FULL EMPLOYMENT FOR POSTWAR AMERICA
Chase, Stuart
Full Employment For Postwar America By STUART CHASE AREPRESENTATIVE of the British Empire Chamber of Commerce in New York was telling me about their plans for employment after the war. "Every...
...This can be done through control of the nation's financial machinery, through social security measures and public works...
...To read your editorials and the speeches of your leaders, it looks as if America were committed to free enterprise with as much employment as possible...
...Pressure for a compensatory economy would be in the interest of the following groups: 1. Twelve million service men...
...The only honest answer is that we can...
...Three Basic Planks To a realist, the chances for the complete restoring of free competition, in America or anywhere else, look about as good as for restoring the tin bathtub...
...You Americans are supposed to be a hard-headed people, but I confess much of your free enterprise talk strikes me as dreamy nonsense...
...We love to keep up with new mechanical inventions...
...As my British friend pointed out, monopoly and administered, prices have been the rule over great sections of American business, ever since Rockefeller organized the first oil trust in the 1880's...
...Prices, wages, interest rates, find their level in a free, fluid market...
...Suppose the danger mark was 3,000,000...
...The rules of a compensatory economy are simple...
...It is unworkable if opportunities for investment fail to keep pace with the national savings...
...Of course it will," I agreed—and hoped ferventlv that we both were right...
...6. The man on the street, who has not failed to notice that when war spending started after the defeat of France, unemployment presently vanished...
...The system is unworkable if prices or wages are taken out of the free market to be pegged or fixed or restricted by monopolies, agreements between big corporations, trade associations, farm blocs, labor unions...
...One home in five has been hit by bombu or damaged by incendiaries...
...The state operated the industrial plant and controlled distribution and farming...
...3. Organized labor...
...She is the outstanding example of a compensatory economy in operation...
...2. Twenty million war workers...
...The gaps should be filled so far as possible with local projects, locally designed and administered...
...Some can be completely self-liquidating, some partially so...
...Even-if we have a domestic free market in some product, the chances are that an international cartel is manipulating the price beyond our control—as Sen...
...This offers a compromise between private enterprise and state regulation...
...This again should be automatic, as if the thermostat throws a tax switch...
...I asked, still leading him on...
...Do you think that is true of America too...
...I thought I would lead him on and get more impressions of this country...
...If we let the returning soldiers down after this war, the way we let them down after 1918, our system might not last very long...
...When the saw starts down, the Government throws its weight up, and vice versa...
...I suppose the answer is that one has to be bombed to face facts...
...Only number three—a compensatory economy...
...you may be able to substitute blueberries for strawberries, but the government runs nearly everything and free enterprise just about disappears...
...Well," I said, "we faced them when the banks folded up in 1933...
...As for old age pensions—ask any Congressman about the tidal wave of popular demand behind them...
...Number four—an automatic competitive system— almost came true in some countries during the last century...
...In all the stories I have read about free enterprise I have hardly ever seen these facts mentioned...
...It was not something sent by the gods, like the weather, but something sent by man, which could be controlled...
...Private interests would own and operate most of the means of production, but the government would underwrite full employment...
...Projects have been prepared in advance to employ so many persons at standard wages...
...The only shadow on this bright prospect is the plotting of certain bureaucrats in Washington...
...When you are driving a car east at GO miles an hour, you may want to turn around and admire the sunset, but the facts do not allow you that pleasure...
...You might just stumble into a revolution somewhere down there, with all those impatient young men about...
...Universal medical care is not charity, it is stark biological survival...
...Sweden has done this...
...We need that labor to rebuild England...
...5. Ten million farmers and farm laborers, faced with their prices falling headlong...
...The little Brook Farms, New Harmonies, and other small-scale collective Utopias have petered out...
...Never forget the war has showed us that what is physically possible is financially possible...
...Some functionless monopolies might even be broken up...
...Why do you now think that you can permanently scrap all such controls in a free competitive Utopia, when your business men found themselves quite unable to furnish full employment throughout the 1930's ? Myths About America "In the third place, and most important of all, the thing that keeps you afloat today is $100 billion of Government spending a year...
...He once said: "Competition has survived only where men were unable to abolish it...
