Wairarapa Times-Age FRIDAY, OCTOBER 18, 1940. AN ECONOMIC INQUIRY.

Wairarapa Times-Age, 18 October 1940, Page 4

Wairarapa Times-Age FRIDAY, OCTOBER 18, 1940. AN ECONOMIC INQUIRY.

A. HARSH critic might be inclined to say of the report presented yesterday to the Economic Stabilisation Conference—a report prepared by the general committee set up by the conference last month —that it does little' more than stress the obvious. It is, of course, clear that the committee, including in its membership representatives of employers and employees —people normally of more or less sharply opposed political and other views—had a difficult task in hand. The report states that the recommendations made “are a reconciliation, for war purposes and for the war period, of different points of view.” Dominating the deliberations of the committee (it is added) has been the common opinion that each interest should ask what it can give for the common cause rather than what it can get for itself. In this, at least, the committee sets a standard which all sections of the community should be very willing to adopt and act upon in the great and terrible emergency by which, as a people, we are faced. What is needed, however, where problems of war economic adjustment are concerned, is a practical lead, and in that matter the report of the committee is disappointing. . From a body of men representing workers and employers, possessed among them of a great deal of experience in the conduct of trade and industry, and no doubt sincerely intent on sinking their differences for the time being, rather more explicit proposals and recommendations might have been expected than those that have been presented. On the whole the committee touches too lightly on questions of costs and prices and on the perils of inflation. The evidence before the committee (the report observes) indicates that there is a tendency for purchasing power to exceed the value of the goods available for consumption, and such a position reveals an inflationary tendency. Currency inflation is the most cruel and least scientific method of making a levy on the people. It presses most heavily on the poorer members of the community, especially those who have large families to maintain, and those on small wages or fixed incomes. Indeed, every wage and salary earner finds that the cost of living keeps ahead of his wages and thus his standard of living is reduced. In short, if these difficulties cannot be overcome, the poorer people in the community will suffer most by shortage of goods and increased prices. The most effective method of overcoming these difficulties is to secure increased production. Much more than a tendency td inflation already exists in this country. The fact of inflation is apparent in rising living costs and in a definite check in some branches of trade. The Arbitration Court already has found it 'necessary to grant a five per cent cost of living bonus to award workers, a temporary and ineffective remedy even in the ease of those whom it benefits for the moment and one which intensifies the problem of risingcosts and imposes an additional hardship on all people of small fixed income, including Social Security and other pensioners. In these circumstances, the committee might have been expected to set sharper and more explicit emphasis than it does on what it correctly describes as the most effective remedy—that of securing increased production. It deals only in rather general terms with this question, however, and so far as primary production is concerned it may be said to leave the whole problem in the air. Commenting on the difficulty of obtaining an adequate supply of farm labour, it recommends “that the Government give serious attention to overcoming this difficulty which, in the main, results from the disparity between labour conditions on farms and those obtaining in other occupations.” Some attention might profitably have been given by the committee to the contention that it is impossible in existing conditions to make farm employment as attractive as employment in other branches of industry. Many dairy farmers, for example, say that though, as,matters stand, they can make a living, the present range of costs, established largely by the conditions ruling in other branches of industry, makes if uneconomical for them to employ labour. As to industries other than farming, Hie committee recommends that-every effort should be made to bring about an increase in production by any or all of the following measures:— “(1) An adequate supply of materials. (2) The best possible use of available labour. (3) Additional hours of work where found necessary.” This again amounts to rather vague and timid advice. It may be agreed out of hand that as regards both imports and local production methodical efforts should be concentrated on obtaining the materials that are most needed. From a committee broadly representative of employers and workers, however, some more explicit pronouncement might have been expected on the question of increasing hours of work during the war period. This is a war of survival and the economic deprivations it occasions fall most sharply on people of small and moderate means. These are the very people whose hardships might be alleviated, in many instances, by a moderate increase in working hours in factory and other industries. Our mechanical and other equipment in this country for the production of consumers’ goods is somewhat limited. It is on that account so much the more necessary that it should be used to the greatest practicable extent. A reasonable extension of working hours, not in itself involving anything that can be regarded as an undue sacrifice in time of war and in comparison with what is asked of the members of our fighting forces, might he made to benefit the whole body of consumers, and -wage-earners and their families most of all, by increasing and to some extent cheapening the production of goods and by raising real wages. It is in its failure to open up this question in a practical and positive way, as a means of strengthening and sustaining the community in its war effort and setting what limits are possible Io the- deprivations and sacrifices the war entails, that the report of the committee of the Economic Stabilisation Conference is most disappointing.