The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-03-28
Liberal Viewpoint
by DIR. HARRY ELMER BARNES

IN the formative period of the new deal much
1 was said by it's sponsors about building an
economic future which would be devoted pri-
marily to the interests of consumers. The new
age was to be an era of consumers capitalism.
In spite of this, the overwhelming majority
of the activities and energies of the admin
istration have been devoted to the promotion and
control of production.
Yet production, however wisely directed and
administered, will mean only factories covered
with moss and cobWebs, rusty machinery and
glutted inventories if sufficient purchasing power
for. the mass of Americans is not assured.
Therefore, the articles by Henry Kittredge
Norton running in Today, are extremely timely
and helpful, and it is to be hoped that in1uen-
tial people in the administration are reading
them with due thoroughness and solemnity.
Mr. Norton differentiates clearly between pro-
ducers and consumers goods:
Every dollar that any one of us spends goes
to buy one or the other of two kinds of things:
1t is spent either for something we want because
we can enjoy ia meal a suit, taxi ride, q
seat r the theater, or a marcel Wave-or it is
spent r something we think We can make
money with-a farm factory, machine, an
engineers plan or a lawyers services in organ
izing a corporation.
when we invest in stock or bonds or
mortgages, we are simply buying somebody elses
interest in some Of these money making things
"All goods and services which depend for
their value upon their earning power are pro
purchased for enjoyment, satisfaction or need,
are consumers goods"
1T is obvious that a scientific and proper bal
L ance must be maintained between our ex-
penditures for producers and consumers goods.
Thus far, we have put far too much in pro-
ducers' goods and been too scanty in our allot-
ment for consumers goods. Hence, we are to-
day far better equipped to produce goods than
WOO To ADEQUATE
| chasing power to buy them
When we put too much money into pro-
ducers' goods we throw the whole capitalistic
economy out of balance and reduce all values.
Our national wealth is not any mystical en-
tity which has a permanent and fixed value
irrespective of economic conditions. It's value
has very definite relationship to the volume
of consumption and the resulting business
activity.
If, for example, we take away 10 per cent
of the funds needed for adequate consuming
power and put it into unnecessary producers
goods, we cut about six times this amount from
the active and practical value of our national
wealth.
The rich, who supply most of the money for
producers goods, often think they are ex-
tremely shrewd in saving at the expense Of con-
sumers' purchasing power. They can see no
particular reason why they should turn their
billions to the services of consumers. Why not
save for further investment in capital plant or
personal enjoyment?
But the joke is on them nevertheless. Every
time the rich capitalists try to save at the ex-
pense of the consuming public they lose much
more than they think they are saving.
I'VE can't hang on to it. He must lose it be-
l. l. fore business revives. He always has. 1t
is taken away from him in various ways-in-
ventories are deprecated, security values fall,
bonds and mortgages are defaulted moratoria
are declared, businesses fail and leave their
creditors unpaid, savings accounts are drawn
upon to pay for necessary purchases. foreign
loans are defaulted"
If we use the approximate figures for the 1929
situation as to national wealth and consumers
! needs. it cost the wealthy producers about
$4,000 100000 to save S8,00o00O,000 at the ex-
penSe of consumers. In the meantime Amer
lean business is thoroughly disrupted in the
bargain.
How much more sensible it would be if the
producers could save the $4,000 100000 they
have lost through their short-sighted folly and,
at the same time keep business in a healthy
condition.
To assure us real consumers capitalism, we
must bring about more equitable distribution
of wealth. This will solve the problem in all
Of its aspects. Far and away the greater part
/ of consumption is carried on by the mass of
people with small incomes. If they get a fair
break in the distribution OF the total, there will
be less left for investment in unneeded pro-
ducers goods and the resulting disruption of our
economic order.