THE OTAGO DAILY TIMES WEDNESDAY, JANUARY 4, 1922. SEEDS OF PROSPERITY.

Otago Daily Times, Issue 18444, 4 January 1922, Page 4

THE OTAGO DAILY TIMES WEDNESDAY, JANUARY 4, 1922. SEEDS OF PROSPERITY.

On the threshold of the New Year it is not unprofitable, to consider the possibilities of the future in the light of the actualities of the past, i For a considerable time a great portion of the world enjoyed a fictitious prosperity which was due to the enormous expenditure that was necessitated by the war. A large number of people believed that this state of inflation—for such it was—would continue, or could be continued but for what they regarded as the decision of financiers and business men to make a raid on wages. During the war money $ was plentiful; prices consequently soared to a high point; and wages.increased materially. The basis was absolutely unsound, however, a|jd or later the, inevitable readjustments had' to be made. The world is„now in the difficult stages of the. readjustment period; While the experience is by'no means new it is not bn that account any the more pleasant. In many cases business ‘is being conducted at' a loss, and there is a great deal of unemployment which affects the wage-earning and salaried classes alike. It is essentially a time of preparation for a new prosperity, tile arrival of which is,. however, being’ delayed by persistence in unsound methods. For the time being, enterprise has been stifled because productive costs' are too high. THbse who have goods to sell still hanker after war prices and those who have labour to sell demand a continuance of war wages. Both classes are pursuing a chimera. Until the pursuit is abandoned the seeds of prosperity lie useless in barren soil. A new range of values or services must be found in order that all classes may continue to share in the wealth that is created. Unfortunately, there remain short-sighted people who affect to believe that the fewer goods that are, produced' the more there will be for everybody. , That involves an inversion of economic truth which should be plain to all. Prices of commodities and the wagfes oj labour are merely the criteria of an exchange of goods and services. If they are on? of balance the industrial system becomes dislocated, with the result that the goods cannot'be sold and labour becomes idle. The balance cannqt be restored by any means other than readjustment. Primary products have fallen in most of the world’s markets, and that moans that the purchasing power of the farmer has been considerably curtailed. Consequently he ceases to bo a large buyer/of manufactured products untiL the prices of those products come, within the range of his purchasing power. So the demand for those goods is reduced and, as a consequence of this diminution in demand, workers in the cities who were catering for the requirements of the farmer find themselves out of employment. One of the suggested solutions of the problem which is thus created is that there should be a reduction of working hours until everyone is employed. this plan in no way reduces the cost of production of goods. It simply aggravates the difficulty and does nothing to solve it. A financial authority recently pointed out that increased attention must be given to economic law. “It is impossible,” he said, “ to restore prosperity on the basis of double time for half-time work. . If the Labour organisations insist upon any such policy, they will protract present conditions until they have learned thp economic truth that an abundance for consumption depends upon ample production.” In America the shortage of the cotton crop advanced the price of raw cotton and cotton cloth. “ There is fio difference in economic effects,” commented an American writer, “ between the ravages of the boll weevil and the policy of half-time work in the industries,” Both limit production and consequently increase the cost of commodities.

The question of unemployment < has forced itself into the forefront of public questions and one of the pressing problems of the hour is that of the remedy which should he applied. In the latest number of the Fortnightly Review Mr J. Ellis' Barker contributes an illuminating criticism of "the British Government’s policy and of the shortsighted conduct of Labour in respect to unemployment. “ Industrial unemployment is worldwide,” says the writer, “and it is due principally to the unreasonableness of Labour- It is most widespread and most intensive in the United States and

England, where labour is most highly organised, and most unreasonable, and it is comparatively unimportant in Gerimany, France, and Belgium, where labour is more moderate in its demands. Germany and Belgium Jjtro industrially ns highly developed as England and the United States. If world causes had brought about unprecedented unemployment, Belgium and Germany should suffer at least as severely from that scourge as the United Kingdom and the United States,” Mr Barker’s explanation of the intensity of unemployment in the two countries which are suffering most from the evil is contained in the following paragraph:

Both in England and in the United' States the strongly organised trades unions practised extortion upon the. consumer in the most shameless manner. _ In the United States / wages for. unskilled workers, such as miljtmen, carters, and navvies, rose up to ten dollars a day, which at the current rate of exchange is equal to £3. In England wages of £1 a day became common. However, English wages werp comparatively more onerous than American wages because of the extraordinarily small output of the British workers. ’ An American miner produces ,as much coal per day as an English miner per week, and an American Bricklayer, working under the Taylor system, lays as many bricks per hour as an English _ bricklayer lays per day. Not satisfied with making everything scarce and dear, the. organised industrial both in the United States and England, inflicted further injury upon "their ’industries by reckless strikes of unparalleled 'magnitude and duration. Extravagant wages ruined the trade of the United States, while high wages, coupled with an extraordinary reduction of output, ruined the trade of Great Britain.

An analysis of some twenty-six industries shows that the net output per worker per week in given years was £5 17b 7d in the United States and £2 Is 3d in the United kingdom. If production is low wages must Necessarily bo low,*but if wages are unduly high the cost qf commodities is beyond the reach of many potential consumers and unemployment is the certain result. If it be thought that the criticism employed by Mr Barker is too severe and that his conclusions are unsound, .it- is to- be observed that Mr- J. R. Olynes, one of the most trusted of tho Labour leaders, in Great Britain, writing in the Nineteenth Century for November, quotes tho Labour Manifesto on Unemployment to the effect that “l it is in'the interests of the whole community that production should be increased and costs reduced.” But he adds these significant words: “It is not enough for Labour officials to preach that doctrine. It is 'necessary that workmen should put it into practice.” Thus only can the seeds of prosperity be expected to produce a bountiful harvest. ;