The Southland Times. TUESDAY, APRIL 10, 1945. The Extension of Controls

Southland Times, Issue 25643, 10 April 1945, Page 4

The Southland Times. TUESDAY, APRIL 10, 1945. The Extension of Controls

TITK A. S. RICHARDS, member o£ L'i Parliament for Roskill, was reported on Saturday to have expressed some opinions about the development of socialism in New Zealand. “The question,” he said, “was whether they were to have a socialized system ... when the war ended, or the uncontrolled system known as laissez faire.” If Mr Richards was saying what he really thought, instead of what he thought his audience expected him to think, he was revealing a somewhat archaic conception of the political, situation in New Zealand. Laissez faire had ceased to exist in this country long before the Labour Government came into office. It, began to die when the ■ State carried out the nationalization of certain industries, instituted controls for wages and conditions of work within a general labour code,and passed legislation for the regulation of marketing and commerce. No sane politician would recommend the abolition of these primary controls; they have been built for years into, the economic life of the country. To suggest a return to laissez faire would be to suggest a return, not to pre-Labour rule, but to the days before Seddon. The real question is. whether the State is to be permitted to retain and increase its wartime controls, or whether its function should be to create an economic framework in which private initiative and opportunity can be used for the common welfare. Controls do not remain static. Unless the general temper of the country is against them, they reach out into widening areas of economic and social life; and they lead inevitably to a bureaucratic ’regime. “Private enterprise,” said Mr Richards, “could not produce’ a plan to avoid booms and slumps.” Neither can socialism—unless, perhaps, the • whole world achieves it simultaneously. A conference will shortly be opened in London .to find means for the disposal of surplus wool stocks, estimated to total 10,000,000 bales. Meanwhile sheep have continued to grow wool; they have been shorn as usual; and the clip has to be marketed. There may be no serious difficulty in selling wool at reasonable prices, for the liberated countries will require heavy stocks of clothing in the coming years. But the facts are mentioned here as an illustration of events which cannot be controlled in New Zealand, and which at the same time can have far-reaching effects on the national economy. Further, in addition to market fluctuations which must be encountered by any type of Government, artificial difficulties can be created by State control. If, for instance, the Government retains its rigid policy of import selection, and uses it as a means of fostering secondary industries, it may find that Britain will place definite limits on her own imports of primary products. Slumps can be caused by extreme forms of State regulation as surely as by collapsing markets overseas. „ The Closed Society

It is becoming necessary to decide what sort of society is evolving in New Zealand. In its present stage it may have become a kind of State capitalism, a transitional stage which could go forward either to socialism or fascism. Private enterprise continues to operate, and to feed with revenue the political machine which is reducing it to a state of dependence. “Under the capitalist system,” said Mr Richards, “the small business man was being eliminated, and combines and rings were springing up in New Zealand.” The small business man is now so bound by controls that a few more turns of the screw could bring him to the point of elimination; and we have not noticed the disappearance of monopolies. Private enterprise is treated on sufferance. The State obtains its power through regulative legislation, and through a taxation which , touches the individual both as a wage-earner and a consumer. It can decide where new industries are to be opened, and by whom; it has placed large powers in the hands of civil servants, who in some cases are replacing the middleman—with no visible decrease in expense, or increase in efficiency—and it has fostered an unhealthy centralization. The difficulty at present is to disentangle peace aims from wartime measures. If, however, Mr Richards was more or less stating the policy of his party, it can be assumed that controls are regarded as the proper instruments for socialization. How will the policy be developed in practice? A famous English economist, whose theories may have influenced New Zealand politicians, once explained that if industries are taxed too heavily to permit their normal expansion, the State must eventually take them over in the public interest. The weakness of this argument is that the taxpayers (including workers, who share the general restrictions) discover what is happening, and vote the Government out of office before its policy is completed. These matters have been studied in Britain, where the use of wartime controls has aroused a strong desire to recover at least the basic industrial freedoms. The Observer pointed out recently that nationalization is a surgical remedy which should be used only where the failure of private enterprise in a particular' industry is endangering the public interest. “Detailed industrial planning without public ownership is an unmanageable proposition for the State.” Two points should therefore be noticed about the situation in New Zealand: (1) the difficulties of private enterprise; under the present dispensation, must tend to bring more and more industries to a. condition which could be said to justify nationalization; and (2) the Government’s policy, as defined by its spokesmen, implies the extension of controls which,will facilitate the consummation of State ownership. If the people want that kind of State, they will have it. And the taste of control they have had in wartime should ensure that, if they accept it permanently, they accept it with their eyes open.