Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, SATURDAY. JULY 17, 1926. WEALTH.

Poverty Bay Herald, Volume LII, Issue 17088, 17 July 1926, Page 4

Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, SATURDAY. JULY 17, 1926. WEALTH.

A Scotch professor, who .specialised upon such subjects as geology, botany and evolution, and in fact appears to have had a free hand to do pretty well what he liked, used to have two examinations a year. The first he called his stupidity examination. This was a test of the students' knowledge of common things. The questions asked were of this nature. "Why is grnss green?" "Why is the sea salt?" "Why is the heaven blue?" "What is a leaf?" etc, etc., After this Soeratic inquiry we are told he began his teaching, and examined his; students at the end. It is a matter ot opinion quite incapable of proof, but we venture it. In spite of advanced scholarship and great educational efforts, there is still n very general ignorance as to what quite common things truly are. It is comparatively easy to note effects: it is not quite so easy to arrive at the cause responsible for those effects. If a stupidity class could be assembled here in Gisborne, the members being one hundred adult persons drawn from the electoral roll through a ballot box, and they individually were asked in private to define- "wealth" it is probable that the answers read out at a public meeting of citizens would be as diverse as they certainly would be entertaining. Karl Marx, upon whose theories many writers, largely favored by Labor Unions, defined "wealth" as "the product of labor applied to land." Sir Ernest. J. P. Benn, from whose "Confessions of a Capitalist" we quoted hist week in another connection, states that, "The work of Marx was done so well that more or less accept the idea that the working man, with his hand, makes a piece of wealth, which is then sold at something more than the price ehaTged by the workman, the difference being the surplus, and the distribution of this so-called surplus has formed the I heme of many lengthy and weighty volumes. Marx's theory eliminated the effect, in production, of brain. This, that particular school now admit: the definition of .wealth, as amended by them, would now read: "Land plus labor by hand or brain." Sir Ernest Bonn quotes the definition of John Stuart Mill as correct. Mill defined wealth as "all things useful and agreeable having exchange value." Sir Ernest would simplify this still move anil would define wealth as simply "exchange." He suggests that if land and labor compose wealth, it would be equally true to say that music consists of catgut and horsehair, oi that literature is comprised of paper and ink. It is obvious other things besides "exchange" do go to the making of "wealth," such as land, brains, labor, but upon a close analysis our author maintains very stoutly that all these are of very small importance "compared with this intangible in- ' gredient expressed by the word 'exchange.'" New Zealand, as an exporting country, has to depend upon opportunity of exchange. It is matter for lamentation by bankers, merchants, and even the Finance Minister, that, the articles we are receiving in exchange for what we are sending out ..of! the country are some two millions on the'debit side. Mr. Nosworthy, following Mr. Holland in the debate upon the Budget, blamed the craze for motor ears, and said ho had felt tempted .to wish that five years ago their importation had been stopped. Those who contribute in any way to the issue > of this paper this evening, from the editor to the runner boys, will nil have contributed labor of brain, hand, or legs, in exchange for which, many thousands of, we hope, grateful readers will contribute the subscription cost. The amount of the subscription will come out of the meat or wool grown on the farm, the article made in the factory or sold by the retailer in the shop, or from the labor of the professional man or .worker, in their several vocations. No ono of those buyers can have our paper unless they or someone olse for them has produced through brain or hand something of at least equal value, for exchange. In the work of the world ono man's work is, at times, of more value than another's. But here comes in the law of supply aud demand. If the work of a particular profession, unaided by any special privilege, is of too high an exchange value, the profession will soon be over-crowded. On the other hand an over-crowded profession will soon reduce its members. It has been argued that if wealth is merely exchange, that then there can be no such thing at profit, for if exchange is fail and equitable, neither party benefits by the transaction. "Profit" has to be- distinguished from what is really "saving." Two men Who exchange a day's work may receive an equal equivalent, but one may spend all he gets while the other, who is more provident, may save a portion of it. Profit is a legitimate addition to that which every man earns by his service. This , is so", whether his work be by his hands.! or his brain, or partly by one and' partly by another. Where there is a free market and free competition, profit, if not limited to current interest upon the capital employed, cannot be excessive. Sir Ernest Benn is very happy in his illustrations of what actually wealth does consist of. We can only quote one. He suggests that a collar may have been purchased in the Strand," London, for a shilling. The colllar was made in Leicester, with mnehinuory, some of which came from Manchester, some from the United States, and some from Germany: that it is composed of Irish linen, manufactured in Belfast, from flax grown in Russia. "So, within thirty seconds you have travelled round half the world; you have been brought up against the problems of iron, steel, coal, transport and power, and most complicated of all, credit, banking and finance." From this it is plain the shilling paid for the collar in London has provided for the peasant in

Russia some equivalent for his labor in ireaping the flax, which may have paid for a cup of tea from China or a cigarette from Cuba. "Wealth" then is something more than merely "labor applied to land." If "capital' is '' wealth " then one would suppose that "wealth" would be "capital," but is it? Here there seems to be inexhaustible confusion, not only in politics, but among writers of all schools of thought. Air. Hilton Young, who speaks with authority, says that "there are as 'many definitions of capital as there are writers on economics." He goes on to say that from year to year the, country goes on producing a certain amount oi wealth in the form of goods, clothing, furniture, buildings, machines, materials for railways and ships, and all the other things which are desired by mankind. A part of that wealth is consumed and a part saved for use in the production of more wealth in the future. The part saved in the year, added to what remains of the parts saved in past years, is the capital of the country." The distinction then between capital wealth and other wealth, according to Air. Young, seems to be as to the uses to which they are put. At the present time England, and probably New Zealand, is living to some extent upon that part of the annual wealth created in any year by the industry of the people, which in pre-war years would have been saved and become capital, and would have been utilised in in creased production. This cannot continue indefinitely. It accounts for the present disarrangement of public and private finances. There is only one method by which the waste of wealth can be arrested. It is by more intensive industry on the- part, of a whole people, united in a common - effort to increase productions of prime quality. A very slight insight in these difficult problems at once suggests the folly of the capital levy, which .would still further reduce the unconsumed part (if any) of the people's wealth, earned by'their industry in any one year. wealth of the nation is the only means for the increase of exports forexchange, and the only real method by which the annual charges upon public and private liabilities can be discharged. '