WORLD OF MAD HATTER’S ECONOMICS.

Manawatu Standard, Volume LII, Issue 305, 23 November 1932, Page 2

WORLD OF MAD HATTER’S ECONOMICS.

“In that’ direction,” said the Cheshire Cat, waving its right paw round, “lives a Hatter: and in that direction,” waving the other paw, “lives a March Hare. either you like: they’re both mad.” “But I don’t want to go among mad people,” Alice remarked. “Oh, you can’t help that,” said the Cat. “AAVre all mad here. I’m mad. You’re mad.” From “Alice's Adventures in AVonderland.” “It’s this way,” said the Hatter, pouring himself a second cup of tea. “Our farmers produce too much wheat, our factories too many manufactured articles, our machinists too many machines. We’re so efficient that we’re miserable. Surely you understand that?”

“I’m afraid I don’t,” said Alice. “For if there’s plenty of food and other things, everybody should be comfortable.”

“Prices have dropped terribly,” contihued the Hatter. “That’s what depresses us so.” “That’s no reason to be depressed,” said Alice. “I thought people complained when prices were high, so if they’re low you should all be happy.” “No,” said the Hatter. “We produce so well with machinery that we have less and less need of labour. So the workman can’t earn wages and can’t buy goods, and the things the factories make can’t be sold.” THRIFT.

(“Then what’s the good of making them?” wondered Alice.) “We are very thrifty,” the Hatter went on. “AA T e .save and pile- up capital with which we build more and more factories, which become more and more efficient. The more efficient they get the more they produce and the fewer men they employ. So their products glut the markets and their machines create unemployment. We put so much capital into making goods that the consumer hasn’t enough money to buy the goods when they are made.” “On, dear!” said Alice. “Doesn’t anybody know what to do about it?” “There are economists,” said the Hatter, “who have seen what was happening and warned us. But they are only scholars who lecture and write books. The practical men who run things have no use for the academicmind. But they know the value of the boll weevil.” THE BOLL WEEVIL.

“AA : liat is it good for?” “It eats up the cotton crop and keeps prices from falling,” explained the Hatter. “Were it not for the boll weevil we should have magnificent crops, and then the South would be ruined.”

“But wlrat about the poor North which has too many factories; couldn’t your boll weevil eat up some factories, too?”

“No,” said the Hatter disdainfully. “Besides, we protect our factories with a tariff.”

“Oh, I see!” exclaimed Alice. “Your tariff helps to sell the goods the factories make, doesn’t it?”

WHAT TARIFFS DO. “Not at all,” returned the Hatter severely. “The tariff checks trade by closing markets. AA’e close our markets against other countries; they close their markets against us. Each nation, you see, seeks a favourable balance of trade—that is, it tries to sell more than it buys.” “But what one nation sells another must buy,” said Alice. She felt very sure of that. “Then how can they all buy less and sell more at the same time?” “They can’t,” said the Hatter. “They< just destroy one another’s trade and add to one another’s suffering. Each nation wants to be selfsufficing, to do without the help of the others, because if there were a war the nation that could manage with the least imports would have an advantage.” ' “I hope there’s no danger of war,’ said Alice. WAR FEARS. “AA r e have many treaties to insure peace —the League of Nations Covenant, the Locarno Treaties, the Kellogg Pact, arbitration treaties without number. But everybody is afraid of war and everybody arms. AA’e are more heavily armed than when the last war started.” “How very strange,” said Alice, though she did not want to seem impolite. “No,” said the Hatter. “For nobody lias confidence in the treaties. Each knows that he will keep them, but he isn’t so sure about liis neighbours.” “Then what’s the good of making treaties,” asked Alice. “Take another cup of tea,” said the Hatter. “Tell her the story of reparations,” said the Doormouse, waking up and rubbing its eyes. “For that’s wha-t has caused the most trouble.” ‘ REPARATIONS. “The Germans were obliged to rebuild what had been destroyed,” began the Hatter. “That was because they lost the war —” “I suppose they sent workmen and materials a.nd repaired the damage,” interrupted Alice. Don’t make foolish remarks,” said the Hatter. “They were allowed to do no such thing. For that would have deprived French builders of contracts and French workmen of jobs.” “Then the Germans paid to have it done?”

“That was impossible. They didn’t have enough money or gjold. The only way they could pay was in goods. But the creditors didn’t want German goods and put up tariffs against them.”

“Then how did they get paid?” asked Alice. They lent Germany money with which to pay. Then she had so much capital that she made her factories more and more efficient and produced more goods and employed less people—just like the rest of us. And now she has borrowed so much money that she’s broke.” “If reparations are bad, why don’t you abolish them?” asked Alice. WAR DEBTS. “That can’t be done,” said the Hatter, “because France won’t agree and because the Allies must get reparations from Germany in order to pay their debts to America. These debts, too, must be paid in money from the sale of goods. But America has raised her tariff so as to limit the amount of goods she receives.” “Then how are the debts to bo paid ?” “Nobody expects they will be paid,” said the Hatter. “Yet we must act as though we thought they would be paid. One difficulty is that the debts change from year to year; so that the debtors must pay, not the amounts they borrowed, but much larger amounts.” “How can that be?” asked Alice. PAYABLE IN GOLD. “The debts are payable in gold, but actually the borrowers received goods, the prices of which were then very high. And what they pay back is not gold, but goods. But the prices of those goods have fallen; so in order to settle their gold debt the borrowers have to pay back about 50 per cent, more than they borrowed.” Alice sighed and wondered whether

anything ever would happen in a reasonable way again. “Can nobody do anything?” she asked. “Well, nobody has done much,” answered the Hatter. ; “But isn’t it important to do something?” urged Alice. ; “Of course. It is extremely important. Everybody knows ‘that,” said the Hatter. . Then Alioe remembered what the Cheshire Cat had said. —Harold Callender in the New 1 York Times.