BOOMS AND SLUMPS.

Auckland Star, Volume LXVIII, Issue 72, 27 March 1937, Page 8

BOOMS AND SLUMPS.

A well-known economist warns Britain that when she ceases to employ a great number of men making war material it is probable there will be a slump. If Britain is called prosperous when great numbers are engaged on economically useless work, surely she could be at least equally prosperous when these men are released for gainful employment. So also New Zealand is warned that when we cease to employ men on public works there is a prospect of a slump here. Reading the opinions of economists and leading citizens, I have been struck by the apparent failure to recognise that there is something radically wrong with our economic system when slump conditions are brought about in the circumstances mentioned. We have an army of men making roads, etc., who, of course, do not produce consumable goods; also thousands unable to obtain work and forced to live on sustenance. In spite of this we send out of the country enormous quantities of foodstuffs and wool. If the men on public works cease work will our output of consumable goods lie lessened? With the aid of these men should it not be greatly increased if necessary? Well, then, as production has not decreased, why should anyone be denied full and plenty when pirblic works cease? For years we have been told by the Press and public men that New Zealand's prosperity depends on the export trade, so it is little wonder the farmers and many others believe it. There was never a more fallacious statement. Our prosperity depends, not on what we send out of the country, but on what is consumed by the people in New Zealand. We may ina*ease exports tenfold, yet while there are numbers of people within oirr borders on short commons, the country cannot be called prosperous. If Britain is blockaded, how long can she subsist on finance? Seeing that finance consists of figures in a book and finance is the only thing required to enable a nation to have permanent prosperity, why have a slump? It requires real effort to produce food and clothing, but the difference between £10 and £10.000,000 is the effort required in writing the six noughts. If people are willing and able to produce all our requirements and ara only debarred from so doing by finance, then finance has fallen down on its job. If money fails to distribute the goods produced, it faik in its fundamental duty. The suggestion that the Government and others refrain from spending is like cutting off the water from the water wheel and expecting the mill to produce to full capacity. Prosperity depends on spending, and when spending ceases, the damp begins. It is wise in prosperous times to tax heavily and pay off interest-bearing debt*. Free the country from this brake on industry and there is no reason why we should not have permanent prosperity. PLAIN BHiL.