INDUSTRIAL PROGRESS

Hokitika Guardian, 13 February 1929, Page 2

INDUSTRIAL PROGRESS

THE NATIONAL VALUE OF MANUFACTURES. A. summary of remarks by Mr F. L. Hutchinson, Vice-President, in proposing the toast of “ Industrial Progress ” at the annual meeting of the Canterbury Manufacturers Association. Industrial progress is the most serious concern of all nations and govern inents at the present day. The problems of Political Economy are more serious .than the old contentions of party leaders and the balance of power. THE GROWTH OF OUR NATION. New Zealand has come, to the period in her evolution when manufactures must be developed; otherwise stagnation and depression will get worse than it is now. We have gone through our earlier stage of agrarian development, and, like other new countries who have gone through the same stages, we must develop . industrially. The United States, Canada, Australia, South Africa, the Argentine—all have begun with agricultural growth and have then developed their cities with a manufacturing community. I have no sympathy with those who decry the growth of cities. They present the greatest, problems, hut also the greatest possibilities of advancement in education and a higher life for the people. How are we to develop the secondary industries which, whon the primary industries are established, are the only things which can give decent conditions of life and then leisure and happiness to the mass of people. We and the men who work for us and with us in our factories are the mass of the people. We must give them good conditions of life to bring up their families and something to look forward to in later life. ' We are really one with them, and unless we help them we shall be involved in their degradation. Sixteen years ago 1 was paying 3d

per hour—2s 6d per day of ten hours—to men in agricultural England, and it ' wa s a shame and a scandal that such tilings could he. Rut for the impelishahie humour in their hearts, they Were no bettor than seifs. Heaven forbid that we should ever bring our workers to this state. Some ate getting perilously near it now, with unemployment

and short hours. • We are told that many of our secondary industries in New Zealand had better he abanodned. It has even been said that the woollen and other industries are cankers in the community, that the country would he better off if our hoot operatives were pensioned off—boots allowed to. come in free of duty, and so on, and so oh. Our economists tell us that “as a general principle the case for free trade was absolutely 1 unchallengable. ,, lam quoting 'the words of a lecture given by a professor of economics last year. Sentiments such as these are echoed by the Government of the country, and one hears them in Ministers’ speeches and the words of Parliamentary candidates. All this is very depressing and makes us think that wo must be wrong and that in some mysterious way all would come right if we could bring ourselves to abandon tlio fight for our workers Jivings and the capital of our shareholders and throw our markets open to the world. It is true that the U.S.A. and Australia and European countries have succeeded and flourished under protection. We must assume, however, that this has been inspite of doing wliat our economists say is quite wrong. England in her industrial era grew rich through her manufactures, and free trade did not affect the issue. The passing of the Corn Laws gave cheap bread to the people, and oil this account free trade is venerated in Eng* land, but seventeen years ago, when the tide had turned and manufactures were sent into her country, she passed the Safeguarding of Industries Act, and Mr Baldwin had said that the experimental stage is past, and that few people would maintain that the experiments had not been successful. All sciences had profoundly changed in the past few decades, and the science of economics, based upon very uncertain premises, had changed too, hut this change very little known in New Zealand. We have felt that there is something wrong with the science as taught in New Zealand, but cannot, in the face of the text-books, define what it is.

FREE-TRADE FALACIE9. Modern economists, however, take a different view, and John S. Hecht, a Fellow of the Royal Economic Society of Great Britain, in his monumental book, “The Real Wealth of Nations,” published in 1920, throws a brilliant light upon the obscurities of the subject. He flatly contradicts the dictum that Free Trade is absolutely right in principle, and that we should sell in the dearest and buy in the cheapest market, etc. He says : •“ Universal Free Trade means the most intense economic war among all nations, with victory to that one content with the lowest standard of living.

“ Underselling by one nation of another, or Free Trade, permits unlimited competition, waste, and the degradation of humanity. Free Trade can now be recognised through all its disguise as false, artificial and selfish, and materialistic. It allows those who are crafty or grasping to exploit the helpless, uneducated, and unsophisticated classes, while a Protection based on the value produced per worker is natural, national, and moral, defends the weak nation against the strong, right against might*

“Free Trade, by preventing the establishment of skilled industries, compels labour to remain m those wliirii are unskilled and badly paid, and which, producing less value per worker, lower the amount of wealth available for distribution. . . Free Trade, by diminishing the wealth share oif each individual, lowers the purchasing power of money, and increases the real price of commodities.” Hocht says that each nation has a right to its own industries. “The first clause in the charter oi

every nation is: ‘THE FREEDOM TO PRODUCE.’ “ A civilised and educated nation should he able to choose its industries for only uncivilised or misguided people are compelled to submit to economic slavery. “ As an industry cannot exist efficiently without a market, and as it i.= undeniable that every nation has a right to its own industries and economic development, it must have a right to its home market, and therefore should itself decide whether a portion slioukl he surrendered or not . . . and to lose the home market without ade quate compensation is to-hetray the nation’s vital interests.

