REMEDIES FOR DEPRESSION

Evening Star, Issue 21116, 31 May 1932, Page 14

REMEDIES FOR DEPRESSION

VAST INDUSTRIAL CHANGES INEVITABLE IMPRESSIONS OF DR FISHER ■' ll i.-, difficult to believe vimL the world depression will shortly rome to an end. not because the remedies for it are difficult to discover, but because it is difficult to persuade people to apply them," declared Dr A. G. B. Fisher, when addressing the annual meeting of the Economic ,Society of Australia, and Mew Zealand at the University last evening. It is quite a commonplace now to say that the crisis is a worldwide phenomenon, but nnlorUmatcly few people see that the world conditions which caused the crisis and which apparently we cannot control arc not independent of or dill event from the national conditions which to some extent we can control. Hence after paying respectful tribute to the importance of world conditions they too often continue the old, bad practices which have made world conditions what they are.”

Apart from the obviously important questions of currency and credit, _ this apparent contradiction showed itself clearly in our attitude towards some fundamental problems of economic organisation, the failure to find a. solution For which was largely, responsible for the persistence of the crisis. The fundamental economic problem of production was to establish an appropriate balance between the various industries which offered employment, and this problem could only bo adequately solved if at the same time people in different countries were prepared to cooperate effectively. To s Pcak of an appropriate balance did not, however, carry ns very far, unless we insisted that the balance must always be interpreted with reference to the needs of the people, and further understood that in a. growing and changing society the balance must always be constantly changing, too. It was useless to attempt to maintain a traditional balance between the numbers employed in different industries, if the needs of the people in any direction could be adequately met from the labours of a diminished number of people. Many of our troubles arose from the fact that most people wanted the organisation of industry to remain unchanged, and at the same time wanted economic progress which made changes in organisation inevitable. Business men now generally agreed that labour temporarily displaced by new machinery would later be absorbed in other employments, but they did not see that the process of absorption inevitably meant a change in the balance between different employments, a decline in the relative importance of the old, staple industries, and an increase in the importance of new industries. This misunderstanding showed itself most clearly in the persistent fallacy that a relative decline in the proportion of the total population employed in primary production was a bad thing which required correction.

The appropriate balance between industries was also likely to change as a result of changes in demand. Many changes were desirable and inevitable, but at a time when there were plenty of unavoidable changes in technical methods and in demand to call for attention, it was undesirable to introduce unnecessary changes, such as was demanded by the almost world-wide appeals to concentrate demand on locally produced goods. The consumer could do little directly to restore prosperity, but lie ought to avoid unnecessary changes in his demands, irrespective of whether he had been in the habit of buying foreign or locally produced goods in the past. The influence of worldwide propaganda similar to our own in favour of New Zealand goods not only had no useful effects, but was positively harmful in introducing unnecessary changes into an economic organisation which was already too much subjected to change. Three years ago it was possible to take the view that the tariff policy of New Zealand was not a matter about which it was necessary to bother much, as our prosperity depended so much more on other factors. In the world of to-day, however, tariff barriers were matters of first-rate importance, and, though it was an exaggeration, it was nevertheless a pardonable exaggeration to say that the growing poverty of the world to-day was a direct consequence of the degree of success which many countries were attaining in the direction of the ideal of self-sufficiency. We could be self-sufficient if we liked, but only on condition that we were willing to remain in a permanent state of poverty. Both public and expert opinion was being educated in regard to the importance of credit stabilisation, but in other directions the trend of public policy was still usually in exactly the opposite direction to that which was necessary if prosperity were to bo restored. Instead of seeing that it was useless to drive more people into the old industries which were already overstocked, people in many countries,_ including our own, agreed with Hitler that the remedy for unemployment was to drive more men on to waterlogged and barren land, and, while everybody agreed in principle that tariff barriers were bad, everybody in practice wanted to make trade more,difficult than it had been before. The chances ol rapid recovery depended largely on tlfe extent to which people in geural could be persuaded to take rational views of these two subjects. Prior to the address, the office-bearers of the society for the ensuing year were appointed as follow: —President, Hon. W. Downie Stewart, M.P.; vice-presi-dents—-Mr K. H. Mumey and Dr Fisher; secretary, Dr W. J. Boraman; treasurer, Mr W. M. Bradley; commit-tee—-Messrs Denford, J. T. Paul; A. 0. Billing, M. It. Wright, S. P. Cameron, and E. E. Nicholson.