MR POLSON, M.P. ON THE CRISIS

Otago Daily Times, Issue 21694, 12 July 1932, Page 10

MR POLSON, M.P. ON THE CRISIS

TO THE EDITOR, Sir, —Mr Poison, president of the New Zealand Farmers’ Union, is one of, the few members of Parliament with outstanding individuality, not closely wedded to any party or political theory. 11 His summary of the crisis bears a remarkable resemblance to the views expressed by the' leading Empire statesmen in Britain, who, in'recent years, have been forced to contract their Imperialistic doctrines by concentrating their attention more fully upon the domestic welfare of their own people than upon commercial expansion abroad. ' Mr Poison says many .things that are, indisputable. All will agree with him that things must be “ stabilised” but how? That is the question. “Stability at reasonable rather than ,high price levels,” says Mr Poison, “ was, one of the urgent needs of the farming community at the present time.” Here we are faee*to face with the crux of the whole economic problem.. No one can-, refute the deplorable .position of the farmer. But in the nature of things stabilisation cannot be secured while the- present system of determining prices by supply and demand in the world’s market continues to be the dominant factor. The whole community fails to-grasp the fact that the price of every conceivable,commodity exported is at present determined abroad, and the price of every commodity we import is also determined abroad, this clearly shows that the cost of living in New Zealand, which forms the rock foundation of nominal wages in this Dominion, is not controlled and regulated by value and volume produced here but is determined by currency expansion and contraction abroad.

Mr Poison comes into conflict with the elements of psychology when he says—- “ The solution that forces itself upon me is drastic —immediate reduction of , cost of production. . . . Each individual in the country, though he may not balance his budget, must give efficient work in return .for wages received-”; While this dictum appears ethically ' sound ' and in harmony with ..economic law, it is in sharp conflict with l the prevailing practice in commerce, which is that of making money by the least possible effort subject to legal sanction. Every farmer and manufacturer knows that the source of all wealth lies primarily in production, and that the distribution of wealth which takes place by exchange is a secondary process. If we closely examine these two systems we observe that no money whatever is made, while the goods are in course of production. What actually takes place in the primary stage ia-a process of increasing value with minimum effort. The profit or money-making part does not enter before, goods are in a finished or saleable condition, when the question of price turns the problem into one of finance involving currency, which becomes a measure of exchange value embodying purchasing power A staple currency is therefore of primary importance before the farmers or anyone else can secure “reasonable rather than high prices ” —which is really a meaningless commercial phrase , of no value. Mr Poison and many other employers, of labour are "not unaware of the conditions which have produced the monetary inflation of prices, but the public at large cannot be said to understand how the inflation is manipulated. Expert economists are all agreed that an increase, in the volume of currency in circulation without a corresponding increase in the amount of goods produced for which the currency is exchanged, inevitably results in an inflation and becomes a source of profit to all institutions dealing with finance —a gain obtained, not by an increased production, but by an increase in the price of,the product after it is produced at the expense of the consumer who pays the higher price. The increased profits that result from this artificial manipulation are also seen not to have been produced by either the farmer or the manufacturer, nor by the wage earners emp'oyed. and are therefore an unearned artificial gain secured by those in the community who are not producers at all. It is here that the question of ethics comes to the front. Mr Poison’s categorical inspirations must be examined in close relation to each individual worker’s, personal efficiency, upon which depends the proof that the workers have earned thpir money. This part of the problem lies in the hands of the local employers subject to the conditions of competition, which is the factor that at present establishes prices, but takes no consideration of value. Therefore it is necessary, in order to protect the farmer and his employees; to curtail the income of the

financial sections that are not employed in producing tangible goods, but are the intermediaries that secures the unearned increment at the producer's expense. Until this is corrected, neither employees nor anyone else need for a.moment think that it is possible—to quote Mr Poison’s idea—that “perhaps if the principal nations were to attack the problem from the other end, viz., by raising prices to an agreed reasonable level, and then stabilising them at that leved, the whole. farming industry of the world would, be saved. Such a notion is a fantastical j dream. —I am, etc., ; W. SIVEBTSEN;