SLUMPS & THRIFT

Hokitika Guardian, 21 June 1938, Page 2

SLUMPS & THRIFT

(Exchange) 11 there is one political and economic fallacy upon winch the people of tut* and conutry must be on their guard it is the fallacy that is crystallised in the Prime .Minister's lamoits declaration that there is no need lor’ thlilt. It is liot always submitted as bluntly as that. Last week it lias appealed m the emotional form of a scolding by Mr Savage for those who dare to speak of slumps or depressions, or the need for looking ahead. This, clearly is intended tii drive home the lesson that while the Labour Party is in office there can oe no slumps. Unfortunately for Mr .savage, he has to reverse every economic axiom to establish his ehtirn that the test of progress is to be found "not in stock exchange quotations, big company profits, tiade returns or statistics of production, but rather in the social welfare of the people. Exactly the reverse is the ease. The social well-being of the people depends wholly on the general prosperity and this in turn comes only from that form of thrift, which finds its expression in for-ward-looking enterprise and increasing production.

The history nf the race is a record of .l.he enrichment of society not for a •share-fhe-wealth division in each generation, hut lor the greatest good of the greatest number in a progressive community. This •greatest uuniher has been defined by Benjamin ’ Kidd in his work on Social Evolution as the genoraations yet unborn. It is true that the demands of the present and the claims of the (future am in conflict, but, for all that, cadi generation finds itself horn into a world with tools and resources that were provided by the greater toil and self-denial of those who went before, and it is hv flu* use of these resources i and not by a share-tlic-wealth movement, that (he potentialities' of wealth and social well-being are developed. Every redistribution downwards, indeed, tends towards a dissipation *of the aeeumnlated assets of society and a- slackening of the rate at which wealth is produced, however tills fact, may he (disguised in times {of high prosperity. Government interference*. in other words, is tlu* greatest enemy of “a more abundant life.” Tin* Brookings Institution of America sounds a special warning against that form of interference*, ineliieling taxation, which drives capital into hiding places, and discourages enterprise. “No matter how much we may increase wage* rates,” it says. 11 with a a view to expanding purchasing power, we will not find available* in tile* market, places tlie* goods which minister to (lie satisfaction of human wants unless wc live* under a wage, price* and profit system, or under a completely Communistic method of economic organisation, it will always be* true that the* level of consumption or the standard of living can he raised only through the production of food, clothing, shelter comforts and luxuries.” Greater production oeines from the* stimulation of enterprise, but slumps and stagnation . are the eliroei result of government interference.