THE ARBITRATION COURT.

Otago Witness, Issue 3832, 23 August 1927, Page 17

THE ARBITRATION COURT.

LECTURE BY DR FISHER. The Arbitration Court a-nd its effect on the cost of living formed the subject of a lecture—the third of a series—which was delivered by Dr A. G. B. Fisher at the University on Wednesday evening. Dr Fisher has dratvn up a roster of lectures dealing with New Zealand economic problems. The lecturer commenced by quoting Edwin Carnan as follows:—“ The rise of wages which has taken place, so far from being both cause and effect of the general rise of prices, is neither a cause nor an effect of it. It is simply part of the rise of prices.” The cost of living index number from May, 1927, said the speaker, was 61 per cent, higher than that for th o corresponding period in 1914. How far, he asked, was this to be explained by tho activities of the Arbitration Court, and what were the real functions of the court ? These questions were inseparable from the subject under discussion. It was sometimes suggested that the awards of the Arbitration Court had pushed prices steadily up, each increase being “ passed on ” in the form of increased prices. If this was so, it was difficult to understand why prices had risen similarly in countries which had no Arbitration Court—Great Britain 54 per cent., United States 76 per cent., Germany 46 per cent.. Switzerland 58 per cent. By far the most important cause of the increased cost of living had been the changes in currency policy which led to inflation of different degrees of intensity. This was as true of Great Britain as of other European countries; in New Zealand any considerable divergence from the par rate of exchange was inconvenient, but if this was to be avoided, our prices must move up and down in roughly the same way as British prices, and banking policy was more or less consciously designed to ensure this. Any modification superimposed by Arbitration Court awards upon these basic changes must be quite small.

How far had the court been guidel by movements in the cost of living in making its awards? It had always denied that this was the only factor to be considered. The court, it declared in 1922, “must first ascertain the movement in the cost of living and then must look to the general condition of trade and industry and all other relevant considerations.” Production, indeed, must be, and not merely ought to be, the basis of all wage payments. An efficient employer would not continue to pay wages higher than tho value of the work performed. The probable effect of insistence on wage rates above the economic level would be a contraction in the volume of employment, but there seemed little reason to suppose that the Arbitration Court erred more in this respect than other forms of wageregulating machinery.

The Arbitration Court was ill fitted to play the part of an instrument of radical social reform such as had sometimes been allotted to it. Under modern conditions, some form of collective bargaining was essential; New Zealand had become fairly well used to her own peculiar form of machinery, and it would be unwise to scrap it. What positive results might critics of the court anticipate from its disappearance or drastic reform? There >as the question of a fall of wages. But it seemed highly improbable that this could be secured on any considerable scale without much loss and friction. It was significant that many would like to see the court go in order to stimulate the fighting spirit of the trade unions. A general acceptance of piece-rates might result. But if general agreement could be secured, there appeared to be nothing to prevent the adoption of piece-rates now, provided the minimum time-wage was assured.