SPIRIT OF INDEPENDENCE

Evening Star, Issue 21716, 10 May 1934, Page 3

SPIRIT OF INDEPENDENCE

PRIVATE VERSUS STATE ENTERPRISE INDIVIDUALISM URGED BY MR A. 0. HEANY Individualism as a forceful, constructive creed and system, under winch-tue present habit ot leaning on the Governmeut would give way to the spirit of independence and self-reliance by the people, was urged by Mr A. 0. Heany, secretary of the Associated Chambers ot Commerce, in an address before the Dunedin Chamber of Commerce last night. The local president (Mr W. H. Brent) occupied the chair, and in introducing the speaker explained the business of the meeting, which was to hear what the object of the Associated Chambers was, and the work carried out by that body. It was very apt that the Associated Chambers should be known as “ the scrutator of the nation’s business.” Mr Heany blamed State intervention for frightening Capital, thereby restraining the swing of the pendulum to better conditions, and held that the encouragement of the Capitalist would effect infinitely more than any economic experiment the State could attempt. He said that the world was experiencing a wave of experimental ism. All kinds of economic expedients were being tried, the instance of the United States ot America being probably the most outstanding, for. the obscurity of its ultimate Outcome as well as for its magnitude and boldness. In the meantime, as the Liverpool Chamber of Commerce pointed out in its latest report, the needs of people were greater than ever, which was one of the fundamentals of trade recovery, but no matter whatever the needs or whatever the anxiety of the individual might be, they were ruthlessly beset by limitations coming from a rigorous restriction imposed by the policies of Govarnments. _ Similarly, the President of the British Board of Trade publicly acknowledged that the misfortunes of to-day were due not to private enterprise,’but to State errors. LEAVE TO PRIVATE ENTERPRISE. There were those to-day who claimed with jubilation that laissez faire was done and finished with. It was important to remember that laissez faire meant no “go as you please,” as was generally understood, but “ leave to do,” and if indeed the policy of giving leave to private enterprise to do the business of the world was passing—a policy which had elevated England to the position of the leading trading nation ot the world, and had raised the whole standard of living—then the future was dark and without much hope. To-day there was too great a tendency to urge deliberate control and regulation by the State, as if that were the end in itself, whereas the State could do nothing more constructive than to establish conditions favourable to private enterprise, then step back and allow private enterprise to do its job. The trouble was that private enterprise had not been allowed to do its job, but had been impeded by deliberate State policy. “ Notwithstanding, a policy that is being widely preached these days is economic planning—the conscious and deliberate . direction by the State of economic activities,” said Mr Heany. “ Unfortunately, this spells further subjection to State control of the liberty, enterprise, and initiative of the individual. Indeed, it appears to mean more than that. Mr Bernard Shaw, to whom a question was addressed as to whether a nation which had a Capitalistic econpmic structure could plan its economy and social activities, answered no with apparent seriousness. So that tho relationship is Socialistic. The dead hand of tho State has already proved to he a poor guide in matters which properly should be outside the functions of government, and in the light of past experience there ■ is need to view with the utmost caution any proposals for extending the functions; of government.” EXPERIENCE OF STATE ENTERPRISE. In connection with New'Zealand’s experience of State enterprise, the speaker proceeded to deal with various State undertakings in New Zealand over a number of years, such as railways, ship-ning.-vjand development, kauri guns businesilNvCoal mining, life and fire insurance, legal business, irrigation, water supply and drainage, engineering, and money-lending. He quoted figures to show that in many cases, despite advantages over private enterprise, heavy losses had been made, in other cases there were very poor returns despite the guarantee of the State as a backing, and there were prospects of further losses from certain undertakings. The benefits that were supposed to result from State enterprise had turned into taxes to meet losses and interest, a burden of debt, injury to private trade as employers and tax yielclers, and the ignominious revelation that the State could not do as well as private enterprise, leave alone better. If by bis works did one know a man, then the works of the State .should be equally eloquent of its ability or otherwise. State intervention, legislation, and regulation in matters of trade were at their best a necessary evil and not a constructive good. The supporters of, State intervention were the last to admit that the deliberate hedging around of private enterprise with restrictions had anything to do with tho present prolongation of the depression'... continued the speaker. In earlier -peril. Is of depression production and trade had been less subject to control, while costs bad been lower and more flexible, so that the pendulum bad been able to swing again. To-day, higher and more rigid costs, allied to the fetters of State intervention, were doing a great deal to bold back tho pendulum. What the next trade cycle would bring if the present restraints on production and trade were accentuated by conscious and deliberate direction of economic activities by the State would probably be a condition of chaos. SOLVING A DIFFICULT PROBLEM. Dealing with unemployment, the speaker said the Unemployment Board was to be congratulated on its efforts to solve a very difficult problem, but its job was after all only to put into force palliative measures. It had to be remembered that the natural and economic corrective for unemployment was tile reabsorption of unemployed into profitable industry, • trade, and commerce. In preference to artificial measures, everything possible should be done, by the removal of harassing restrictions by the State, to assist the restoration of profit to industrial and commercial enterprise. A first essential was a reduction in the burden of taxation, which bad already passed sale limits, and was seriously retarding industry and enterprise and accentuating unemployment. Currency schemes were greatly popular to-day. said Mi Heany, and the Associated Chambers of Commerce bad found it necessary to define clearly the attitude of .the commercial community on the subject. Only harm could re-

