MACHINERY OF AUTARCHY

Timaru Herald, Volume CLVI, Issue 22992, 8 September 1944, Page 4

MACHINERY OF AUTARCHY

Economic Control In Dominion An American View New Zealanders are not political nationalists and not yet economic nationalists. They are deeply aware of their place in the British Commonwealth. and they are firmly convinced that the peace and progress of nations large and small depend on international cooperation. They are not frightened by the thought of a post-war organisation with teeth in it, and they are not worried over the bogey of “impaired national sovereignly," states an article in the American magazine, “Fortune.” But a country cannot assume responsibility for detailed and sweeping manipulation of its economy at home without manipulating its foreign commerce and attempting to secure trade advantages for Itself alone. In this respect New Zealand faces decisions of much the same sort as the United States faced with the N.R.A. in 1934. New Zealand does not face the same consequences as the United States or, for that matter, any other large nation. Small countries of high living standards compete in the international traffic of trade and ideas with something of the facility of a corporation competing in a domestic market. So long as New Zealand remains economically and politically responsive to world price changes there is little chance of demagogic nationalism. Yet the Industrial Efficiency Act, together with fixed prices, import licensing, and exchange control, gives New Zealand much of the machinery of autarchy, and where such machinery exists thr’e is. always the danger that in the long run it .may be misused. Even now. New Zealand’s cry for insulation and fox’ trade manipulation stands in conflict with her hope for collective security.

Prospects of IndustryNew Zealand’s best economic brains think it would be sheer folly for New Zealand to aim at anything approaching industrial self-sufficiency. Plants catering to less than 2,000,000 population. they say, cannot effect massproduction economies except in specialised industries. But they would Uke to see New Zealand develop industries permitting her to take hex; pastoral products further toward the finished stage. They also would like to see the Dominion concentrate on light and finishing industries, which would capitalise the intelligent, high-standard labour supply. Above all, they would like to see the establishment of a real graduate university specialising in scientific research and training, out of whch would come leadership for founding new industries and improving the old. The development of industry depends somewhat on the population trend. At a conservative estimate the country could support 6,000.000 people, and some authorities think the figure should be 10.000,000 to 15,000,000. But the Dominion’s net reproduction rate is only a little above unity, and immigration barriers are not likely to be lowered. But new industry will still have to depend on old grass. New Zealand -ets not only ;ts foreign exchange but its domestic market largely from the soil, and so long as the farmer operates on margins so narrow that slumps in world pastoral prices—let alone depressions—quickly erase .them, industry is without the security necessary for growth.