The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, JUNE 17, 1931. ECONOMIC PRODUCTION.

Hokitika Guardian, 17 June 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, JUNE 17, 1931. ECONOMIC PRODUCTION.

Economic production by -which goods are produced at a price ensuring general demand is discussed in one of the latest American backing journals, the columns of which are revised by those fa,mihar with big businesses, ami therefore more qualified to discuss international finance, The writer at the outset deals with machine economy, the saving in production costs, brought about by mechanical power, in lieu ox manual, and thereby decreasing avenues for employment, and proceeds: There are three fundamental factors in the modern industrial organization which together afford a better explanation of its difficulties than the one offered by the machine economy. They are (1) that for the sake of greater productivity we have developed a very complex and (independent system, (2)..that it is a free system, allowing individual initiative and action not only to all proprietors of industries but to all contributors in any capacity. and (3) that the human kind, whether engaged in the- industries, the universities, the churches, the practice of statesmanship, or any other line of organized effort, has not vet developed a very high capacity for harmonious co-operation. Emerson said that the best test of the civilisation of any people was “facility of association" meaning the ability to understand each other, get along together harmoniously and work together tor common purposes. It must be lecognisod that by this test society does not anywhere manifest a very high degree of civilisation. The task of regulating armaments, which rests with a few governments, would seem

to be an easy one in comparison with

the task or maintain,,ng business stability tiie world' over, it is often said that the economic organisation lias ueveloped beyond the understanding oi tue common man. He does not understand his own part in it or the benelits he derives. The organisation is a wonderful uevelpjinhiiL, which lias taken lorm without a,.y comprehensive plan, muter L.e sueiit direction of economic law, for the purpose of supplying the needs and wants of the population. Tins is an age of specialised effort and an exchange of services. 'The organisation is luce a great machine, in which every part is dependent upon every other part, and tne efficiency of the whole is dependant upon balanced relationships and co-opeialive effort throughout; hut so low is the “facility of association,” that society tends to break up into groups, blocks, factions and organisations of various Winds which expend most of their energies in fighting each other, and thus very greatly impair the efficiency of the organisation as a. whole. What is wanted of course is the largest possible flow of goods and services from the organisation 3,s a whole, accompanied by the ready distribution and consumption which will clear the markets and staois© production and prices. Since the system, .although for convenience functioning by the use of money aaid credit, is really one of refined barter, it is of the first importance that the offerings shall come on the market in proper proportions, also that their exchange relations shall not be sudden1, and radically etianged. Any disruption of these balanced relations to which production and trade are adjusted will throw the whole system into confusion, for unless each group of producers is able to dispose of its products or services on the accustomed terms it cannot make its usual purchases, industry slows down, unemployment results, and we have what is called the mystery of unemployment, “with milieus to work limit suffering want in the midst of plenty.” This general situation may be illustrated by the organisation of any single industry of numerous departments. It is said that a pair of shoes in the making passes through thirty or more processes by different workers. Evidently all of these departments must be in balanced relations, or there will be last time, inefficiency and waste, with the result that the output of the factory will he lessened, the profits of the business will be lessened, if the pay of the workman is by the pie e their earnings will (be lowered, and if the condition 1 is chronic the business will bo eliminated by the competition of more efficient rivals. Balanced relations are secured in a private industry by the supervision of the management, but there is no such over-head control over industry as a whole. Our industrial system is a voluntary system. Everybody is expected to find L-s own place in it. Whatever business relations we have with each other are by mutual agreement or common consent. It is evident that the equilibrium in industry and throughout the business wond is the fundamental condition of prosperity, and increasingly so as business becomes more highly organised. It was of the minimum importance before the use of power machinery and railroads, when each small community was in a large degree self-supporting by means of hand tools and the household industries. With modern machinery and mean of transportation and increasing world trade, the sitution is more complex, with greater danger of 'ma 1-adjustments which disturb the equilibrium.