WAGES, RENT AND PROFITS.

New Zealand Herald, Volume LXVII, Issue 20690, 9 October 1930, Page 16

WAGES, RENT AND PROFITS.

heading of " Arbitration Court" in Saturday's Hi", ha I.D, your correspondent writes: —" What is tho position at ptesent owing to wages remaining at the same standard as they were v.h''ii (induce was 50 per cent, higher: I'mj reads and hears so much on this subject, just now that some further light on thu position might be of interest, to your readers. It is, of course, widely acknowledged that a reduction in the. of production is imperative, but cost of production and wages are not synonomons, and that is just where your correspondent goes astray. The cost of production consists of the sum total of (lie cos-ts of the three agents of production, namely, land, labour and capital, these costs lining known as rent, wages and profits, tho last-named being further divided into interest and earnings of management. ;>s being a more accurate definition. Here, then, we have four elements eiiteiing into'the cost of production, yet your .-orrespondent selects tli3 element of wage, to bear the necessary reduction alone. Would it not be more equitable to at least divide such reduction equally among tho four elements concerned. Profit?, admittedly, cannot be fixed before the sale of the commodity, but it. would seem that if the three remaining factors o: production could be made to bear the burden equally, after a thorough investigation of each industry individually, profits would automatically fall in line, tints affecting the necessary 1 eduction in costs with a minimum of friction and ill-feeling, as at present the worker naturally feels that he is a partner in a very tin fa itpartnership. being the last to participate in increased trade returns and the first to suffer any loss that may occur. W. R. Gauss.