The economy

Press, 6 December 1985, Page 10

The economy

Sir, — Robert Trueman asks, “Do we really need full employment?” We do, first because a system where some work and others live off them is totally unjust, and second, because it is difficult for the unemployed to maintain their sense of self-worth. Hugo Steincamp says my economic ideas are 30 years out of date, but his belong to the nineteenth century. Then people believed, like him, in laissez faire capitalism. In this century Keynes showed that, in addition to being disastrous in practice, laissez faire capitalism was also theoretically unsound. This the Americans, with some exceptions, refused to accept. They gave nineteenth century ideas a new name and trotted them out as the latest fashion in economics, a fashion which most New Zealand academic economists have followed uncritically. Now we are being forced to learn again, by hard experience, that those reactionary ideas are disastrous in practice. — Yours, etc., MARK D. SADLER. December 4, 1985.

Sir, — Landmark Properties has reported a six-monthly total profit increase of 383 per cent, has since purchased ?10M worth of properties and is confident of a record annual profit resulting from rising property values and rents. These profits from essentially nonproductive activities are dependent on excessive money supplies and high interest rates plus inevitable inflation. These three factors are detrimental to our productive sectors which earn export funds and provide employment. The profits have not grown on trees. Increased rents and costs of premises are recovered from the next person down the line. The price of living is a reflection of all costs and markups. The purpose of free enterprise economics is providing consumers with their legitimate needs with those participating receiving just rewards for creative effort. Exorbitant and damaging profits from asset speculation destroy the spirit of democracy in the same way that monopolies and excessive union demands do. — Yours, etc., P. NORMAN DAVEY. December 2, 1985.

Sir, — Even since my last letter on the economy it is much clearer that my predictions are coming true. The pace of change being forced on the rural and business sectors is just too rapid and will alienate even people who want change. It will be the eventual downfall of this Government, which is sailing into uncharted waters.

The medicine is so strong it is going to kill the patient. While there is still cause for enthusiasm for a fairer tax system and sustainable economic recovery, an increasing cross-section of society is realising these goals are distant and unreal if in the process they are going to be so badly knocked around. No wonder there is such an exodus of valuable people to Australia. Political opinion will soon change and polarise. The present course adopted by this relatively inexperienced Government is going to make Nordmeyer’s “Black Budget” fade into insignificance. — Yours, etc., W. J. C. ROYDS. December 4, 1985.