AN ECONOMIST’S NOTEBOOK

Dominion, Volume 29, Issue 208, 30 May 1936, Page 9

AN ECONOMIST’S NOTEBOOK

Prospects for Youth

(By

M. B.)

Actuaries of the A.M.P. Society have been busy estimating the prospects o£ a healthy young man of 25 years ot age in Australia to-day. They calculate that out of a typical group of 100 healthy young men of 25, in 40 years time — 1 will be wealthy. 4 well-to-do. 5 still working. 36 will be dead. 54 will be dependent on relatives, pensions, doles or charity. The calculation, of course, assumes that conditions over the next 40 years will be much as they were over the last 40. The aim for all Governments to-day appears to be to make the 54 well-to-do, and the one dependent on doles or charity. The problem of youth is also causing much concern in America. It has been estimated that out of 20.100.000 young people in the United States between the ages of 16 to 25, 5,000.000 (or 25 per cent.) are unemployed. 4,000,000 (or 20 per cent.) are in schools. 500,000 without employment are taking part-time school work. 7,800.000 (or 39 per ceut.) are employed in full-time or parttime jobs. 2.800.000 are young married women not employed. The figures clearly show that this section of the population has suffered most from the depression. Meanwhile the exploitation of child labour has increased substantially since the autiNR A. Supreme Court decisions. The National Child Labour Committee estimates that 1,000,000 children under la years of age are employed throughout the nation. Moreover, 77,000 cases of industrial work in homes where children are hired at low wages and long hours are on record. Such blatant refusal to look after its youth will undermine the structure of any nation. “The claims of the future,” said Disraeli, “are represented by suffering millions; and the youth of a nation are the trustees of posterity.” The Australian Tariff The world has dined so fully in the last few years on a diet of economic nationalism that Australia apparently thinks another little drink won’t do her any harm. Her new tariff is ob-(Week-end Radio Pogramnies on Pago 26.) viously aimed mainly against Japan, and to a lesser extent America, and at fostering intra-Empire trade. So another link has been forged in the lengthening chain of imposed on imports from Japan. Yet a careful examination shows that, from a national viewpoint, undue dread of increased Japanese trade is both unwarranted and illogical. We say to Japan, in effect, "We will not take your exports because the standard of living of your workers is so low as to give you an unfair advantage.” We entirely neglect the fact that it is only by increased trade with us and other countries that Japan can raise the standard of living of her people. Industrialisation is her one hope for an improved standard, and industrialisation depends on available markets. By refusing her goods we are forcing Japan either to remain at the low standard already prevailing, or to use force to bring other colonial markets within her reach. If to-morrow another Manchukuo were to spring into the limelight, our trade policy would not be as innocent as we would like to think it, for our trade restrictions are giving a background of economicnecessity to Japan’s dreams of a PanAsiatic Empire. Another prevalent fallacy that finds concrete expression in this Australian tariff is the belief that trade between two countries should be balanced reciprocally. Australia hopes to divert her fashion trade to France because France is a better customer of hers than America is. The stupidity of this policy can best be seen by comparing it with the position of an individual. Imagine a tailor who finds that his clients are almost exclusively doctors and lawyers. Is he to indulge in a riot of purposeless litigation or to develop imaginary illnesses by the score? As long as trade as a whole is balanced it matters little with whom we trade. If we were to send all our produce to Britain without taking any in return, Britain were to send an equivalent export amount to Japan and Japan to us. there would be a perfect balance without a suspicion of reciprocal trade. Prices and Costs

Tiie vexed question of the extent to which raised prices will follow raised labour costs is still being debated and many false statements published. Recent price increases anticipating the operation of the legislation have been criticised as unfair. But it must be remembered that returning prosperity would, in any case, have brought higher prices, and that prices for goods quoted for forward delivery, say in six months’ time, must be calculated on the basis of this legislation. It has also been suggested that as wages represent only a small proportion of costs, prices need not increase in the same ratio that wages do. This is true in the short run. but there will be gradual subsequent adjustments upward as these higher prices are incorporated in higher capital costs and overhead expenses. Capital costs represent wages and dividends at one or two stages removed. Shipping

Aii observant reader of ‘'The Dominion” on Tuesday iast would have noticed two adjacent columns, one describing arrangements for the maiden voyage of the Queen Mary and another the refloating of the Rangatira. This coincidence might have led him to wonder whether British shipping was really in the bad state that is so often described. In a measure his doubts would be well founded. The reduction of international trade in 1933 to one-half of its 1929 physical volume had created a vast mass of surplus shipping, and while small nations were able to protect their mercantile marine, this reduction was concentrated on Britain, who had to bear far more than her Share of the decline. Yet toalay. British shipping and ship-building are showing a remarkable recovery. Figures published up to the end of March, which exclude warship and rearmament figures, show a total of 850.000 tons of merchant shipping on order in Britain, of which 1-1 per cent, is destined for sale abroad or foreign registration. This represents double the employment available two years ago, and three times that of spring, 1933. Germany follows Britain with a total shipping tonnage that has increased from SO.OOO in 1934 to 320.000 tons today. France. Italy and oilier continental countries arc worse off in mercantile shipping than they were two years ago. Britain is dealing with -16 per cent, of the world's shipbuilding.