The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo and The Sun. TUESDAY, FEBRUARY 24,1931. THE MADNESS OF MR. LANG.

Auckland Star, Volume LXII, Issue 46, 24 February 1931, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo and The Sun.

TUESDAY, FEBRUARY 24,1931. THE MADNESS OF MR. LANG.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, And the good that toe can do.

Mr. Lang has already established his reputation as a muddler and blunderer of the first order in the sphere of economics and finance, and his address to the electors at East Sydney does not in any way detract from his prestige in these respects. However, his latest remarks serve to throw a little additional light upon the extraordinary mental confusion by which the Premier of New South Wales is apparently afflicted when he tries to explain his views on questions of policy. The two main features of Mr. Lang's pronouncement are his proposal for scaling down interest and his suggestion for the establishment of currency on an entirely new basis, apparently with "goods" as the standard of value. In criticising these suggestions we are to some extent handicapped by the suspicion that we do not understand precisely what Mr. Lang thinks he means by his policy. But in any case it is not a difficult task to reveal the folly and futility of this new economic gospel.

As regards the rate of interest, it is easy to talk about "scaling down all interest charges," but extremely difficult to explain how it could be done. The rate of interest, generally speaking, represents the relation between the available supply of loan capital and the demand for it, and if the supply is small or the demand great, then no amount of legislation or coercion can ever prevent people from borrowing or lending at high rates. Of course, Mr. Lang's proposal to reduce interest charges by force is absolutely inequitable and immoral, as it means the confiscation of property secured by due legal provisions. But seemingly Mr. Lang's conscience is not particularly sensitive on such points, nor is he even concerned to ask how public or private credit could survive the shock of such shameless repudiation. His final suggestion, that "goods" should be substituted for gold as the "standard" of cui*rency is a masterpiece of fantasy. If Mr. Lang means that the volume of currency ought to vary with the supply of goods, he is only repeating what J. M. Keynes and Irving Fisher and many orthodox economists have said before. But if, as seems probable, he means that "goods" should regulate price through their cost of production, he is simply reiterating a threadbare Marxist formula which has been exploded and rejected long since by all the ablest Marxians of the age. However, there is little to be gained by attempting to make sense out of Mr. Lang's speeches, and one can only regret that the people of the Commonwealth are for the time being at the mercy of such ignorant, reckless and irresponsible politicians as the Premier of New South Wales.