NO EASY ROAD

Otago Daily Times, Issue 26704, 25 February 1948, Page 7

NO EASY ROAD

HARD WORK ESSENTIAL MAINTENANCE OF LIVING STANDARDS PROSPERITY NOT INEVITABLE P.A. WELLINGTON, Feb. 24. “ I am convinced that we cannot too often emphasise in these difficult days that our standard of living must be earned by the sweat of our brows. It cannot merely be dictated, nor can it be secured by the easy expedient of handing out extra pieces of paper money.” This was stated by Mr Leslie Lefeaux, former governor of the Reserve Bank of New Zealand, when he addressed the quarterly dinner meeting of the Hutt Valley Chamber of Commerce and Industry. Mr Lefeaux reviewed events over the past 30 .or 40 years which had led up to the present world economic position, more especially in relation to the situation in which Britain and New Zeland were now placed. Britain's Predicament

As a result of her expenditure and losses in two wars, and the policies adopted in relation to trade and exchange, Britain was left almost like Samson after his locks had been shorn, struggling to rise again. Mr Lefeaux said he feared the strain had been too great for any easy way out of her difficulties to be found unaided. The United States appeared to be more or less flourishing, though prices there had risen disconcertingly. All the world was crying out for dollars with which to buy her produce but few had much to offer in exchange. “In comparison with world needs, the crumbs which fall from the Bretton Woods table seem pitifully incapable of providing a good square meal,” said Mr Lefeaux.

Two conditions were needed for Britain’s recovery, he said. Either others must bear a much fairer share of the cost of the war -or else her people as a whole must greatly intensify their efforts until sufficient goods were produced at prices at which they could be sold overseas in exchange for essential things which could only, be obtained there in sufficient

quantities. Unfortunately, it was not the time for resting on her oars, however weak and weary the crew happened to be, Mr Lefeaux said. A greater output was needed, not easier conditions and higher pay. Larders could not be left to be filled by a miraculous fall of manna. Output Restricted Instead of the need for more intense effort being fully apparent in Britain when the American loan proved inadequate because of price rises, there were widespread demands for shorter working hours and increased, wages. The school leaving age was raised, and this had deprived industry of the ordinary yearly addition of recruits. Britain appeared to be on the horns of a dilemma, he said. - Without goods in the she ’? to purchase, it was difficult to get people,to work harder, and unless they worked harder goods could not be forthcoming. Discredited were those prophets of ease who taught that all that was necessary was to pay out more in. wages and all would be well. ' “That there is no such easy road to comfort and prosperity is being proved daily,” said Mr Lefeaux. A ground for confidence in Britain’s recovery lay in the fact that she was so placed that, the economic truths were likely to be forced home to her people by the need to tighten their belts. . In New Zealand any falling off in the returns from exports probably resulted in a shortage of pots and pans—things not in the first rank of indispensability—but Britain, unless her returns from exports were sufficient would be unable to obtain sufficient food to stave off hunger. Time for Broader Outlook "Gail anyone deny that this is one of the great crises of the world, and especially of the British race. Mr Lefeaux went on. He felt ■ therefore that they of British stock should put away all petty considerations and consider the broader issue. The position of Britain would have here before long. It might be sooner or later that a problem might arise m connection with the guaranteed price if the return from exports fell. What was produced was a matter for themselves; what_ was obtained for the surplus exportable was beyond their control. Nevertheless, the country’s standard of hving _denended in the main on the level of its production and not the national income pxnressed in.terms of money. There was a limit to the amount of overhead charges which could be borne by a py country as well as by any industrial °Standa t rds'of living might be endangered by either of two causes, he sad, bv a reduction in the output ofindividual producers or by a reduction ?n V heir l numbers in comparison thP rest of the community. He disagreed with a lot of criticism of the profit motive. If people’s activities were compulsorily ■ restricted, or ff of the irate ot

their labour by excessive < their output would tend to decrease and the country’s standard of living would fall to.that extent.' After all. he continued, it was the efforts of those who worked harder than the average which made possible any" to those who ontobuted less than the average. •_ Was it likely that many would continue to work harder than their fellows to em able them to reduce their working hours to considerably less than their nrimary producers had responded magnificently to the call for maximum production in the war and were still doing so to provide food fnr Britain. Was there not a risk that sooner or later their output might become affected if much easier conditions than theirs obtained elsewhere and at the same time they were not allowed to retain reasonable proportion of fruits of their production; Mr Lefeaux said the true test of the 40-hour week lay in whether it-would in good times or bad provide those things, including amenities and health measures, which they required. In relatively prosperous times,surpluses should be accumulated against a rainy day. . If the 40-hour week were merely a device for obtaining extra wages by working overtime, then it became merely a question of total cost and not volume ,of production. If a rainy day should come it would be of little use going to. Britain, as in the past, for a loan to tide over. Bureaucratic Control He doubted if rigid controls, with armies of people dotted round the country’to see those controls observed, were helpful to production. He was not sure it was in the interests of healthy' administration to have public servants in a position to say “Yea” or “Nay” to others strongly desiring something in limited suppply. New Zealand had been, something like a cyclist riding downhill with a following wind. The danger seemed to lie in that the wind might change and the road be uphill. Were lasting

qualities of energy and enterprise being developed which would fit the people to withstand adverse conditions? Or was there danger of one section becoming overtired while others took things too easily, with an inclination to lean on the Government if things went wrong? “ One thing is clear. It is the combined efforts of the community as a whole which will determine your standard of living as a country, and a high standard means plenty of goods and services available to the people —not merely big monetary incomes,” Mr Lefeaux. said.