NOTES AND COMMENTS.

New Zealand Herald, Volume LXVIII, Issue 20842, 8 April 1931, Page 8

NOTES AND COMMENTS.

WAGES AND PRICES. "There is no reason to doubt that the curtailment of economic activity is creating conditions which will at the proper time generato a new forward movement. Indeed, there are already signs that the downward rush has spent most of its force," the Economist observed recently in discussing the prospecte of recovery from the slump. "Are we likely to see commodity prices recover to 20, 30 or 40 per cent, above the present figure, or will prosperity bo slowly rebuilt on a. very small recovery from the existing low basis ?" The latter possibility, it suggests, would involve a very severe and difficult adjustment of all wages, salaries and fixed charges, including taxation, in all countries which may mean a decado of difficulty involving friction and widespread social disturbance, and probably a violent disturbance of the world's monetary arrangements. "Fortunately, there is ground for confidence that there will be somo recovery of prices from their present level in the not distant future," the Economist added. " One argument only need be mentioned to support this view: in no country —even in those with the most flexible of wage systems—can costs of production bo very rapidly adjusted, and, since output of many commodities is now taking place at n loss, prices must inevitably before'long be restored, by the elimination of marginal producers, to a level which will cover costs. That is to sny, equilibrium may well be re-established by falling wages meeting rising prices half-way."

POPULATION AND FOOD. The conclusion that there is, throughout the world, a disproportion between population and food supplies is expounded in the Spectator by Dr. R. A. Fisher, of the statistical department of Rothamsted Experimental Station. He refers to articles on the subject published by him in 1929, in which he formulated four tests to determine whether population is " pressing upon" the food supply. Briefly defined these are a progressive increase in the price of foodstuffs relative to the goods from which clothes, houses and other necessities are made; general prosperity of the food producing industry, agriculture, in contrast to other industries; the production of staple foodstuffs more profitable than other branches of agriculture; and economic conditions for the agricultural labourer superior to those of the urban worker, and consequently an increasing proportion of the population becoming engaged in agriculture. "On every one of these tests," says Dr. Fisher, " it is clear that the modern world is experiencing, not increasing over-population, but paradoxical as it may sound, increasing under-population. The price of food relative to that of materials other than food has fallen; not by a temporary fluctuation of small amount, but substantially and progressively, for the last fifty years. . . Next, the profits of agriculture in return for capital ,and management are unquestionably less than in other industries, while the wages of agricultural labour for the same level of skill are equally unquestionably lower; where they como into competition the manufacturer, the transport service, or the local authority has the pick, and the farmer has the residuum of the labour market. Within the agricultural industry, the tendency to rely increasingly whenever possible on non-food crops rather than on food crops and, among foods, on luxury foods rather than on staple foods is, I believe, doubted by no one connected with . the industry. Finally, I do not know of any country in the world in which the rural population is not a diminishing fraction of the total, and since the country dwellers have almost if not quite invariably the higher birth rate, it is clear that the current economic inducement is away from rather than toward food production."

THE ABUNDANCE OF FOOD. " Relative over-population, in so far as it has occurred locally in the past, must be ascribed, not to the limited resources of the earth, but to the incompleteness with which its resources bad been made accessible," Dr. Fisher adds. " The great material progress of the last half-century, especially in respect of transport by land and sea have, in fact, flooded the market with unused resources and have brought civilised peoples, mentally prepared as they were to mitigate the evils of over-population, face to faco with the totally unexpected evils of the opposite condition. To the increased accessibility of tho unused lands must be added the great increase in potential yields brought about by the now unlimited supply of fixed nitrogen; and the recent abrupt halt in tho increase of the white race in North-West Europe and North America. . . However misguided the drift to tho towns may be from an aesthetic standpoint, wo must recognise that it is the economic effects of underpopulation—of insufficient mouths to consume the food produced by land already brought under cultivation—that impover-. isli the idealists who still remain culti vators. These are the people who should bo consulted, in my judgment, if the aesthetic argument is to be used, as to whether a countryside largely derelict and neglected is aesthetically more satisfying than one supporting a prosperous agricultural industry."