...It compensates where business falls short—hence "compensatory...
...Why don't you face up to the real situation...
...It would be curious and tragic if Americans, deluding themselves with myths about free enterprise, should neglect the lessons of the war and become the most backward people on earth...
...Russia did have full employment, and will certainly have it after the war...
...Nobody, however, except Thur-man Arnold, has ever seriously tried to enforce that act on a broad front...
...It puts an economic base under the whole system, through a steady flow of benefit payments—"hot money" on which business men can count...
...In Britain, not many people are putting ideology ahead of jobs for all when the war ends...
...There are theoretically four ways to get full employment : First, by a completely rationed economy...
...Housing, slum clearance, parks, playgrounds, urban redevelopment, super highways, control of stream pollution, many other types of conservation, come under this head...
...They have been rejected by large majorities in poll after poll...
...Of these four ways to get full employment, three have been tried out to some extent in recent years...
...Until our leaders in Government, business, labor, are ready to deal with these realities, the chances for a decent world after the war are not too bright...
...They are used to hard living, bombing, violence...
...All other belligerents seem to have taken a good firm grip on these principles...
...Ever since then every nation on earth has been getting farther away from it...
...I mean you have had no free competitive system in America since the rise of the trusts, monopolies, and cartels in the '80s and '90s...
...Fourth, by a free competitive society that works perfectly...
...People in the mass, I have observed, prefer bread and work on whatever theory to no bread and no jobs on the most exalted ideological grounds...
...I think it is coming in due time from at least six directions, and I wish you would check them with me...
...It has to be a pretty hidebound individual who cries out against social security after the experiences of depression and war...
...Every group in Britain," he said, "from the radicals to the Tories, is committed to full employment, with as much free enterprise as possible...
...No raking leaves-— all should be projects which make the worker feel he is doing something important...
...If any politician starts monkeying with them, he can be instantly detected and dealt.with...
...My British friend spread out his hands, and put on his best diplomatic manner...
...In a deflationary period, the national credit expands, in an inflationary period it shrinks...
...Bone pointed out recently in The Progressive...
...It is here, if anywhere, that the "native American intelligence" which our polite British friend referred to, will show itself...
...Your leaders talk as if this did not exist...
...as if 'free enterprise' were now furnishing employment to everyone in splendid isolation and should be permitted to go on doing so after the war...
...Third, the Federal Government cooperates with state governments to insure minimum standards of health and well-being...
...When the count indicates' a Tabor shortage and a developing boom, a pre-arranged tax should be levied, or existing tax rates should be raised...
...They can be operated in a goldfish bowl...
...Even Walter Lippmann backs me up in this...
...The free market should be expanded to the practicable limit by enforcing the Sherman Act, by breaking up patent monopolies, by incentive taxation to promote venture capital, and so on...
...A compensatory economy might also be described as a "thermostat economy...
...Well, you see, most of us like our business system, and we don't want to lose it by being too stubborn...
...What do you mean...
...Advocates of such a society define it by three basic planks: First, business men are encouraged to produce and distribute as much as they fan, so long as the output is sound, in demand, and able to pay its way...
...Facts Which Fill The Sky "Don't you think we can do it...
...For the long swing, the burden of the national debt should never be allowed to increase faster than production...
...With the state as underwriter, a good deal of free enterprise can be maintained...
...Even larger majorities, however, have demanded full employment...
...They are jolly well determined not to live^ on the dole, and we know that it is not necessary that they should...
...Are you suggesting that we must go down into purgatory again before we can deal adequately with employment...
...Savings would have to be invested so promptly that the dollar circuit is always closed and plant and labor resources are fully utilized...
...We can build all the tanks we want, up to the limits of our manpower and materials...
...The Beveridge Plan in Britain, the Wagner Bill here, indicate how this can be done and social security extended to everyone...
...Unemployment insurance is of the utmost importance right now, as war industry is cut back and workers released...
...Before the war perhaps half your business was conducted outside the free market, on the basis of fixed prices, fixed agreements, quotas, artificial restrictions on output...
...The state would own or control most of the factory and farm plant, and appoint managers to operate it...
...All this strikes me, if I may say so, as perfect bilge...
