STANDARDS OF LIVING.

New Zealand Herald, Volume LXII, Issue 19124, 16 September 1925, Page 16

STANDARDS OF LIVING.

A COMING BATTUE. EFFECTS OF CHEAP LABOUR, struggle for markets. No. L By J. 8. CONDUFFE, (Professor of Economics, -Canterbury College). lu a previous article an attempt was nwde at the somewhat difficult task of conveying iji few words ah zmpicssion ot the rapidity with which industrialisation is likely to proceed in Eastern countries within the next few decades and the Magnitude of the eoonotnic and social char.ges that are involved. One of the most important consequences, and one of the most immediate, will be a battle of the standards of living. It will be sufficient to remind New Zealand readers of the way in which economic competition between labourers with a lower standard of living lias given in the past, and will always give, an economic basis for tho bitterest feelings of racial hatred. Much more than

economic conflict is,- of course, involved in the unwillingness of countries ■with a high economic standard to admit immigrants who are likely to undercst wages and lower the general standard of comfort—there are hygieuic, social and moral differences which make it extremely difficult for two sets of dissimilar people to live comfortably side by side. America's experience of the social dyspepsia which comes from mixing too many racial ingredients in the "melting-pot' is a warning to all young countries of the wisdom of controlling the composition of .■ their own populations, even at the risk of some retardation of their economic development. A Eisky Experiment. It has to be remembered, moreover; that it is the different standards of living -which often lie at the root of many of the other differences which make the mixing of peoples a risky experiment. Education, hygiene, restricted birthrates, and high standards of child welfare, leisure and good working conditions, ample food, good housing, public amenities—all these are largely dependent upon the margin over a bare subsistence which industrialisation has made possible in ■ Occidental countries. It must be admitted that the margin of wealth is often wasted or used in undesirable ways, but the iact remains that economic and social reform is : possible .to those countries which can afford to pay for it. Social reform may possibly, by improving the human capital of a country, pay handsome dividends from increased production in future generations; but extra production is the necessary pre-condition for .starting such a beneficent process of action and re-; action, 1 The higher economic standard which our countries defend so tenaojcraily is, therefore, not merely a liigher standard of material comfort, but ratihar a margin , over bare subsistence sufficient to give opportunity for adequate -education and . child welfare, leisure and from : incessant toil in adult life, and a freer odd age. Hie life erf poverty, however admirable it may be in .individnal cases < w&en practised voluntarily and of deliberate choice, means, applied to the mass of the people, stunted childhood, hard, incessant adult »3abour and | a miserable old age. • I Regulating Immigration. There is a general agreement, and to this agreement Japanese and Chinese leaders 'bow as a matter -of practical politics that every country has the unfettered sovereign right-of regelating smnripution as it thinks £j;„ It is unthinkable that the exclusion laws already in force in the English-speaking countries around ifcbe Pacific will be twanged iin the tune that one can see ahead. It is doubtful in the extreme whether the interests ol international peace would bo served i! they were repealed. JVieiwfiiness is sometimes best preserved if the less preseirtabla mtjirhers of one's family are not allowed to take op their residence in the neighbour's backyard. The leaders of Japanese and Chinese thought recognise that, their prestige, their opportunity for trade, and their prospects of diplomatic support and' international friendship, are ' not served by allowing other peoples to 'j"* l ?®. by the 'irriiathjg presence of illiterate coolie labourers in their . countries. Ear more important than immigration which is rapidly passjrg out of the sphere of problems into the sphero of mutual agreement and the,, beginnings of international law, is the prospect, of what may be termed "vicarious immigration," the competition of goods made by cheaper labour working on lower standards of living- "It is in international trade, the competition of imported goods with domestic produce and in the struggle for neutral markets, that the battle between the opposing standards of living will be joined. ' Problem of Cheap Labour. speaking one is on delicate ground at this point. The cry of cheap labour has often enough been "used by struggling industries demanding tariff protection when their difficulties were due rather to expensive and inefficient management. or to a .necessarily restricted acale of production for an inadequate market. But at the same time tJbere is a genuine transitional adriantage in the employment of cheap labour, and in reaejafcyears this advantage has been* enormously increased bv the great improvement of automatic machinery. With skilled organisation and up-to-date machinery there is w reason why the Indian or Chinese operatives should not tend automatic repetitive machines very awcccnsfully. Their lack of mechanical konwledge can be safeguarded by the provision of mechanics set apart to look after the machines and their lack of physical stamina is likely to ba more than compensated by the cheapness of their labour. In any case, if historical precedent if any guide, this lack of stamina will bs met by using a constant succession of labourers, and will in time gradually be eliminated by more plentiful lood and better general conditions. Ihe laisser-faire theory of frea-trade which tended to ridicule the "cheap labour argument for tariff protection, depended upon artificially simple reasoning from the assumption that competition within a country was unrestricted and that there could not be any transference of labour and capital internationally. Both assumptions are so far out of touch with actual facts as to render the old theory quite invalid as, indeed, economists havet taught for several generations now. „ J" it is quite clear that while it is difficult if not impossible, and in any case uneconomic, to shift masses of labourers, it is comparatively easy to transfer capital in the most literal way. For example it is to be remembered that while Great Britain's export of cotton cloth was reduced during the war to about half of the pre-war yardage, the exports of cotton machinery 'from Britain id India have increased since the war approximately 600 per cent. Here surely is a transference of capital internationally. _