AN ECONOMIC FALLACY.

Dominion, Volume 2, Issue 314, 29 September 1908, Page 8

AN ECONOMIC FALLACY.

FAILURE OF THE ARBITRATION ACT. AN AUSTRALIAN VIEW. Mr., Millar, Minister for Labour in New Zealand (says the Melbourne "Argus"), has grown restive, under 'the 'abuse, poured upon him from the mouths of unionist leaders. During; the recent labour congress in the Dominion nobody had a good word .either for Mr. Millar or for his new Arbitration Bill. The oratory was for the most part of the bitter and irreconcilable brand- which is too well known in Australia. •; So we find Mr. Millar expostulating thus with his old" confreres in .unionist agitation:—V . "There. are,Bome men in this country connected witl) labour whose one objcct seems to be to make trouble. They seem to think they cannot hold their positions as union officeis unless they are continuously making trouble.".;. «• .r,, .... It is something of • a grim satire to find Mr. Millar thus harassed by reckless agitators. He was the chief organiser of the great maritime strike" in New Zealand, and in those days was himself no milk-and-water tribune. : But since experience' steadied him into prudence and self-restraint he ha 3 become too reasonable for his old followers, who spit him out as a Laodicean, just as the inflamed labourites spat out their most valuable leaders in Australia. The men who make trouble for the sake of keeping office in their unions are wise in their generation. They know on which side their bread is buttered. There is a worldly-wise Eastern proverb which says, "If the water is too pure, the fishes cannot live in.it." The agitators make their political 'living most easily by keeping the stream muddy. . Still more remarkable than Mr. Millar's complaint is his frank confession of' the impossibility of. raising wages indefinitely by artificial means. He has learned wisdom. Wo quote again from the speech with which, on Wednesday, he moved tne. second reading of his amending Bill in the New Zealand House of Representatives:— " It is necessary to tell the workers that we cannot go on. There is a limit beyond which wages cannot go in this or any other country." That lesson, alas, is bound to be learned by every community which attempts, through the agency of tribunals of any kind, to force the perpetual increases of wage demanded by the workmen. The calculations of Dr.. Eindlay, Attorney-General in New Zealand, recently made it appear that the whole net profits of all traders and manufacturers in the Dominion amounted to only £3,775,000 per annum. Only 5885 traders and manufacturers (including companies) earned more than £300 a year each. Their profits allowed for only a trifling increase in the pay of the 290,000 wage-earners. Evidently the wageraising process had practically reached its limit. 'Mr. Millar, who some years ago no' doubt believed in the existence of "the bloated capitalist class," as firmly as Luther believed in the devil, has now' been convinced of the futility of 'trying to squeeze extra wages out of non-existent profits. It is a wonder that Now -Zealand did not bump its head against this boundary-wall before. The Dominion, however, has passed through a poriod of wonderful prosperity. The primary rural industries have been booming. Tbo dairying trade,- the export trade in frozen meat, have expanded by leaps. So for a time the country was ablo to carry the extra load without feeling the strain. But long before Dr. Findlay's calculations showed that a halt must bo made in the arbitrary enhancement of wages, it was realised that Now Zealand workmen were getting nothing out of it after all. The cost of living went up even faster than the rate of weekly pay. So, after yoars of experiment, New Zealand workmen end where they began, or perhaps a little worse off than before/ Tho wcalthproducing capacity of the country cannot pay them any higher wages than at present. Yet the increases which they have received have helped to advance the prices of the necessaries of life, and possibly tho purchasing power of tho money thoy earn is less than it would have been had no wage-raising machine been invented in tho Parliamentary workshop.