Economic Theory Outlined To Adult Education Class

Press, Volume XC, Issue 27403, 16 July 1954, Page 2

Economic Theory Outlined To Adult Education Class

NEWS FOR WOMEN

When Mr Graham Miller, a senior lecturer in economics at Canterbury University College, began an address in the middle of Wednesday afternoon, he was talking about the theory of money and of the banking system. When the sun had set he was still answering questions—about the effects of high wages for the young, secondary industries competing with primary industries for labour, and the implications of betting with the Totalisator Agency Board. The address was part of a series at a residential school for women organised by the adult education department of , Canterbury University College at Canterbury Agricultural College, Lincoln. Three dozen women are attending, about a third of them from South Canterbury, a third from MidCanterbury, and a third from the Lincoln district. From the principles of economics, questions led the talk to the allocation of nylon stockings and the consumption of beer. Miss Ray Robins, senior tutor in home science of the adult education department, who is directing the school, said Mr Miller’s address was called, “Where the money goes.” The women would be equally interested in where it came from, she said. Mr Miller said that money could be described as anything with purchasing power over goods and services. It need not take the form of notes or coins. Pacific islanders had used shells; in early Australia a tot of rum was used; and in prisoner-of-war camps cigarettes or bully beef had fixed exchange values. Volume of Money in New Zealand “Money is a measure of value but it is not always as consistent as we would desire.” Mr Miller said. He traced the growth in the volume of money in New Zealand since 1936. “One need not Jament the fact that the volume of money alters. Indeed it would be disturbing if it had remained the same over the last 100 years,” Mr Miller said. The difficulty was in adjusting this expansion to the trends of productivity, he said. Since 1945, there had been considerable pressure on the banks to provide more money. So far as this increased output, it was justified. The Reserve Bank could not be blamed for an increase in the volume of money any more than the Transport Department could be blamed for an increase in road accidents. Both were controlling authorities faced with increasing pressures. Every baby born meant an increased

demand, at first for napkins and cod liver oil, then for clothing, food, kindergartens, schools and universities, transport, and other services, said Mr Miller. “The critical decision to be made is how mucfi of the country’s resources is to be spent on consumer goods, and how much ploughed back into capital undertakings,” Mr Miller said. It was natural that after a period of relative stagnation through the depression and the Second World War, New Zealand should need more capital development to serve its rising population; “But unless we are prepared to restrict our consumer demands, we will have no goose in the future to lay the golden egg,” Mr Miller said. Capital works gave the means of increased production in the future. Consumption of Goods On first reading recent reports on the purchases of refrigerators, washing-machines, and other home aids he had feared that the Dominion was consuming goods at a rate far beyond reason, Mr Miller said. A second look showed that the proportion of goods consumed was tending to fall in comparison with national income. Savings also were improving. He gave the following table of estimates:—

A lot of the increased saving was by means of insurance, superannuation schemes etc., Mr Miller said. Private savings amount to about 8 per cent of private income in 1938-39 and 17 per cent, in the latest return. This generally encouraging balance between consumption and funds preserved in savings and capital provisions had been achieved although the consumption of beer has risen from 11 gallons a head in 1938 to 19.1 gallons, and milk from 220 pints to 337 pints, he said. Ice cream consumption had risen from 3.2 pints to 12.8 pints in the same period. Replying to questions, Mr Miller said he was inclined to agree that starting wages for young workers were out of proportion to the services given, and also to the needs of the young people at that stage. He also mentioned that time-payment business was a smaller proportion of trade than might be imagined.

Gross National Product. Consumed. Savings. £000,000 % £000,000 1938-39 .. £229 69 £17 1948-49 £484 71 £22 1949-50 .. £550 65 " £76 1950-51 .. £692 60 £125 1951-52 .. £713 63 £79 1952-53 .. £741 59 £117