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But such action must dig deep, for the institutions and habits relating to saving lie deep in our economic and political organism. Urgently questioned are traditional views as to the role of the state, the desirability of various measures and degrees of control, and the place of individual responsibility in both economic and political affairs. Moreover, the international Bnancing of it can all be arranged in such a way that it contributes strongly to continuing prosperity in our own land.
The 24 POSTWAR ECONOMIC PROBLEMS Federal government through an appropriate Federal agency would then be asked to advance a substantial part or all of the funds with which the real property in the slum and blighted areas would be acquired. And, of course, it would provide for its own subsequent revision to meet unforeseeable needs. This system of providing one good meal of the proper supple mentary protective foods to workers in factories and in mines is just beginning to take hold in the United States. In 1932, in fact, no less than 78. The license taxes could not be eliminated, because for certain years they are not reported sepa rately. Prestige consumer healthcare company. Since the war started, the unemployment insurance fund has finished paying off its debt to the Exchequer and is now trying to build up a large reserve for meeting the situa tion of mass unemployment with which it is again likely to be con fronted after the war. Wartime price control, as such, may well have much less effect upon the outcome than results from materials shortages, expansion of the capacities to produce war materials, and technological change. Perhaps competition has declined; perhaps it has increased.
It is that unemployment rather than a high rate of private invest ment is the practical alternative to high consumption and public spending. This group probably makes up two-thirds or more of the population of Great Britain and of some of the peoples of western Europe, and onethird, at least, of the people in the United States. Toward improved aw Locaf d iS rn ^ s. M c iire In addition to ensuring greater equalization in burdens and resources, the foregoing proposals, if adopted, would undoubtedly place the nonfederal units as a group in a better Snancial position than at present. Department of Agriculture, Publication 223). Repudi ating the one, we must recognize the need for diminishing the other. The file Wonderlic contains the average Wonderlic scores of football players trying out for the NFL and the graduation rate for football players at selected schools (data extracted from S. Walker, "The NFL's Smartest Team, " The Wall Street Journal, September 30, 2005, pp. Prestige products and prices. 5 CONCLUSION It may be a shock to many to learn that a public debt of $4, 000 billion mag/ be carried by the economy without a collapse of the capitalist system, a repudiation of the debt, or a great inflation. But the major POSTWAR E C ONO MI C PR OB L E MS part of goods in process in the war industries are going to be value less for civilian purposes.
230 POSTWAR ECONOMIC PROBLEMS Outlays for public assistance are provided in part through grants from the Federal government, which cover a large share of the cost. Agriculture would have engaged an average of 10, 000, 000, and all nonagricul tural pursuits 44, 000, 000. Before we can well afford any more post offices or even irrigation projects, we need the houses, factories, machines, highways, automobiles, power plants, movie theaters, restaurants, and other paraphernalia that would make possible the production of goods and the rendering of services consumers desire to the tune of at least $140, $150, $160 billions a year. Federal net contributions to national expenditures of about this size during our domestic spending program failed to prime the economic pump of this one country; the expenditure of $3 billion, or even sub stantially more, diffused through the world, without a drastic * /bid., p. Fashion Marketing - Student Notes - Marketing Concepts -Student Notes Accompanies: Marketing Concepts 1 Directions: Fill in the blanks. The Marketing | Course Hero. 466. A realistic appraisal of the future would suggest that these can only be wiped out by a sub* Cy. Consumption forgone today is gone forever. While we cannot be optimistic about what will be done, the development of something like a permanent relief policy is one of our most urgent social security needs. Any approach to social ism other than by continued extension of government control and expropriation of the upper strata by taxation would no doubt meet resistance from the farm interest and from small and medium-sized business.
In such areas it is difficult to imagine any widespread movement toward monopolize- 404 POSTWAR EC ONOMI C PROBLEMS tion whether by conspiracy, gentlemen's agreement, or otherwise. To that extent it will reduce the downward pull of large agri cultural labor supplies upon wages in those industries which can readily establish plants in small country towns. Let us discuss more fully the burden of transfer payments. Actually, however, developments were in the opposite direction. 178 POSTWAR ECONOMIC PROBLEMS If, in a period of 50 years, we could attain a national incomc of $200 billion plus the interest on government securities, then a public debt of $4, 000 billion might well be within the realm of possibility. Capitalism is doomed if the experience of the thirties is repeated. The reply to these critics is that public investment is accepted only because other alternatives fail. If this privileged country cannot 611 the import needs of the United States, sugar will still be imported from nonprivileged countries, say, from the world market. SURPLUS DISPOSAL The more that is said about solving the problems of international food distribution and minimum adequate diets for all, through level ing of tariff barriers, the less the chances are that the Congress of the United States will permit the necessary steps. In addition, of course, there will be what we may term the political risks.
