MACHINE MADE WAGES

Taranaki Daily News, 17 July 1930, Page 13

MACHINE MADE WAGES

TUE WAGE-EARNERS SUFFER.

SOME PRACTICAL RESULTS. The economic section of the Australian Association for the Advancement of Science, which lias recently been sitting in Brisbane, has issued a statement bearing upon the economic problems now facing Australia. While this statement is necessarily academic in essence and expression, it contains some points that demand popular attention. For instance, it is stated that “a system of machine-made wages destroys the hope of increasing real wages as prosperity increases, and in times of crisis concentrates the burden through unemployment upon the minority least able to bear it.” That is a very concise statement of a fact patent to all who have made a study of economics, but obscured in the minds of many by the fallacious preachings of demagogues. It applies to New Zealand as well as to Australia.

Wages are that part of the cost of the production of anything that must be paid to those who assist, in the production of that thing. The essential elements in all forms of production are capital, raw materials, labour (including management) and markets. These fotu are interdependent, and cannot be separated, The greatest co-ordination pro-, duces the best results for all concerned. When any one of the essential elements is governed by arbitrary interference coordination is destroyed. If natural, or any other, causes interfere with the supply of raw materials industry suffers; if capital demands more than its fair share of results industry is over-bal-anced; if the reward of labour is fixed without reference to industrial exigencies the same thing happens; and if markets are adverse industry languishes. Because, in the past, sweating by capital became a reproach in certain avenues of industry ' there was engendered a popular movement to protect the wage-earner against undue exploitation. That movement necessarily won wide approval. It was not right, people said, that the mere possession of “capital” should enable an individual to wax fat, and the various means of safeguarding the “worker” were devised.

So far so good. With the real sweater nobody has any sympathy. But this movement, purely humanitarian in origin, developed beyond reason. Socialism in its modern forms grew out of it, and men of the best intentions began to think that they saw in Socialism the hope of the world. Alost young men see it that way still,, and it is perhaps a sign of social health that they do. But Socialist ideas have been exploited by some who saw in such exploitation an easier living than they could obtain by hard, productive work.

In New Zealand we have dabbled, extensively in socialistic experiment, because, politics having become a lucrative profession, and the franchise having been given to all adults, it became manifestly easier to win political preferment by pandering to the mass. Through Arbitration Courts and other tribunals we fix wages by standards which are arbitrary to the extent that they are based on considerations outside the exigencies of the industries to which they relate. They are, as the Science Association says, “machine made.” As we have often pointed out, wages are a product of industry and industry must produce them or fail. As it is, under our system raw materials may cost what they may, products may fetch what they may, and capital may earn what it can. But wages must be what a court decides. This, aa the science people point out, destroys the hope of increasing real wages, and in time of crisis boars hardest on those least able to bear it, because when industry cannot pay arbitrary wages fixed by law it cannot carry on, whereas it could give employment if wages were subject to the same laws as those which govern the other elements in production. The result would be cheaper commodities and better “real wages.” (Contributed by New Zealand Welfare League).