A RECONSTRUCTION PLAN

Evening Post, Volume CXV, Issue 85, 11 April 1933, Page 15

A RECONSTRUCTION PLAN

The plan of the National Reconstructive Association recently outlined by Mr. McMillan, of Auckland, reads plausibly, but is, I fear, unduly optimistic and indeed quite fallacious (writes E. A. Gosse). Briefly, the plan is as follows: If, say, twenty thousand men could bo absorbed into secondary industries, their increased purchasing power would employ a further number of men. These again, would employ still more, and so on. To start the ball rolling, it is necessary' that Capital, now prevented by fear, should receive a guarantee of 5 per cent, interest, secured on the Unemployment Relief Fund. Blessed Relief Fund! It has already performed quite a number of offices undreamt of at its inception. At the present time, with a high tariff and a high exchange rate, what is it that hinders the expansion of secondary industries in New Zealand? Not the lack of capital, surely, but the certainty of loss! What, again, would be produced? If it be goods that are now imported, how can the farming industry be paid for its exports? Again, would it be beneficial to produce an article here for a shilling which could be imported for sixpence? Poor as primary produce prices are, they yet, judging by the prices of overseas goods received in return, pay us far better than our secondary industries—this, of course, on the basis of Free Trade. But why must industry work at a loss? If labour produces all wealth, surely, with modern facilities, there must bo a profit! The law of rent comes in here, which Mr. McMillan,' and quite, a number of people with plans conveniently overlook. Land has no cost of production; it is given by the Creator quite free of charge, land being a natural monopoly absorbs all tho general increase due to social progress, leaving to labour but a moiety for its services. .Worse, speculative rent, or the forestalling, of future production, denies labour even that moiety. It was the exactions of speculative rent that, depleting the purchasing power of the masses, brought to a head the phenomenon known as tho world depression. ... Unless Governments exercise their true function of_ dealing justly by all.and collect this common rent for the common needs, at the same time abolishing all taxation, we must drift into a state of anarchy or slavery.