THE LONG PULL

Hawke's Bay Tribune, Volume XXII, Issue 36, 26 January 1932, Page 6

THE LONG PULL

BRITAIN’S GREAT TASK. FAMOUS ECONOMIST’S -VIEWS. Sir Josiah Stamp, the economist, delivered tho Ludwig Mond lecture at Manchester University early in December on tho position of monetary science. He put forward three statements of policy which he said would occupy the field prominently in the near future:— (1) That we Britishers should endeavour to gravitate to an exchange rate that would correspond with a price level at which our economic machine would function smoothly, and at which employment and profits were satisfactory: (2) That we should test that rate out in its de facto stability with tho dollar over a reasonable period before wo committed or accomplished the formal act of stabilisation ; (3) That we should not formally stabilise until we had, by international co-operation, secured an understanding about the future management of gold; otherwise, we might find ourselves forced off again by unnatural movements, maldistribution, and the like. Sir Josiah also said: “The brutal fact is that the present wholesale and retail levels are incapable of giving the desired equilibrium ; they constitute an entirely an stable and artificial distribution of the national income; and a rise in the wholesale level of the order of 25 per cent, and of the cost of living of 10 per cent, arc essential to full employment at the current level of money wages, for some time at any rate, until real efficiency earnings are substantially greater.” “We might as well recognise the hard fact that a sufficiently thoughtout and agreed programme which would guarantee us against continual gold deflation and maldistribution was a long-distance effort.” This could only be achieved, Sir Josiah concluded, by painful stages of realism, like the truth about the economies of reparations.