Omit ting the description of the necessary theoretical computations, we give in Table 2 the final results. As the spring of 1919 wore on, sales increased in retail lines such as clothing for returning soldiers, household goods, etc. "Our own view is that the success or failure of public works and budget deficits during a depression will depend largely on whether the public in general, and investors in particular, approve of these policies. " That this reasoning is sub stantially correct is almost universally agreed among economists.
The term "nationalization" does not sound well to every ear and it may be that other means of establishing no less complete public control, even if less rational and fraught with more friction, will be preferred by the political groups in power. Given some assurance of political stability and confidence in economic development, private investors may ultimately be prepared to lend great sums abroad, but we cannot rely upon them in the early stages. Specifi cally, factors such as the three first mentioned above tend sub stantially to modify what may be referred to as the pattern of our economy, including particularly the structure of markets and the operation of market forces. Ease of communication of thought is a twentieth-century commonplace; but the conse quence that like factors of production are beginning to insist upon a greater approach to equality of real incomes in spite of lack of mobility is barely beginning to be realized. But that time is now past and it must be recognized that national sovereignty is not an end in itself but an instrument for the fostering of Economic Liberalism. This figure, in predevaluation United States dollars, is given in a compu tation covering 1927-1937 by Colin Clark, TAe Conations o/ Fcofwmtc Prepress (London, 1940), p. 463. Now an estimate of "normal" plant and equipment expenditures based upon past experience contains already an element of "normal" 102 POSTWAR E C ONO MI C P R O B L E MS cyclical deferred demand because in any peacetime year of high prosperity, a backlog of demand accumulated during preceding years of lower national income is in process of being made good. The other and basic economic reason is that the level of economic activity after the war both depends upon and determines civilian demand. Out of that war we got vocational rehabilitation and public medical care for veterans, and in the twenties old-age assistance. Factory and public utility.................................................... Other.......................................................................................... Net foreign balance.................................................................... Net change in inventories......................................................... 0 5 0.
It has one great advantage for the type of program we are considering in that it provides a very convenient and effective way of introducing into new areas the most modem techniques and able management, as well as capita!. 2 per cent decrease between 1930 and 1934). Thus, feudal society har bored, besides the lords and peasants and artisans that constituted the essential elements of its system, also other elements—traders, for instance, and certain classes of producers—that did not belong C A P I T A L I S M IN THE PO ST W A R WO RLD 115 to the feudal organism and dwelt in tpwns which that organism failed to subjugate or to assimilate. What is needed and what to the present writer does not seem to be an entirely hopeless task (although this point cannot be argued here) is the development of an economic system which preserves the essentials of free enterprise, free markets, the freedom of consumers' choice, and the freedom of choosing and changing the kind and place of occupation and which at the same time elimi nates or at least sufficiently alleviates the grosser evils of a com pletely free system.
Hitler has at least shown T R A D E AND THE PE ACE 143 us the seamy side of collectivism and raised intellectual inquiry, even in radical circles, from sterile contemplation of policy as choice between an ideal or perfect statism and the inevitably imperfect institutional system based on individual freedom. — D IS P O S IT IO N OF CROSS N A T IO N A L E X P E N D IT U R E, 1929-194!, F IS C A L 1943, AND PO STW A R E S T IM A T E S (Billions) $ $ 5 3 $ 7. 6 billion per annum and that for consumer expenditure upward by the same amount to $93. There is always the possibility, of course, that the con struction techniques actually used will be different from those used on PWA; but where differences in techniques are subject to control, as in the Work Progress Administration regulations, no serious problem arises. We can safely assume that, although permanent changes in the public and private economies are certain to result from the war, the states and localities will continue to affect significantly the national economy. Compared with a deScit of $40 billion per year, this is not of primary importance. Expansion of public-welfare expenditures— Federal aid to education, public health, old-age pensions, and family allowances. This means that current receipts in the whole community decline; saving is cut by the drop in business and by unexpected reductions in consumers' incomes. This would amount, in principle, to an extension and liberalization of the credit policies pursued by the Reconstruction Finance Corporation and Public Works Administration in the depression of the thirties. A system of private enterprise is eco7M M / preferable to one of public ownership only if over? Pro gressive income taxes are one way of achieving this result, as are estate and capital taxation. The United States has had a foretaste of these complications in connection with reciprocal trade agree ments with countries that had advanced in the art of totalitarian economic control. 69 An inadequate Bow of investment expenditure thus means depression, unemployment, wasted productive capacity, poverty, and insecurity.
