Nelson Evening Mail. SATURDAY, APRIL 20. INDUSTRY AND LABOUR,

Nelson Evening Mail, Volume XLVII, Issue XLVII, 20 April 1912, Page 4

Nelson Evening Mail. SATURDAY, APRIL 20. INDUSTRY AND LABOUR,

Till-: LAW OF SUPPLY AND DEMAND. IN continuing the articles on economic

questions, it is interesting at this juncture, to refer back to a matter that was incidentally touched upon a few weeks ago. It will be rememhered, pcrhap*. that, in dealing with certain matters lending up to the commencement of the great- coal strike, reference was made to the remarks of Dr Gore, Bishop of Oxford, which were jnade in an address on this question. "The proper basis for the reconstruction of Society,"' he declared," was the principle that the adequate payment of the labourer should be the first charge on industry." With this view of the matter we largely agree, but it must not be forgotten that the learned Bishop is treading on very dangerous ground. Of course, his remarks represent an ideal that- is much 'to be desired but at the same time, many difficulties lie in the way.

On Thursday last when referring '.o the need that undoubtedly exists for alterations in the fiscal policies of the various countries, mention was made of the contention that with the institution of the minimum wage in Great Britain, a. certain measure of protection will be rendered necessary. Without this protection we fail to see how the Bishop's views can be given effect to, at any rate to any degree. He says, "Ignore the law of supply and demand." He does not seem to realise that, in effect, this is really a natural law, and natural laws may be avoided, but they will -not avoid . us. It is a well-known economic fact that so long as commodities are exchanged, the law of supply and demand must be supreme. If there be no exchange, then every man must be his ! mvn butcher, baker, and candlestick j maker. But so long as exchange remains the needs of the sections governed must be the determining factors. So far as the living wage is concerned there is morally no reason why one man should receive higher wages than an- \ other, but from an economic point of view there are of course many reasons why there should tjk a difference. The value of every man's labour i 6 the value of what \ the product of it will exchange for. And this wage is determined by public demand. If the wages are raised all round, then all the people will have to pay -more for their commodities. If they refuse to pav more than the present market value, or are unable to pay more, thev indirectly prevent that higher wage being given. Carried beyond a certain point, it would mean, as one.authority puts it, that everybody's wages would bo raised at the expense of everybody else. This particular scheme has been likene-d to that of the perpetual motion , crank who starts off without staying to consider the fact that not a particle of energy can be got out of a machine more than is put into it. * •).- * •

The. danger in carrying the Bishop's contention into effect lies in the fact, as ahead" hinted, that some of the fundamental economic laws may be violated. Reduced down to bedrock it simpry means that if an article will not sell for the cost of producing it, work must stop. Beyond a certain point the choice is only between such a wage as the law of supply, and demand will authorise, or no wages at all. An authority in such ma,tter s gives an interesting illustration from the English cotton trade, which represents one of the principal manufacturing industries in that country. Two things are essential to its existence — material and labour. All the material iu the- shape of raw cotton is imported while the labour is procured locally. The cost of these two things combined, is tlio cost'of procuring cotton fabrics, some of which are sold at home, and the balance exported in competition with the rest of the world. It is estimated that thp average margin of profit on the whole business is not over five per cent. The argument is carried on on these lines: Suppose a. fresh charge were made upoi> it for labour, which increased the cost of nroductiow bv more than that sum The danger is that the whole industry would come to the ground, and that the men employed in it would be made competitors for work with those of other Industries. The surest way out of the difficulty seems to be in the direction of increasing the extent of the wealth created au< i g^ v ' n S labour the benefit. Every man who works well, no matter what his occupation, is surelv entitled to the means wherewith to live deSently himself and to give his family a failstart in life, but disaster and far more suffering than exists already will be the result if, in an attempt to secure this ideal, fundamental economic laws are overlooked.