THE WORLD’S PRODUCTION

Manawatu Herald, Volume LI, Issue 4508, 23 September 1930, Page 1

THE WORLD’S PRODUCTION

The theory that the present economic position was brought about by the overproduction of raw materials has been criticised by the Times Trade Supplement as not being an entirely satisfactory explanation. Since many millions of human beings are inadequately supplied with food, raiment, and shelter, it seems absurd to blame over-production when the real difficulty is clearly under-distribu-tion. “'The point is not merely of academic interest it is of practical importance,” the writer continues. “If the idea of over-pro-duction becomes an obsession the tendency will he to seek a remedy in restriction of output, which as a policy is retrograde and futile. The proper approach to the problem is from the other side. If something could be done to enable these millions of very poor people to purchase all that they need it would probably be seen that overproduction was non-existent. It follows that the proper remedy for the present deadlock is to increase the potential purchasing capacity of the power consumers

The present position is that workers in manufacturing industry and in sheltered occupations are relatively so much better paid than those engaged in primary production that the latter are unable 'bv the sale of their products to make enough to buy manufactured articles. Bence the slack demand for raw materials of which they are made. T'lie want of relativity between the emoluments of the primary industries and those of the secondary industries is the real cause of the present stagnation of trade. WSheii, therefore, measures are taken to maintain an arbitrarily high standard for a

section of the workers the inevitable result is to reduce the number of them that can be profitably employed on that scale and to perpetuate' a state of affairs in which .he primary producers are unable to obtain a full share of the world’s wealth.” THE REMEDY KOI? BAD TRADE.

A similar interpretation oil the problem was advanced in a letter to the Times iby Mi* Ernest J. P. Benn. Discussing- (Conditions in Britain, he wrote: —“I have never discovered an estimate of the relation of oversea business to our total home trade which satisfied me, Ibut it is, I believe, over-opti-mistic to suggest that imports and exports are worth To per edit, of our total business of all kinds. If that exaggerated percentage be accepted, then the trade which we I do with one another at home amounts to rather more than £13,000000,000. If, again, we may assume that employment is roughly proportionate to the volume of trade and unemployment proportionate to employment, then we may say that seven out of eight of our unemployed are home traders, and this thought, in so far as it is true, makes rubbish of seven-eighths of the suggestion that unemployment is due to world conditions. From which it further follows that many of our unemployed are in that condition because we will not work for one another at the price which the other thinks Ht to pay. Unless, there is some vital flaw in the argument, it seems as if the remedy

for much of this unemployment trouble is in the hands of each and cvcrv one of us. . . . Mv

suggestion is that our economic difficulties are very largely due to a. widespread and futile endeavour to secure rates and taxes or wages and prices without regard to the value given. It is not only a ease of rates and taxes and Government departments, but of every trade union and other trade organisation which is trying through force to squeeze wealth out of <fche rest. . . • If it is true

that our- goods are dear, first, because we will not make them at a proper price, and next because that unreasonable price is further inflated by public -expenditure, then the remedy for bad trade is in our own hands."