HIGH PRICES.

Taranaki Herald, Volume LXVIII, Issue 16769, 19 June 1920, Page 3

HIGH PRICES.

SOMETHING ABOUT CAUSES, AND THE ONLY REMEDYWORK. THEORIES AND PLAIN TRUTH. The Right Hon. the Prime Minister, on the eve of his retirement position of President of tiie Board of Trade—a position which ho has occupied for over four strenuous year's—stated on Wednesday that one of New Zealand’s most important needs was a right understanding of tiro much-used phrase “cost ot living.” Many theories were current about the causes, but the most important factors of all—the havoc of war and the slackening of industrial effort—seemed to be overlooked by the general public. Throughout the Dominion there was a demand for “pre-war conditions” and “pre-war wages,” which made it necessary to review briefly the effects of the great war, in relation to cost of living. “What were the conditions in New' Zealand five years ago? All classes here were employed in the works of peace. In the main, the strength of the country’s manhood was used for production. Then came the war for the saving of civilisation against Germany’s scheme of enslavement to a military despotism, and the flower of New Zealand’s manhood was diverted from the constructive, productive arts of peace to the tasks of war. New Zealand’s help in saving the world from Germany’s domination cost the Dominion more than 16.000 lives of stalwart young men ; wounds and sickness changed many others from producers to dependants; others had their productive power greatly diminished, ancT are thus partially dependent on the Slate. The sequel to this sad toll of tlio men has been the granting of State help to many thousands of women and children whose bread-winners have lost _ their lives or their productive power_ in fence of their country. In addition to the heavy destruction of man-power, there was' a huge consumption and destruction of wealth in the operations of wav. One effect of this diversion of materials to the needs of w r nr has been the doubling of New Zealand’s public debt since the year 1914. “What is the position here to-day? New Zealand, with a serious reduction of productive power, has to bear enormously increased burdens. How, then, is it possible to have suddenly the 'pre-war conditions’ and the 'pre-war wages?’ Who can work the miracle of increasing the real w-ages (the needs ot people with a comparatively high standard of living) per head of population when the production per head tends to decrease ? “Obviously, when the war came to an end the people were faced with the need of working harder and producing more Jn order to assure fair living conditions for the disabled and for the dependants of tho dead and disabled. There /was also the burden of the -warwinning as reflected in immense increase of public debt . Yet what is the plain truth, which no fair-minded observer can deny P Instead of increased effort to meet the Dominion’s urgent need there is a widespread slackening, and some of this has been due to the strain of extra exertion during the war, and some to other cause® only too well known. Whatever tho cause the effect is the same. There is a loss of production, which must reduce the share of products per head of population. In other words, there is an automatic reduction of real wages. Nominal wages, as measured 1 by money, the mere medium of exchange, may be increased for groups of workers, but it is obvious that taking the population as a whole, if the community produces less it has less to consume; therefore, the average of real wages for the whole population must he less. There is no possible artificial method of making the average w'orker’s position bettor in real wages unless tho production is increased. “This slackening of effort is worldwide; many countries are troubled with the temporary madness which lies in the desire to produce less and consume more. There can be only one end to that kind of lunacy—universal poverty and chaos. Mr. Archibald Hurd reviewed this ‘go-slow’ folly in a recent issue of the Fortnightly Review. _ He showed that in shipping the efficiency rate had declined hi the proportion of 100 to 66. A similar decline had been noted in other industries in Great Britain, as well as in New Zealand and other countries. This decrease means an inevitable increase in the cost of living. “While this slackness continues various theorists' seem to believe that the share of goods per head of population can be immediately increased by a rearrangement of the currency. Prices niav be affected 1 by an unsound system of currency, hut the. real solution lies in work, more work and still more work, steady, conscientious work. The instinct of self-preservation should induce the community to work harder. The case is crystallised in the following passage of ‘Eclipse or Empire,’ a bobk in which Samuel Turner and H. B. Gray have presented plain, solid commoiisense on the question of work and wages; ‘The nation is a great co-oper-ativo society. Some men make boots, ] some make, clothes, some produce fuel, and some raise food. The workers engaged m making hoots, clothes, etc., got certain wages which they spend in buying hoots, clothes, fuel, and food. Now. if all workers limit their output to the utmost, they may conceivably receive high wages, but there will be little food and fuel and few boots and clothes. There will be ton few to go round, and the result will be that the workers are ill-clad and ill-nourished, whatever their money wages may be, for one cannot eat money.’ “In another very helpful book, ‘From War to Work,’ Mr. Turner remarks: ‘Money is tho medium of exchange, but tho only real wealth is commodities. If employers and workers in each industry produce with steam shovels instead of hand shovels, it is obvious that that industry will have vast quantities of goods to exchange, and will ultimately receive vast quantities of other goods in return. Commodities, that is to say. will be cheap. It is inevitable. There is nowhere else for the goods to go. . . The main issue is production. Given that, it goes without saying that wages will bo good and ample, for under such conditions there is no reason on earth why they should not be; in fact, such wages are a. necessary element in tho process.’ “Mr. Turner’s point is, of course, that large consumption goes with largo production, and large consumption requires sufficient purchasing power ; that is, real wages increase with increase of production. One word summarises Eclipse nr Empire aud From War to Work, and all other books, pamphlets, newspaper articles, and speeches fjp.it are worth while op the subject of cost

of living—and ttat word is ‘Work. 1 * While many thousands of people are de-. fearing the return to the pre-war willingness to work and are thus increasing the cost of living, the Board of JTrada and the Price Investigation Tribunals are working hard to minimise {he exploitation of the public by the charring of excessive prices for commodities. The officers entrusted with this work are doing their duty earnestly and conscientiously, as the evidence available will prove to any unbiased citizen.”- ,