Economic policy in New Zealand 1936-1939 (1941)
AuthorsOxnan, D. W.show all
The aim of this survey is twofold. First, it attempts to describe and analyse the more important aspects of the Labour Government’s economic policy, and second, it attempts to demonstrate how the achievement of this policy is conditioned by the characteristics of the New Zealand economy. The economic policy of the Labour Government is important for several reasons. First, both the “recovery measures” of the previous Government during the depression, and Labour’s policy after the depression tend to show that New Zealand, in common with other countries, is experiencing a definite trend towards an extension of State control of economic life. Secondly, since the 1890’s the Dominion has indulged in economic and social experiments which have attracted the attention of economists not only in New Zealand but also abroad. The economic and social policy of the Labour Government thus appears to be an acceleration of this long term trend. In addition it is generally recognised that conditions in New Zealand are more favourable to economic experimentation than those existing in most other countries. In examining this policy it is of fundamental importance to realise that the Ottawa Agreements of 1932, mark the end of an era when New Zealand could confidently rely on a large and expanding overseas market for her exports. Moreover the rise of economic rationalism, the progress of agrarian protectionism, the developments in the alternative sources of supply and the declining rate of growth of population in the consuming countries, all have forcibly demonstrated the inherent weakness of the New Zealand economy. Consequently the post depression years have witnessed a conscious expansion of New Zealand’s secondary industries. Although the social and economic policy of the Labour Government is in many respects similar to that of the Liberal Administration of Balance and Seddon in the early ‘nineties’ of last century, it has certainly been carried out under far less favourable circumstances. It is mainly for these reasons that this subject provides a fruitful field for economic research. To cover the whole of the policy in detail and would be beyond the limits of a brief survey of this nature. It would be possible to write a detailed survey on any one aspect of the policy. Nevertheless, it is felt that a broad treatment of policy is not entirely unfruitful. On the contrary a wide survey has much to commend it, for a detailed analysis of one aspect only tends to lose sight of the nature of the policy as a whole. Thus the first two chapters are devoted to an analysis of the Labour Government’s Programme and the economic factors limiting the achievement of this programme. The remaining chapters are concerned with the development of policy. Separate chapters deal in turn with Monetary Policy, Marketing, Transport, Rationalisation of Industry, Import and Exchange Control, and Labour and Social Legislation. In a concluding chapter, the threads are drawn together and an evaluation of the policy attempted. It should be noted that the period under review extends from 1936 to 1939 inclusive. It does not deal with the policy after the outbreak of war in September 1939, because this has created new problems and has thus modified to a certain extent the direction of Government policy. At the outset, originality is disclaimed. Much has already been written on particular aspects of policy, but little if any, on the policy as a whole. The material has been collected from all available relevant literature, consisting of numerous pamphlets, periodicals, articles and officials publications. A detailed account of references is given in the bibliography. Finally it is not proposed to reveal anything which is not already known to competent economists. This survey merely aims to make a comprehensive and critical analysis of the economic policy followed by the Labour Government in the years 1936-39.