Economics and Ethics

Dominion, Volume 29, Issue 204, 26 May 1936, Page 11

Economics and Ethics

Sir, —To £. Questing student of life, it is refreshing to read the varied as well as informative articles and letters that appear daily in your excellent journal. The impartiality with which you countenance the expression of contrary opinions I have often admired, but now I presume to test it, by hazarding a few comments on the views advanced this week by “Scrutator” in his two articles on .price-fixing. (1) In presenting the first tenet of his argument, “ . . . The workers’ standard of living is determined not by legislative decree but by the operation of certain laws and processes of our economic system . . .” it would seem that unless “Scrutator” puts his emphasis on the word “our” (and “we” are "orthodox economists”), he has made a crucial mistake by omitting the term "consumption.” from his enumeration of those “laws and processes,” for one can be so unorthodox as to believe that ail men are consumers; and consequently, conclude that not only does the need for production depend upon the rate of consumption, but that “The workers’ standard of living” is best, measured by the extent to which he can obtain and consume ail the good things he wants. ■ (2) When “Scrutator” states that prices must rise in the same proportion s? costs, one can nod agreement, presuming that profits will not be sacrified. But when ho suggests that prices rise in the same proportion as wages, so that “the standard of the worker is unaffected,” one has to find out whether wages happen to equal the total cost of production, or if “Scrutator" is in error. Unfortunately, official statistics show that over an average of 14 New Zealand industries, the percentage of wages per £1,000,000 of output is only 16.6. Consequently one is justified in asking why a (say) 10 per cent, increase in wages should necessitate more than a fraction of a 10 per cent, rise in prices. ■ (3) Economic ’“progress” (presumptuous word!) requires, according to “Scrutator,” either “fluctuating prices,” or else “a central planning authority.” As he correctly points out, laissez faire gave us “fluctuating prices.” But whence will come our “central planning authority”? There are some innocents abroad who think that our present Government satisfies that requirement. But doubtless our “orthodox economists” will be capable of deflating such nonsensical opinions by proving that our Government is not an “authority”; that it was never guilty of “planning” to control the sale of our dairy exports, nor is its control at all “central” —and with such a clear conscience, that in their next breath they will be able to justify the labels of “bureaucracy” and “socialisation” already tacked upon “Labour’s policy.” (4) To point out that in fixing prices, the Government is only doing what “trusts and inonopolies” have done before, is not to prove that the Government, therefore, is no better than the exponents of modern capitalism. To a good end. there may be many means, ail good of themselves—until used by the wrong party and for the wrong end. Fortunately there are ninny in the community who realise that the fixation of prices by a people’s lawful ruler and for the people's welfare (i.e., usually to facilitate consumption), is a wholly different thing. From fixation of prices by a private few and for private profit (which, too often, demands curtailed consumption), (5) Speaking of means and eud. “Scrutator” must surely be among the pioneers in insinuating that mass unemployment is a means to a good end, as he does in these words “ .. .The individual.., is forced into the ranks of the unemployed, whence new industries are recruited. If the economic structure is stable and the extent of change small, the number of individuals strongly affected is so few that they are unable to put up an effective resistance.” Ixit us close our eyes to the fact that the only “new industry” that ever came out of unemployment has been that of digging holes and filling them in again. Instead, let us be as logical in another sphere, aud advocate the dissemination of disease germs throughout New Zealand so that our medical men will have a greater incentive to find the cure for dread diseases. (6) Equally intriguing is the quotation from Barbara M'oottcn. • Unless the phrase “Great Society” signifies some secret organisation or other, her statement is simply a contradiction in terms. For since it is a demonstrable fact that tlie family is the unit and life-principle of society, an economist (even) can no more make a man a better member of society ami at the same time a worse father ami husband, than a gardener can prune a tree by severing its fibrous roots. Barbara Wootton would have done better by pointing out that tlie “orthodox economist” is siieh a gardener. It is surely time, sir, that thinking men of all professions regained a sense of perspective by the realisation that every branch of human activity (even econo mics) is but a limb of the great tree of life that has its roots in the soil of ethics. For then they could understand that as society presupposes the family and natural law must precede economic law. so -it is consumption which necessitateproduction.—l am, etc., PRINOIPIO. Wellington,. Max- 2K