Evening star., 1944-04-02

u6llC dIG6T IIle war, WIlen UIle (JOVeTn-
ment has ceased to be the chief Gus
toner of industry, comes down to the
problem of creating a market for the
goods that the American industrial
machine has shown itself capable of
producing.
To say this is to say also that future
prosperity depends on the maintenance
of high and widely diffused purchas-
ing power, for only with such power
among the people to absorb the prod
ucts of industry can the necessary mar
ket for the goods be developed.
The formula for national prosperity
runs in a beneficent circle: High pur-
chasing power among the people means
high consumption; high consumption
means high production; high produc-
tion means high employment; high en-
ployment yielding high volume of
wages gets us back to the starting point
high purchasing power.
These are the terms in which the
postwar employment problem is seen
by the industrialists who have an
nounced themselves against a general
lowering of wage rates after the war.
They are talking from enlightened self
interest.
Mobilizing for Abundance.
A leading Southern industrialist said
at a. recent postwar planning conference
at Vanderbilt University, in Tennessee,
that one obvious way for the South to
improve it's material well-being was to
give the Negro a chance to raise his
standard of living. He seemed to think
he had made daring statement. But
neither among the educators nor the
businessmen present was any voice
raised to challenge him.
"Mobilizing for Abundance"-a new
book Of which more presently-puts the
matter in this way:
"It may be that, when increases in
income are made available to the poorest
classes, their selection of goods and
services runs counter to what moralists
would dictate, but certainly the an
swer, from social point of view, is in
better education rather than continued
substandard incomes and subsistence,
with consequent unemployment and de-
preston.
Some people claim that too much
money is bad for people-usually having
in mind an increase in the income of
the lowest brackets to moderately higher
levels, such as rise from $40 per week
to $25 or even $40 per week. These
same critics would defend with equal
or greater vigor the desirability of some
incomes of $4,000 or 100000 per year
or more. Maybe slum dwellers won't
know how to use the nice things of life
intelligently, but they can learn only by
application. 1t is certainly better to
continue to provide them with luxuries
rather than keep millions of people out
of work and plants closed, thereby un-
dermining the very pillars of our de-
mocracy.
1.-THE continuance of our economic
system will probably depend more on
rapidly rising standard of living to pro-
vide the demand necessary for full
employment than upon any other single
factor"
Views of Eccles.
Mariner S. Eccles, chairman of the
Board of Governors of the Federal Re-
serve System, states the problem with
admirable clarity and conciseness. These
are the steps in his reasoning:
The war has shown us how greatly
our national product can be increased
If there is sufficient demand for the
country's output.
After the war, we shall be able to
maintain a high level of output only if
vast increase in peacetime expendi-
lures replaces large part of the wars
outlays.
Business will not be able to supply a
product of 100 billion dollars (his esti-
mate Of the required product at 1943
prices unless there is corresponding
demand by the economy as a whole.
Demand will not be sufficient unless
business distribute its income to the
people, and unless the people return
their incomes to enterprise in the pur-
chase of its goods and services.
This means, first of all, maintenance
of high volume of wages Some wages
may have to be adjusted downward and
others upward, but the aggregate VOL
ume of buying power must be main
tanned
High Consumption Needed.
This buying power must then be re-
turned to the economy through high
level Of consumption expenditures.
Not all income, of course, will be
spent on consumption; there will be
savings both by individuals and by
business enterprises.
When savings are invested in the
improvement and expansion of our
economy, they provide income and en-
ployment
But when savings are held idle, or
used to bid up the prices of existing
assets, they are not returned to pro-
duction, and other dollars must take
their place if employment is to be
maintained.
The basic condition for economic
prosperity is thus a steady stream Of
consumer, business and public expendt-
lures at volume sufficient to employ all
who desire to work
The more fully private enterprise sue
ceeds in providing the necessary VOL
ume of income and expenditures, the
less necessary it will be for government
Federal, State and local-to provide
supplementary employment.
1t Is to be noted that Eccles speaks
OF income and expenditures, not of
income alone. If the cycle that makes