THE Wairarapa Age MORNING DAILY THURSDAY, APRIL 6, 1933. OUR ECONOMIC FUTURE.

Wairarapa Age, 6 April 1933, Page 4

THE Wairarapa Age MORNING DAILY THURSDAY, APRIL 6, 1933. OUR ECONOMIC FUTURE.

Some interesting and thoughtful observations on the present economic plight of the Dominion and the conditions in which improvement may be possible were made recently by Mr. D. O. Williams, lecturer in economics at Massey Agricultural College, in an address to a gathering of Rotarians at Palmerston North. We have passed, Mr. Williams pointed out, from conditions in which, there was no visible limit to the amount of our produce which the world could consume to a state of collapsing prices in collapsing markets. The root of our difficulties to-day is indicated in the statement: "Under our New Zealand organisation, the bulk of our national income is directly or indirectly exposed to English economic conditions. We have no real, independent economic life of our own." This is a fair summing up of the position as it stands. Our economic state is determined first of all by the amount we can obtain, chiefly from Britain, for our exports of produce and then by the further amount of internal production and dealing that can be based on the allimportant part of the national income obtained in the shape of returns on exports. As matters stand, the volume of this further -production and dealing obviously is determined by the amount \of consuming power derived from the sale of export produce. Two basic z things, Mr. Williams suggests, are needed by way of remedy: (a) a greater variety of products; and (b) less dependence on the United Kingdom market. This plainly implies an expansion of secondary industries. Mr. Williams holds that:— If any secondary industry can offer the nation a scheme of reorganisation which has a reasonable chance of success, then we would be prepared to offer them the local market in return, but the only possible condition for such help is improved efficiency. The reservation evidently is very necessary. Some people are already going to the extreme of urging that all protection of New Zealand industries should be withdrawn. This would amount to a passive acceptance of economic standards determined by world conditions and to the abandonment of any attempt to establish national economic standards. It is certainly right that improved and improving efficiency should be demanded of protected industries, but for a long time to come, New Zealand is likely to be offered many kinds of goods at prices very much lower than those at which her own industries can produce them. In other words, if affairs were allowed to take their course, the organised use in industry abroad of machinery and low-paid labour inevitably would force down production and wage standards in this country. It is hardly in doubt that the interests of farmers, as well as those of other sections of the population demand that this line of development, if it can be so described, should be avoided. Our aim must be to establish industrial conditions in which people on and off the land will be able to cooperate in raising their common standards. This must mean a greater and more varied development of secondary industries which no doubt will only be made possible by considerably higher standards of efficiency than those that have hitherto sufficed. Mr. Williams considers that the State must play a vital part in 'the development that is demanded. On the whole (he observed) I

incline to the view that we have to knock out some transitional type of. economy in which private enterprise will be allowed to function only within a framework of clearly defined national planning; and that the State must be ready to exercise its coercive powers "to impose both lines of action and forms of organisation on private enterprise, when private enterprise is incompetent, or unwilling tp act in the country’s interest. Hitherto, the State has been materialistic—it has . helped and served and comforted and coddled. Now it must become the overseer and demand an account of the talents.

The plain man may be pardoned for asking how Mr. Williams would define the (State to which he thus freely assigns mandatory powers. Our experience of State-controlled and even of State-regulated industry has not been happy and it may very reasonably be doubted whether there is in this country or any other a 11 State” that is capable of setting industry on the way on which it should go. On thfe other hand it might be premature and unduly pessimistic to suppose that tl ? people actually engaged, in controlling and directing industry will fail to respond in an adequately efficient way to the new demands now insistently madO upon them.