...It is high time we did some keeping up with new social inventions...
...Everybody who is anybody seems to want to...
...Many soldiers and many, citizens are asking why we cannot keep prosperous making houses for people to live in, as well as by making tanks for people to die in...
...If they do not get it, their opposition to more radical proposals may weaken...
...Arnold has recently been relieved of his labors...
...Our soldiers and war workers will be the most powerful political group in the country...
...It isn't so much what you want, it's what the facts of the situation permit...
...4. Organized business...
...I asked...
...Money is used...
...Four Ways To Do The Job Suppose that we put full employment first and made it our goal, instead of a by-product of free enterprise...
...I'm sure that your native American intelligence will assert itself before that happens...
...The Government acts as umpire only...
...So what way is left for getting full employment...
...A college education for qualified veterans is another good local project...
...The bureaucrats, or somebody, had jolly well better be plotting or planning for something to take the place of $100 billion of expenditures for war— which means directly or indirectly about 45 million jobs...
...Number one has not been tried...
...Citizens would be assigned to work, as in the army, and then take their coupons to the warehouse and get their supplies...
...This struck me as a broad-minded line for a Chamber of Commerce Britisher to take...
...Third, by what some of us call a compensatory economy...
...For years private industry has been unable to absorb all our savings...
...Money is not used at all, and if you don't like strawberries you have got to eat them just the same...
...As for rationed or socialized economies, they are highly unpopular with the American people...
...Try and find a really free market in the building trades, in aluminum, oil, drugs, fertilizer, sulphur, optical instruments, plate glass, harvesting machinery...
...When the boys get going on the eternal verities of free enterprise I take a good look at the Aluminum Company of America, and suffer an acute attack of nausea...
...Officials of the Chamber of Commerce, the National Association of Manufacturers, and the Committee of Economic Development, have repeatedly said that if private business cannot achieve a high level of employment after the war, private business as a major factor in the economy...
...Russia came close to method number two, or socialism, before the war...
...Those three mountainous facts the Britisher mentioned are looming there behind the myths and dreams: monopoly, the Depression, $100 billion of Government orders...
...No national economy has operated under total rationing, at least since the days of the Incas of Peru...
...They got so menacing by 1890 that the Anti-Trust Act was passed by Congress...
...One out of two of our boys summoned by the draft were rejected for physical defects...
...The state is banker under this plan, not producer or distributor to any great degree...
...Yet there they stand, filling the sky...
...Fortune, in its famous supplement for December 1942, argues that the choice is no longer between free competition and state control, but between the state as financial underwriter and the state as production manager...
...In the second place, only the war rescued you from chronic depression, with an average of 10 million unemployed...
...Isn't the ideology of free enterprise as strong with you as with us...
...I asked...
...A Thermostat Economy Second, the Federal Government should cooperate with local governments and local groups, to fill any serious gaps in employment...
...The controls, in other words, can operate automatically, the way your oil burner operates, if you have any oil...
...The proceeds are then used to pay off part of the national debt...
...When the count falls below 3,000,000, projects should be completed, but no new ones started...
...The Only Honest Answer Thus the Government controls the pivot of the economic see-saw...
...When the count reaches that figure public works or services are initiated...
...Why...
...Second, by a completely socialized economy...
...To keep it from growing worse you had set up a whole network of government agencies and controls and called them the New Deal...
...That seems a pretty expensive way to do it, doesn't it...
...A group of research men from the universities or the foundations could set the thermostat by giving us, every month, an accurate count of those seeking employment...
...We've been facing them ever since Dunkirk...
...is through...
...Health insurance is absolutely necessary to maintain a strong, energetic population...
...Among ourselves, however, I must admit that I get pretty blue listening day and night to myths about the American dream...
...You Americans," he continued, "may find it a bit difficult to restore free competition in the midst of a world hell-bent in the other direction...
...As they fell after the last war in 1920...
...You cannot plan for something you refuse to look at...
...Your production men in business are doing magnificently, but their orders are coming from the Government...
...This thermostat idea is all very well, it may be objected, but where is the popular heat coming from to get what may be a conservative Administration and a gun-shy Congress to sponsor any such program...
Vol. 8 • April 1944 • No. 16
