Borrowing and business in Australia

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Monograph

Identifikator:: 183051623X

URN:: urn:nbn:de:zbw-retromon-222122

Document type:: Monograph

Author:: Wood, Gordon L. http://d-nb.info/gnd/1239193688

Title:: Borrowing and business in Australia

Place of publication:: London

Publisher:: Oxford university press, H. Milford

Year of publication:: 1930

Scope:: xv, 267 Seiten; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Prosperty and crisis after the gold discoveries

Collection:: Economics Books

THE GOLD DISCOVERIES 31 to produce commercial crises of the type just examined. The analysis of Tooke and Newmarch might, in fact, stand as a model for the examination of later crises. But, despite the fact that the economic consequences of the gold discoveries bear a strong family resemblance to those to be noticed later in connexion with the borrowing cycle, certain remarkable contrasts must also be indicated. The first of these goes far to explain some of those features which give the period its peculiar and characteristic significance. ‘In general terms the first effect of the gold discoveries was to confer upon the labourers the full benefit of what, in effect, amounted to a quadrupled demand for labour at quadrupled wages.” But the most dynamic change is to be found in the origin of the demand, not so much for labour, as for both foreign and home-trade commodities. The greatly increased wages ‘did not arise from the production for sale, after more or less delay, of some artificial commodity; but in the extraction by the labourers themselves of a universal instrument of exchange of intrinsic value, the process of distribution proceeding from the Labourers to the Capitalists and not from the Capitalists to the Labourers’. Here again, to digress for a moment, it is possible that in this cir- cumstance may be detected the source of the Australian tradition which has tended ever since to place an excessive and illusory value upon the function in production of labour as compared with capital, a tradition which is responsible for much of the industrial trouble of later years. A further contrast has reference to the behaviour of prices consequent upon the changes in demand and supply which occurred. The patient accumulation of Tooke and Newmarch of lists of current Australian prices! during the period of this cycle makes possible the statement of some of those broad tendencies which can be compared with later price movements. By an application of Cairnes’s theory of ‘non-competing’ groups the commodities examined fall, roughly, into three classes, in each of which the price reactions exhibit characteristic differ ences. These groups are, (i) Foreign Trade Commodities the supply of which could be readily increased by importing, especially from the United Kingdom. Prices in this groun rose ! These exhaustive lists will be found in Appendix XXX to the History of Prices, PP. 830-44, They form a tribute to the soundness of the authors’ statistical method.

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