ECONOMIC PLANNING

Evening Post, Volume CXVI, Issue 103, 28 October 1933, Page 10

ECONOMIC PLANNING

WOELD MOVEMENTS

THE RUSSIAN SCHEME

World movements towards economic | planning were discussed by Dr. Guy I Scholeficld, Parliamentary Librarian,' in an address given to tho Wellington, branch of the Economic Society oi; Australia and New Zealand. Dr. Scholeficld described tho various ■. schemes of economic planning at pie • sent being tested. He said that it h;> d not been easy to arrive at a definiti? m, of planning, but he had come to tj ie conclusion that planning might bo iicfincd as "social control of the ecouou lie system" or State intervention in Uho working of the forces of supply and demand, generally with a view to iproducing equilibrium." Practically any intervention from outside the a inks of producers and consumers amounted io planning, namely, tariff restrict ions, subsidies, quotas, control boards, S3tate schemes of colonisation, etc. SUPPLY AND DEMAND. The aim of a good plan was to adjust supply and demand so as to avoid gluts and shortages, and to smocr th out the sharp fluctuations in price which resulted from unrestricted corny* atitiou, Any sort oil planning involve* I some curtailment or modification of ti.ie freedom' of capitalist, enterprise.' Some States, Russia iii particular,, endeavoured to eliminate it altogether. All controlled it. Obviously, no St ate that entered on planning could a 7 low- private enterprise the old urn estricted freedom. In discussing the i heory of planning it was usual to eon»\dcr it as extending only to the commodity supply and demand. Eventual!;/ it must extend to labour, as well, jjabour at tho least must be regarded a»; a perishable commodity , for whicJ i it was equally necessary to find a pi oper equation between demand an d supply, | namely, to eliminate unej uployincnt. State planning was, in. fact,, the whole field of State activity in sup ply and demand, both for commodities and for services. ESSENTIAL POINTS. Iv describing the essential points of the various national plamis ng schemes, Dr. Scholefield said that t'bo outstanding feature of the Russian scheme was that they started with a; clean sheet. The Soviets eliminated a .ot only tho existing overhead of capital investments, but even the. capita list idea and capitalist personnel. Morjeovcr, Russia was in such a backward o ondition that tho problem, of speeding^ up in every direction was comparative ly simple. Tho autocratic control of the Government made it possible to sell, exports even when there was no surplus;, and to make its own people tighten tlj.eir belts as a gesture of national discipline. OUTCOME OF ADV ERSITY. j The problem was not niiarly so simple in Western countries wbjfxre private enterprise was established iand democracy was the principle of government. Planning was the outcome of adversity. Everywhere it was inspired by nationalist sentiment, and sC rongly protective. Amongst the eaj ly schemes of planning, most of which ivero voluntary, Dr. Scholefield r<;f erred to the Fruit Exchange in California, the Wheat Pool in Canada, ."ind the various control boards in Ne? f Zealand and elsewhere. In almost all cases the object was to avoid viokiiit fluctuations by smoothing out the i low of supplies, not by restricting production. Soon after the war most coui itries, caught in a maelstrom of new anid abnormal competitive forces, resort* unconsciously to planning. In France tho National Economic Council wai: established in 1925. Germany's Coumiil appeared five years earlier, but did IWJt take the same prominent part in reorganisation. The Fascist system in Italy aimed at making the country self sufficient by tho medium of the corporante State. It deliberately abstained from, an export policy, but pursued 'energetically the aim of self sufficiency. PLANNING IN THE EAST. One of the earliesi and most important planning schemes; was Dr. Sun Vat Sen's proposal in 19(19 for the international development of China, providing, amongst other tilings, for the construction of 100,000 miles of railway and 1,000,000 miles! of roads. Owing to lack of capital a ud political uncertainty this had suffi; red many modifications, but it was now being vigorously pushed forward. China favoured capitalism, but in co-operation with vigorous State enterprise. Japan had passed through tho1 stage *of rationalisation and had anrived at control of certain industries, but the most important feature of Japanese planning was a vigorous economic imperialism, the effects of whieih were being felt all over the world todjay. Her system was strongly capitalistic. ROOSEVELT'S POLICY. Tho policy of President Roosevelt in the United States* was one of the most extensive schemes of national planning, said Dr. ScholefieM. The Hoover policy, like the pre-depp ession control boards, restricted itself to withholding surpluses in the liope of a return to prosperity. Tho Roosevelt policy definitely proposed ; the limitation of agricultural production and the re-employ-ment of labour «>n conditions of shorter hours and better pay, which, with other provisionis, involved considerable curtailment of capitalistic freedom. Yet the Unitoed States scheme was based upon thfj continuance of the existing capitalint organisation. COMMODITY CONTROL. Apart from, national schemes, there were a number of proposals affecting particular eoinmodities which had a world-wide operation. First and foremost was who at, which, after disastrous fluctuation in price and a steadilymounting output, had now at last been reduced to control by international agreement. ' Tho great exporting countrieshad consented to reduce their production by 15 per cent., and the importing cousitrics to prevent increased production ,'trithin their own borders. Sugar had also experienced disastrous fluctuations. Attempts to secure agreement for tho restriction of production had failed, and crops in Cuba and Java had now at. last been reduced by half by sheer a diversity. Rubber production was in.a similar position. .The Stevenson scheme .of restriction failed because it eniFjraeecl oniy British territory. Coffee also haid. been in a state of glut for years past, and Brazil had made desperate clßarts to dispose of surpluses. A world scheme was proposed at the Economic! ■Conference.