The Times WEDNESDAY, SEPTEMBER 7, 1938. "Cannot Create Wealth”

Manawatu Times, Volume 63, Issue 211, 7 September 1938, Page 4

The Times WEDNESDAY, SEPTEMBER 7, 1938. " Cannot Create Wealth”

Six States ill a world oi GO-odd are working on what may be termed “new economic policies. ” These policies fall within three classifications. In order oi divergence irom orthodoxy they are: The complete Socialist State, as in Russia; the regimented State, as in Italy and Germany, where private ownership is maintained but rigorous State control is exercised. The third group comprises U.S.A., France and New Zealand, where a hybrid Socialist-private enterprise economy is “enjoyed.”

This type oi new economic policy is oi supremo interest to citizens as they will be shortly called upon either to endorse or condemn that policy—a policy founded upon a supreme belief in Money.

This policy as implemented by the New Zealand Labour Government' was neither original nor new. Two and a-half years before the last election here President Roosevelt assumed power in U.S.A. and there introduced his “New Deal.” X'ho policy followed by our Government is a very much “Made in America” one. And in France at about the same time as we caught the Socialist fever the electors did there.

This “New Deal” economy has, therefore, had every reasonable chance to show what it can achieve. Indeed, it had every opportunity, for the world as a whole made splendid recovery during the years 1934 to date. What verdict can be given upon the record of this policy in two great overseas nations V

In France, leadership of the Continent has been lost, expert trade has dwindled, the currency has depreciated alarmingly, tlic national debt increased enormously and a definite lowering oi the standard of living lias resulted. The Socialist Government has fallen and a middle-class Government has been called upon to restore order out of chaos.

In U.S.A. the “New Deal” was tried under ideal conditions and lias had both its greatest and longest opportunity. Here was the richest nation on earth, the most self-contained, with proportionately only a minor overseas trade to worry about. The “New Deal” President was given almost dictatorial powers and had the goodwill of the vast majority of citizens. His five and a-half years’ record serves only to condemn the policy. The nation’s debt has been doubled, the currency inflated GO per cent., trade is diminished, the economic independence of the people dangerously undermined and the U.S.A. has to-day an unemployment problem unparalleled in all the world. Whilst the world as a whole has recovered from depression depths, America is stili a weakly convalescent. Now

“pump-priming” is to start all over again with £800,000,000 of new credits. Inflation proceeds apace.

Returning to our own land, where the experiment is being tried in a third instance, our situation is happily better at present. For this we have Britain to thank. The Motherland, under seven years of Conservative National Government, has made complete recovery from the depression and is to-day strong in finance and spirit. Her population is the most prosperous in all Europe. Her prosperity has given us that which wc have enjoyed. Our Government has done nothing to bring that bounty, despite all professions to the contrary by effusive politicians. The influence of a Government upon a nation’s welfare has been most ably stated by Mr. J. A. Spender, a noted British publicist. “A skilful Chancellor can do much to ease the nation’s burdens, but the one thing he cannot do is to create wealth. A Government may have a very fine programme, but if the goods and commodities necessary to carry it out are not in existence or cannot be quickly produced, then the moneys or credits voted for them have simply a paper value, and to put them into circulation is to diminish the value of all the money already in circulation. This is the point to be watched in all modern budgets.”

The soundness of the principles thus enunciated is indisputable. How then does the current Socialist “New Deal” being followed in New Zealand agree with those principles? It does not, which is a misfortune. An unsound policy is being followed. A policy founded upon false premises, on a belief in Money. The production of Goods is given a minor place.

A Government cannot create wealth. But it can all too easily stop wealth from being created, and that is now coming to pass in New Zealand as it had in France and U.S.A. As a young, vigorous nation this Dominion can stand “going on the bust” anil will recover provided the debauch be nes too long continued. The time is due, however, for a return to sane liviuv