“ It must be recognised as not merely right, but the duty of every nation to keep such industries inviolate; to neglect to do so is to commit economic suicide; ... it must at all costs preserve its market . . . against all international competition whatsoever. “ A nation is justified in reserving to itself its whole market for the products of its skilled labour, for otherwise its industries cannot he efficient. “ Thus, prohibition of imports of all such products, to the extent of the nation’s utmost capacity to produce for itself, is right and desirable.” CREATING WEALTH FOR OURSELVES. Hecht shows that real wealth is attained by employment of skilled \\Olivers with efficient machinery, turning raw material into valuable products in their own country, so that the wealth produced remains in the country. He says:

“If we buy at a cheaper price from a nation with a lower standard of living an article which we also make ourselves, we compel our workers to accept the same low standard.”

“An article produced in a skilled industry should represent a high value per worker, and therefore a. high wealth wage, . . and even if the workers producing this article get exhorbitant wages, so that the home price was excessive,-indicating an unfair distribution of wealth, the nation would lose if a similar article were imported from abroad merely because its price was cheaper,, and the products of unskilled labour were exported to pay for it. In such a case the nation would actually he poorer hv the whole of the wealthwage, probably exceeding by far any price difference.” By wealth-wage he means the value produced above what is required to keep the worker and his dependants, apart from luxuries. What the worker produces above the cost of keeping him is to the wealth of the community. In unskilled work this is very little, but in skilled work, with machinery, it is veryhigh, so that the whole community benefits, and real wealth, education and leisure come to all. INSANITY AND SUICIDE.

To throw your skilled worker out of employment is therefore suicidal, and to say that they had better go on the land to relatively unskilled work is sheer lunacy. It would degrade this country to those terrible conditions I referred to before.

We have a right to 'our industries, just as we have a right to our homes and to our property. No nation, not even the Old Country, has a right to interfere with our industries by tills commercial invasion. As Hecht reminds us:—“This principle of non-interference and recognition of the right of each to its maximum economic development is essential, no.t only to the peace of the world, but for the very existence of small nationalities.”

“ The more wealth produced - and available, the greater is the possible share of each individual, and consequently the most intensive wealth-pro-duction should be the first care of every Government.” Hecht defines wealth as anything tangible or intangiable beyond man’s immediate necessaries of life, which contributes to the welfare or improvement of the human race.

Instead of producing wealth in our own country, we have steamer after steamer unloading at our ports the products of other nations’ work—England, U.S.A., Canada, France, Germany, Czecho-Slovakia, Switzerland. They are grinding their workers down to poverty-level and lower, so as to beat our markets. We do not really help them; we ruin ourselves.

Hecht points out that a great appearance 6f prosperity is given in the carriage and handling of goods, and the dealings of the merchants, but this does not add to the nation’s wealth. “It is the importers and exporters who benefit by the exchange of goods. They flourish at the expense of the workers when products similar to their own are imported in exchange.” The workers are also to blame; they insist on on buying their requirements in the cheap imports and at the same time want a high price for their labour. They think the employer can he forced to pay a bight wage, and only find themselves, as a result, out of work. This is where legislation should come in. No person, no shop or business can stand against competition by lowpriced goods. They are forced out of business by others who deal in the lower-priced goods. Legislation must help us. If it is right to persuade people to buy Now Zealand-made goods —a course which, if carried out, would meuu protection of our industnes it

is surely right to arrive at the same result by legislative means, so putting everyone on the same footing. Ministers of the Crown go around the country advising everyone to.buy New Zealand-made goods. Jf this i in the interests of the country, which they claim it is, why should they nol enforce it by law? CONCLUSIONS.

If you want authority for saying that the true way to bring prosperity to this country is by a development of its secondary industries, you have the authority now in the views of the newer economists, who clearly show m that the importation of overseas goods however cheap, while our and women remain idle or are forced ■

poorer jobs, does not add to, hut takes away the wealth Dominion. As the truth of these views is recognised, a new day will dawn for this Dominion.