Full Employment by Faith
WITHERS, WILLIAM
Full Employment by Faith Has Henry Wallace Abandoned the New Deal? By William Withers Associate Professor of Economics and vice-chairman of the New York State Liberal Party WE, the poo-Henry...
...Referring to the depression of 1929, he says: "We survived only because the bold, courageous action of the Roosevelt New Deal restored the people's confidence in themselves and their faith in free institutions...
...Here Wallace follows a certain current tendency to define full employment as free enterprise...
...4) faulty economics...
...His outline of broad aocial backlog* of housing, health, edu cation, conservation and rural valley developments to sustain demand for tabor ia excellent...
...Regardless of the unreality of such choices, this proposed budget constitutes unwise public finance...
...With slight changes in terminology, one discovers the same ref erenres to "Ameiican institutions," the same insistence on free enterprise, the same belief in balanced budgets, the same stress on the importance of business incentives, the same under-estima-tion of the role of labor in economic leadership, the same over-emphasis on community planning, the same faith in the boldness of American business men and even the same idolization of Henry Ford (of Dearborn Independent and labor spy fame...
...Perl taps the trouble lies in Wallace's excessive faith...
...6) unwise public finance...
...Thus, "We can attain this goal without a Planned Economy, without disastrous inflation, and without an unbalanced budget that will endanger our national credit...
...On the other hand, government expendi-tures are estimated at only $35,000,000,-000...
...Not the least important «s a friendly attitude toward Soviet Russia I Full employment goals will be achieved because "sensible men" will insist on them...
...at many appropriate momenta...
...The capital investment or $30,000,000,000 proposed by Wallace, is unrealistic...
...There may well be some sag back in 1946 and 1947—but if we are to keep up with our past record of growth we should be up to $200,000,000,-000 again in 1950...
...Realistically regarded...
...The reader also senses profound confusion between the words will and should...
...Undoubtedly Sixty Million Jobs represents to some an effective and brilliant tight-rone walk between the philosophies el economic planning and free enterprise...
...Some of the New Deal'a leading exponents, like Rexford Tugwell (whom Wallace cites only for his sartorial perfection) preached that laissez-faire is dead...
...economics and sociology are really psychology...
...It is not the "American way...
...Wallace either approves or diaapproves of theae New Deal policies—it is hard to tell which from Si>iy Million Job...
...Attitudes are first causes...
...He assumes that we will...
...Aa a result of hia genuine desire for "sixty million jobs" the book has many fine features Wallace ¦rges the maintenance of high wage* after the war...
...Therefore there will be $200,000,-000,000 of national income in 1950...
...The so-called 'Planned Economy' of the regimented states whereby the Federal Government would assign people to jobs, fix wages and control pratically every other aspect of our national life" is, according to Wallace, an extreme way to solve unemployment problems...
...He insists upon Federal Government responsibility for maintenance of full employment but assures us that 'this does not mean that the wartime powers of the President must tie perpetuated in peace...
...The National Association of Manufacturers and the Committee for Economic Development are just as "New Deal" as he is on these questions...
...Whatever this may mean, it apparently does not mean unbalanced budgets, government deficit spending, a National Planning Board, realistic controls over capital investments and prices or a modernized National Recovery Administration...
...The $26,000,000,000 expenditure foi the Federsl Government means little more thsn prewar expenditures plus veterans' assistance and public debt charges...
...But he does...
...2) erroneous statistics...
...ey are likely to draw exaggerated contusions from them or to underestimate 'fceir significance...
...Sixty Million Jabs" is the "right deviation" of Henry Wallace...
...But for the long pull of economic reform it may be the wrong kind ot political approach...
...Even if one could net discover this by reading between the lines, one could not fail to find it in hia definition of full employment: "The full-employment problem—which, after all, ia the preservation of our- democratic free enterprise system...
...They will close the book wondering whether Wallace has not now become a liability for liberals...
...This is how: "To live up to our potentialities in the future as we have in the past would mean $200,000,000,000 by 1949-50...
...Will we choose a $200,000,000,000 budget where government spends $65,000,000,000 or $36,000,-000,000 a year 7 Wallace thinks a budget of $200,000,00,000 in which consumers spend $135,000,000,000, business capital investors $30,000,000,000 and the Federal, State and local governments $35,000,000,-000, is about right...
...Men like Wallace are over-hapressed by statistical "guideposts...
...Wallace makes very litUe of this significant fact, while accepting on faith other statistics that indicate business' readiness to employ that total...
...Wallace's Psychological Determinism Wallaces full -employment prescription resembles the faith-healing so pop ular when Herbert Hoover sat in the White House...
...In manufactures!, plans are now being made to employ 1,000,000 fewer workers than were em -lieyed during the war...
...It is quita passible that more realism will be respired...
...For example, Wallace *h«s the I9«3 Department of Commerce Hediction that ia 1940 we can produce the Sam* amount of goods that we pro-**ed in I HO and still have 19,000,000 *"**rs unemployed...
...It may lie a policeman, a clearing house of information, a stimulator of business, but never must its participation in economic affairs lead to extensive economic control...
...Phyaical forces give way to human will and morals...
