Evening star., 1944-06-11
Britain to Try
New Deal
By Owen L. Scott.

The New Deal that President Roose.
welt says is dead In the United States.
presumably because 1t is too radical. il
to be taken up whole -heartcdiy by the
conservative government of Great Brit
ain as the pattern for British postwar
policy.
In this country, once the war ends, the
emphasis Is to be placed on getting the
Government out Of business as rapidly
as possible. Apparently, the objective
will be to balance the budget, to retire
some debt, to remove Government con-
trols, to forget pump printing and to re.
lease private enterprise as the motive
force that will provide profit for enter
prisers and jobs for all.
The British, obviously, do not believe
that this kind of prescription viii work
In postwar Britain. A Tory government.
In an ofncial White Paper, instead of
urging return by Britain to Its tradi-
tional reliance upon private industry
and private initiative, Is suggesting a
New Deal. 1t accepts the prospect of a
government-industry partnership in
planning and in exercising control over
the economic machine.
Tories of Great Britain recognize Gov
ernment responsibility to assure rea-
sonbly fun employment. They expect
government in postwar to plan so that
exports viii be promoted even at the ex-
pense OF the British living standard.
They look to government to stabilize
postwar wages and prices and to control
the location of new industry so that
some districts will not develop while
others stagnate.
All OF these are tasks that New Deal
ers want Government TO perform in the
United States, although in this country
the emphasis would be upon using Gov
ernment to encourage imports rather
than exports. The most striking point.
however, comes next. The heart of the
New Deal was the idea that Government
should use its power over money and
nnance to assure public Investment on
any scale necessary to provide Jobs at
time when private investment might
not be large enough.
The British Tories 20 all of the wav
A2A 0SSSpeAii6 lO6d.
1t is proposed that in Great Britain
there should be flexible attitude to-
ward the Governments budget The
budget would be unbalanced deliberately
IN periods when unemployment deyel-
oped generally, with borrowed funds
used to promote public works and other
enterprises that would create Jobs. The
budget then would be brought back into
balance In the period when prosperity
returned. This is excellent New Deal
doctrine.
The British also intend to use gov
ernment powers to create cheap money
In order to encourage private borrow-
ing In periods when 1t is necessary to
stimulate activity. In event of a boom.
interest rates would be increased. II Is
70 be the same with taxes. In q period
OF boom, If planners have their way.
taxes would be increased while in periods
OF depression there would be tax refunds
to encourage spending. This policy
would extend to social security taxes,
With taxes on workers increased In
periods of rising income and decreased
automatically when unemployment
reaches certain level.
All Of those proposals are In line with
the New Deal idea Of q. compensated
economy In which Government takes
. hand to assure against too wide
swings In the business cycle.
The catch In all of this is, however.
that there has yet to be a demonstration
In democracy that government SUBJ
sidies, once instituted, can be removed.
There also has to be q demonstration
that budding boom can be knocked on
the head gently enough to keep it in
hand without actually killing it. The
New Deal had promising little boomlet
under way in 1887 and tried to restrain
1t only to discover that the restraining
influences precipitated new depression
in 1888 that finally gave way to spending
for war preparation.
In Britain, government may be able
to time its moves with some precision
to get desired results and may be able
to turn on and off its pump printing
subsidies as well as its taxes, but in the
United States the Executive must gear
its moves more to the political mood of
Congress than to the advice of econo-
mists.
The important point to note is that
the British businessmen and financiers
who did so much to design the economic
system under which this country as well
as Britain operates, now are convinced
that it will not operate after the war on
a purely automatic basis without gov
ernment Intervention. This conviction
on the part of the British extends to
the outlook in the United States as well
as to that in Britain.
British who look at this country from
rather detached viewpoint appear
convinced that the United States after
the war will run into a boom and then
bust. They are fearful that this
country is to shake off it's Government
controls in too much of hurry, thereby
permitting prices to get out of kilter.
and then is to try dehation as remedy
in an effort to squeeze the air out of
wages, prices and profits. The United
States is such large factor in world
markets that British businessmen want
to try to get partly insulated from the
effect of any depression that American
postwar policies may precipitate.
The New Deal that this country now
is trying to shake off and that Britain
is preparing to adopt could come back