TRACTS FOR THE TIMES.

Auckland Star, Volume LXIV, Issue 211, 7 September 1933, Page 6

TRACTS FOR THE TIMES.

- THE WORLD CHANGES. (By PRO BONO PUBLICO.) I wish everyone could read the two articles in the "New Statesman," in which Mr. J. M. Keynee has explained how and why he has drifted away from his old position,. as a free trader and an economic internationalist. When you remember that he was brought up to regard free trade not so much as an economic doctrine but almost as a moral law, and when you find him now expressing toleration of economic nationalism, you realise that a revolution has been taking, place. "The nineteenth century," he says, "carried to extravagant lengths the criterion of what one can call for short the financial results as a test of the advisability of any course of action." The nineteenth century, in fact, always asked the question, "Does it pay?" and if an individual, or a city or a State could not show a money profit on enterprises those enterprises were written down as failures. "The whole conduct of life,' Mr. Keynes says, "was made into a sort of parody of an accountant's nightmare." He is thinking of State and municipal activities, of course, "rather than of individuals, because -in regard to many activities of individuals the pecuniary tests are unavoidable. But the State, he argues, cannot be regulated and governed by the test of the accountant's profit. That there is a pronounced trend of opinion away from nineteenth-century ideas is, I think, undoubted. We can see it in many directions, but principally in the anxiety of tho nations to be self-sufficient. The meaning of this, as I understand it, is that the nations are realising the importance of looking after their standards of livin<* and of comfort and that these standards cannot Safely be left dependent on foreign trade figures. Hitherto the world has been run on the principle of the international division of labour. We bought in the cheapest .market. Now, I think, there is a swing almost to the other extreme, to the view that it is always cheaper to make a thing yourself if you can, whatever the cost of it. - It is admitted that national self-sufficiency may be more costly than economic internationalism, but Mr. Keynes thinks that the extra cost may be outweighed by the advantages accruing. As wealth accumulates, he says, both primary and manufactured products become relatively less important houses, personal services and local amenities; and, moreover, nowadays manufactures can bo carried on equally well in most countries, so that the advantages of the international exchange of products are not so obvious as they used to be. Discussing this question from another angle, we find that we can "afford" many things that previously seemed dangerously extravagant. Mr. Keynes suggests that if the money spent on the "dole" in England had been devoted to the improvement of cities the cities would by now be amongst the greatest works of man in the world. Slums were built because people thought they could not afford to build palaces, but in truth the slums proved the more costly.

The general conclusion is that the world is passing ?rom the doctrine of the nineteenth century, "it is experimenting, sometimes rashly, but it is clearly very important that wo should try to understand where the changes are taking us.