1937—AND NOW.

Auckland Star, Volume LXIX, Issue 127, 1 June 1938, Page 15

1937—AND NOW.

ECONOMIC SURVEY. THE AMERICAN "RECESSION." LONG CONTINUANCE UNLIKELY GENEVA, May 10. Mr. Harold B. Butler, Director of the International Labour Office, in his annual report an "World Economic Conditions," which will be submitted to the International Labour Conference when It meets next month in Geneva, warns that war "is already invading the social field"; that it has already blocked some of the main avenues of social advance," and that it "may soon begin to sap the' eociaJ edifice this generation has" raised." What last year he described as a "darkening shadow," Mr. Butler now i-ees as "threatening to blot out the lio-ht trom the whole earth."- ° * "With, war blazing .in . the • Ear East and in Sjpain, he. declared, "with Europe oricu more an armed camp, with the fear of war obsessing th e public mind everywhere, all thoughts and-plans of social progress ma y well seem more appropriate to some other planet. No secret oMutense warlike preparations is made in a large number of countries. ProxiesBivoly the whole national life and the activity of every individual is bein<» subordinated to the requirements of the State in the event of conflict. "The Overriding Necessity" "Every country which feels itself menaced and insecure is perforce driven along the same road. Individual freedom and economic expansion are more and more cramped and distorted by the overruling necessity of national prepared"ln such circumstances, vast sums which might otherwise have been profitnmL Tf * to fl S htin g sickness, to prolong life, to sweetening old age, to adding a cubit to the knowledge and culture of mankind, are diverted to the destruction of what man has so painfully acquired or created by the sweat of his brow and to the exultation of death by the perfection of everv method available for extinguishing human life with all the thoroughness and horror that science can devise." Reviewing the economic and social achievements of the last few years and the hopeful projects for a new future, Mr Butler admits that by soma readers ol these cheerful passages" he may be suspected of bitter irony." Yet he finds it "not impossible to imagine conditions under which tolerance and neighbourliness might replace the neuiotic pugnacity of the depression years and might really bring about that 'appeasement' of which politicians never cease to talk or the man in the street to dream." But he adds that "as long as the energies of every great nation are directed primarily" to war, as long as economic development is encased in a military strait-jacket, as long as social welfare is subordinated to the construction of guns, warplanes and battleships, it is futile to indulge in Utopian expectations. "While such an atmosphere persists," he says, "there is no chance of attaining the standard of feeding, or clothing, or health, or housing, or working hours of leisure which the vast technical progress of this century has brought within our grasp. In the circumstances, we may be thankful for such modest progress as has actually been attifrifed, while deploring the failure to reach the higher levels which are clearly attainable." Prosperity and SeUpse. In a chapter on "Prosperity Regained —and Lost?" Mr. Butler analyses both the "boom of the thirties" and the "recession." He points out that the "boom of the thirties," which reached its peak last sumpier (northern), was regarded by many as a fraudulent boom, because, while some countries derived considerable benefits from it, others hardly emerged from the shade of the depression. But what he finds really astonishing about this boom is that it should have reached such considerable dimensions despite the obstacles and suspicions it had to overcome-. This, he declares, is a remarkable testimony alike to the tenacious optimism of humanity and to the unfathomable possibilities of economic expansion that lie at its door.

'"What is certain, however," he says, "ia that genuine prosperity might have been more abundant and its prospects of endurance greater, had not an excessive portion of the national wealth of almost every country been diverted to war equipment." * 4 With regard to the "recession," Mr. Butler points out that its effects have been felt principally in the United States, but since in most other countries production showed little falling off in the late months of 1937, he can see no great cause for alarm on this" score. And tlja Very rapidity of the' fall in the United States, he says, makes an early resumption the more probable. As to the factors that contributed to. this, fall, they, he says, cannot be evaluated with any certainty. But he declares there Is no doubt that, in most countries, the industrial worker was in a far better position in 1937 than in any other time since. 19*29; and, as evidence, he cites 1.L.0. index numbers showing that world unemployment in 1937 was just above the 1929 level, while world employment was on the whole better than in 1929. Admitting that the. level of employment has undoubtedly. been raised In many countries by intensified efforts to increase and accelerate the production of war materials, as, wellas by the withdrawal .of large numbers of ;nj«in. from industrial life into military service, Mr. Butler Bays: "The result 111 not' only to diminish unemployment, particularly in"countries where conscription operates, but also to reduce the numbers of skilled workers in industry. Modern armies, navies and air arms do not just require unlimited supplies of 'cannon-fodder,' but also large numbers of artificers possessing a high decree of mechanical aptitude. This is undoubtedly a contributory cause, though not the main cause, of the shortage of Rkille<rlabour which has now been noted in many countries." The Far East. Mr. Butler concludes hi» report with a chapter on "The Future," in whicjr he stresses particularly the growing importance of the Far East. "Any longrange view," he declares, "cannot pos- ; sibly ignore the new thing which, amidst! pain and travail, is coming to birth in the Orient. After centuries of passivity it is being stirred by the modern outlook, with all its incalculable dangers and its unlimited promise." Pointing out that, although Asia con» j tains 53 per cent of the world's population it furnishes only 16.3 per cent of world exports and only 13.7 per cent of world imports, he predicts that , Oriental jfomtSet.itioir "will bontifiue and j will expand Until some'-sort of. balance I

h-J JL tru £, k between the economic world St and the rest of the

,wJI T ew °" e f l "pressed in older industrial countries—that cheap goods exolLj^ Bla £ lc countries should be iuatifij? wherever possible—cannot be inn tr ' Butler holds, on anv ™5" ra, l? e . ec ° non, . ic calculation, and he rl l s t .shutting all doors against the trade of eastern countries can onlv intensify their poverty and thus favour explosion? are apt t0 pr ° duCe

Japanese Competition. Even the so-called 'Japanese menace , he says, "has been greatly exaggerated. In 1936 Japan's proportion of world trade was only 3.07 per cent—not an excessive share for a country with a population of 70 millions. What really shocked thg competitors of Japan was not the immense quantities of Japanese goods put on the market, but j d T, ery W P rsces at which they were

Citing the opinion of medical officers Tanganyika—that Japanese rubber shoes have done more to eliminate hookworm than all other prophylactic measures put together, and the benefits accruing from the introduction of the cheap bicycle into Africa and Asia which, he declares, might almost be said to mark the transformation of the beast of burden into an upright human being, Mr. Butler says: "These and other elementary needs of civilised living will be supplied by Oriental industry at low prices and in expanding quantities. It is impossible to ignore, let alone deny, the value of such developments. "On the other hand, for the East to make a mass assault upon the international market at prices defving competition, regardless of the effect upon the older industrial countries and the living standards of their workers, inevitably leads to the erection of trade barriers and to international animosities which profit nobody. It is a problem to be worked out rather than fought out. In the long run, the raising of the standards of eastern countries cannot fail to benefit eastern and western industry alike."