Evening star., 1934-09-28
Adequate Medium of
Exchange Is Essential
To the Editor of The Star:

To the Editor of The Star:
wonder If a correct critioue of the
New Deal could not be epitomized by
| commencing the trend toward nation
alizing most Of the functions of Gov
ernment while condemning the trend
toward governmentalizing most of the
functions Of life?
Yet, as Glenn Frank has been tell
ing us in The Sunday Star, we will not
escape this latter trend unless we can
solve the problem of economics-of
practically eliminating the speculative
element, not from the individual COM
ponents Of industry, but from business
as whole. Failure to see this leads
into such incongruities as those in
which DR.. Carothers finds himself
involved.
1t seems a pity, indeed, that q rep
utable economist, presenting en- ade-
quate criticism of the New Deal, should
virtually nullify the effectiveness of
his remarks by the suggestion that
probably such superior (socialistic)
system will come with time" for If
socialism is superior" why wait fer
1t to come with time? If an ounce
Of prevention is worth q pound of
cure-eventually-why not now?
But isn't there, in DR.. Carothers'
whole theme, an obvious implication
that our present order" with its al
legged "cure" for recurrent industrial
depressions through economic blood
letting, Is passe? In his wavering
pinkness Of opinion, may we not find
a tacit confession of the ineptitude of
his thought in seeking a solution for
our problems? AS against a mere
knowledge of the facts of economic
history, their Interpretation seems of
vastly greater significance Such a
conclusion, because of the mass and
confusion Of statistics involved, seems
inevitable after a study of the leading
article in Science for the last week in
August by Prof. Edwin B. Wilson,
statistician for the Harvard School of
Public Health, and our cocksure-
almost-economists need to read this
article. entitled Are There Periods in
American Business Activity"
Statistics are, Of course, valuable in
business analyses, but, for the same
reasons that the experiment" of the
New Deal can never prove anything,
they are relatively of little worth in
general economic studies There are
too many of them involving the same
subject at the same time, with no
controls" to tell what would other
wise have happened. The manifold
trends Of individual elements in trade
neutraliZe each other, and the errati-
cally variant value of money becomes
the dominant factor. 1t is, for in
stance, just as well proven by history
that economic disasters are due to the
gold standard" as that economic sue
cesses are traceable to it.
We will never succeed in any at
tempt to change the biologically in
evitable fact of competitive profits
as the basis of industry. Put money
system has no such fundamental and
Interchangeable significance. 1t is but
an artifice in implementing human
competitive effort. Essentially it is a
system of bookkeeping that not only
can but must be vastly improved and
moderniZed and kept under social
control, as our own Constitution pro-
vides, in order that it may be fair
and so make a mechanized civilization
really feasible rather than disastrously
unfair. exploitative and speculative in
the character of its complex system
Of exchange When the medium of
exchange is awry, nothing that can
be done to exchange itself can be OF
any avail. But with an adequate
medium even temporarily in hand, the
meddlesome and dangerous utilities
of professional organizers and poll
ticians will become suddenly and
miraculously workable and bureau
cratic paternalism get another boost
toward its inevitable goal-the de-
struction of human liberty.
ALDEN A POTTER.