PLANS AND PRINCIPLES

New Zealand Herald, Volume LXXIV, Issue 22629, 18 January 1937, Page 13

PLANS AND PRINCIPLES

Sir, —In these days, when there is such a plethora of "plans," hopelessly superficial and fallacious in conception, for the righting of our economic troubles, it is a pleasure to read such things as the report of the lecture by Professor Hytten, and your subleader thereon, which appeared in Thursday's Herald. When the "guaranteed price," for example, was first mooted here, f wrote a letter to your journal, pointing out the reasons, as stated in the report and article mentioned herein, why such things could not be successful in any permanent wav. The experience of England and Denmark should have taught those specially interested in New Zealand chat all forms of subsidies are, as Professor B. E. Murphy truly stated in respect of the wheat areas, soon capitalised in laud values, and the margin of cultivation extended to absorb" the extra, so that future producers arc no better off, while the consumers arc taxed, directly or indirectiv, by tho uneconomic process. Mv letter," under two years ago, also referred to the protective duties for local industries, and 1 pointed out that the complaint of our manufacturers in respect of "backyard industries" was renllv due to the natural desire of "small men" to reap some of the artificial rewards, also coming under the term "economic rent" often, or an "advantage." The man who "gets in early" with the use of a new and better machine in a factory also secures "economic rent" for a time, until his competitors follow his example, and then ho loses the advantage. This factor of "economic rent" is one of the most important things in economies; .T. S. Mill says of it that until a person apprehends it lie cannot possibly understand the more complicated industrial phenomena —in "Principles of Political Economy." It is to lie hoped that other economists take a lead from the examples of Professors Hytten and Murphy, and in future give this factor of "economic rent" tho leading place it merits in discussion upon economics. T. E. McMillan. Mataiaata. /