Anything along this line is difEcult to work out and is likely to become snarled up in a Federal-state controversy, but it merits attention. During the past 2 years we have become increasingly conscious of the vital role the United States has to play in this terrific struggle, and the view is gaining that any sort COMMODITY AGREEMENTS 307 of assurance against its recurrence requires that we help safeguard the peace that follows victory. Almost unanimously, our relief institutions were 276 P O S T W A R E C O N O M I C P R OB L E MS regarded as most unsatisfactory. Another problem ignored by Galbraith is the possible negative effects upon employment of particular projects. This problem can be eliminated by adequate foresight and planning.
198 POSTWAR ECONOMIC PROBLEMS Unfortunately, because of the grooves in which state and local oRicials tend to think about public work, projects of the noncontinuous and nonconstruction type are difRcult to obtain. If any of them were adopted, no nation need retain its controls over trade transactions for fear of being unable to pay for imports or in order to reconstitute a monetary reserve of appropriate size. 6., the durable goods industries, were curtailed and converted to war production. Znterrepionat jFftphimys and Transportation. To discharge its long-run functions adequately, price regulation would have to be bolstered by a number of correlative controls over private Bnance, accounting, and the quality if not quantity of production of goods and services. To begin with the more pressing matter, they do not ensure that the transition from war to peacetime production will be successfully achieved. Here we have the largest nation in the world and the poorest economi cally, an ally that has suffered longer than any in this war—and 366 P O S T W A R E C O N O M I C P R O B L E MS certainly as badly—that is desperately short of capital, with its land deteriorating and its increasing population pressing continually against its means of subsistence. Policies with respect to the allocation of orders and materials, geographical dispersion of plants, deliberate concentration of business in a few plants, conversion of facilities, man-power allocation, Snancing of plant expansion, and ON P R I C E CONTROL A F T E R THE WAR 403 many other phases of war planning are obviously of major signifi cance. That while each of the Allied Governments and authorities will be primarily responsible for making provision for the economic needs of its own peoples, their respective plans should be co-ordinated, in a spirit of inter-allied collaboration, for the successful achievement of the common aim. Not only has Germany provided that men called to the colors retain all social security rights without cost to them, but their dependents are automatically included in health insurance. Sharp increase in excise taxes on commodities competing with the war program.
Regardless of the programs for postwar employment that are adopted, we are likely to witness a strong urge toward the use of machinery and power on farms in all parts of this country. It may also cause workers to be confronted to a greater extent than ever with the problems of technological change. The war is dissipating those resources. IN TERN ATIO N AL COMM ODITY AGR EE M E N TS IN THE PO ST W A R W O R L D................................................................................................ 305 Joseph & Daws PART VII INTERNATIONAL ECONOMIC RELATIONS X IX. My own personal opinion— admittedly somewhat vague—is that the ultimate solution will lie in reducing the cost of adequate housing, on the one hand, and in rais ing the incomes of the families now in the lower brackets, on the other. At least this will be true if the control of prices during the war and immediately after is reasonably effective. Even when the educational task is accomplished, however, the legislatures still may ask what reason there is to believe that the towns could finance their rebuilding anyhow. The weak links in the chain, then, must be related to the Keynesians' minor premise, t. e., to their belief that these conclusions have been applicable to the United States in the decade of the thirties and will again be applicable to the United States at the end of the war. There has, in fact, been a general progression in industrial communities from a deBciency to a surplus of capital relative to internal requirements. Although the lender prefers to lend rather than to be taxed, actually he may be worse off under a lending than under a taxing program.
Hansen grants the point. The net effect of the rise of the public debt will depend upon the value of the assets created in the process of public investment and net effects on private investment and national income. England and Sweden are two of the clearest examples. Against these factors must be men tioned the increased intensity of work under multiple-shift operations and the fact that national income figures are swelled by the less prudent expenditure of funds which the emergency necessitates. Congeries of crude ideas require testing and restatement, in respect of actual burdens and benefits from holding and release of stocks, attempts to regulate production, and measures to improve world nutrition. On the other hand, its expenditure upon recreation may increase by more than 10 per cent.