MR COATES AND ADAM SMITH

Press, Volume LXX, Issue 21325, 19 November 1934, Page 9

MR COATES AND ADAM SMITH

TO THE IDtTOR OT THE PRESS. Sir, —Mr Coates's able address to the Manufacturers' Association was marred by the quotation of and apparent acceptance of Adam Smith's axiom "that, production is governed by the market" as the final word on such a matteii I It is a pity that Mr Coatcs had to go back to 1780 and that he did not quote some more modern authority. Many writers since Adam Smith have proved that production has been limited by money supply. Michael Fliirscheim, in his "Effects of a Scientific Paper Currency" written more than 30 yeai-s ago, estimated that production could increase tenfold when freed from the blighting influence of a restricted currency. More recently has the Douglas social J credit movement emphasised the need for increased purchasing power or consumer credits. ' The idea of a national dividend, the idea of giving consumers the money

or credit for buying the goods that are produced, may be astounding to many people, but surely not half as extraordinary as paying a bonus on nonproduction, as witness the following letter to the editor of ,a farm journal in America: —

Dear Sir, —A friend of mine in New England has a neighbour who has received a government cheque for a thousand dollars this year for not raising hogs. So my friend now wants to go into the business himself, he not being very prosperous just now; ho Rfij'is, in fact, the idea of not raising hogs appeals to him very strongly. Of course, he will need a hired man, and. that is whore I come in. I write to you as to your opinion of the best kind of farm not to raise hogs on, the beßt strain of hogs not to raise, and how best to keep an inventory of hogs you are not raising. The friend who got the thousand dollars got it fot* not raising 500 hogs. Now we figure we might easily not raisft 1500 or 2000 hogs, so you see the possible profits are only limited by the number of hogs we do not raise.. The other fellow had been raising hogs for 40 y*ars. and never made mo ro than 400 dollars in any one year. Kind of pathetic, isn't it, to think bow n<j wasted his life raising hogs when he rouUi have made so much more not rnising them. Yours, etc., NOVELL-SMITH. November 17, 1934.