UNEMPLOYMENT PROBLEM

Evening Post, Volume CXIII, Issue 57, 8 March 1932, Page 6

UNEMPLOYMENT PROBLEM

(To the Editor.) •Sir,—The- whole of your argument in the present discussion has clearly been based on. the-false assumption that the overseas buyer'of the goods we export pays the New Zealand producer for such goods in money. My. argument' on the contrary, is based onj the fact that New <sealand. receives payment in goods-for the, produce she: exports, and that it is from the proceeds of the sate in New Zealand of such, imported goods that the JNew Zealand producer receives payment m money for the produce he exports..This being the case, it logically follows that the price our primary producers ultimately receive, for .the produce they export is determined by the local market, exactly! in the same way as the price they receive' for the produce they sell locally is determined by local conditions.1 Just as America,, by cornering gold and erecting tariff barriers against British goods, is making the payment of her war debt account with Britain difficult, so is the action of our New Zealand Government and employers in reducing the purchasing power of New- Zealand workers, makinl it extremely difficult for our primary producers to receive payment for the produce they export, and also, by the way, for the produce they sell locally.: The barrier of reduced consumption is considerably more effective than the American tariff. barriers. A tariff barrier is only a temporary impediment; it is like a dam in a stream. The stream gradually rises, overflows the dam, and continues its course as before. The barrier of reduced consumption, however, dries up the stream.. I submit that the whole of my' arguments in the present discussion, in! addition to being based on fact, have been constructive, and that they prove that,' notwithstanding world conditions, we in JNew Zealand can determine our own standard of living subject only to our capacity to produce, and our sense of justice in distributing the proceeds of our industry —I am, etc., . A. PAELANE. [We have never adopted the "false assumption" which Mr. Parlane puts up so that he may knock it down. But his argument reveals the fallacy of his own contentions. If we are paid in goods, and the overseas buyer will give us less goods tor.our produce, and more produce is required to pay interest on our overseas debt, our standard of living cannot be maintained by repeating that our receipts, whether m goods or money, are the same as formerly. The suggestion that a reduction or local purchasing power has been responsible for a lower return from exports is untenable in view of the undoubted fact that overseas prices fell first. But as Mr. Parlane is probably of the same opinion still it would be futile to continue the discussion, and the correspondence must be closed.—Ed.]