THE NEW ECONOMICS

Otago Daily Times, Issue 23828, 7 June 1939, Page 17

THE NEW ECONOMICS

TO THE EDITOR Sir, —In reply to your correspondent " J. E. M." in your issue of June 4, the question of consumer credit does not offer an insurmountable difficulty. Whether our production is for local consumption or export makes little difference in the amount of money that should be available in New Zealand to buy it. I cannot agree that our currency is involved in British currency as ho money passes out of this country for our production sold overseas. Your correspondent asks how we can create consumer credit. The answer is by the infusion of debt free money to bridge the gap between costs and prices, the authority to control such issuance to be delegated to a national control authority whose duty it would be to ascertain the shortage of purchasing power sufficient to buy back such production. In all modern communities with the daily improvement of processes and the growth of mechanism and power, the creation of wealth, actual and potential, is vastly in excess of consumption of wealth, and it is this excess which it is necessary to monetise, if it is to be enjoyed by the community. This wealth can only be made available to the community by the declaration of a national dividend. Not all of it need be paid out to the peonle as a dividend, but could be used: (1) Progressively to wipe out the National Debt; (2) To pay all social services; (3) To provide funds for national development; (4) To provide debt free bounties in order to bring all wanted primary production up to a profitable level; (5) To pay a rebate (or price discount) on all retail purchases in consideration of businesses selling their goods at agreed margins of profit, thus enabling a vast expansion of purchasing power to take place, with a contraction of prices—a factor which rules out all possibility of inflation. ...

Economics is essentially a study of things as they are—not as they should be. Some economists are far-seeing enough to call attention to the flaw in the system; others, either for personal gain or through inability to grasp realities, are hindering the march of progress. The banker is doing his, job, and doing it well, but we do not want him using community credit for shareholders' profit. Professor Murdoch, professor of literature of the Perth University, in a broadcast address said: "I regard.it as the bounden duty of everybody to do what in him lies to awaken the world from this nightmare, and that is why I commend to your close attention the Douglas proposals, which to the best of my belief would result in making money our invaluable servant, instead of as at present, our despotic master." This, then, is all we monetary reformers ask, and we do not bolieve the newspapers, chiefly on account of limited space available, arp the best mediums for information. The publications of Major Douglas are all available at the Dunedin Public Library, also, I believe, the "Encyclopaedia Britannica" on banking practices should be read, Mr Hartley Withers, and numerous other writer's. If possible, secure the report of the McMillan Committee on Finance and Industry, the opinions of Sir Charles Addis and of the late Sir Basil Blackett, both directors of the Bank of England; of Mr Cole, member of the Economic Advisory Council; and there arc scores of others of whose opinions we must pause to consider Let us.not forget that new ideas are born to trouble, since they start life as a challenge to the intelligence of the people who do not think of them first.—l am, etc., New Trntta. Dunedin, June 6, 1939.