SOCIALISM’S DANGERS

Dominion, Volume 26, Issue 182, 29 April 1933, Page 11

SOCIALISM’S DANGERS

Profit Must Remain Urge of Enterprise INCENTIVE STILL A NEED Dominion Special. Service. Palmerston North, April 27. Dealing with State Socialism in New Zealand and its effect ou private enterprise, Mr. A. O. Heany, secretary of the Associated Chambers of Commerce, in addressing the Palmerston North Chamber of Commerce this evening, said the Dominion must I choose between a return to private en- , terprise and thorough-going Socialism, i The speaker replied to criticisms of I private enterprise made recently in a I public address by Mr. D. O. Williams, I economist, of Massey Agricultural I ' College, who had stated that we must I I consider the possibility of “finding a | ; working compromise between Western I and Russian economic ideals,” nnd that a plan must be evolved “under which private enterprise would be ; allowed to function only within a framework of clearly-defined national planning.” Incentive to Effort. Mr. Heany said it was doctrine such as Mr. Williams seriously put forward that had made New Zealand to-day Hie most Socialistic State in the world outside of Russia, and which would propel the Dominion further into a condition similar to the chaotic collectivism of that, misguided country, where there was no incentive to effort because no private profit was permitted. Mr. Williams had said that private enterprise functioned well only when profits could be made, and that without profits its mainspring was broken. Of course, said Mr. Heany, private enterprise must make profits. The jingle of recent years that private enterprise, by some miraculous feat of subsistence, should work “not for profit but for the public Interest” was impudently false. Private enterprise could perform no greater service to Hie country than the making of profits, since by profitable trade and industry was employment created and revenue i provided the State. Continuing, the speaker said that | public trading undertakings, national I and local, had small need to concern ! themselves with making profits, since ■ any losses were made up by the uni fortunate taxpayer and ratepayer. The j private business man who failed was not a charge on the people: he went to the bankruptcy court. The incentive of private profit, in competition with his fellows, made him of service to the people as long as he could give service, without obligation on them, whereas State enterprise remained a millstone round their necks. State enterprise was notorious the world over for the want of incentive that inseparably clung to it. Competition would attend to any inefficiency in private enterprise. Chain of Monopolies. “While the State will piously avow that it Is not concerned with making profits, the taxpayers have to foot the losses.” said Mr. Heany. “How can they do this, as well as provide money for other State expenditure, unless they may make profits? It is nonsense to decry the profit-motive in our economic life unless we are to have straightout Socialism. Place State and local body trading undertakings on the same basis as private enterprise and we shall learn their worth. If they cannot do better than private enterprise then they should be closed up, because there would be no justification ; for their existence. It is the State, not i private enterprise, that must answer at I the bar. The State has yet to prove I its value.

“The truth is that State enterprise in trade. State interference in business, and State regulations and restrictions of endless length .and variety, have aireadv brought this country to a sorry pass. ’The wonder is that private enterprise, its scope reduced, has been able to come through at all. We are at this time unconsciously moving on to Socialism like a ship in the dark. The privileges the State allows itself in competitive trade is enabling it to forge a chain of vast monopolies. It is worse than folly to give a patient a further dose of the wrong medicine. Mi'. Williams was right in what he expressed loss simply, namely, that we have to choose between a return _to private enterprise and thorough-going Socialism.”