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Hokitika Guardian, 26 August 1921, Page 2

The thoughts of many public writers turn now to economic questions which are the ehiei issues of the present world crisis. Quite a plethora of literature is being published on the question also. As a case in point, a reviewer in an English paper discusses “Prices and Wages,” a publication just issued by P. and A. Wallis, and as the subject traverses an important phase of the industrial and -price question it is of interest to quote from the review rather freely. The chief purpose of this Itook is to demonstrate the real cause and nature of exchange value or price, and the hulk of the work is the investigation of the data relating to prices. The authors have endeavoured to construct a theory of value and its distribution between the co-operating classes of its producers, based upon the idea that labour enters into cost of production and alone determines value; showing that value is created by the co-operating labour, and dees not in any way enter into its cost of production or cause the value. With this aim in view the authors start their investigations hv an inquiry into the actual nature and extent of the wealth of the United Kingdom as shown by the official report of the Census of Production. And the result of the investigation is interesting in the f;iet that it leads to the conclusion that virtually the whole wealth produced is anually consumed. As thri conclusion leaves no margin for the ( production of capital wealth, it is found necessary to reconsider the concept kin of capital. * This necessitates a rather long discussion of the definitions and theories of capital. In tin's section the authors fear that they have indulged over much in hypothetical eases, the actual data being scarce. Tint consilering the indeterminate nature of capital this might well he excused. Tn the long chapters on prices they have endeavoured to bring cost of production to its proper place in the foreground of the inquiry and show that the more or less accidental circumstances of local supply and demand are the result of price variation, not the cause. The detailed examination of various commodity prices is not only to show the common movement as evidence of a, coalman cause of movement, but to illustrate the constant adjustment of supply and demand, and point out the relation of those adjustments to the labour cost of the special commodity, gold. “It is probably the impression Hint prices of commodities vary up and down while the labour time in the production of these commodities remain the same, that has been chiefly responsible for the idea that prices do rot depend upon cost of production.” An important reason for a conscientious study of prices is to get the proper understanding of the constant adjustment of supply and market prices to the ical but unknown cost of production or normal price, liecause such undertaking will alone enable us to grasp the tooth'-d l v which the theory of ■■nine may bp demonstrated by experiment.

This test of the theory by the scientific method of experiment is explained in Chapter IX., frith examples of actual experiments carried out-. This demonstration, perhaps, constitutes the really unique feature of the work. The remaining chapters explain how the adjustments of supply and market price to the normal value determined hv social labour time bring about the circumstances that determine the distribution of the value produced between the cooperating capital and the labour that produces it; and also bow all the more important phenomena, of the production and distribution of wealth are related and dependent upon this law of value.