FUTURE GOVERNMENT

Rotorua Morning Post, Volume 2, Issue 587, 19 July 1933, Page 6

FUTURE GOVERNMENT

OfPost" Special Commdssioner.)

SERIOUS PROBLEMS OLD SIMPDE METHODS OBSCURED BY ECONOMICS WORK FOR EXPERTS

Wellington, Saturday. How far 'are governments orgamised to handle economic tasks? In view of the steady encroachment of" politics into the sphere of economies this is a question that may have to be answered in the near future. The question has got far beyond the stage of academic discussion. Immediateljy the State imposes reigulation on industry its1 function no longer becomes purely political and the consequences of its action will react elither to the economic betterment or the detriment of the people. There is no doubt that in many cases the State has been forced to extend operations into industry, in facty it has been spurred on to take action at times by the industrialists themselves. The early factory acts in England, the anti-slavery laws, and the anti-sweating legislation were widely supported by the better class of industrialists. These men realised, however, that, unless State regulation was imposed, they could not put their human'itarian principles into operation independently, as their less scrupulous rivals would undercut them on the market where they sold their produce. The history of\ tariffs is a history of agitations for State action against foreign competition. The raising of the exchange rate in New Zealand is another instance of action by a government outside the traditional field of politics. It will be remembered that when the question of rais- ' ing the exchange was first mooted the Prime Minister (the Right Honi G. W. Forbes) said that it was a matter for the banks, but subsequently the Government took the responsibility for the artificial exchange upon itself. Taxations or loans raised by governments for State economic enterprise are important examples of the departure of the State from its traditional functions. These loans shift the flow from one direction imto another and the wisdom or otherwise of the action of the State must be judged by the effect it has on social and economic welfare. A Possible Committee. In the course of a discussion with the delegates to the New Zealand Farmers' Union conference this week, I the Minister of Finance (the Right • Hon. J. G. Coates) said that he favoured the setting up of a Parliamentary committee to inquire into the monetary system. Should this committee make recommendations and the GoI vernment act .on them, the consequenj ces might be far-feaching in the extreme. There is no lack of bsnking and currency schemes amongst members of Parliament, and the willingness of a Cabinet Minister to allow them to set up a committee of inquiry constitutes an important departure from the orthodox attitude of the past on this momentous question". j Among Parliamentarians there are several distinct schools of thought on financial matters and some of them do not appear toi have a scientific basis 1 for their beliefs. Headed by the Hon. W. Downie Stewart, there is a group ! which contends that it is not the func- , tion of the State to interfere in banki ing problems, and at the other exj treme there is the Labour Party which i stands- for a State bank and the State i control of currency and credit. | There are some who are inclined to the Douglas credit proposals and j others who are straight-out inflationists. Thus one would not be surprised at any .proposal which would emerge from the deliberations of a committee drawn from such diverse opinion. Fimctions of Government. It must therefore be seen that the ' question of the eapability of governments, organised as they are, to grapple with economic problems is an imminent one. Historically, governments were not devised to administer economic enterprise. Their primary function was the maintenance of in- ! ternal peace and defence against ex- ' ternal attack. This involved defence, ^ and, therefore, taxation. Representative government grew up as a method | of protecting the taxpayer against the | government by exploiting the Gov- ; ernment's need of taxes to impose ' conditions. Now parliamentary government, which grew out of this representation of taxpayers, is admlirably adapted for the purpose for which it was devised — for the superI vision of taxation and the regulation • of social relations by law. "But those were the days when our ancestors re- ' garded death, war, plague and famine as manifestations of the hand of . God," writes Professor G. E. G. Cat- ; lin, "when less was expected of legislation, and when the simpler problems | of a less exaobing age could be dealt j with, by a f ew gentlemen, amateurs at Westminster or at Washington." I To-day the world of politics, as the I world of physics, is a world of natural fact, and its complicated processes are to be observed, understood and controlled only by patient study and research. Is this control consisti ent with what Mr. H. G. Wells calls | the "immense inattentions of niankind?" Government is a technical business, vastly more cofnplicated than that of any industrial concern, although resembling a great business enterprise in its problems of efficiency and management. It is this problem of management which is so pressing at the present time. Here in New Zealand the Prime Minister, a farmer, holds the portfolio of At-torney-General and another farmer memiber of the Cabinet is Minister of Justice. In the ordinary course of events either one of these two men will have to pilot the proposed new company law through the House of Representatives. In the Legislative Council a member of the legal profession, Sir James Parr, as Leader of the Council, will no doubt have charge of the bill, but it is evident that neither Mr. Forbes nor Mr. C'obbe have the experience or the knowledge to take charge of such a complicated piece of legislation during its passage through the Lower House. Now that Mr. Downie Stewart is out of the Ministry it is just a question as to whether any member of the Government would be able to throw any

profound enlightenment on the necessity or otherwise of the Central Reserve Bank Bill which 'was held over last session, but which will, according to Mr. Coates, come before Parliament again next session. After| all a Minister of Finance who has followed a walk of life in which finance has been a minor aspect cannot be expected to be able >to embrace the ramifications of a wide and complicated projblem to which men are devoting their whole lives. However, if he recognises his shortcomings signal progress may be made in the art of government. It has been said that in the work of government, there is a real need for an enhancement of the sta.tus of the expert, and students of politicaf science, like Professor Ziibbern, are to-day engaged in the task of dovetailing the duties of the democratically elected politieian and the expert in such a way as will provide scientific progress in social and economic welfare. This school of thought urges that the problems of politics to-day are complicated problems and that by bringing in the expert into consultation, the people may increase their "control over their environment," especially over social environment, in which Professor Zimmern finds the essence of civilisation. "The means for controlling our environment exist," he states. "The necessary facts are known or can be ascertained through research according to known methods. . . . To-day in the bewiildering mass of our problems, thev association between scientific inquiry and the art of government has become a prime necessity." In economies, it is just coming to be realised that, if the currency of a country is to be rehabilitated, not politicians but professional economists must be called in. In England this policy is more widely recognised than in New Zealand, and if Mr. Coates's suggested Parliamentary committee for the investigation of banking and currency is set up, it would appear

that the Dominion is revertdng from enlightened modern practice. It may be that the time will come when to dogmatise about education or .social legislatinon without consulting the psychologists will seem a temerity. An American psychologist has put iit, "the recent progress of psychology has been very great, but it is only beginning. Until it has gone further we can do no more than speculate and sketch the development of the political life of mankind . .. Until knowledge has been sought and beaten out, we are workers without tools, soldiers without weapons. But, as a country and its government moves in the direction of at tama ng that knowledge, it is likely that all sections of the community will find "the idea of wilful and creative" change in social and political environment by technicail methods more comprehensible and more congenial. The fruitfulness of the world of the expert, however. depends on the attitude of the practical statesman.