Economic Facts.

Star (Christchurch), Volume LXVI, Issue 20456, 8 November 1934, Page 6

Economic Facts.

Dear Sir. —“ A. 8.” has a queer idea of imports. They are not goods dumped in New Zealand because the people who produced them couldn't afford to buy them If those who grew cotton had to use all they produced they would be buried under it. If the people of Queensland had to eat all the sugar they produced they would be in a bad way. They produce to exchange, and no country can afford to be a little world unto itself could produce sugar from beet, but it" would cost us about Is 6d a lb. It is export what we can produce and import what we can’t. To export more than it imports is no good to any country. It means sending more wealth out of the country than is received. No country can afford to do that fdt long. The best trade balance for a country like New Zealand is for the value of imports, plus interest on our overseas debts, to equal this value of exports. No country can create unemployment in another country by exporting goods to it. You cannot make a country poor by pouring wealth into it, in the form of goods, especially when the goods are of the sort the people need. The cause of the depression in New Zealand is the restriction on imports. Every slump and depression we have had has been caused by the same thing, shortage of imports. When wealth in the form of goods was coming in in large volume we were prosperous. Whenever imports have been restricted we have had a slump. Tariff walls when accompanied by excise duties are for the purpose of providing revenue for the State. When not accompanied by excise duties they protect inefficient industries—what are termed parasitic industries. They force up prices against the workers, reduce their purchasing power, lower the standard of living, and create unemployment and distress. We have some examples in Customs duties plus adverse exchange rates, which put a tax of over 10s in the £ on some of the workers’ needs. This is responsible for much of the poverty and unemployment we have. “ A. 8.” thinks Britain could produce sufficient foodstuffs to supply her own people. She used to, and there was hunger and starvation and poverty and food riots. And the population was only one quarter of what it is now. She might manage. But Britain is an industrial country, one of the largest exporting countries in the world, and most of the population are engaged in industries not associated with the land. If Britain refused to take foodstuffs and raw materials in exchange for her manufactured products, she would automatically destroy her export trade. Heaven help Britain if that ever comes about. The production of goods for exchange, and the exchanges of services are the things that keep the people busy and happy. So far as politicians interfere with free exchange, so far do they cause unemployment, poverty | and distress.—l am, etc., CRITIC.