THE OTAGO DAILY TIMES THURSDAY, June 16, 1938. MR SAVAGE AND SLUMPS

Otago Daily Times, Issue 23527, 16 June 1938, Page 10

THE OTAGO DAILY TIMES THURSDAY, June 16, 1938. MR SAVAGE AND SLUMPS

To any mention of the word “ slump ” Mr Savage lends an impatient ear. Months ago he talked about slump prophecies being as common in New Zealand as noxious weeds, and rebuked “ croakers ” as people who refused to enjoy the sunshine—provided by the Labour Government—and found pleasure only in predicting wind and rain. The metaphor drawn from climatic conditions was not perhaps the happiest that could have been used in the circumstances. The Prime Minister has returned, however, to the subject. There is no occasion to disagree with him in his deprecation of talk about slumps as more calculated to do harm than good. In the same way talk about the inevitability of war is to be deplored as calculated to create an atmosphere of uneasiness, But it is impossible to go very far with Mr Savage in his reasoning on this topic. Slumps, he says, are brought about by human stupidity, and he makes bold to assert that ,jvhat human stupidity can bring about human intelligence should be capable of correcting. This is tantamount to saying that it is only because of their stupidity that, nations subject themselves to all the penalties of fluctuations of their prosperity and economic depressions, and that it has been left to the New Zealand Government to make this great discovery, and to show the world how by the exercise of intelligence the danger of slump visitations may be eliminated. It is a large claim, and it is to be inferred from Mr Savage’s words that his Government is prepared to risk falling down on it. But really, having so little fear of slumps and knowing how to meet them, Mr Savage might find those who talk about such visitations more amusing than a ground of impatience. His grievance is that everybody is not prepared to accept his logic and share his confidence. After all, nothing is easier than to say that slumps are brought about by human stupidity and that

the cure lies in human intelligence. To offer such a generalisation, to propound a remedy on such premises, is very characteristic of Mr Savage. People who refuse or are unable to accord due weight to economic factors may find satisfaction in the discovery that slumps are “ man-made.” They may call them so if they choose—even as they may call civilisation man-made —but to what purpose? We are to infer, presumably, that human intelligence is not directed—though it is to be in New Zealand—to combating the effect of movements and processes which sweep through a community and bring about what is known as a slump. Perhaps Mr Savage will say that these movements and processes are preventable by the exercise of human intelligence, and he seems to claim that the Socialist Government in New Zealand, by virtue of its exceptional intelligence, has evolved a formula for their prevention. Surely then the discovery should be given to the world at large. Being so steeped in stupidity it has much need of it. Meanwhile the presumption is that New Zealand is to be “ insulated ” against the risks of communicable economic depression—how precisely, except through the replacement of stupidity by intelligence, Mr Savage is not yet quite prepared to reveal in detail. The experience of the depression which began about 1930 shows that New Zealand could not possibly have “ insulated ” herself against the effect of it. She might have met its impact in different ways, but the avoidance of it was impossible. The circumstance that the national income dropped from an estimated figure of 150 millions in 1928-29 to an estimated figure of 100 millions in 1932-33 was one over which the Dominion had no control, and the fact that economic conditions in New Zealand are affected so greatly as they are by the movement of export prices shows how inexorably they are subject to the influence of external affairs. With singular stupidity, presumably, Mr Anthony Eden has just been saying that neither the political nor the trade and economic outlook justifies optimism. It would be very satisfactory to feel that New Zealand could afford to be indifferent to what is called “ deterioration on the world economic front,” but that feeling will scarcely be engendered by mere restraint from talk about slumps coupled with absorption of Mr Savage’s assurances.