THE PROFIT MOTIVE SYSTEM

Otago Daily Times, Issue 23223, 22 June 1937, Page 7

THE PROFIT MOTIVE SYSTEM

TO THE EDITOR Sir, —State control is definitely to be preferred to the chaotic control or no control. The system of private- enterprise is to-day being superseded by amalgamations, trusts, combines, etc., with the tendency for the worst form of despotic control, ruthless exploitation or both producer and consumer. “No Politics” and “Truth” both mention Denmark, Sweden, and Norway, and so, for the purpose of pure debate, allow me to compare the Danish dairy farmer with his contemporary in New Zealand. Both sell to the same public and their product commands relatively equal return over the shop counter. The Dane, through his co-operative svstom, has had control of his produce right from the farm to the customer. The New Zealander lost control of his the moment it left his farm. When the produce left New Zealand it may have changed hands several times before being cured and before it reached the customer. At each transaction a great profit was raked off it into the hands and pockets of "dry" shareholders, who have not done a hand's turn towards cost of production. I forgot to mention also that before the produce left New Zealand “dry” shareholders benefited to a degree out of all proportion to fair interest on their outlay in capital, etc. Now the system in New Zealand is failing. The producer has got to produce and compete with the Dane and, no matter what other factors or monetary systems, the New Zealand producer will always be at a disadvantage until he receives all that there is in the marketing of his produce. , , , In the meat industry complete domination is hold in New Zealand by vested interests, and, where there are any profits for so-called co-operative freezing companies, the greater part of the profit is divided between “_dry shareholders who draw up to 37 per cent, while the producer hardly makes production pay on all that is left for him Over a period of years the “ dry" shareholders have drawn from the industry more than has been paid to the producers. The prosperity ol this country depends on the spending power of the producer as well as ot the worker. No wonder that monetary reform addicts, Douglas Credit enthusiasts, etc., have secured audiences. Now, State control in the dairy industry and in the meat industry is to be preferred to that of speculators, exploiters, etc., but Norway, Sweden, etc., have yet a better system. Their marketing is all controlled by . huge co-operative concerns. There is no word more widely used and more imperfectly understood than " cooperative.” The true “co-operative is the concern in which there is no “ dry shareholder, no dividend drawer other than the “ wet ” shareholder. The “ wet ” shareholder is the one entitled to be so by reason of his supply. It may be extended to include workers who would be entitled to a share in the dividends in proportion to their contribution of labour towards the earning of the profits. Henry Ford, the worlds best type of capitalist, is, after all, the world’s greatest apostle of true co-oper-ation. The farmers of Denmark are the greatest benefactors from, and New Zealanders should be the greatest students of, this system. “No Politics, by his nom de plume, evidently does not wish this “ pure debate ” to degenerate into a political argument; hence “ no politics,” but in time it must be politics. A former letter of mine on the Spanish question was, I had hoped, an appeal for common sense against international finance. ‘No Politics” made his appeal to common sense against the finance of vested interests. Both flourish in the ignorance of the people, and that is the only drawback of democracy. I do not necessarily maintain that all ills will be done away with by the institution of true co-operation in the primary production of this country, but true co-operation will go a long way towards cleaning up the mess, loosening the shackles and giving credit where credit is due, and it is the only thing that stands for permanency and morality. International morality is poisoned or made impossible by international finance. Exploitation is made possible and practised by vested intorests. One thing I would like made clear and that is that no true co-operative system denies fair interest to capital, but it does deny it to exploitation. It does not deny the worker his due and, above all, it guarantees the producer a fair return, which is everything there is in the marketing of his produce above marketing costs, and, further, it does away with the exorbitant “ overhead ” which insane competition creates and it guarantees to the consumer a continuous supply of graded pure foodstuffs at a reasonable price. No one detests State control more than I, but still I regard it as a great improvement on control by vested interests.” Is it not pathetic to realise that 100 per cent, control of New Zealand lamb is held by Chicago? “ G. R., in his letter upon Russia under Stalin, confirms my belief that after all the British financier is just about as true a Fascist as Hitler, and is doing _ his best to prepare the path for Fascism, and that Russia to-day is the only true bulwark against Nazism or Fascism, which both mean the damnation of mankind in the interests of the munition kings of Europe. It would be great to be able to believe that Mr F. Milner was exaggerating in his recent address in Oamaru as reported in your columns, but unfortunately I am. etc.. A Recent Convert to Socialism.