...As he puts it, "The lesions learned from twelve years of <lose association with this great practical humanitarian should have cautioned me •gsinst questioning his goals...
...In discussions of full employment planning in 1942 and 1943, it was thought that free enterprise might be saved by full employment, but certainly not that the two were virtually identical...
...There is even to be found a peculiar form of psychological dsterminism...
...As a man of faith, be ?sstigates himself for doubting in 1944 Franklin Roosevelt's estimate of the need for 60,000,000 jobs...
...31 unsound social causation theory...
...Hia views on the treatment of veterans, the economic development of the South and the serial effects of the Tennessee Valley Authority are sensible...
...These are vague words...
...Full employment, if achieved, will strengthen free enterprise...
...His per-aonal integrity and aocial idealism hava endeared him to lib-avail and conservatives alike...
...Many will eagerly thumb the pages to find sub-sUniiatiea for sound liberal attitudes...
...The latter, however, had liegun to spend over $10,000,000,000 before the war and the upward trend in their expenditures will doubtless continue...
...The figure is not much higher than that recommended by most business men's planning groups...
...It is amazing that Wallace continues to regard himself as a New Dealer...
...Liberals will have to decide whether t» take hit libe,nlum on faith, assuming that he hat become confuted, or to believe that he hat decided to accept the business man's point of view at a new tactic of political liberalism...
...Because of all-out war production, we reached the $200,000,000,000 total national production in 1944 — six years ahead of time...
...Sixty Million Ms (Simon and Schuster, New York, X, $1.00) can be indicted on five ts: (1) substitution of faith for facts...
...This reader concludes that he haa abandoned the New Deal and ought to admit it frankly...
...In Wallace's full-employment plan government is not to encroach on business: that is a primary criterion...
...He believes that Manufacturing, mining, construction, utilities, trade, finance and services will •dually employ 37,000,000 workers in IttO, although these industries employed ?eJy 25,000,000 in 1940...
...Excessive faith in statistics, how-er, is a modern foible, not a sin...
...It is well-calculated to lull even the most conservative-minded person into feeling temporarily friendly toward full employ stent planning...
...But free enterprise is not full employment, nor is it likely to create full employment without the aid of the federal Government...
...Rumtrt of this deviation, spreading since he became Secretary of Commerce, ¦ art now eon-firmed by hit own word...
...Doea Wallace mean that the New Deal succeeded because it restored people's confidence, a psychological achievement, rather than because its controls over business and its policy of deficit spending exercised a salutary influence ? Does he believe that the methods employed to cope with mass unemployment In New Deal days are now "impractical" T Surely the New Deal meant unbalanced budgets, government controls, tax interference with business incentives, government stimulation of consumer purchasing power, government competition with private production of electricity, multiplication of government planning agencies, fundamental changes in the inter-pretstion, if not in the structure, of the Constitution and altogether a genuine challenge to free enterprise...
...They will have to decide alto whethtr the publication of vague propaganda for full employment, stud ded with conetttiom to conservatism and American temantict, conttitutet tkt bttt approach to full-employment education...
...It does not represent a "New Deal budget" translated into postwar prices...
...Far worse is Wallace's faith in free enterprise as the primary means to full employment...
...Wallace should be assigned a Baby Snooks to ask "Why, daddy...
...Wallace's program implies a happy atmosphere of choices...
...Henry Wallace sincerely wants full employment...
...We must now pick up where we left off then, consolidate the gains, and develop a practical means of preventing mass unemployment...
...By William Withers Associate Professor of Economics and vice-chairman of the New York State Liberal Party WE, the poo-Henry Agar Wallace...
...They may mn wonder whether at nomination time m 1944 President Roosevelt did not understand Wallace better than we knew...
...Wallace's faith extends to the willing-**«• and ability of business to fulfill ** 60,000,000 job goal...
...Wallace believea that full employment and 're« enterprise are aynonymous...
...Of this amount, the Federal Government is supposed to spend $25,000,-000,000, the Stat.- and local governments, $10,000,000,000...
...If this is true, It is just another indication that private enterprise will not employ 60,000,000 workers now or in I960...
...Instead of accepting New Deal philosophy...
...Many kinds of tactics can be used in the fight to achieve full employment...
...Aad tome will prefer this bad "good •eek te none at all...
...For this reason Sixty Million J»bi will generate a conflict between amotion and reason in most critical - minded readers...
...PH.* for Ofopio ElCRSSlVE faith reduces critical-aundedness...
...The problem is "not one of changing the framework of government"' but of using "the same spirit which the founders used, not to change the constitutional authority, but to develop under the Constitution new mechanisms to enable us to meet economic problems in a wise and orderly way...
...For example, it ia deeided that there should be $200,000,000,000 of national income In 1950...
...From the standpoint of public finance, Wallace is not a New Dealer, since he insists upon a balanced budget, the retirement of the public debt, incentive tax reductions for business men and the prompt repeal of the excess profits tax...
...It is couched in simple and innocent terns that the layman can understand...
...private business invested only half that amount in 1939...
...Attitudes of faith and unity create full employment...
...There is no assurance that business will hire 80,000,000 workers in 1950...
Vol. 28 • November 1945 • No. 44
