CONTENTIONS

Press, Volume LXX, Issue 21133, 7 April 1934, Page 12

CONTENTIONS

XXL—THAT WHAT WE WANT TS MORE LAISSEZ-FAIRE t,*riCUl.Lr TTRTTTI* TOR TIT* TSr.M.) [V-t A. V. WEIGHT j

In order that there should be no misunderstanding in the mind of the reader as to the contentions sought to be upheld in this article, it is well clearly to define "laissezfaire." The most concise definition that I nave been able to find reads: "A phrase expressive of the principle that government should not interfere with the actions of individuals, especially in industrial matters or in trade."

ute, regulation upon regulation, restrict the free play of economic forces—often with no ciear conception of what those forces rcaily are. We stifle the principle of laissezfaire and substitute governmental action, often at the expressed wish of the people themselves and not infrequently at the urgent request of departmental bureaucracy, in the hope that it may lead to better things. It is well that we should be reminded in the words of that eminent economist. Sir Arthur Salter, that "The normal economic system works itself. For its current operation it is under no central control; it needs no central survey. Over the whole range of human aridity and human need supply is adjusted to demand, and production to eonsumption by a process that is automatic, elastic, and responsive. This intricate system has been built and maintained by the work of thousands of men of keen but limited vision, each working within his own special sphere, each normally seeing and knowing only his own and the immediately adjacent territory. Since the rude shock of war broke this machine, the world has been looking lor the supermen who made and controlled it. for those who understood it. both in its basic principles and infinite detail and therefore refashion it and remodel it to the new conditions. It has not found them; they do not exist." As the old economic system was built, up under laissez-faire "by the work of thousands of men of keen but limited vision," may not the new economic system, which we are told is essential, be built up rather by individual effort than by the conscious well-meaning, but often ill-directed effort of a government. The blind faith in governments to solve these intricate questions which now obtain so widely is touching, but is such faith justified? Has a government capacity and power to "deliver the goods"? Politics and Economics "Whenever political power," says Sir Ernest Bonn in his book, The Return to Laissez-faire, "is applied to an economic problem it always produces the opposite to the result desired. That may be thought by some to be too sweeping a statement, but I have yet to discover a case where any other result has developed." May we not find confirmation of that statement in much of our legislation of the last 20 or 30 years?

That government has an undoubted right within certain limits to interfere with the actions of individuals must be conceded. It is as to the limits of that interference that the advocates of laissez-faire on the one hand, and its detractors upon the other, arc brought into conflict.

The Old Pclicy of Laissez-faire The old policy of laissez-faire, which, in its heartless cruelty and indifference to suffering, opposed the abolition of child labour, the passing of the Factories Act and many oilier remedial and beneficial measures, stood condemned. But to apply the condemnation and denunciation which were rightly levelled against the system of laissez-faire as understood a century ago to the retention of a system of laissez-faire as at present understood is to ignore the sweeping changes which have, taken place in the interval and to apply it to circumstances and conditions which bear little or no resemblance to those existing when such denunciation was well timed j and essentially justifiable. In applying such condemnation to the system as we now regard it, are we riot going altogether too far and pushing disapproval beyond reasonable bounds? This, it is submitted, is undoubtedly the case when applying the condemnation of the system when applied to New Zealand conditions. I contend that New Zealand Avould benefit very materially by a return to a sane and reasonable policy of laissez-faire. The restriction of the principle of laissez-faire over the last 30 or 40 years in New Zealand has already brought forth a plentiful crop of evils, and how many more are aripening time alone will prove. H:ls State Interference Gone Too Far? Apart from world conditions which are so vitally affecting New Zealand as a primary producing country, are not our troubles intensified by our almost complete abrogation of this principle over a long period of years? Have not State j interference and control pushed I their forces too far into the domain i of business, and business dealings? Is there a business or commercial institution in New Zealand that has not felt the harsh hand of bureaucratic or government control? Has that control always been for the good or ill of this country? The position in certain quarters to even the modified system of laissezfaire obtaining in New Zealand is largely responsible for the socialistic legislation of the last 30 or 40 years. Such opposition is indirectly responsible for the delegating to government departments of many matters which heretofore were regarded as coming peculiarly within the domain of private enterprise and individual effort. V/hen any difficulty confronts us now, we very frequently go cap in hand to the government to solve our problem, and the matter is then delegated to a government department, which has no specialised knowledge enabling it to deal with the question at issue. The policy has largely emasculated individual initiative and displaced a robust freedom of individual action j by government or bureaucratic ac- j lion in many directions. I It was but a few years ago that I the country was incensed with gov- j ernment action, bureaucratic domi- j nation and departmental interference in business. In point of fact, one important political party, reflecting the temper and spirit of the community, swept the polls and went into power on the slogan of "Less government I in business and more business in I government." Now alas, the cry is I changed, and we are told by responsible ministers of the Crown that we shall have not less but more interference, and more regulations in business than in the past, and many economists give their support to this pronouncement. Restriction of Individual Action The reason given for this change of front is that the economic system lias broken down, that the old land j marks no longer serve as guides, that i (cnnomie equilibrium cannot be re-j stored by individual effort, and that | this can only be achieved by the 1 action of the State. We. therefore, j seek to restrict and control individual effort, and by statute upon stat-

Why should we delegate to government and to government departments questions which so deeply affect our business and economic relationships? Is it laziness and indifference on our part, or do we attribute a wisdom and breadth of outllook to governments in dealing with the prave problems with which we are confronted, which they do not possess? "It is in my judgment." again to quote Sir Ernest Benn, when referring to 10 or a dozen problems affecting the old country, "a physical impossibility within the space of one human life and with the limitations of one human brain to know more than a fractional percentage of the knowledge required to grasp the problems 1 have mentioned. And yet the politicians and the bureaucrat will almost always tell you almost everything there is to know of every trade there is. The habit of giving power to bureaucracy is most noticeable in those cases where politicians have seen fit to trespass into the realms of industry, production, and economics. It is the more dangerous because there is not a shred of safeguard in the shape of any test by which we can know whether the bureaucrat is given satisfaction or not." Government in Business The incursions of Government both at Home, in Australia, and in New Zealand into the realms of business can scarcely be said, even by the most pronounced advocate of state interference, to have been a success. Witness the entry of the Commonwealth of Australia into the shipping business and its ignominious exit. Not only in Australia, but again to quote the above writer, in England, "The endeavours of government to get into shipping are a standing proof of the utter impossibility of a nationalised industry, all of which brings us back to the incscapeable conclusion thatpolitical control must be confined to political purposes, and that our material well being, our economic health, or wealth making, must be left to the free play of economic forces, through which alone the public can secure any guarantee of service or supply." Sooner or later this derided and condemned policy of laissez-faire will be rediscovered and again given play in the rcconstitution of our economic future. Then, I contend, we shall be able to say that we are really on the high road to economic recovery.