PUBLIC OPINION

Waikato Times, Volume 127, Issue 21187, 9 August 1940, Page 7

PUBLIC OPINION

As expressed by correspondents whose letters are welcome, but lor whose views we have no responsibility. Correspondents are requested to write in ink. It Is essential that anonymous writers enclose their proper names as a guarantee of good faith. Unless this ruie is complied with, their . letters will not appear.

NEW SOCIAL SYSTEM

(To the Editor) Sir, —Mentalities, the result of their environment, who look upon the New Zealand Cup as the most outstanding event of the year and the Turf Guide as a library in itself, and their conversation limited to Hitler, boxing, brands of beer, roads, sheep and petrol, seem to have a notion that after the war there will be a new social system because society will be reconstructed. Let me try to prick the bubble about the reconstruction of society. It is as meaningless a phrase as the reconstruction of the body. You can only reconstruct a lifeless, stationary mechanism, a steam engine, a dwelling or a motorcar, etc., but not a living and progressive organism. Why? Because a living and progressive organism is automatically subject to the law of change. Consequently, any attempt to artificially reconstruct a living and progressive organism which is subject to the law of change may result in death and destruction. Of course there will be a change, there is nothing new about that. Tlie living organism, society, has changed ever since the dawn of history to the present time, and will continue to do so by virtue of law. Hence we can only enunciate those conditions under which alone the free contract becomes a reality, always bearing in mind that limits of individualism by State interference determine exaggerated luxury at the top, flunkeyism, ignorance and arrogance in the middle, poverty, hunger and want at the bottom.—l am, etc., HARRY WOODRUFFE. Auckland, August 7.

WAGES, PRICES, INFLATION

(To the Editor) Sir, —In recent applications to the Arbitration Court for increased wages, the applicants base their claims upon the increase in prices. This has been met by a warning against the danger of prices and wages chasing one another and causing a “vicious spiral.” Under normal conditions prices are controlled largely by supply and demand. The purchaser can turn to alternative goods when certain lin»« become too expensive. In time* of war most of the usual checks on price increases disappear, and at the same time the costs of production, other than wages, increase. If wages are increased to meet

every rise in prices it must be remembered that these increases iovat" direct and further increased cost of production. And as one industry is often dependent upon the production of other industries the increased cost is cumulative where the manufactured article has to pass through more than one process. For instance take the number of processes through which wool has to pass before it becomes clothing. If every process has been granted an increase in wages the cumulative extra cost is very large by the time the cloth is made into a suit of clothes. Unless some form of price control is imposed, the extra wages, by providing more purchasing power on a market which is being depleted of goods owing to the war, it would automatically cause a rapid increase in prices, for the law of supply and demand would operate. Thus the higher money wages would purchase less and the £1 becomes of less value. This is inflation. In New Zealand the policy of price control is being tried and to some extent it helps, but it is not enough. The point is reached when a rise in price must be allowed to meet the increased cost of production due to an award for higher wages. This is now occurring in New Zealand, and proves that even controlled prices must be allowed to risl to cover the extra cost in wages. Then wages will again be increased to meet this rise, only to be followed by another rise in prices to cover the extra wage and so on, with the effect that wages will not be able to catch up with the rising prices. It is like a dog chasing his tail. What is the remedy? This is difficult to say, but it seems to us that if inflation is to be avoided the answer to a slight increase in price* due to war conditions is to economise in non-essential expenditure. It is better to deny oneself a few thing* than to demand more salary or wages only to find prices rising again and rendering those wages less valuable. —We afe, etc., N.Z. WELFARE LEAGUE. Wellington, August 5.