CONSUMER CONTROL

Waikato Times, Volume 94, Issue 14669, 4 June 1921, Page 9 (Supplement)

CONSUMER CONTROL

APPLIED TO COAL QUESTION. (By n. R. Macgregor, Ph.D., F.R.1.A.) The keynote for the efficient working of any modern industry is cooperation. All modern co-operative industry serves, then, a dual purpose. It has Ike power of making and putting goods on the market; and it also distributes "money.” It also appears to have another function, viz., that of emphasising industry as a means to distribution of goods, rather than to the provision of work. Those economists who do not subscribe to this must face these alternatives —either (1) it takes all the available labour to provide the requisite amount of goods; or (2) a number of persons cannot get the goods; or (3) goods or labour must be "wasted” purely for the distribution of purchasing power. Now, it can be assumed that the first of these is not true, because production is nearly always proportional to the dynamic energy applied to it, and the amount of solar energy actually harnessed in industry is thousands of times that available by merely human power, which yet was able (say) by the 14th century to provide a high standard of civic life. As to the second and third statements, both may be affirmed to be true as a matter of common and expert observation. These positions lead u s to a system by which purchasing power is distributed to the public, and taken back from them in return for goods. This is what is called, or, rather, mis-called, the “Capitalist System.” Capitalism. This system has been built up on the rule or custom that all costs (i.e., purchasing power distributed to individuals) should be added together and recovered from the consumer in "prices.” Notice, here, that it is unnecessary 1 to bring profits into the question at all. The contention is that it is impossible to distribute in the above way sufficient purchasing power to buy the whole of the production in respect of which it is distributed at the prices it is necessary, under this system, to charge. It follows that, the distribuion of the purchasing power fails to distribute the product through the agency of wages, salaries and dividends, and, therefore, the object of production as a means to distribution of its product to individuals is defeated, and, finally, if the product cannot be distributed, production fails and ceases. Now, to compose the above difficulties 'implies readjustments outside the sphere or power of cither employer or employed. The result is that there has come into existence a kind of forced growth of purchasing power, or loancredit, or export-credit. Neither export-credit nor loan-credit arc available to the consumer as such. Yet these two elements have, assumed giant proportions, and are becoming the preponderating fraction of pur-chasing-power; hence, production tends more and more to capital goods, which ttie individual does not use or want, but on which credit facilities are given, and less and less to consumption goods for individual use for which there is no demand backed by purchasing power. Tho Remedy. This would appear to lie in the control of credit by the consumer and the fixing of prices at a level which will ensure distribution. The practical mechanism necessary for this purpose involves the formation of a co-operative producers’ bank based on the productive industries. Take the coal industry, in which case the following requirements would be necessary for a producers’ bank. Each geological mining area should be considered as autonomous for purposes of administration, and in each of these areas a bank formed by a Mining Federation of New Zealand should be established as the producers’ bank, the shareholders of which should number all persons engaged in the coal mining industry, whose accounts are kept by the bank. The bank, as such, should pay no dividends, and all capital invested in the mining properties and plant should be entitled to a fixed return of six per cent, and, together with all fresh capital, should carry with it the ordinary privileges of capital administration other than price fixing, which should be entirely separated from production. The Board of Directors should make all payments of wages and salaries direct to the producers bank in bulk, and 'in the case of a reduction in the cost of working, one-half such reduction should be dealt with in the national credit account, one-quarter should be credited to the colliery owners, and onc-quarter to the producers’ bank. From the setting to work of the producers’ bank, ail subsequent expenditure on capital account should be financed jointly by the owners and the producers’ bank, in the ratio which the' total dividends bear to the total wages and salaries. Price Fixing. There would be several jequirenients for the above. The Government should require from the colliery owners a quarterly statement properly kept and addited of the cost of production, including all dividends and bonuses. On the basis of this ascertained cost, the Government should by statute fix the pri.ee of coal to ttie home consumer of coal for purposes of heating, cooking, etc., distinct from use in manufacture, at a percentage of the ascertained cost, this percentage to bear ttie same ratio to one hundred ns the total homo consumption of all descriptions of commodities does to the total production —i.e., price would bo to cost as consumption is to production. Therefore, price would equal cost per ton multiplied by cost value of total consumption and depreciation, divided by cost value of total production. Ttie Government would also rc-imburse to the colliery proprietors the difference between total cost and total price by means of Treasury notes, such notes being issued against the national credit. The price of coal for export should he fixed at such a day-to-day price as would serve the general interest. All exported coal would be regarded as consumption. Applying these conditions, mutatis mutandis, to other productive industries, we should arrive at a common-sense system of price-fixing, which related production to consumption on the footing of an adequate distribution of goods and services throughout the community. In other words, the price of articles sold for actual, final and beneficial consumption by their individual purchasers would he that proportion of their cost of production representing the ratio of credit-production to credit-consumption—i.e.. price equals cost multiplied by credit-consumption divided by credit-production. The difference in price below cost could be made up by an issue of Treasury notes or non-interest-bearing bills, from the national crcdUU