The New Zealand Tablet WEDNESDAY, OCTOBER 14, 1925. THE ECONOMIC ARMISTICE

New Zealand Tablet, Volume LII, Issue 39, 14 October 1925, Page 33

The New Zealand Tablet WEDNESDAY, OCTOBER 14, 1925. THE ECONOMIC ARMISTICE

IF the old theory of the equation of cost and prices is a fallacy, it follows that accepted notion-,, regarding the relations between labor and wages must also be wrong. Upon examination ir will be found that : n the present conditions of society it is absolutely false to hold, as was so long held by people, that either prices or wages ■iire determined by considerations of justice. It will be seen that the one and the other are actually conditioned by the class struggles between the capitalist and his victims —the laborers and the consumers. And one more proof will be forth ip g that the various “nations of shop-keepers” in the world to-day are far indeed from being influenced by Christian ideals in their dealings with their fellow-men. * * • As regards what may be called “ fancy prices” it needs no demonstration to show that they depend exactly on what the purchaser will pay for the goods. Thus John Stuart Mill’s example of a music-box sold in the wilds of Ontario illustrates die fact that cost of production has nothing to do with price in such a case. Again, it is clear that when a trust or a monopoly has cornered the supply of a commodity, the price has no relation to the cost of production, 1 nt has a very real relation to what the consumers can be induced to pay for the goods. The monopolist will want to get as high a price as possible for as much of the commodity as possible, and he will fix a price which he calculates will bring him in the greatest net profit. Monopolist’s price, says Mr. Leacock, depends on monopolist’s profit and not on the cheapness of sale. Price, therefore, has in this case no relation to cost. /The greater the output the lower the price must be in order to effect- a large number of sales. Hence, if there were an unlimited supply of any commodity it would be worth

nothing—a fact which once more proves that there is no relation between cost and price. Now, producers will take very good care that there will be no such supply as will reduce the prices lower than they want them. In other words; what they aim at in production is the production of “values” not of plentiness. Modern industry is careful to check production just short ■ of satisfying human wants, so as to keep prices up to a satisfactory standard. Now, as to wages, let us see what determines the rate paid by our capitalist. It is clear that he will pay only as much as he is compelled to pay. This will depend on the number of men available and on their condition. If a number of starving nnm were competing for work the wages would be low indeed. If the men were united the wages would he fixed as die result of a sort of armistice between laborers and employer. The men would want as much as they could get, and the employer would give as little as he could get them to accept. In this sense, Adam Smith was right in saying that “wages is the result of a dispute.” AA bat we have said about prices and wages under a monopoly applies relatively to competitive conditions. There will of course bo more need to consider the consumer to whom the employer wants to sell his goods, but again the result will be fixed by a sort of economical armistice. There will be no consideration of flu' equation of cost to pricer, as then' will be no thought of the bearings of social justice on either price or wages. Industrial unrest, agitation, the unity of the workers, the needs of consumers, the power of capitalists are therefore the real determining I actors, and they are like great forces which are constantly being adjusted to a state of unstable equilibrium which may rightly be described as an armistice-in the economic struggle. • • • Obviously, the industrial progress and the vast achievements of inventive genius have not made society more stable. The present conditions of the world are not such as to warrant any man in being proud of the match of civilisation towards the universal brotherhood which ought to be the natural condition of men and women who, whatever their creed, all profess to be inspired by the same noble ideals. It is true that the day of sweated labor is gone; English landlord’s no longer fling women and children from their homes to die on the roadside; females are no longer made like beasts of burden in the mines. But there is misery and suffering enough still; there is fraud and injustice and inhumanity in every part of the world; and the throbbing of restless, discontented hearts is not always hushed by the safeguards .which are part of the machinery of our capitalist States. What good has been done is the result of organisation among workers in other words, the result of fear on the paxt of the capitalists. And fear never goes with kindness and charity, as we all know. Organisation harnesses individuals as to a machine which marches forward in virtue of sheer strength. The machine, as well as ■its enemies, is not inspired by the noblest ideals ; and on the one side and on the other there is little evidence of a promise of a

settlement which might be the starting point for real, stable, orderly reform. The whole truth is that men have closed their eyes to the fact that they have higher interests than those of this world, and in doing so have learned to judge all things by the standard of this life, forgetting that the self-sacrifice and self-restraint of Christian virtue are the essential conditions on which true brotherhood of man must be based. LIBERTY The mental confusion created by moderncommercial education is reflected in the tendency of people to make a fetish of words and phrases to which popular opinion asscribes no precise definition. Such a term is liberty, for men advocate all kinds of stupid and wicked things in its sacred name.. Liberty is understood in a vague way- to mean freedom from restraint which, extended indefinitely, serves to justify all manner of abuses and excesses, which, in their turn lead straight to tyranny. God is the source oi liberty as He is the source of life,; ami true liberty consists in the freedom to live in conformity with His law. Law, therefore, is essential to liberty, for it is only by taking counsel from the supreme wisdom of God, which transcends the human intellect immeasurably, that the desires of men can be directed constantly towards good. Without this recognition of God by man freedom degenerates into licence and man becomes the slave of his passions. Liberty is not for the lower animals, but is for rational beings alone. It is defined as the faculty of choosing a means fitted for an end proposed; “for,” says Pope Leo, “he is master of his acts who can choose one thing out of many.” An end is proposed; reason judges it: the will subsequently acts upon the judgment of reason ; and man exercises his freedom. Now if man acts in accordance with reason, that is if lie acts in conformity with the natural law which is engraved in the human mind, he will be acting in accordance with the divine law, with which the natural law in a limited way is identical. Thus, in a natural and rational fashion man will enjoy liberty. But the human mind is defective and may be deluded by external influences which prompt it to choose evil lather than good In that case man loses his liberty. “'Whosoever committeth sin.” said Christ, “is the slave of sin.” Hence, anything contrary to God, Who is the Author of reason, is opposed to reason. Even God Himself, AY ho is supremely free, could not choose evil. If He could do so He would not be God, for He would be acting in submission to an external force, and God. being infinite, is the Creator of all forces. The law of liberty for individuals is equally binding' upon States, “for, since God is ibo of all goodness and justice,” says Form I. e--),, “it is absolutely ridiculous that the State should pay no attention to these laws or render them abortive by contrary enactments.” Now the Church is the divinelyappointed interpreter of the law of God, and" when States oppose the Church it is because, they wish to repudiate some portion of Divine law, and thus .become the slaves of sin.'