The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-08
Liberal Viewpoint
by DIR. HARRY ELMER BARNES


THE most deadly challenge and implied
i criticism which the New Deal has to
face does not come from Republican die-hards
and Bourbons or from radicals inspired by
Moscow.
1t has emerged from the calm and dis
passionate figures gathered by the learned
and conservative statisticians Of the Brook
ings Institution in Washington
A hundred-fold more deadly than all the
vaporizings Of Ogden Mills and his like or the
Nominations Of the Daily Worker" is the dig
niied volume on Americas Capacity to Con-
sumo" by Maurice Leven Harold @. Moulton
and Clark Warburton.
There has been a great deal Of talk about
ours being an age of plenty and Of over-pro-
duction. 1t has been assumed that our pro-
ductive plant can produce more than we need.
and that the only way to bring about re-
turn of permanent prosperity is deliberately
and ruthlessly to restrict production This
has been deemed especially true of our farm
ing areas, where bounties have actually been
paid to reduce the production Of food stuffs.
Some confirmation seemed to be given to
this assumption by the first volume in this
BrCckings series. which stated that in
1929 we might have produced 20 per cent
more than we did. This was taken by many
to mean that we were equipped in 1929 to
produce 20 per cent more goods than we really
needed
This Interpretation has served as the cor
nerstone of the economics of the New Deal and
the NRA. But the book by MeSsrs. Levin,
Moulton and Warburton blows sky high this
whole thesis, and utterly destroys the economic
perspective which has justified such assump-
tons. 1t shows that even if we strained our
productive plant and farming resources to
the utmost could not today begin to meet
the legitimate needs and requirements of
the American people, provided they had the
money to buy the goods which they would and
should consume in a civilized society that
maintained decent standards of living for all
Americans.
THE real crisis in capitalism today is not
u produced by the fiction of over-produc-
ton but by the somber actuality of under
consumption due to the absurdly lop-Sided dis
tribution Of wealth. In 1928, for example, the
per capita income of the 100000 American
farmers, constituting about 25 per cent of the
whole population, was only S273, as over
against a per capita income of 5000 for the
rest of the population.
This would seem to place the non-rural
population in an enviable position compared
to the farmers. But at least the latter could
eat while even on the basis of 1929 incomes
three-fourths of the non-rural families did
not have a sufficient income ito provide an
adequate diet ri a moderate cost" Nine
tenths of the non-rural population did not earn
enough to provide themselves with "a liberal
diet. Just how facts like these justify re-
stricting farm production passes ordinary hui
man understanding.
Let us take few more very revealing fig
ures. The average income of all families in
the United States in 1929 was only $780, No
less than 100000 families, or 81 per cent of
total, had an income of less than $1,000 re-
ceiving only As per cent of the total national
income. Some 100000 families, or ~ per
cent of all families. received less than 81 500
year. Twenty million families, or II per cent
of the total had incomes of less than $4,000
a year.
Over against these staggering and dolorous
statistics may be set the challenging fact that
OIL per cent of the families at the top-those
with incomes Of over $4,000 year-enjoyed
about as large an income as the poorest AZ
per cent of the families, namely, those with an
income of $1,000 or less.
MOT so long ago Nicholas Murray Butler
tried to assure us that poverty is a myth
in the United States and referred to the exist
ence of a large number of savings accounts
But in 1929 % per cent of our famihes-those
who had incomes of over $4,000 each-pro-
vided two-thirdS Of all the savings of al Amer
leans, while the poorest 80 per cent of the
population contributed only per cent Of the
national savings.
Inc Roosevelt administration and the New
Deal must stand or fall with the success of
capitalism. Capitalism can not endure unless
the American people have money to buy goods
This can only come about as the result of
marked increase in the income of the major
ity of Americans.
On the basis Of 1929 prices and incomes,
the authors show that a family needed an
income of at least $4,000 to buy the basic ne
cessitieS. But so per cent of the total number
of American families had an income of less
than $4,000
If the II per cent of American families
those having an income of $4,000 or less
were all to have their incomes raised to $4,000
a family they could spend 40 per cent more for
food, 65 per cent more for living quarters, IS
per cent more for clothing, and lis per cent
more for other goods and services.
Here is the key to recovery-and the only
key What does Mr.. Roosevelt propose to do
about it?