WAGES AND BUYING POWER

New Zealand Herald, Volume LXXII, Issue 22221, 23 September 1935, Page 12

WAGES AND BUYING POWER

Sir, —" Tantalus " has strangely misread my letter. I have no belief in the quantitative theory of money, and my suggestion that the Labour Party should increase wages 40 times to create a perfectly delirious boom was, of course, pure sarcasm to show the utter absurdity of their theory that raising wages of itself increases purchasing, power. To attempt the improvement of our position by raising our own wages is merely repeating the ancient effort to lift oneself by the boot straps. What increases our purchasing power as a nation is tho obtaining of better prices for our produce. It surely is " as plain as a pikestaff " that raising labourers' wages or civil servant*' salaries increases the purchasing power of these classes only at the expense of the rest of the community. If employer Siflith has to pay labourer Brown £1 more wages, it is surely clear that Brown's purchasing power is increased £1 at the expense of a loss of £1 in Smith's purchasing power. Such moves are perfectly futile, but they happen about election times. So far from doing any good the raising of wages beyond their real value does absolute harm —the same as giving a false value to money. I would remind " Tantalus that the question of contract or time debts is another story, but I have shown elsewhere the necessity of these being discharged on a goods, instead of a money basis. Indeed, if we would only think in goods, instead of in money, most of our difficulties disappear. F. Fable V axle,.