THE EVOLUTION OF ECONOMICS.

Observer, Volume XL, Issue 12, 22 November 1919, Page 30

THE EVOLUTION OF ECONOMICS.

It doesn't require a professor of economics to give the reason why. Prior to the war the Dominion's man-power was about Out of this 112,500, the flower of the land, enlisted; 17,000 have paid the' supreme sacrifice, and about 20,000 permanently incapacitated, and tho recent epidemic adds another 5,000, making the total 42,----000; and, with no immigration, we will be handicapped for a year or so. And does not this also apply to the whole of the Empire? During the second year of the war, production of man's requirements was reduced materially, and our armies and munition workers had adopted a higher standard of living, and twice as much used in the shape of clothing, boots, meat, butter, cheese, etc., etc., which thousands upon thousands unfortunately were never accustomed to prior to war, and at the time the prices of those commodities were not a burden to the soldier and the munition workers, as in the first instance the soldier didn't pay for them, and the. munition workers didn't feel them owing to the enormous wages paid. Now the war has ceased tho soldier is seeking employment and the munition worker's wages, for argument sake, are down to about 35 per cent, over pre-war rates, with his requirements about 50 to 60 per cent, higher, owing to a world's shortage and with a desire to live at the same, status as during the war. The Empire's wheels of industry (with a tired people) are at a reduced speed for the want of raw material, and the products of the land are about two years behind, and until they get back to normal, and with huge shortages as at present, the pinch will be felt. The workers rightly demand a higher standard of living, which creates a heavier demand on production, and until it is overtaken, with the Continent on the verge of starvation, how can prices recede? If they do, wages must also, in a line with Japan and other Eastern countries. This is a complex question. Profits are now taxed 7s. 6d: in the £. For instance, an industrial concern with a working capital of £100,000, paying 7 per cent., yielding £7,000, is taxed 7s. 6d. in the £, which brings its earning power down to about 4£ per cent. Who would be worried about industry when War Bonds are paying 4. per cent., free from taxation? This is the question to be considered for the salvation of the Dominion. Champion wishes his people to understand that this essay is not for advertising purposes but to guide his candidates, as he is an acknowledged authority' on economics, as well as muscle-raising. V., AUCKLAND.