TRENDS IN ECONOMICS.

Manawatu Standard, Volume LXI, Issue 96, 22 March 1941, Page 10

TRENDS IN ECONOMICS.

ADDRESS TO LUNCH CLUB. The trends of economic thought and policy during the 19th and 20th centuries were discussed by Dr. W. M. Smith at the meeting of the Citizens' Lunch Club yesterday. He referred first to the need for bold and constructive thinking even in time of war. There were some, he said, who would render the solution of social problems even more difficult by claiming that in the crisis of Avar it was wrong to think out and apply methods of social adjustment. | It was fashionable to-day to scoff at economics and in the process to impute to economists a great deal they I hall not said. However, the fact remained that the classical economists were open to criticism, not merely for some of the policies they had lent countenance to, but also because they claimed a great measure of authority ior theories which had since been shown to be markedly defective. Still', some of the criticism of economists might be better directed to ignorant people who popularised the subject and to politicians and business men who sought to twist the pronouncements of economists to suit their own ends. Despite all the bias that had been shown by some economists, especially in regard to wage policy, despite the the higher branches of economic theory had become so refined that they were useless as well as unintelligible to the citizeii, it remained true that no one was entitled to pronounce upon social problems who had not studied the writings of economists. Such study ought to sharpen the powers of analysis and clear away much flabby and wishful thinking. Since the great depression, continued Dr. Smith, economic policy in all countries had been characterised by a marked tendency to restrictionism and monopoly. Every device had been employed, whether through private or statutory monopolies or through subsidies, to preserve profit margins through limiting output. It was wrongly believed that assured profit through monopoly would of itself lead to expansion and increased employment. The fact was that there could be eventual expansion of economic activity only if the advantages of monopoly and subsidy were used to effect fundamental reorganisation and increased efficiency. Industries were not anxious for this, however. They wanted to continue on the old uneconomic lines and to have the losses consequent upon their doing so borne by the public. All this oppressive collectivisation had been well described in pre-Hitler Germany as "cold socialisation." Socialism, of a sort, far from being the horror of the scared investor, had become his salvation. Against all that biased economic theorising had said and all that monopolistic practice had achieved, there stood in shining contrast the realisation, even in some cases among men of wealth and privilege, that gross inequalities must be diminished and that the nightmare of insecurity and unemployment for cue common man must be abolished. It was the fashion in certain circles to denounce any determined attempts to reform the social order as "Communism." The danger of such underhand tactics was that the sum total of human misery might remain greater than it need bo. The refusal to vountenance further advance in the direction of economic democracy, the "Bourbonism" of bodies like the House of Lords, was a far greater uanger and, if not broken down, might some day present the Communists with a great opportunitv. The civilisation we cherished would endure and thrive, concluded the speaker, only if we could meet changing circumstances with measures adequate to those circumstances. Mr W. L. Fitzherbert, who presided, thanked Dr. Smith for his address.