THE WORST OVER

Evening Post, Volume CXXIII, Issue 142, 17 June 1937, Page 8

THE WORST OVER

SURVEY OF THE SLUMP

NEED FOR STUDY

TO PREVENT RECURRENCE

(By Professor F. L. W. Wood.)

"The worst effects of the slump are now matters of past history," writes Mr. Harold Butler in his report as Director of the International Labour | Organisation. "After a scries of unprecedented experiences the world is beginning to regain a precarious equilibrium." Accordingly, he sets himself to study the lessons of the crisis and to discover to what extent recent experiences have increased our knowledge of economic processes or modified our attitudes towards current problems.

First of all. he notes certain newproblems that have arisen. For example, he discusses unemployment as it still exists in spite of recovery, and he adds some interesting remarks on the effect of the falling birth-rate. The pace of modern industry, he says, wears out workers comparatively quickly. Consequently, the older men tend to lose their jobs, and even ber come "unemployable" at full wages. But at the same time the supply o£ younger men is falling off. The falling birth-rale not only means that population will become stationary or decline. It means also that a much bigger, proportion of the population will be elderly—perhaps unfit for work. It is an obvious question to ask whether the decreasing number of young people will be able to carry the burden. Mr. Butler is not the first to raise such questions, but has had something new and valuable to say about them. ECONOMIC COUNTER-ATTACKS. Hovfever, the part of the report with the widest general interest is that in which Mr. Butler asks what we may .earn for our future guidance from recent economic experiences. The first thing which strikes him is a change in people's attitude towards economic problems. Not long ago, he writes, the general belief was that depressions just "happened"; they were in the nature of "a divine visitation, to be accepted with resignation." Nowadays, he finds all over the" world signs of the belief that depressions have a human origin, and are in fact due to "failure of human foresight and organisation." From this it follows that their remedy is human also. The result is an insistent demand that the State should usa its utmost strength to protect the people from economic depression. This demand that slumps must be met by furious counter-attack instead of resignation is strengthened, says Mr. Butler by a growing social consciousness which revolts against the spectacle of I poverty and suffering in a world of technical efficiency. In addition, there is a conviction that man can in actual fact interfere successfully with the play of economic forces. The coming of the depression stung Governments all over the world into applying emergency remedies. .Some of their measures increased the evils they were meant to cure. But, says Mr. Butler, it is generally believed that other measures did really help to revive prosperity This belief naturally prompts the demand that such beneficial measures shall be applied again, but more scientifically, more promptly, and more generally. , LINKED MONETARY POLICIES. Here Mr. Butler enters the lists himself. He frankly shares the general belief that Governments should lead the struggle against depressions. He thinks that the present recovery is due to "the positive action of Governments and peoples," and that such positive action, if wisely g.ulded« should be even more successful in the future—perhaps even to the extent of preventing serious depressions altogether. Further than this, Mr. Butler offers concrete, advice, for he gives a brief analysis of depression policies, indicating what in his opinion was wise and what foolish. In this analysis his views are challenging, even though some will disagree with them. The clearest lesson of the depression, he says, is that monetary policy is the most important single factor influencing a country's economic prosperity. In this he is widely supported by bankers and statesmen in Europe and in the United States. But Mr. Butler emphasises again and again that each country's monetary policy, while primarily concerned with internal stability, must be linked up by active co-opera-tion with the policies of other nations; and it must be linked, too, with a planned revival of international trade. Even so, currency is only one factor in the world's complex economic structure. Wages policy and unemployment relief are both extremely important; in these cases Mr. Butler argues strongly for a policy of high wages ana generous relief. The problem of agriculture must be solved and that of its relation to industry; and here Mr. Butler expresses an orjinion of some interest to New Zealand. Primary producing countries can only find ultimate salvation in a general increase in consumption. Half the world, it seems, is underfed; when all eat their fill farmers will not lack customers. ECONOMISTS AND STATESMEN. As the result of his analysis of recent experiences, Mr. Butler presents some clear-cut ideas as to what may be done to cure and to prevent depressions. The point of his argument is that this is now technically possible, provided that States act in genuine cooperation in the light of the knowledge available. That is perhaps the first thesis of his report. The second thesis is that today nearly every country is, wisely or foolishly, trying to promote prosperity by the action of the State. Not the least interesting sections of the report are those in which Mr. Butler discusses the policy of the different countries. He writes tolerantly, but there is shed upon all the light of his own views on economic wisdom. The result is a comprehensive review, in which many puzzling things are placed in their true context as part of world-wide movements. But perhaps the moral of it all lies in a contrast already mentioned. On the one hand economic problems are being studied in a way which is increasingly scientific and which promises fruitful results. On the other hand, political problems still seem to be beyond the reach of reasonable discussion. And the last word seems to lie with the politician. The economist can do his part towards building a new world order by providing the knowledge that is necessary, and also the machinery for co-operation. It rests with the statesman to say whether that knowledge and machinery are to be used to the best advantage.

tendance on expectant mothers of families of more than three. The present Government-was going to do wonderful things for mothers of large families but it is taking its time about it. Then again there is the question of houses. Is the Government going to discriminate in favour or against the people with families? —I am, etc., MOTHER.