THE PROFIT-MOTIVE SYSTEM

Otago Daily Times, Issue 23221, 19 June 1937, Page 21

THE PROFIT-MOTIVE SYSTEM

TO THE EDITOR

Sir, —We should probably get further in our discussion of affairs if we could, as your correspondent 41 No Politics ” suggests, refrain from bitterness and avoid or get rid of prejudice. We should get further still if we were • careful to define our terms, to be precise as to the application, for instance, of the phrase quoted by your correspondent, “ the capitalist or private profit motive system.” .Shall we say that by these words we mean the system of individual or private, as distinguished from State, enterprise in undertaking the production of goods and services for the community? It then becomes evident from the facts of the world to-day that there is much to be said for private enterprise as a producing agency. It has filled the world with goods of an .amazing variety. quality and plenty. We are familiar with the fact that the last financial crisis was a crisis of glut, not one of scarcity, so far as goods are concerned. Whether State enterprise would have done as well or would prove a better substitute is at least debatable, from this point of view. Even with its extension into the joint stock company—an extension which is essentially financial in its origin—private enterprise has much to its credit, as a producing agency. It carries with it also probably a larger possibility in initiative than purely State enterprise, .and certainly a larger possibility of freedom. It is rather peculiar to find certain persons who dislike the thought of being 44 wage-slaves ” eager to deprive themselves of even the option of another employer. With State enterprise carried to its limit, we should have only the wage system, only one employer, and 44 enthrone the trust magnate in the chair of the bureaucrat, with the added advantage, to him. that he would have no shareholders 4 meeting” to face. I do not wish to question the statements and figures given by your correspondent about Britain. The abject condition of huge numbers of her population is only too well known, but these facts are traceable not to a failure of private enterprise to produce goods and services of a kind and quantity to provide a high standard of living for all, but to the failure of distribution, and that failure is bound up I with the nature of our money system, i According to your correspondent. Den- i mark, Sweden and Norway are not 44 capitalist ” countries in the sense that [ Britain is. They may not have carried the system of foreign investment —essentially a financial feature of tbe economy of nations—to such a point, but they are not countries which have turned over the land, buildings, machinery. etc., of production to the State. Private enterprise still exists, and because of certain important modifications in the money system there inaugurated, they are understood to get more good of their production than Britain does. It is conceivable that for real economy of effort, co-ordination and so forth, communal enterprise may have it over private effort in some directions. but in others that is very doubtful. In any case, the same difficulties will arise with both forms, so long as people adhere to the canons of the existing money system What is to be the outcome of the effort to provide work for everybody and at the same time make the best use of modern machinery in a highlv rationalised State with.no private enterprise? Of course your party in power, or your dictator or your oligarch can always put the people to digging holes and filling them up again, but where will the money come from to pay their wages? Out of other people’s wages or as a loan from the banks—to be repaid later with interest again out of other people's wages’’ And will the various State departments—remember the New Zealand Railways—simply write off the losses represented by the goods and services that the united wages fail to buy?—l am. etc.. Truth,