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New Zealand in the Post-War World: Reconstruction Problems of a Vulnerable Economy

Published online by Cambridge University Press:  07 November 2014

Horace Belshaw
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Extract

In this paper it is proposed to discuss the post-war economic problems of New Zealand, not so much because of their intrinsic importance, as because they raise questions of some general interest and fairly widespread application. It is not intended to pursue an elaborate statistical enquiry and as far as possible the facts selected will be confined to those having a direct bearing on problems and policies.

As elsewhere, the nature of these problems will be determined by the “fundamental” characteristics of the economy, the changes which have occurred during the war, and the nature and intensity of the forces which impinge on it from the world at large. The nature of the response to those forces will be greatly influenced, of course, by the prevailing political attitudes and the sort of administrative machinery and techniques to which the country has been accustomed.

Production and Trade. Since New Zealand is a small country with a population of less than 1,700,000 people, and with a comparatively simple economic organization, its problems tend to be sharp in outline, and readily amenable to analysis. Production is highly specialized. On the average of the ten years prior to the war somewhat over 60 per cent of the value of physical production was provided by farm products (when processed). About 53 per cent of the value of all production consisted of grass land products, in respect of which New Zealand has enjoyed unique comparative advantages.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 11 , Issue 3 , August 1945 , pp. 388 - 401
Copyright
Copyright © Canadian Political Science Association 1945

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References

1 The statutory reserve requirement is that gold and sterling exahange must be not less than 25 per cent of notes in circulation and other demand liabilities, but the Minister of Finance has power to suspend or vary the requirement.

2 Among the more important economic measures enacted between 1935 and othe outbreak of war are the Primary Products Marketing Act, covering the system of guaranteed prices for export and She system of internal marketing to regulate the marketing of perishable foodstuffs; the Industrial Efficiency Act intended to promote the rationalization of industry; the establishment of the system of Import and Exchange Control; amendments to the Industrial Conciliation and Arbitration Act re-establishing compulsory arbitration and in effect establishing compulsory unionism; regulations directed to restrain price increases, and later to control prices; and the substernal extension of social security legislation.

3 Between 1938-9 and 1941-2 the average numbers employed in various industries varied from between an increase of 74 per cent in hosiery to a decrease of 34 per cent in coach building and motorcycle engineering.

4 Already they would require an annual increase of same N.Z. £13 million, or about 24 per cent, on 1938-9 expenditure.

5 Cf. for example Hansen, Alvin H., America's Role in the World Economy (New York, 1945), p. 169.Google Scholar

6 For a discussion of the problem of stabilization in New Zealand, of the writer's “Stabilization in a Dependent Eoonomy” (Economic Theory and Monetary Policy, supplement to the Economic Record, 04, 1939).Google Scholar

7 Cf. Articles of Agreement International Monetary Fund, Article I (iv), Article VI, Section 3, Article VIII, Section 2(a), Article XIV, Section 32 and 4.

8 Cf. the writer's “Foundation of Rural Welfare” (International Labor Review, March, 1945).

9 See for example Beveridge, William, Full Employment in a Free Society (London, 1944), especially pp. 238–41.Google Scholar