Evening star., 1943-02-06
New Deal
Seen Losing
Price Fight
Wage Control
Also Is Getting
Out of Hand
BY DAVID LAWRENCE.

Out Of Hand
BY DAVID LAWRENCE.
Economic stabilization"-the at
tainment of that balance or eoui-
ubrium so necessary in wartime
seems to have been flop.
The Roosevelt administration
which for a decade has sponsored
the philosophy that the old laws of
economics were outworn and that
any one with knowledge of busi-
ness or with a record of success
must be suspect, has finally had
Its chance to control completely the
Nations economy and has made
mess of 1t.
Wage control is getting out of
hand. Taxes are inequitably i'm
posed. Prices are too low to enable
marginal producers to stay in busi-
ness so the monopolists have a field
day. Labor Is scarce because the
price levels are held down so low
that higher wages cannot be paid
to attract labor. And manpower is
wantonly wasted by the. simple de-
vice Of "plowing under" needed
hours of labor. The 40-hour week
with the time-and-a- half penalty
has operated to waste more labor
than any other single factor, not
excepting strikes or absenteeism.
If the work week could be stretch
ed to 50 hours as it is in England,
more than 1,000,O 900 men in effect
could be added to our labor supply.
The present 40-hour week law
makes 1t impossible to work So hours
except at a prohibitive cost and
even this cost could be absorbed if
price control were sensibly adjusted
to At the situation.
Food Supply Imperiled.
Last but not least, the Nations
food supply is imperiled because
the prices permitted are not high
enough to keep the normal incen-
tives to production. The farmer
cannot get labor at his own wage
scale. but even If he raised 1t to meet
competition in the cities he would
not find it possible to get higher
prices for his products because of
the shortsighted policies of price
control.
When incentives are lost and too
rigid q ceiling is kept on prices, the
result is bootlegging or black mar
kets. Every imitation in world history
has been attended by black markets.
While the existence Of all this is to
be deplored, the answer does not lie
In an army Of policemen nor in ex-
hortations to patriotic cooperation.
for these do not reach all. The
answer lies in keeping as close to
economic law as is possible.
When once the laws of supply and
demand are violated as they must be
IN wartime because rationing and
ALLEGATION are necessary, the need
for careful pricing and the retention
Of the incentives to production be-
come more instead of less important.
The trouble with the whole eco
nomic mess today is that the New
Deal is still trying to fight two
wars-the war with the foreign
countries and the war against the
successful and the prudent, the
thrifty and the talented in our own
country Having announced at the
outset that social gains" must be
preserved, the New Deal now Stub
bornly and with mistaken pride
sticks to Its political pronounce
ments long after every weu-informed
economist has advised that the
work week must be heightened and
that all penalties for lengthening
It must be removed.
Economy vs.. Politics.
The administration, moreover,
wastes manpower by allowing pay
to be drawn for work not done. In
many industries these subsidies
could be removed by the simple
process of allowing the wage rates
per hour for work done to increase
correspondingly. There should be
little objection to the raising of
the wage level even to permit the
same total wage for 48 hours that
hitherto has been paid for eight
hours OF time and a half plus 40
hours Of straight time. But this
should be done only If the work
week above 48 hours could be
heightened on a straight-time basis
to meet the shortage Of manpower.
Economic stabilization would be
simpler to achieve if the only fac
tors involved were economic. But
the New Deal must, Of course, keep
political stabilization in mind and
that's where the train goes of the
track most of the time.
Soon the price ceilings as we'll as
wage scales must De revised upward
in order to retain incentives to
large production both in the factory
and on the farm, for when prices
do rise after the war, as they in
evitably must, the workers will have
to be protected ahead Of time with
higher wages-at least sufficiently
to ward of in part the rapid 0e-
cline in the purchasing power of
the dollar That decline will be the
way that the enormous public debt
accumulated during the war will be
reduced" if, indeed, the term re
pudiated" is too harsh to apply.
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