sult from any such experiments in this country. It was ridiculous to propose any scheme for New Zealand when the country was so completely dependent on sterling. What was to be the future international monetary policy? And what was to be the future monetary policy of England? These were the two paramount considerations that must affect any action by New Zealand in the matter. PLIGHT OF THE DAIRY INDUSTRY. A subject ot great import to which the associated chambers had given attention was the plight of the dairy industry, stated the speaker. The cry for increased production, added to the use of artificial props such as State interference with the exchange rate and with mortgages, had had its effect, and there had been -an increased output of butter-fat, produced on an uneconomic basis. In order that the industry might be made an economic one, the maintenance of , artificial standards would have to be abandoned, and the proper basis of values arrived at. Those producers who could not produce butter-fat at to-day’s prices could be assisted into alternative forms or production. There would have to be an exploration of these alternatives, as well as an investigation of alternative markets, while an urgent need w?s to concentrate on quality instead of quantity. There were good possibilities in the direction of a greater internal consumption of raw milk. Only by following such lines as these did there appear to be any prospect or avoiding all the evils ot a quota and the consequent dislocation of the dairy •industry, with further State control and the interference of Government departments. TAXATION PERCENTAGES. An unblocking of the avenues of trade, in order to facilitate the exchange of goods, was a vital necessity, while in New Zealand, as elsewhere, taxation relief was one of the first essentials to industrial and trade recovery. Whereas State revenue from taxation in New Zealand in 19-8-29 was lift per cent, of the national income, the percentage rose in 19-9-30 to 13i per cent., in 1930-31 to 15J per cent., in 1931-32 to 17 per cent., and in 1932-33 to 19 per cent.—a steadily increasing proportion. Over £2,000,000 more was taken by Government taxation in 1932-33 than in 1931-32, and that from ;i poorer public. In the year just ended the full year’s incidence of sales fax and gold export duty would go to swell still further the taxation receipts. As regards meal Government taxation, in 1931-3-£3,500,000, or one-quarter of the total expenditure, came from rates. In that year general and local government taxation totalled nearly £23,000,000, or 2‘ii per cent, of the national income, which was a crushing proportion. Those figures were a compelling argument, if argument were needed, for a contraction of the activities of government, and they should be enough to silence suggestions for further State intervention, with its inevitable concomitant of steadily mounting administrative costs. Private enterprise needed more freedom and “ leave to do,” in order that it might regain its resiliency and restore conditions of prosperity. The job of to-day was one for private enterprise, not the State. Sir Ernest Beun was probably rather caustic in bis statement that “ when a politician says he will help a trade, that trade’s .number is up,” but his point was that political interference definitely added to overhead costs and multiplied the official class. TO RESTORE PROSPERITY. ‘■The only way to restore prosperity is to give back again to the individual the opportunity to make money,” said Mr Heany. “ Capital, which has been made timid by State intervention in •contracts, exchange operations, and so on, as well as by high costs and increased taxation, should bo encouraged to function with confidence. However extraordinary and urgent the circumstances that may have argued the necessity for State intervention in such directions, the fact remains that capital has been frightened, and is seeking safe refuge. Until capital can be coaxed into applying itself to production with confidence we will continue to stagnate, notwithstanding the claims of all sorts of currency schemes and other nostrums, popular when the body economic is sick.” The speaker said that chambers of commerce were composed of jiractical men, who had a duty on them to study and examine tho problems of the day, and by their thought and energies to make their contribution to the betterment of national and local economy. They were trying to do that as far as the heavy calls of active business enabled them. They were not selfish nor self-seeking in their efforts, and they were greatly concerned with improving the conditions under which industry, trade, and commerce function, because prosperity was so dependent on the free running of the industrial and commercial machine. In face of unsound counsels, of course, there was the danger of falling into a purely defensive “ anti ” attitude, and Chambers of Commerce could do a valuable thing in advancing a definite and forceful policy of individualism for the whole community, in order that the people might win to prosperity by efficiency and initiative instead of falling into the bondage of a swollen State. At the close of the address air Heany answered several questions, and was accorded a hearty vote of thanks.