The Washington times., 1935-12-28
.TUGWELL IDEA
NOT NEW, SAYS
PROFESSOR
BY LEWIS HANEY
professor of Economics, New York
University


. University
:; NEW YORK, Dec. 28.-Prof.
.4Tugwell has aired his views again,
this time in some remarks made
:, before the meeting of the Amer.
ican Economic Association here
In New York.
=, He tells about what he says
:, "is our hope" This signifi-
cant phrase shows that he re-
CARDS himself as the spOkes-
man for the Roosevelt Admin
It, istratiOn, telling the economists
-. what 1--WE" hope to do.
~ He proceeded to attack eco
nomic science by saying that
those who hold its main princi-
pie, the law Of supply and de-
,mand, show q romantic attach
.ment to the past" This is the
typical New Deal attitude; times
are different from the horse
and-buggy days, so we must
~change even our scientific prin-
aciples.
:. I suppose they will get around
TO the laws Of physics and bi-
ology in time
AS a matter Of fact, the New
Deal notions are much older and
much more romantic than econo-
--mic science. They go back to
'price-fixing and social control Of
the Middle Ages. and to the cur
aFency debaSement and regimenta-
Htion Of the sixteenth and seven
:teenth centuries.
-sr Perhaps the greatest error in
1.-THE Tugwellian-New Deal econo-
mics, lies in his statement that
;9tprices do not set themselves, they
sare set by administrative deci-
5Bion." This error is the more seri-
Gus because to the superficial OBJ
server there seems to be some
truth in it.
When a business man names
his price, however, he cannot
make it anything he wants to. He
Is limited on one side by the de-
mand for his product, and on the
other by his costs and his need
Of money. OF course; sellers name
their prices, but they do so sub
ject to economic laws.
q In the vast majority Of cases, If
% business man asks too high a
price, he can not sell his goods.
..1Or if he is buyer, he finds him.
sell swamped with offers, as the
Roosevelt Administration has been
with silver.)
90 Tugwen quantity remarks
afthat "laisSez-faire believers
= think society should keep out"
= In the first place, no economists
today believe in laisSez-faire. In
. :" the second place, laiSSez.faire
= has nothing to do with go
= ciety"; it is q matter Of "gOv-
ernment," which is very diff
ferent.
For example, I, like most econ
on1iSts, favor competition and a
competitive price system, because
that is the only way to keep $50
ciety" in. Under competition each
member Of society gets a chance
to register his demands and sup
plies. What we believe is that
"the government" should keep out
aS far as possible.
"The government" is not So
ciety. It is a bunch of politicians,
such as Farley, and their under
lings, such as Tugwell. THE
government" is political "ad-
ministration," and is no better
Qualified to run business or fix
prices than are the particular per-
sons who happen to get control
at given time.
-, At least, we can be sure that
under our present political meth
:odS there is little chance that
4the government will be run by poll
vticianS who know how to run
business. Il will add that the
-s'wisest and biggest business leaders
agree that no individual can
know enough to fix prices wisely)
Tugwell goes on to say that
~ he favOrS social mechaniza-
ton using control for its own
ends" This is just the prOfes-
sOr'S way Of saying that he ia
. vOrs a dictatorship and regimen
: tation. Social mechanizatiOn
means regimenting us into a
: sort Of industrial army. "Con-
: troll for its own ends" means
: dictatiOn by some Duce or Fueh-
>. rer who will decide what to pro-
duce and what prices to charge.
These would-be social plan
SnerS" and price fixers cannot get
-away from the fact that the only
ealternative to a democratic COM
.petitive process is a social ma
:.chine." That means government,
=or the state. And that, in turn,
smeanS some Mussolini, or Hitler,
sor Stain, or Roosevelt.
, They certainly do not think
: that democratic Congress can
fix prices on all commodities and
: services, and run the business of
s"society."
IL { u;If,vard EInr+od