New Find The Daily News, Views of Labor, 19 July, 1932 [The Economic Crisis – The "victims" of the depression]

The Family and the Depression

"The Daily News" has complied with a request to publish once a week a column of Labor news and views. This contribution will appear every Tuesday, it being understood that we do not necessarily subscribe to the opinions expressed. The matter is supplied officially, and can be taken as the voice of the Labor movement in Western Australia.

(By J. Curtin)

One of the paradoxes of the economic crisis is the relatively worse plight of the necessity trades and industries, compared with those regarded as serving comfort and even luxury.

The milk producers are a case in point. The agriculturists here and elsewhere; the building trades everywhere; and the wool industry and the market-gardeners are all apparently suffering more losses than certain other activities which, whatever their nature, cannot be considered in a rational world as of equal vital importance to mankind.

Indisputably the demand exerted by the rich and the well-to-do on the services associated with the satisfaction of their leisure and pleasure, has diminished to a less extent than the demand of the mass of people with small incomes for the products essential to human welfare. While the essential industries are languishing, all kinds of unnecessary, and even harmful, occupations relatively flourish. The fact illuminates the general character of the social order.

PRIMARY PRODUCTS

What is it that the essential industries lack? It is not machinery, or men, or scientific development, or raw materials, or easy transport. These industries lack but one thing – a steady demand for the products. Why is this the case?

Surely it is reasonable to consider that 400,000 people, or 6,000,000, or 60,000,000, need very much the same goods today as tomorrow, this year or next year, or now, as when things "were prosperous". The actual human requirements for wheat, milk, meat, boots, and clothing fluctuates very little. It is the power to buy them which fluctuates – fluctuates partly because we have never yet attempted to co-relate our power to consume and our power to produce, and partly because purchasing power is unequally divided.

THE CHILDREN'S MARKET

Some years ago I was a member of a Royal Commission that explored the question of the difficulties of families with more children than the wages fixed by the Arbitration Court provided for. I could not but be impressed by the deprivation suffered in many households because a wage intended to maintain four human beings had to suffice for seven, eight or more. The fact was patent that, notwithstanding our alleged high standards, many children were being stinted of what was essential for their adequate nurture.

In this present crisis of the producing industries it is clear that if all the children of the nation were provided with milk, fruit, clothing, bread, furniture, butter, meat, etc., to the extent that is desirable and proper, there would be a fixed and steady demand for the services of thousands of the very kinds of workers we most wish to see employed.

Looked at universally, the very best way to find markets for the wool, wheat, meat, milk, butter, fruit and vegetable industries is by ensuring that the children of the world, who are going through life with less of these than they require for proper health and well-being, should be given more of them.

I am not suggesting that an extra pint of milk, or more oranges, be added to the dietary regimen of every child, but I am definitely suggesting to the producers of milk, and the growers of oranges, that an increased demand for these products can only be secured when the children who now get insufficient milk, and those who, at present, go without oranges, are able to adequately satisfy their needs. That is to say, that the prosperity of the producers in these and allied industries really depends on the powers of the masses to buy milk and oranges; for the problem of production is acknowledged to be far less difficult than the problem of ensuring consumption.

THE SURPLUS

It must be realised that, however much experts may differ on some things, they are agreed that it is imperative to increase export trade. The reason is clear. In recent years each country, generally speaking, has been able to make more goods than it has been able to buy. All of them have desperately sought to sell the difference – that is, the surplus – to a foreigner. This suggestion, however, fails for the simple reason that the foreigner has also produced more goods than he can buy, and therefore, unable to consume his own surplus through lack of purchasing power, it is not to be expected that he can buy ours.

THE POOR FRUSTRATE INDUSTRY

Basically, the necessity industries have suffered because some of the people have incomes too low to permit them buying in full measure the necessities of an orderly life, while others have had, and have, incomes which not only satisfy their necessities, but enable them to excite a demand for luxury production. It is idle to deny the truth of this, and for the moment I am ignoring the justice or injustice of it in order to point out to the producers of food, clothing and houses, that their prosperity is dependent on the purchasing power of the masses, and not on the growth of a wealthy class in the community.

Put in a nutshell, the primary industries will the earlier return to a profitable basis by reducing the numbers of the poor, and by increasing the capacity of the lowest-paid sections of the people to buy. That is the crux of the matter for wheat growers, wool growers, milk producers, and the like. For them the objective should be higher general wages, not lower general wages.

LOW WAGES AND UNEMPLOYMENT

Early unemployed man, every poorly-paid man, every breadwinner with a large family and a mean income, contributes, by the limitation he imposes on human consumption, to the acute economic burden of the man on the land. We can only find a market where a human need for goods is not satisfied. In that respect, unhappily, we do not need to unload a surplus on foreigners, nor they a similar surplus on us. What the world has to do to market the present surplus of goods is to arrange a purchasing power for those who would buy if only they could.

Is it any marvel, then, that commonsense folk are regarding the means whereby goods and services are exchanged as in need of reformation? A child needs milk, her father needs work, there is milk for sale, which cannot be sold until the father finds work, and the father cannot find work because the milk, boots and the furniture cannot be sold because h cannot buy.

The problem of the producers, therefore, is the poverty of the consumers.