THE NEW ERA.

Hokitika Guardian, 26 July 1918, Page 1

THE NEW ERA.

(By_x.) INDUSTRIAL PROBLEM—INTERNATIONAL. When through the League of Nations the safety anti freedom of all nations is assured and the war menace removed, each nation will have the chance to “ set its honse in order,” and to come into line with a higher and better civilisation. This will mean social, economic and industrial changes, and the revision of systems , of currency, land tenure, taxation,' and education. If our present civilisation has become insufficient for the advancing needs of the world of mankind—and there is no doubt it has proved so - there most be searching investigation as to the causes. It will be found there were weaknesses, inherent in onr social structure which must inevitably sooner or later have brought about collapse. These weaknesses had tendency to bring about war between nations; to cause internal disorganisation and strife; and to j prevent the human race reaching a higher and better state of development. It is somewhat difficult, as the ' social and economic problems are so dependent for solution one on the other to decide which is the more important However, let us look first 1 at the industrial problem, and con- j aider it in the first instance from the international point of view * * We all know that the present world war was brought about by 1 Clermany—but do we all realise why ? It was the greatest crime in .the world’s history —a crime which lux- 1

inanity must see is never again com mittecl. 13at there was method in il mad and criminal as ii was. Gei many lias been for years building u enormous industries under a com'ple: system of State assistance, whicl system was; economically quite nn sound unless she could command tin world-markets. It has been provec by tlie highest industrial and tiuanoia authorities that Germany was facet with the alternatives of war or bank ruptey. But. there is not the slightesi doubt that Germany knew from tin first what she was about; realise! clearly what the consequences ot forcing her industries would be, and had perfected her plans when the time, was npe, to secure the markets of the world by force of arms. The intention was not only to dominate the world by force, blit at the same time to make Germany the great manufacturing centre.into which the wealth of the world must, pour, and ngainsf which no other nation could compete. Germany was like-a huge store overstocked with goods. The simple and obvious remedy was, of course, to destroy other competing stores. Primitive, barbarous, and criminal no doubt, but from the German viewpoint justifiable—if it succeeded. Now the chief object of a-manufac-turer is to secure a big output. Given an unlimited market for any article of manufacture the cost of production can be cut. down to a very low minimum. That is the reason why many articles in everyday use are sold at a price which makes the pnrehaser wonder how they can be made for the money.” No, it is not always a question of cheap and sweated labor —though that factor may sometimes come in. Some of the largest and most successful manufacturing concerns pay high wages. The problem is only one of very large output, and the necessaiy capital outlay on large, well organised and equipped works with the - latest quick production machinery. Of the necessary factors for successful manufacture that of large output , ea-ily comes first. Of course tlis prudent manufacturer will see that other conditions are favorable, that raw material, labor and transport facilities are available. But the first and vital'question is the extent of the market. If he puts up a works to turn out say 10,000 articles a year, he may have to sell these articles at say £• 0 each to pay expenses and get a reasonable profit. If on the other hand he can put through 100,000 a year lie might conceivably sell at little more than two-thirds the price and make a better profit. Under the present industrial system, therefore, the large manufacturing concerns produce far more than the local market can absorb. They keep prices up locally, and “dump ” the surplus on the outside markets. That is the reason why, for example,: you can buy cer- , tain-A merican goods cheaper in New ' Zealand than m America. Now there is nothing wrong in this. No one is being robbed or exploited—it is quite clean, legitimate business, so far as it goes. If, to revert to ourlllustration, the local market can only absorb 10,000 articles a year, and these articles,are sold there.at £lO each, at . which price they would, if the manufacture was confined to this number, pay only a reasonable profit the local consumer, is not penalised. On the contrary, if the manufacturer puts up huge works and puts through i00;000 articles a year, he is, by distributing large sums- in wages and I

building up a'big industry, increasing the wealth and importance of his

pw,n ; district,

Neither is any -harin'

being-done to the outside consumer, as he is given an article ,at practically

the price, or perhaps less, at which it is sold in the place of of its manu- '

factnre, while the manufacturer in-

directly bears the charges for freight and selling commission, and sometimes the duty as well But—and we are

now considering the international

aspect of industries —trouble is sure

sooner or later to arise through this apparently harnilees and legitimate system of trading.

