WHO DOES THE WORK?

Evening Post, Volume CXII, Issue 17, 20 July 1926, Page 10

WHO DOES THE WORK?

MAKER OR SELLER?,

THE SPECULATOR AS SOCIETY'S SAVIOUR

PINAL ANALYSIS SHOWS "NO

UNFAIR PROFIT."

"In a free market, under a system of free competition, nothing is contributed to the general service of the community so cheaply as that essential element known as profit."—Mr. Ernest J. P. Benn, in "Confessions of a Capitalist."

"The Confessions of a Capitalist" (by Ernest J. P. Benn, a successful publisher who specialises in trade newspapers), is an affirmation that capital is not over-rewarded in consideration of tho sqrvice it renders, and the risk it takes; that cmployership is the most economic method yet discovered of carrying on the business of production and distribution; and that profit; in the average, is no more than capital's fair wage. UMBRELLA FOR "MIDDLEMEN." Plenty of manufacturers have said this about manufacturers; plenty of farmers have said the same thing about farmers; but not many of either have said the same thing about the so-called "middleman." Mr. Benn's umbrella is, however, big enough to cover almost everybody. "Ear too much importance (he writes) is given by thinkers on industrial questions to the making of things, and far too little to exchange and distribution. It can be argued that the making of things is comparatively easy, but that successfully and economically to negotiate the transfer of goods from pro- : ducer to consumer constitutes the more i difficult and more vital part of the complete transaction. Justice has nfiyer been done to the all-important share of business, as business, in the economic scheme of things." In fact, "the only hope of securing better conditions, or a higher standard of living, not only for the workers, but for tho people as a whole, is in the increase and encouragement of a competent class of business men working for the common good on competitive and individualistic lines." A SHOCK-ABSORBER OF PRICECHANGES. Dissatisfaction with the business links between New Zealand butter and the British consumer gave rise to the allegation that the business people concerned had extracted profits far in excess of their services. That is, of course, a statement concerning a specific business.

In a general way, Mr. Benn sees it in this light: "The business man is the agent of exchange, and because it is, as a rule, far lore difficult to exchange an article than to make it, the business man generally secures a higher remuneration for his part in wealth production than the labourer who performs the simpler and easier work of wielding the hammer or the saw. . . . The more the exchange, the more the wealth, from which it follows that freedom of exchange is vital to our wellbeing. ... It is a misunderstanding of the vital question of risk-taking which leads to much wrong thinking on speculation and gambling. It is probably true that England's greatness, that our lead in the creation of the commerce of the world, is due to the fact that we possess in a' rather more pronounced degree than most people the speculative or the gambling instinct. .. It is not realised as widely as it should be how much each one of ns depends for his comfort, convenience, and security upon the speculator, 'who, of course, makes and maintains every market there is. The business of the speculator is to ease the price of a commodity up or down, as required, thus relieving the rest of us of the grave risks and serious inconveniences to which we would be subjected if we ourselves had to shoulder the violent fluctuations of the market. . . Without the speculator, no forward contract is possible. Many of our current troubles are due to the excessive risk engendered by post-war conditions, and the lack of a sufficient number of speculators to bear the burden of these risks. TRAGEDY OF AN UNDENIED ASPERSION. "Risk-taking and speculation illustrate, perhaps better than any other examples, the real trouble with capitalism and capitalist Bystems —the stupidity of the business classes as a whole. They have allowed the impression to become widespread and general that there is a largo class of persons making big fortunes at the expenso of the community by gambling in the commodities upon which the rest of us depend. Nothing could be more inaccurate. That there are such gamblers and that they occasionally make money cannot be denied. These, however, constitute a very small class; and further, it is beyond doubt that on the whole they lose moro than they make." Referring to the underwriter and the stock-broker, and their like, Mr. Benn says that by a delicate process, day by day and hour by hour, they discover the happy mean which exactly suits the points of view of both buyer and seller, and make it possible for both to deal in stoek, and for a local body or company to borrow money that otherwise could not be secured. "If all the books and articles that havo been written about the iniquity of private gain were re-written round the subject ot private loss the writers of most of them would of necessity be driven to different conclusions. This1 personal desiie, individual greed, so much discussed and so much dissected, is in fact, an immense power, working through millions of private individuals, for the preservation of society from losses which, it allowed free play, would soon bring it to an end. When losses and profits are balanced, when it is shown that notwithstanding all the profits, these aro mostly absorbed in the losses; when it is shown that the owners of the profits, whatever their desires, take no more than a very small margin whish is barely sufficient to provide us with the increase of savings and capital upon which our progress depends, then it seems to me that the case against private enterprise and individual gam entirely disappears."

Referring to recent discussions m Parliament, Joseph Bell M'Donald expresses tho opinion that the Reform Party's complete victory in tho election was attributable in a large degree to the use of slogans boosting Mr. Coates. "Lot me say here that Mr. Coates has his chance to prove himself, and it he does, then I will be among tho first to recognise his worth. However, to date he has not made a very promising start. First,-the Eden by-election caused not a little stir in the Reform ranks, and now we have Mr. Coates reprimanding two or three of his supporters. Does this»'make for the good, of the party? Ono member who came under the Premier's censure is just_a 'new chum,' and it was, in my opinion, bad form to publicly admonish him. In conclusion, may I say that if the Prime Minister wishes to remain in office as long as his predecessor, he will need to bring more harmony into the ranks .o£.^-^M_iXi^L*# w -I—-——— -~^_