LABOUR AND CAPITALISM.

King Country Chronicle, Volume XXV, Issue 3372, 1 October 1931, Page 5

LABOUR AND CAPITALISM.

(To the Editor.)

Sir, —In your leader of the 22nd inst., "Unity Displaces Dissension," you assert that "the Labour Party in this country does not realise the seriousness of the position in New Zealand" and "Labour is obsessed with the idea that the State banks, industries and the land possess inexhaustible sources of wealth for the use of the workers." Dealing with the latter statement first, you must admit it is a little mixed, for anyone will agree that the possessors of sources of wealth take care that only the workers use them. Labour knows (and I hope anti-Labour also) that the State, i.e., the people, can produce far more wealth than it can consume from the inexhaustible sources in land, air and water. Surely the people who produce the wealth should have the first claim on it. That is simple justice! May I state that the members of the New Zealand Labour Party fully realise there is a financial, economic and social crisis to-day, which it is impossible to muddle through, and that scientific planning on Socialist lines is the only solution. The cause of the crisis, as you know, is the inequitable distribution of the national income and the interest system under which the moneylenders get away with a third of the nation income.

It took approximately thirty-five million pounds, very nearly the whole of last year's exports to pay the interest bill. Had the people of New Zealand that 35 million to spend on food, boots, clothing, etc., coupled with a reduction m hours, unemployment, with its attendant misery and mental torture, would have disappeared 'like mists before the morning sun.'

The world's greatest need to-day is the abolition of the interest system; its second, socialised banking systems, with scientifically regulated currencies based on commodities instead of gold and issuing credits at cost, and its third greatest need is the stabilisation of the price level, fsr it is possible for financiers to so manipulate the price level that the peoples of this earth could never get out of debt, save by repudiation. One authority says: "A rise or fall in prices, indeed, is neither more or less than an arbitrary alteration in the distribution of a nation's income as between different classes of its people. It is desirable that ways and means be found of regulating the supply of money and credit, so as to obviate disturbing price fluctuations." The member for Bay of Islands quoted in the House the other day from a bulletin issued by the City Bank of New York, relating to the distribution of gold. This sets out that: "The consequences of the continued maldistribution of gold are serious." From the standpoint of the recipients it is undesirable as constituting a source of potential inflation; from the standpoint of the losers it is even more dangerous as involving a drain upon the bases of their credit and currency system. The banks' bulletin goes on to quote from an address entitled: "The Economic Impasse ' of the Western World," delivered by the president of the University of Wisconsin upon the occasion of the seventh annual conference of the major industries, held under the auspices of the University of Chicago, on October 22, 1930. He said: "The simple fact is that a machine economy must, along with the making of commodities, see to it that the consuming millions have money with which to buy and leisure .in which to enjoy the products the machine economy creates. And that means higher wages than we have yet paid, shorter hours than we have yet set, and lower prices than we have yet fixed. Our machine economy is to-day sinking us in a sea of surplus production that we have not yet proved statesmanlike enough to use to the advantage of ourselves and of the world. But that we are producing more goods than the consuming millions are able to purchase is obvious; production and consumption are seriously out of balance. There are two obvious ways to deal with this disturbed balance between oroduction and consumption. We can slow down production by deliberate policy or we can speed up consumption by deliberate policy. I shall not attempt to disguise my conviction that to throw the brakes on our productive capacity would be a coward's policy and a social retreat. We have evolved a machine economy that can, if we will but bring a far-sighted statesmanship to its direction, emancipate the race from drudgery, lift the standard of physical well-being throughout the world, and give mankind at last leisure -in which to cultivate values that be beyond economics. But the machine economy will never do these things unless and until the leadership of industry sees to it that a larger share of the national income is shifted into the pockets of the consuming millions, and until the margin of leisure for the millions is markedly increased. And if, and when, the leadership of industry resumes, as one of its major duties increasing the income and the leisure of the millions, it will discover that, as a by-product of this statesmanlike social ministry, it has made greater profits than ever before. It is one of the ironies of history that the very things for which Labour and Liberalism have pleaded through the generations on the ground of simple social justice, namely, high wages, short hours, low prices, are now seen to be the only things that can, in the interest of the solvency of capitalism, keep our industrial order a going concern. By a thousand superficial tests our captains of education and our captains of industry have been successful during the decade just closed, but in the deeper sense, they failed when faced with the crucial test of their careers, namely, the prevention of the current economic depression." The banks' comment on that is:—

"We attach mpre importance to these utterances than to those of a semi-political character previously quoted, for undoubtedly the latter represent the reactions of a great

many sincere and thoughtful people to the present situation." The gospel of "hard and honest toil and the exercise of thrift" is obsolete and must be replaced with a gospel of "more leisure and a higher standard of living for everyone." In conclusion, I believe the people of New Zealand are determined to have an immediate reduction in interest rates to a reasonable level. (I would suggest a maximum of 2% per cent. for a start). And if the financiers and their political representatives—the United and Reform Parties —stand in the way, well . . . you know what happened to the bull that tried to bluff the railway engine.—I am, etc., C. CROALL. Mahoenui, 27/9/31.