THE New Zealand Herald AND DAILY SOUTHERN CROSS THE ECONOMIC OUTLOOK

New Zealand Herald, Volume LXXIII, Issue 22427, 25 May 1936, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS THE ECONOMIC OUTLOOK

Brief as is the cabled summary of the annual, report of the International Labour Organisation, it gives a useful indication of economic tendencies as these are noted by the expert staff of the office at Geneva. In a large measure the basis of judgment is statistical, and it must be remembered that -such published surveys always lag considerably behind current facts. The consequent need for discretion in quoting details of these reports is frequently impressed by the 1.L.0. itself. Figures of employment and unemployment are particularly the subject of this official caution: the quarterly tables are regularly accompanied by emphasis on their limitations. In January last, for instance, the report stated that "in certain countries there are discrepancies in the figures which make it impossible to draw any conclusion as to whether there has been an increase or a decrease in unemployment," and the furnishing oi: inconsistent sets of figures by some nations is named as a barrier to accurate discovery of trends. " Admittedly," says the 1,935 annual report of the 1.L.0. Director, " the various national statistics of employment and unemployment are far from furnishing a satisfactory basis for international comparison. They are not established on any uniform system and have therefore to be used with caution." With this caveat, however, it is possible, as he claims, by putting together the data available for each country as to employment, unemployment, prices and production, to form a fairly good idea of its general situation. Further, when the various national situations are grouped—regard being paid to the need to classify them in accordance with their degree of economic intimacy —a conspectus of world tendencies can be got. The actual date of the survey has been passed, and complete accuracy is unattainable, but enough is given to justify broad conclusions.

The tone of the present report suggests that this is not a time for rash experimenting. A year ago the Director recorded a distinct advance: in most countries unemployment was continuing to diminish, production continuing to increase, and exchanges were more stiable than they had been a year before. The world's" economic life was running in smoother and deeper channels. Nevertheless, recovery was deemed to be superficial rather than fundamental. International trade was little better; reserves of capital were still stagnant and sterile; the springs of international lending were not running at all freely; and in general, although some countries were doing well, there was a lack of assurance in the solidity and permanence of the gains. In the succeeding twelve months, as ; is now noted, that experience has been repeated: progress, with disappointing setbacks, and an increase of nervous tension because of the sinister nature of remarkable increases of industrial activity due to rearmament policies. But for the untoward signs, arising from political causes, there might be happy confidence that the depression is rapidly passing into history. These causes cannot be safely neglected when the economic outlook is scanned. They tend to paralyse international trade and thus 'react prejudicially on internal conditions. Whatever be done within each country's boundaries—and the duty of doing the best possible is so obvious that it needs no argument—the problem of international organisation cannot be avoided. Unless this complementary duty be undertaken there can be no sure return of good times. Another World Economic Conference is urged in the report as essential. The last broke down so ignominiously that this advice may be coldly received. International conferences, indeed, have registered failure after failure, and distrust in them is natural. But what has been called " the outworn notion of self-sufficiency " offers no better achievement. The last 1.L.0. annual report turned despairingly away from it as a means of averting a recurrence of disaster. " Through the exchange of goods between nations," it preferred to say, " larger and richer populations have been made possible in the past, and there is no reason why the same process should not continue if the conditions of international commerce and finance which facilitated it are once more restored. . . . Unless it is understood that the prosperity of the world can only be assured by making the interdependence of nations a living reality, it is difficult to see how a progressive standard of living can be ensured." Again, but with a difference, the 1.L.0. asserts the imperative necessity of this international outlook, and the difference ought not to be overlooked ; it consists in the prevalent cutting down of imports required for normal economic activity—in order to get instead materials for rearmament. This is trade, certainly, but its international service is largely fictitious; and its proof of much ill-will clouds the prospect of an established revival of shared prosperity.