LAWS OF ECONOMICS.

Taranaki Daily News, 20 December 1919, Page 3

LAWS OF ECONOMICS.

SOME ASPECTS OP RECONSTRUCTION. AN INTERESTING LECTURE. An interesting lecture entitled "Some Aspects of Industrial Reconstruction" was given by Mr. B. E. Murphy, M.A., LL.B, 8.C0m., lecturer in economics at Victoria University (Wellington), in the pood Templar Hall, New Plymouth, last night. There was a good attendance, capital and labor botli being represented, and the Mayor (Mr. Jas. Clarke) presided. Mr. Murphy prefaced his address by disclaiming any attempt to lay down plans and specifications for the millenium. He also said he intended to keep away from current political controversies. His object was to explain the industrial unrest of the present time, which was so patent, and the steps necessary to understand and meet it. From a general point of view he aimed at a reform and evolution within the present system, and not a reconstruction on a socialistic basis. History showed that revolution would leave things worse than ever. He explained the general nature of productive activities and went on to show that the modern system of industry was based on free enterprise and competition, and was organised by private employers with the- motive of profit. This resulted in a great increase in the volume of commodities and it had certain concomitants which were largely responsible for the existing social unrest. THE HUMAN ELEMENT. The problem was, if possible, to alter that without removing the incentive of private gain. Incidental to this there was the factory system, with production on a large scale, by being organised principally on the lines of a joint stock system. This had driven the employer and the worker out of contact with each other and removed the human element out of industry, and one of the problems was to restore that element. At the present time the workers were divided and with the spread of education they were getting more and more restive. This 1 was the mam cause of unrest and of what we now know as the "go slow" policy.

Dealing with competition a3 the basis of capitalism, the speaker said competition worked two ways, cither as competition in service or in oppression Rnd fraud. One of the problems, therefore, was to eliminate the latter type of competition, which frequently resulted ill the artificial inflation of prices of the necessities of life and added to the previous unrest. Much of the world's wealth was frittered away by the idle rich in luxuries, which caused anxiety in the less favored classes and also added to cost of living, by lessening the amount of capital and labor available for the production of necessaries. Finally, said the speaker, tho moat difficult problem was the division of the product of industry. Beeause there was 110 natural principle of division it. was divided by means of a trial of strength, which made a battle between the employer and the worker. In face of these difficulties, and especially in the light of the experience of the war, the requirements were threefold: (1) a greater volume of commodities; (2) a better distribution of the world's wealth; and (3) a more satisfactory system of industrial bargaining and the settlement of quarrels. RELATIONS OF MASTERS AND MEN.

Increased production depended upon | satisfactory relations between masters and men, which would lead to the abandonment of the present disgraceful "go slow" policy, against which society had no protection. It appeared Chat the desired result could only be effected by conceding to the workers a greater share in the control of industry on the lines of the Whitley system, under which Councils comprising equal representatives of both sides sjtting continually to deal with differences, and to settle them before they get to the stage of a dispute. It was suggested that in exchange for a larger share in industrial government the workers should abandon the policy of restriction in production. The general distribution of the wealth of the world should be improved by the taxing of community created increase where administratively possible by higher death duties on every large fortune. There should also be created some public opinion hostile towards unnecessary luxury and idleness, whether on the part of the rich or the poor. The main consideration was the change of outlook on both sides, and in the final analysis it depended upon the higher development, of the mental and moral outlook. It was fundamentally a moral problem and without a change of heart and outlook no real good would be accomplished. WHITLEY COUNCIL SYSTEM.

At the conclusion of the lecture a number of questions were asked. In reply to Mr. Nash, the lecturer said that in saying that a large proportion of the workers in Great Britain adopted ttie Whitley Councils he was aware that the system had not been adopted by the miners, the railwavmen, and the transport workers who comprised that important organisation of labor known as the Triple Alliance. He was satisfied that where tlte Whitley Councils had been adopted that had tended to allay unrest by giving men an interest in control. He did not go as far a,' to say that the system had stopped unrest, because it could hardly be said that the system was in working order yet. When the system got thoroughly in working order it would tend to aliay unrest. Industrial unrest could never be altogether overcome, but the Whitley Councils would workagainst itMr. 11. Cocker pointed out that' most of the industrial unrest in Great Britain had come from the ranks of the Triple Alliance, which had not adopted the Whitley Councils. CAPITALISTIC OR SOCIALISTIC? Another questioner asked if it was a fact that under the capitalistic system there were twelve million people in Great Britain who had to face starvation? In Russia, he said, the masses were working out their own salvation, and from this comparison he asked the lecturer if he considered the capitalistic system was preferable to the socialistic system. Mr. Murphy said he believed there were about that number of people in Great Britain who were underfed. But, lie asked, how many millions were underfed In Russia? Mr. Murphy said he would be perfectly frank regarding his opinion of the capitalistic system. There I were many features about it which weri

bad, but it was a system which had not been invented by man, bat rather a system which ha i grown up It was the only system whicii the world know —it was the only tried system. Whether it was better than a socialistic system he could not say, because we had never had the two systems working together. The capitalistic system had some unplfeasant features, but so far it had done the' work of the world better than any other syti'em wt had produced. Bad as it was it was the best we were able to devise. Every attempt to inaugurate a socialistic system had broken down. INFLATED CURRENCY. In answer to another question Mr. Murphy said that high prices were due very largely to the fact that the Government very unwisely inflated the volume of the currency in the Dominion. The cost of living was also made ihigher to some extent by the industrial unrest, and there was also profiteering. He was satisfied that a great deal of the industrial unrest to ; day was due to the lagging of wages behind price levels, and this in its turn was due to the doubling of the currency of the country. THE "GO SLOW POLICY."

Mr. Murphy dealt exhaustively with the influence of the "go slow" policy on the cost of living. The "go slow" policy had been deliberately adopted by workers as a weapon to use against established society, but the worker, by retarding production, was forcing up the cost of what he produced. The weapon acted as a boomerang, for though it fulfilled its object by hitting the capitalist it also came back and hit the worker. Production was the basis of wealth. It was true that by increasing production the worker provided more capital for the capitalist, but what happened to this capital? It was not buried in the garden as wa's the way in olden days. It was put in the bank, but it did not lie in the bank as so much gold or in rolls of notes. The bank put the money out and invested it in industry and so brought about an expansion of industry. This expansion of industry made more work, and where there was more work than labor there was more money for the laborer. And finally more industry giving greater production brought down prices. Briefly, the "go slow" policy kept back production and kept up prices; but if the workers gave of their utmost there would bo higher wages for the worker and greater production to bring down prices. MERCHANTS AND PROFITEERING.

In reply to a suggestion that merchants were profiteering, Mr. Murphy said that there was no doubt there was profiteering to some extent. Where merchants could "corner" certain articles profiteering became possible, but it could not be done in the open market. It was true that a merchant made a greater profit to-day than before the war, but it had to be remembered that the turnover was different, and whenever a merchant sold an article he had to replace it. ]f he forced tho market up he had to pay more when he went into the market to purchase to replace the goods he had sold. At the conclusion of his lecture Mr. Murphy was accorded a hearty vote of thanks, and at the suggestion of the meeting he promised to pay another visit to New Plymouth.