Evening star., 1944-11-19
u. S. Faces Postwar Problem
In Totalitarian Economy
Probability of State Owned Industry in Most oi
Europe to Pose Real Test for Free Enter.
prise in World Markets
By Constantine Broom

ideal since they imagine that 1t takes
away the power of the small groups OF
politicos which In the past had all the
advantages and places it in the hands
Of the people themselves. But even II
some of the liberated" people, such as
the Poles, the Balts, the Firms and the
Yugoslavs, do not like the new order,
there is little they can do against the
mass of Russian forces which are in
full occupation of their countries in the
name of all the Allies.
Looking at the situation realistically,
there is nothing that either they or
the United States and Great Britain
can do about 1t. The Russians are in
those sections of Europe to stay.
Competition Will Be Keen.
AS far as Germany is concerned, there
seems to be no definite policy regard
ing the portions of the Reich west of
the Elbe River. Moscow has not yet
said very much about its intentions con-
corning the portion of Germany which
will come under Soviet jurisdiction.
But from the few statements which
have come out of the capital of the
U. S. S. r., there seems to be no doubt
that East Prussia, Silesia and Pomer-
ania will be taken over by the Soviets
either by direct annexation or by ces-
sion of some of these provinces to the
new Polish state controlled by Moscow.
Thus within few years after the war
the United States may be confronted
with Europe which has adopted either
a mild or an aggressive totalitarian form
OF government. This means that the
bulk of continent rich in natural re-
sources and raw materials and Dos
sessing excellent engineers, chemists,
artisans and industrial workers, will
have adopted an economic system with
which we shall find it difficult to
compete.
In totalitarian national economy
everything belongs to tha state. The
industries do not have to purchase their
raw materials on the open market since
the soil belongs to the state and the
state Is the chief industrialist. The
wages and the hours are regulated in
accordance with schedule devised by
the state and there are neither strikes
nor labor disputes. The foreign trade
is entirely in the hands of the state,
which controls exports and imports.
There are no considerations of profits,
dividends or increased costs of labor
because of the rising cost of living to
be taken into consideration in a totali-
tartan economy. There are no taxes
and excess-profit taxes since the state,
which decides on taxation and makes
collections, is the sole employer.
Felt Effects Before War.
We had taste of this only a few
years ago when the American indus
trialists who were trying to forge ahead
in South America were confronted with
stiff German competition in which the
German products similar to those of
the United States were much cheaper
than ours. We saw how the Japanese
were selling watches in Europe by the
pound instead of the piece and bicycles
at s6 each, price which could not be
met by either the American nor British
industrialists. =
Japan had a totalitarian industry.
1t needed gold and sold these objects
in limited quantity because her in
dustries were intent on war production,
at far lower price than free in
dustry could dream of. Had the Japa-
nese and the Germans not been busy
building up their ornaments they would
have undersold the American and
British automobiles in all the world
markets. The Japs had already planned
mass production of a new small auto
mobile to be sold at $3.50 complete.
When the Axis totalitarianism began
to overexpand, the United States Gov
ernment became seriously concerned.
The situation was not very grave yet,
since the totalitarians did not possess
the necessary raw materials. They had
to buy many of the much-needed raw
materials from countries which had a
free economy.
But the problem will become alarm
ing and require the full attention OF
the American Government If the whole
continent of Europe adopts the totali-
tartan or the communistic form of gov
ernment and co-operates with Russia,
Europe's new paramount military and
political power in a formidable eco
nomic development. Thus new Europe,
which will extend in the east as far
as the Pacific Ocean, will have every
thing under the sun at its disposal.