INSURANCE OF WEALTH

Waikato Times, Volume 92, Issue 14365, 17 May 1920, Page 9

INSURANCE OF WEALTH

* J| ttjgp ORDERS OF ECONOMY, (By R. H. MacGregor, F.R.A.1., F. 5.5. London.) Moralists declaim against the spirit of our times, as being dominated by wbnt is called a money-economy. Implicitly accepting Ibis criticism, hortatory persons urge us to return to tlie ways of our more industrious ancestors, ami so practise what might be fittingly called a “Uoods-Hconomy.” In more nsyal words, we are advised to concentrate on greater production. Others, again, affirm that the only true objective is a life-economy, ami even beyond that a civic economy. Of (he former we have a statement in lluskin’s oftcpioted phrase “there is no wealth but life.” For reminder of the latter there is the sacred saying’that unless the ideal huildeth the city (lie watchman watcheth but in vain; and there is the ArislotcIcan maxim that while men labour for life, they make cities for the sake of “the good life.” Here arc different orders of economy, or principles of work which it might be well to distinguish, difficult though be tbai exercise of thought. Even the most cullivated of statesmen are given to .the confusing of them. The distinguished Chancellor of Oxford University, for instance, recently made Hu's pronouncement; The clue to University reform was, he said, finance. Is it then in the, subsoil of a money-economy that the leaders of our intellectuals must find Ihe. root of alt wisdom? Testimony to that spiritual perversion is perhaps discoverable in the well-established custom by which universities invariably elect their chief officer from tiic magnates of the temporal power. Thus at a time when the universities (which are collectively Hi 3 cloistered side of the spiritual power) voluntarily, continuously, systematically subordinate themselves to the temporal power, what wonder that whole classes of Ihc community put their faith in the primacy of money over goods and life I Do not the directing classes struggle passionately for profit, reni, interest, as ends in themselves, amt similarly Ihc working classes for wages? But ibis means in effect a concentration of the organised forces of capital and labour, on the raising of prices without regard to the kind ,of goods produced, or the quality of iife which they serve. Who then is left to lead and man a genuine movement for a goods-cconomy? There are left those masses of the common people who stand outside the ranks of organised labour; there are left the profession. 0 . 1 classes who arc too humble to climb info the juggernaut of speculative investment; happily also are left the emotional arm of the spiritual power, amongst whom,'in addition to the clergy and the women not yet gone into politics or “higher education,” may lie counted practitioners of liic line aids, still immune to the “auri sacra lames. ’ In this uncovcnatcd grouping of Ihe disinherited poor with servitors of souls, queens of homo, masters of thought, makers of beauty, are io lie. tound the natural leaders of the needed campaign for a li'e-eeonnmy. and there arc many signs of their being astir. Specialised Economics. But for guidance in the transition from a money-economy to a good economy, one naturally turns to 'he specialists in economic science. These, we know, march under the gold standard. But whither does that standard lead? Wo have perhaps more definite knowledge of where it does not lead, and Ihe conditions of going thither. Vel on certain suppositions, Ihe destination of the gold regiment is fairly clear. If currency, in whatever shape or form, is not issued except under reasonable certainty of redemption in gold, and if gold be taken as coming nearest of all things to a permanent stabilitv in value then certain results follow; others may or may not ensue. What follows is that the strong arm of the creditor-classes is strengthened. Not only arc these favourites of fortune endowed with facilities to collect their long-term debts j in full, but they are often given the chance of extracting from their debtors something over and above. So also under the gold standard will the creditor nations be put in a position to do justice upon the, debtor nations and, further, he. afforded an opportunity of exereising mercy! What the doctrine of gold convertibility does no! concern i!sclf about is whether or not. Ihe loots go lo those that ran handle them in Ihe service of life. Hence. II is cob! In plead for increasing Jiie quantity and improving (lie quality of production. Equally indifferent is it to the social reactions involved in the mere ownership and control of money. In short, the gold dogma is like university chancellors, an inslituO.n well adapted lo a financial age. lienee it is entirely natural and true to type that bankers and orthodox economists should be lustily crying out for a return to gold-convertibility ns a necessary step towards sound finance, j and healthy trade. But before deciding i to follow their lead, let us Iry to see j more precisely wiiilher they would lake j us. Recall, 1 hen, the economic features of the past decade or so. Recently the nation concentrated on ihe making of “goods" and the rendering of services useful only in war. The return of pence, therefore, found us saddled w: 111 an accumulation of profits and savings recorded in paper claims, unrepresented by assels. Yet realise that (be thing | called “inflation” exists (j-day, not only j in the circulating paper claims call id "currency." but also and lo an im- | mnnsely greater exlent in the 'fixe l ; paper claims called "securities.” Hep’ I are two kinds of business ballooning J which it were well carefully and critic- | ally to distinguish. The first is infl.i- j tion ordinarily so-called. For the second | a convenient term is lacking, since Hie process is by no means on all fours with the dubious American custom known ns “watering of slock.” A hint, of lb.; needed word is conveyed by reflection on tin' extensive recoups i lo advertisement in the issue of securities alike by Ibe Government for war and by final.eiers in peace. Is it not then perm'ssible to describe the implied expansion of eapilal values as a process of “seeu-riUes-pufiing,” a term which would Urns I stand alongside the more generally I known and widely reprobated “currency inflation.” before Wap and After. Tills dislinelion helps lo Hie nml'rslamling of eeriain tilings otherwise obscure. For instance, is it not 100 much ; assumed tlial eurreney-inllation in war finance and Ibe simultaneous seeuriiirs- ; pulling are si different from ami j opposed lo whf)l went on before? i ‘ Against III" controllers of currency, during the generaliuu In fore Hie war, 'IT i u 11**’ 1 i ■•; 11;. - !'" I’ll:*! * ’l* ‘ bnj.

l,o?|p, imli'Pil, would t’nrhiil lln'in. si:i•• i* ur<>l<l ponvoplibilily was Umn in ini' opppa lion. Kul think of llm I'niMi.-s

imlliill nl' sopiipitjos whirli limn issu-'il from tlm wliolr pins,' nf Miumpp Innisps. hi?, unit liltlo. nn tin- j > 11»11 < • limy llo,ili’d .1 cuiiliiiiiniis array nl' limit’ mump oaMnns. nsnailv tmpim in llm liiyli winds of tlm llmniPi.il pposs, sonml.iinos convpyei! by Urn pddyin? piipp' tits nf “rji.v’’ iniss• ji miiil jinmniv. II was 11m natupp of llmso snonrilios dial limy ypimponsly papilalisoil Urn roconloil profits of olil-i’shililislmil undoptakinirs. or still innpc tmimponsly rapilalispd oillmp llm anlicipa tod profits of pposppplivp Imsiimss piilirpriso, op llm fniiipit in-Ir-ppsl of mopltraypil proprplios, or I'm spopl.in? pliaiii’i’s of faintlous ilividomis. On this fool'ny was sriniml tlm valorization of llk’sp papop plaims Ihroinrli llm stork PxrliMnarcs, am! so was nrhmvr I {lll’ll’ pankin? as somvi's of bank pi’riiil; ftllll Imni’o llmlp polonliat conversion into piinvncy. (To bo Continued.)