Ilf in tlie outside countries it is desired to establish —as maybe necessary for their welfare—similar industries to those of the great manufacturing countries, some State assistance is obviously necessary. This generally takes the form of protective tariff, or it may be a State bonus system. A hundred years and more, ago when the industries of Great Britain were gradually growing, this protection was not essential. She was the pioneer in the field so far as many industries were concerned. But as conditions changed and transport was cheapened and facilities for exchange of commodities were improved, the countries coming later into the industrial field had to resort to State protection. America built up her huge industries under a protective tariff—almost a prohibitive tariff. The Continental countries and even Britain’s own colonies and dependencies followed on the same lines. Now whether protection is eeonomicilly sound I am not going at this 1 huge to discuss ; but as every country must have the right to decide whether I it will build up its local industries or not—and this decision may be arrived j it on other than purely economic j 'rounds—every country must have ! die right to decide its own fiscal j policy. One of the chief causes of j war in the past has been the deter- j nination of nations to force other 1 lations to trade with them. Now so ! ong as the manufactures of acouutiy ian be absorbed by the markets of hat country itself or by friendly and 'eciprocal trade between nations all vi*l go well. .But if manufactures are oreed until it is essential that the urplns sh.dl he taken by other coiiii- i ries; and if these other countries.

wishing to establish their own indus ’ tries, decline fo trade, then s rainei relations will inevitably follow whicl _ may load to war.' ‘ Great Britain.was, and is a grea nation, a wealthy nation, a patriciai , nation. Her industries, great as they have grown, are but as it were otii department of the great national life It is only of late years that socia . recognition was accorded to tin leaders of industry. They were fore that a ■’ class apart—the middle class. At no time were the interest! of this class paramount, or allowed tc sway fclie-policy of life nation. The result is that, we have seen Greal Britain with her markets thrown open to the whole world ; with one foreign market after the other closed 01 partially closed to her trade, and yet never attempting to coerce even hex colonies and dependencies into trading with her.. We... can imagine how uttei'ly incomprehensible such attitude must have been to Germany. America as we have seen,had to resort fo protection to build up her industries. But here again we have a large and wealthy nation with huge resources, and it would probably have been generations before the position would have been acute, even if all the markets of the world were closed to her. But with the example of Germany before us the danger to the peace of the world of the industrial aspect to which I have referred must be apparent. This nation deliberately forced its industries into a mushroom and unnatural growth, at the same time preparing to force, by war, the world' to trade with her on her own terms. The criminal audacity of such policy is not likely to be followed by any other nation. The mad sxperiment has led—must lead—to the utter downfall of Germany. But though the dastardly scheme he nipped in the hud it isat such terrible cost that the lesson should remain for all time. Germany must not be allowed to benefit by a single one of those “ concessions ” she lias extorted from demoralised Russia and betrayed Ronmania. Otherwise there is no guarantee that other nations—particularly the Eastern nations—with their inexhaustible supply of cheap labor may w>C be tempted to follow Germany’s example and become a moie terrible menace to the of ihe world than that deluded nation has endeavored to become. The principle must be affirmed that eacli nation, even each unit in a national group, may take such steps as it considers necessary to build up industries to meet its own. requirements, and take these steps without fear of coercion or interference. The newer and undeveloped countries will for a time—like New Zealand and Australia—develop first their natural resources and rely on the older countries for some of their manufacturessupplying foodstuffs and raw material in exchange. But later on they too, will develop their manufactures and become units of the self-contained and self-supporting nations which will constitute the new world. For it must he remembered the future of the world will depend not on nations which can' acquire the maximum Avealtli, the inevitably unequal distribution of which tends to produce a nation of nvllionaires and paupers; but on nations which can support large populations in comfoit and security. This I venture to maintain is the vitally important international aspect of the industrial problem.