Not control of demand

Press, Volume CXI, Issue 32531, 15 February 1971, Page 12

Not control of demand

Australians, too, are worrying about inflation and the a nd <T e PnCe nses this year recent wage and salary increases are likely to create a suree of consumer demand. Price control is being talked of in Australia, too; but it has no support from Mr Colin Clark who has had practical experienced contriving and administering price control. In an article nrinted in the “Sydney Morning Herald” last week Mr Clark concedes that in wartime—when public opinion was strongly m favour of control-the difficulties of running a “ bad system ” were only mitigated Much private expenditure was deferred, he recalls and wages were controlled and labour directed into employment according to production priorities Even then, he says price control did not work well ‘ When the prices of “necessities of life” are producers switch to production of something e“ e The final comments of Mr Clark—a research economist, and a former Labour candidate for the House o:f Commons—are just as pertinent in New Zealand today as m Australia: New

There would be a shortage of bread and a com parative abundance of cake. So then you put controls on cake, too, and end up trying to control everything. ... We are creating demands-by our private consumption, by business investment, and bv Government spending—which in the aggregate are beyond our country’s productive capacity. So lone ?/<-Y e r go °“ doin g this > P ric es and wages will rise If Stalin could not control them, with his totalitarian methods of government, what chance have we of controlling prices and wages under these circumstances.