no small extent, from great world chsnges beyond the control of any nation or any group, is to be admitted. The conditions of the world to-day have' theii l'oots in the Great War, and that in tuni sprang from the wlio.e course of human history. Admitting all this, however, jt still reniains a fact that the enormous economic changes of recent years must be attributed, at least to some extent, to the lack of skill of business leadership. The great boom failed, and that is evidence that it was unsound. The great depression went too far, and that i3 evidence that business leadership was not adequate. Business leadership must do better. It must not again permit witbout protest speculative excesses, and rash development of unsound types of industry and commerce. The penalty for such an error of judgment is that public opinion loses faith in business leadership, The Profit Motive I have said that the profit motive is wise and good. Should it fail to be wise enough to serve as a reasonable guide in keeping the economic life of a modern nation functioning smoothly and well, tho consequence will be that the mass of the people will be ready to follow those who attack it, and offer some untried panacea as a substitute. The answer to this lies in the aeceptance of a few simple principles. One is that the profit motive is only adequate as a guide when it is directed by some sound appreeiation of the difference between a passing profit and a lasting one. If, in order to gain a passing profit, we take men from their established homes and callings, move them- to other homes, and place them in other occupations, then, should the profit prove not to be lasting, the consequence will be to leave a mass of human wreckage stranded when the tide of business recedes. It 'is in these masses of human wreckage that the ferment of discontent first begins to grow. Long-term profit can be gained only by basing it on a sound and lasting service of the needs of the people as a whole. It can only be gained by treating labour not as a commodity, but as a partner of eapital. It can only last if the wealth which results from ,it is treated as a trust, and not as loot, Profit can only be lasting if those who gain it gain at the same timo the confidence of those who work with them, and of the mass who consume their product, This is a time for business' men to reassert their faith in the system of society of which they are a part. Now, as we tend to emerge from depression, is the rnomeut to proclaim that business directed by the profit motive is the surest road to increase iu production and geueral distribution of the necessities and comfortB of life, Thig is the time to say thai capitalism has not 'failed; that it is still the surest road to increase in wealth for all the people. I believe in the maintenanee of the system of society whichi we have. I believe that a society of free men engaged in honourable competition to add to their wealth is the one best adapted to raise the general standards of our living and to improve the race. I believe that the functions pf the State should not be increased, but limited. I believe that ordinary decency and the ethics of our society will keep us from permitting the excesses of individuals from becoming a danger to the community at large. 1 assert again, however, that the certaiuty that these views are right cannot be regarded as the defence of our society against the iguorant prej udiee and iiiiiiuormed b.it ♦ternes# of those who woujd deatroy itJ