The Timaru Herald WEDNESDAY, NOVEMBER 2, 1938 THE IMPORTANCE OF ECONOMIC DEVELOPMENT

Timaru Herald, Volume CXLV, Issue 21183, 2 November 1938, Page 6

The Timaru Herald WEDNESDAY, NOVEMBER 2, 1938 THE IMPORTANCE OF ECONOMIC DEVELOPMENT

When that noted British economist, Dr. H. Robertson, declared recently that “unless the nations work towards international control of the cyclical movement of trade sooner or later we shall all be back in the gutter playing beggar-my-neighbour,” he was indirectly stressing the immense importance of the promotion of international trade as the basis upon which social advance, seen in its world aspect in large part depends. Doubtless, it is appreciation of the fundamental principles upon which improved international trading relations can be established that prompts the leading trading countries in the world to seek improved trading relations with smaller countries. Moreover, the Anglo-American negotiations and the suggested economic understanding Mr Chamberlain hopes to promote in Europe indicate the importance of this issue. In a bulletin recently issued by the International Labour Office at Geneva the social importance of world wide economic development is stressed:

‘■The essential importance of international trade, looked at from a world point of view, lies not only in the fact that it increases prosperity, but that it helps to raise the standard of living in countries which would otherwise be condemned to remain at an exceedingly low level. It enables small countries to concentrate on the type of production to which they are best suited, instead of having to strive after an impoverishing self-sufficiency. “It enables backward countries to acquire capital equipment and to get the first impetus towards higher standards by way of sales upon the international market. Furthermore, international trade is not simply an instrument of economic amelioration but also to some extent of social justice.’’

Two points of major importance are emphasised by compilers of the International Labour Office Year Book for 1938, namely (1) the enormous value of international trade to the smaller and to the less affluent countries; and (2) the respousibilities devolving upon the great industrial countries to maintain a high level of economic activity. It is realised, of course, that the importance of international trade is often exaggerated; nevertheless, it cannot be denied that where there is great mutual advantage in the exchange, as is sometimes the case in the trading of manufactures for raw materials, the addition to prosperity is considerable. But there remains this disadvantage that when the figures of trade are swollen by exchange arising from relatively insignificant differences in costs, prosperity is not greatly increased. The economic experts at Geneva moreover insist that indiscriminate international trading may not contribute to social advance because “it would be possible to imagine large additions to imports and exports which would add little to the sum of human well-being.” It is, of course, regrettable in face of world conditions and the needs of humanity, that so much diplomatic activity is needed to save the world plunging over the precipice into war, whereas the most important work devolving on the leaders of the world to-day is to provide sound measures that will save the whole world in another downward spiral of which the period 1929-1932 is an outstanding and unforgettable example.