Detroit evening times. (Detroit, Mich) 1921-1958, 1942-06-01
Waits 2dACt
In Prile-Fixinq
After the War
Hsnsy Sees Disgust
With Regulations as
Likely 70 Sersp II
Nv LEWIS HANEY

BY LEWIS HANEY
Professor ef Eeenesics. y, Y. University
A Chicago reader asks:
Wont there he o second act
In the price-fixing show. when
the administration will be forced
20 prevent o decline of prices In
: period Of adjustment"
Answer: Unless we become so
disguised with the whole mess OF
regulations and bureaucracy that
we throw Il out as we did the blue
eagle of MIRA. II we keep the
OPA on long enough. IL will GER
tainly 60 in for fixing minimum
prices as well as maximum. But
my guess is that IL will all be
abolished before the next big
depression comes.
You should note that this price
fixing grows out Of long process
of growing government regulation.
1t began with price "pegging," as
in the case of cotton. There was
a great effort TO raise prices 10
the 1895 level. Wages. too. were
raised. and minima set. SO the
minimum price-fixing idea really
came first. All the time, our
.x,o.,lA ~. r~ft~-t;,,;ets ha,,A xhe,,oht
of price-fixing as q means OF ex-
perimenting with complete govern
ment control or social planning
Some Of them know well enough
that there Is no way 10 control
prices but to control the whole
economy. including not only sup
ply, but also demand and con-
sumption. What they fail to see
is that VIC can now blame the
price fixers for Our economic
troubles. and this we will soon be
doing.
Another ChieAgoan asks:
"Csn you refer mo to q book
dealing with the proportion OF
wealth which can economically
70 10 lAbofs There must be .
, limit 20 what labor can tAke
without destroying our economic
balance"
Answer: In my book entitled
Value and Distribution" t1939)
I have not only discussed this
problem rather fully. but given
references on the subject. See
especially PIP. 542-546. The general
outline for determining the equilib-
rum wage in any case is a. fol-
lows: III Find out what buyers
are willing and able 10 pay for the
product OF the industry involved.
(2) Find how much the invested
capital. enterprise and land used
along with labor In producing the
product, have to get as q MINI
MUM to induce them 10 function.
(3) The difference Ia the MAXI
MUM demand for labor. t4) The 4
find all the costs Of the laborers,
and their holding power In bar
gaining. 70 get an idea OF the
minimum wage. The equilibrium
wsge lies between Cd and ca.
You have TO consider the price of
the product and the rewards re-
quired by factors other than labor.
Long Island asks:
"Could we, the axpaying cIti-
zens, demand that the govern
ment refund part Of the money
paid for licenses, Insurance and
stamps?"
Answer: 1t might be a good
thing to write to your senators
and congressman, briefly express
ine your thought on the subject.
The point that impresses me is
that the would.be social plan
ners" don't seem 20 have any
ability to foresee conditions, or
know what 10 DO when the trou-
bic they failed 10 foresee arises.
Brooklyn asks:
81 zee rubber kneelinK pads,
sink mats. stair pads and hose
IN the stores, and small rubber
scraps lying around. why not
have q collection, ~ In alumni.
num-"
Answer: The aluminium collec-
ton was entirely unnecessary, and
o complete flop. But why not write
-