Evening star., 1938-04-03

, frontiers were unfolding to attract the
investment of job-making capital. Rich
mines. fertile soil, railroad and utility op-
| portunities, the automobile industry, movies,
| radio and the like lured dormant capital
into action, and the unemployed again
found work. The sequence used to be de-
| preston, investment. jobs, consumption,
business profits prosperity, overexpansion,
| depression.
| No New Industries.
Since 1929 no major new industries have
developed. Television and air-conditioning,
unfortunately, are still relatively unex-
| plotted fields. Since 1929 the American
| economic system has been kept aliee by
| feeding not through the mouth but through
| skin injections. Instead of private industry
| expanding and thus keeping the mass of
| consumers at work, the consumers have in
| important measure become Government
supported, and industry has become in
| creasingly dependent upon Government
stimulated consumer demand. Those with
| capital hoard it in banks or Government
bonds. being afraid to take the risks of
business. The new sequence has been de-
| preston, fear, boarding of capital unem-
| ployment, met Government spending"
| consumer buying, cautious investment, So
| clal security collections. diminution of met
Government spending" more depression.
| If private investment is to be revived on
| scale sufficient to displace the Government
| as a prop to economic l-being, there
must be inducement in the form of pro-
| spective profits. New frontiers of the geo
| graphical sort are out Of the question, and
those Of the industrial sort, eg., a new
| mass-production industry, are not at the
moment visible. Moreover, Government
| fiscal, monetary and business policies can
| and do deter new investment Heavy taxa
| ton like the corporate surplus tax fear on
| the part of capitalists of Government regu-
lation. Government labor policies and the
| like. or the expectation of Government COM
| petition-such considerations act as
| damper to the old type of business recovery
| mentioned above. The old machine Just
| puffs along on one or two cylinders
To a large extent the economic stale
| mate feeds upon itself. Business distrusts
| the wisdom of Government and Govern
| ment diStrusts the wisdom of business.
| Certainly official Washington is skeptical
| about ever turning business loose again
on its own. That might make for quick
| prosperity, it is admitted, but remember
| 1922" Little of the reform road travelled
| since 1882 is likely to be retraced.
Business on Relief
More and more, Government is tending
| to become the thing that makes the wheels
| go around More and more it is enlarging
its role of mere regulator of our activities to
| one of planner Even business is going
on relief So We have the Government in
the power business, and driving COM
| petitors out. We face Government ra-
tionalzation and ultimate naturalization
of the railroads. We see business men
significantly, small business men-asking
the Government to invest capital in their
businesses. Will Government financial aid
become habit with business on relief, as
| it is becoming with individuals on relief?
1t seems more and more to be ques-
ton, ultimately, of private capitalism VS..
state capitalism. Meanwhile, it is a case
| of share the wealth.
| When the Government makes met
contribution to mass purchasing power" as
for example through w. P. A. expenditures,
| 1t does this not through producing wealth
| and not through taxation but through in
| f1ation. To levy social security taxes on the
employed and then to spend the collections
| to total mass purchasing power.
But when the Treasury takes brand-new
/ issue of bonds to the banks and says
create some new deposits against these
bonds so that we may draw w P. A. checks
| against them," the process is infationary.
The w. P. A. workers spend their checks
| for food, clothing, ETC., and in effect the
producers of that food and clothing have
sold them for Government Understanding
promises to pay at some future date.
Course of w. P. A. Checks.
If the w. P. A. workers did not have
Government checks and could not buy the
food and clothing, either the price of food
| and clothing would go down for lack Of
sufficient buyers, or it would not be pro-
workers concerned would lose their, jobs.
The process, whether or not it results in
net addition to mass purchasing power
is a share-the-wealth process, because the
recipients Of the Government checks re-
ceive wealth" they would not otherwise
have, and the producers or owners of that
wealth" give it up in exchange for the
Governments promises to reimburse them
some years from now
And what is true of w. P. A. checks is
also true of relief checks, c. c. c. checks.
Soil Conservation checks, payments to vet
Grams, etc. The Government is redistrib-
uting the country's wealth by going into
debt. But the process cannot go on forever.
Producers will not forever be willing to
give up the product of their toll in exchange
for Government promises.
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