SINEWS OF WAR

Nelson Evening Mail, Volume 76, 31 December 1941, Page 5

SINEWS OF WAR

PROFIT MOTIVE SUBORDINATED A peace economy in a non-collectivist (State is based on the successful anticipation of the future wants of the population, the criterion of success being the gain by the aggregate of producers of such receipts for their efforts as will enable them to repeat the process on a gradually expanding scale. This criterion normally takes the form of profits. Under a war economy, such foresight regarding future wants by the entrepeneur ceases to be the major instrument of success. Demand —the wants to be filled—is to an increasing extent determined by the Government and made known before the productive process begins. The stimulus of profits is partly or wholly removed. The power of the Government to acquire the goods and services it requires is obviously conditioned by national productive capacity and by the Government’s ability to borrow abroad or sell abroad existing claims to wealth. There are, in fact, four possible sources of supply: (1) the unutilised productive resources; (2) Existing resources actively employed oil production of goods and services either to meet civilian needs at home or capital exports; (3) Consumable capital; (4) Finally, a Government may make use of its own credit. It may borrow abroad and leave it to future generations to repay. (World Economic Survey, issued by the Secretariat of the League < i -Nations).