WELLINGTON NEWS

Hokitika Guardian, 11 December 1931, Page 7

WELLINGTON NEWS

THE ECONOMIST’S TASK

(Special Correspondent)

WELLINGTON, December 9,

Professor T. E. Gregory, who visited Australia and New Zealand as a member of the Xiemeyer Mission, lias written an article for the 'Royal ißank of Canada, in which he declares that “the problem confronting the world .to-day is one of will and not of knowledge. It is possible to lay down the conditions on which, and upon which alone recovery is possible, but tit does not lie within the competence of the economist to guarantee ‘that there is enough willpower, imagination and determination available to carry out the details of the solution nor that the people of the world support .their Governments and central banks if the attempt to salvage the world. The economist’s task is done when he has diagnoised the disease indicated the. remedies; the rest must be left :to the men of action.” Professor Gregory defines the present depression, for which he maintains that there is no parallel in the history of modern industrial civilisation as a “crisis of coiiifKlence” *nd a “price crisis.” Every flection of society (he declares) has a responsibility in a crisis of this order of magnitude. He goes on to say that “the public generally has the duty of not adding to the decline fit the volume of business by abstaining from its normal volume of consumption through exaggerated fears of the future. To discharge servants to abstain from the purchase of useful goods which the individual really needs in |the normal cause of existence, in order to add to the funds available for the relief of distress, is to create as much distress as is relieved. If every one, in order to help things forward, economises, i.e., abstains from expenditure, the result must be to increase unemployment. The same remark appl es ito the withdrawal of currency from hanks, to unnecessarily alarm about investments and the tike, all such actions bring about the very evil they wore intended to avoid ; they add to the existing degree of disorganisation, further 'loss ojL confidence, and further weakening at the economic structure.

Unfortunately these evils are rampant in the Dominion. People are not spending what they could spend, and what they have a right to spend. Currency is being withdrawn and hoarded and secreted in the belief that thereby safety is obtained, and also to defeat the tax-gatherer. The festive season is approaching when, by custom and tradition, increased personal expenditure is in order. It is to be hoped that those who can spend, and 'that is the bulk of the population, will brighten the Christinas trade by a more generous expenditure.

Professor Gregory maintains that a further responsibility attaches to employers and employed in relation to tile problem of wages and employment. Oh this point he- says that a reduced income is an unpleasant experience—-so is unemployment, 'but there can be no question that from the social point of view the second is much more undesirable. T.iere can be no doubt that if the general level of prices does rot murh recover from the depths ,to which it has fallen, it will be impossible to maintain both the level of money incomes and the, itrvei of employment. Society has a choice, -in a period of falling prices, between increasing unemployment and decreasing money-income per capital. The discussion of how far wage and salary reductions are necessary should, therefore, conducted in an atmosphere free from the allegations of bad faith and deliberate desire to destroy the workers’ standard ol living, which poisons such discussions to-day. But, to achieve this result i:t is necessary that there should be a much clearer realisation than generally exists of the relation between changes in the level of soiling priaes ana changes in the level of costs. Unless prices can he raised again, one condition to recovery is adjustment of costs.” In the New Year the Government' will be compelled to face Uie problem. 4