THE "JUST PRICE"

Press, Volume LXX, Issue 21121, 23 March 1934, Page 14

THE "JUST PRICE"

COST OF PROIHVTION i sk or sociai. i ithnn Trie ph:>;cal cost of prod lie-ins swuds iv ,ii ihc cost of the material consumed during production. Mr D. C. Davie, seeretarv of the Douglas Social Lred.l Movement in Christchnrrh, said in about CO members of the movement la. t evening. 1 ' lc . Jl ' ** price" was the financial reflection of that phv.Mcal fact. The debt rystem t -f She country was responsible lor a meat deal of the individual producc'- cos', wh.ch was greater than the •■ju,t piSco." Those costs had to be net. and ;f the consumers were to «ct the at the physical cost of pioduction. the d.(Terence would have to be made up by the issue of social i-iedit, which would be backed by the excess of production over eonsumpt ion. There was a I'M of talk about the lew standard of living m Japan, Mr Davie said, but the standard of living (hero was actually higher than cu" In-fore. and the. work-Ts hart received a 10 per cent, rise during lecu.i months. It 'as incorrect to say that Japan was Hooding the markets, of the world because of sweated labour; the lnanuO-turins centres ot the world were menaced by Japanese -ocus because Japan was issuing social credit. AU .uoods made for export were subsidised by newly-issued money, and the other countries ot the world would have to nice! the tion by usins social credit sooner or later. Japan was a commercial menace only because the rest_ of the world was clinuin.u to the old financial tern. New Zi j akind could sell butter to Japan at lid a pound, and make up the difference to the producer out of the social credit of New Zealand. The "just price" could be briefly interpreted by say in ji that it represented tiu.' physical cost of production in financial form, said Mr Davie. It was unnecessarv and impossible to consume 100 units oT Roods in order to make 100 units. Accordinp \ esticat ion the ratio was about ~-i 'o Kin. Therefore the porcontaso ot physical profits from the labour oJ man was about "S.

The National TrofUs If 75 per cent, profit could be earned in a physical sense the book-kcepuiß or financial system of the nation should record that fact. The disposal of the profit to its rightful owners without upsetting present-day business practices could then be considered. I'' Xew Zen land the people were stul bciiiß told that they must live on their export income because they had done so in the pa.-t. "An army marches un its stomach i was a military axiom, and it was just , as true that a country lived on what , :t consumed: not on what it exported. A country could be greatly enriched | by exchanging some of its surplus pro- [ miction of one kind for production ot { another kind, but the real point was | that it d;d not become enriched by ; exporting more than it imported, and it was not a law of nature that a i country mu- : t have an export trade toj enable it to consume its own pro- . duets. , ' Financial experts and professional economists had all claimed that inter- i national trade, and especially export j trade, were, vital to economic progress. ; Hankers still insisted that it was vital, j but in spite of their trumpeting the theorv of the interdependence of na-' lions'was fast falling into disrepute.] "We do not have to look very far , for an explanation of this false doc- j trine." Mr Davie said. "Interna-! tio.nal money lending is dependent for; its very existence on international < tradius ''

True Stale of Prosperity A country's real wealth did not do- J nend on jts exports, except to the cx- \ tent that a foolish convention decreed. ; The true .state of a country'? prosper- ! ity was measured by its excess of pro- i (Suction over eonMimplion. If a coun- . try produced 100 units of goods, and ; i onsnmed onlv 2r> units its wealth was ; 75 per cent, of the whole production. | !f the real cost of production was j represented bv the value of the goods . consumed, the cost of production ; should be the cost of the goods con- > -limed, and that would be the "just price." The present financial system j arrived at the price of the goods pro- j ducrd by adding up all the costs of , production. A large percentage 01 | that cost, was due to the debt system, j and coods could not be purchased at > the "just price" if the debt system was j to bo recognised. There was no alternative between issuing new money and increasing the debt system. j The cost of !he wheat used in Nov.- | Zealand could not possibly be more ! than the value of all the goods eon- I sinned during the time the wheat was bo ins produced, plus the depreciation of the land and plant. With the assistance of scientific machinery man had to produce far more than he could consume; in other words. he mu=t make a physical profit. The "just | price" was the price of all the poods ; consumed in producing the goods to i be sold, but the individual producers had to meet costs greatlv in excess of | that, so it was suggested that goods j should be sold at the "just price." the j difference to the producer being made I up by an issue of new money. New Zealand was one of the wealth;- J est countries in the world, and could \ produce the necessities of life for j 5.000.000 people. There was no reason why New Zealand should not produce all that the people of New Zealand required. H would be said that 'he production of motor-cars in New Zealand was economically impossible. but if the cost of production were measured by the "just price" it would be quite possible.