Douglas Social Credits

Manawatu Times, Volume LIV, Issue 7280, 6 October 1933, Page 12

Douglas Social Credits

(To the Editor.)

Sir,—Rip Van Winkle’s letter on the Douglas scheme is a glaring example of bad economics and confused reasoning. Money is a medium of exchange, but it also has a value; a value which R.V.W. denies. This denial proves that R.V.W. is not acquainted with eveu elementary economic laws, of which value forms a part. If he should reply to this letter I would like him to tell me what he thinks is a definition of value. Until this question of value is understood it is hopeless to expect any solution to these economic problems. I have yet to meet a Douglasite who has any knowledge of the fundamentals of economics, and I might add it is because of this lack of economic knowledge that they are Douglasites. The Douglasite insists that there is a shortage of purchasing power, when the contrary is the case. The trouble lies in the fact that the purchasing power is unevenly distributed. Sir John Ellerman, a shipping magnate who died recently, left a fortune of over £17,000,000 and there are hundreds of other millionaires in Britain. Does R.V.W. believe that these men suffered from lack of purchasing power? Let me, by a simple illustration, endeavour to put the position-so that it will come within R.V.W.’a power of comprehension. Supposing R.V.W. were invited to a social evening at which the supper table was heaped with all kinds of eatables, more than enough for all the guests, even if everyone of them were gluttons. A few of these guests, however, manage to secure all the eatables for themselves leaving the great majority of those present without anything to eat. In this instance would R.V.W. say that those foodless guests suffered because ot a lack of eatables or was it because the food was unequally distributed? The real cause of the depression is due to the fact that machinery is largely displacing human labour. Let me try again to make this clear by a simple illustration. Supposing in a given factory 101 workers were employed. Then a machine is invented which can do the work, of a. hundred men. Now one man with tho aid of tho machine can produce as much wealth as formerly took 101 men. The former purchasing power of the .100 men, who are now unemployed, goes into the pockets of the owner ot the machine. The total amount of purchasing power remains the same as prior to tho introduction of the machine, but the distribution of it is different.; the previous purchasing power of the 100 now unemployed jnen going into the pockets of the owner of the machine. Multiply this instance by thousands aud you get, on the one hand an unemployed army, aud on the other hand a concentration of purchasing power .in the hands of a comparative few, No fiddling with finance can possibly solve the problem of how to utilise all lab-our-saving devices without creating an unemployed army.—l am, etc., R. ROSS. Palmerston North, October 5.