The Evening Star MONDAY, JULY 4, 1938. THE "INSULATION” ABSURDITY.

Evening Star, Issue 23000, 4 July 1938, Page 8

The Evening Star MONDAY, JULY 4, 1938. THE " INSULATION” ABSURDITY.

It is a waste of time to argue over the question whether New Zealand could be “insulated” or could not. The real issue is whether or not insulation could be carried out at the expense of a loss of living standard to the people of New Zealand. If the scheme could be shown to be applicable without cutting down living standards, then it would be so wonderful that most people would support it without further ado. If it could not be carried out without loss of standard, then it would leave the country ho better off than it could be without it. The Hon. P. Fraser, in his address in the House on Friday, appears to have kept away from this phase of the question.' Mr C. M. Williams, member for Kaiapoi, on the other hand, specially emphasised the argument that a reduction of imports does not mean that there would be a reduction in the standard of living in the Dominion, so far as it is supplied by goods and services produced in New Zealand. Mr Williams spoke of replacing imports by locally-produced goods. Can he really believe that that could be done without increasing the cost of those goods? For what reason is international trade carried out at all if it is not because it results in reduced prices to the consumers? Why do the people of England import New Zealand’s products if they do not gain a material benefit by doing, so? Mr Williams’s argument is a refutation of daily experience ever since international trade began. And what about the goods that cannot be produced within New Zealand? It will be replied that Mr Williams restricted his argument to articles that can be supplied within this country; but a reservation of that kind would show that “ insulation ” is not the subject under discussion. Thousands of articles in regular demand and use are not producible within New Zealand. Would their disappearance from our homes and our shops and manufac-

tories not mean a loss of standard? On the other hand, if New Zealand cut down its imports, what would happen to its exports—those products from which it derives so much of its income? Of course, if the country were insulated, overseas trade would cease, and local consumption, to the extent that that was possible, would absorb all that was produced, and nothing besides. The luxury-loving people of New Zealand would find that a hard thing to do. Would not a loss of variety and standard result from that alone? And if the people of New Zealand could not consume their own primary productions, what would occur to the farmers and their dependents? Would the Government provide for them by means of inflated public credit? So far as we can see, “ insulation ” is possible, but at a cost that would make it a greater burden than unregulated depression. It would so upset and throw out of gear the whole trading and commercial system of the country that it would take decades to restore it to normal. It would bear as hardly upon our overseas clients and customers as upon ourselves, and in consequence would irritate and antagonise them. It would bring down our own living standards to that of a primitive community.