WAGES AND INDUSTRY.

Otago Daily Times, Issue 20005, 24 January 1927, Page 9

WAGES AND INDUSTRY.

TO THE EDITOB. Sir, —On the loth instant you published some striking remarks on wages and industry in New Zeaknd by Mr Albert Spencer, president of the Employers’ Association, in Auckland. As Mr Spencer’s views may bo taken as fairly representative of those of the employing class in this Dominion, their significance should not he overlooked by the members of the public on whom all charges fail, and who have no voice in the matter, or competence to judge if Mr Spencer’s arguments are sound or merely of benefit to a section in the community. Mr Spencer not only opposes further increases in the workers' wages, but advocates the stabilisation of their wages over a much longer period than that at present fixed by the Arbitration Court, upon which he places the responsibility of being the cause of the present unsatisfactory situation. As the questions raised by Mr Spencer are all of a technical nature, the public can only be advised that economic science does not support Mr Spencer’s deductions. He says: "if wages were stabilied it would benefit the industries by cauing more articles to be manufactured locally, thus preventing money being sent out of the Dominion, and at the same time providing more jvork for the people resident in New Zealand.” To show the weakness of Mr Spencer’s claim it must be understood that money is never sent out of a country in payment for the goods it buys abroad. Trade everywhere is based upon exchange of commodities, in which “price” forms the denominator if value. What actually happens is this; If Now Zealand, we will say, imports during 12 months goods to the value of £50,000,0130, then goods to the value of £50,000,000 must be produced in New Zealand to pay for the imports. The belief that more employment would be provided if we imported less is, therefore, seen to be a fallacy. Wo can only buy from abroad goods to the same value or amount as is bought from us. Mr Spencer is obviously led astray by the variation which constantly takes place in all foreign exchanges, ' because wo find him saying that “last” year there was a shortage of about £9,000,000 in the amount received for exports from New Zeeland as compared with the money sent away, for imports.” It would appear, from this unfavourable balance, that £9,000,000 would have to be remitted from New Zealand in money, but such a thing as sending out money never happened before, and will not happen now. No one is more qualified to affirm or explain this parados thin our bankers who control and effect a settlement of all the foreign indebtedness arising from the variation in value between imports and exports. To the public the whole problem appears an insoluble maze, but there is really no mystery about it, as the whole problem rests, not on money but on credit, and credit is always good and sound so long as all obligations can be settled at the ap‘pointed date. What Mr Spencer, in common with the groat majority of people, fails, to see is that the problem is one of “value,” and not a problem of money being sent out ot the country. Stabilisation is certainly the correct word, by which is meant a fixed relation between “value” and “price,” not only of commodities out also of the personal service of labour; but Mr Spencer’s , argument does not include or cover this part of the problem, because he says nothing about stabilising prices. He wants wages stabilised over a long period, but this is utterly impossible before “prices” are stabilised, because wages nominally will always fluctuate with the cost of living. Stabilise the cost of living and it is child’s play to stabilise wages. The problem must, therefore, be approached with a much broader view than that which now animates our legislators and employers. In furthering this expansion, the public can rest assured that the natural forces arc never at rest. The evolutionary forces unceasingly operate in response to all human activities. If those bo in harmony with natural law, the conditions will assuage and remove the oppressive and painful features of our struggle for existence. But if human activities are in conflict with natural law, then pain and oppression will foment rebellion. Our economists are sadly to blame for not advising the public of the danger of drawing conclusions from superficial and incomplete evidence. Their advice is all the more urgently needed because our industrial system is fast evolving from the elementary to a more highly complex organism, requiring a harmonious co-onera-tion between the several divisions and requiring intelligence of the highest order to direct the course that is to bring us peace. —I am, etc., W. Sivertsen;. January 22.