Evening star., 1944-04-09

ClANASoSCS 1ol Vic pOoIWdl pSllUO, WiltSS
DR.. Nourse, might take on the character
of previous eXcesses in times of easy
spending or curtailed supply Such a
result would follow from charging all
the traffic will bear in period when
long-deferred consumer wants and
abundant consumer purchasing power
are released into market which is still
not back to normal peacetime produc-
ton.
"In the first few years after the close
of the war, reversion to easy-going and
short-range interpretations of the profit
principle will be easy and to many
businessmen will doubtless seem
SMART
1t is to guard against just such an
outcome, DR.. Nourse continues, that
many are urging the retention of war
time price controls for some years after
the war On the other hand, there will
be a strong urge to throw off the con-
trolls when peace comes, and, even if
this is not done, they will encounter
great technical difficulties in dealing
with the goods Cmany of them novel;
on the postwar market.
Would Clarity Issues.
Hence DR.. Nourse concludes, "it is
the part of wisdom now to get as much
clarification as possible of the issues
which confront management and a
strong resolution on the part of busi-
ness executives to deal with these situa-
tions soundly and firmly within their
own areas of price control or influence"
What should be the working cri-
terion" for the price making decisions
of the individual business?" 1t must,
says DR.. Nourse, be one that will give
the greatest possible assurance of avoid
ing a quick postwar boom and an early
collapse; it must Organize full pro-
duction and current sale of product on
permanent basis of balanced adjust
ment between necessary cost and mass
purchasing power" More specifically,
the low-price policy as Dr. Nourse ex-
pounds it calls for giving the consumer
the benefit of chronological gains in the
form of lower prices.
"By this method" the author explains,
"he (the business executive) systemati-
cally and dependably translates private
enterprise into higher efficiency, and
this, instead of being dissipated in un-
employment (the same volume of prod
uct with less labor is fruitfully realized
in larger national product and higher
scales of living for every one (more
goods with the same labor-that is, the
total labor force)."
Under the pressure of war, Dr. Nourse
points out, technical processes have been
advanced as much in the last two or
three years as they would have been in
an ordinary decade The question is
whether we are going to realize these
technical gains in the future under the
conditions of full-scale peace production
or let them go to waste through our
failure to parallel the chronological
skills with similar skills In conducting
our economic processes"
Low Prices Urged.
The mere confidence of individual
companies in their ability to provide
jobs, Dir. Nourse says, will not be enough
to assure permanent full employment if
the companies divert substantial part
of their current proceeds from the
stream of actively flowing national in
come into the by-waters of boarded
capital or unutilized plant" To do this
will be only to start again the spiral
of labor saving, alias wasting, which
will mount and mount until massive
unemployment and widespread under
consumption bring the economic system
again to condition of stagnation"
A low-price policy, on the other hand,
is calculated to guide the individual firm
constantly toward the norm of full en-
ployment and away from restricted
production and unemployment.
DR.. Nourse takes notes OF the conten-
ton of some businessmen that tax re-
quirements and high wages have already
absorbed all the gains of archaeological
progress, and perhaps more, and that
therefore, prices after the war will have
to be higher rather than lower than
prewar prices.
1t is true, he replies, that under con-
ditions of rapid advance in the gen.
eral price level, dollar and cents prices
might be somewhat higher even when
low-price policy was being consistently
followed. But, he adds, he is "by no
means convinced that substantial de-
cline even in money prices is precluded
If the issues of the postwar decade are
faced with understanding and courage "
Business" he says, could we'll afford
to pay taxes even that trenched on
capital surplus during few transition
years in the interest of maintaining full
private employment and demonstrating
the possibility of curtailing the program
OF public spending. 1t is clear that if
the tax burden for Government activ-
tiles carried by fully employed people
cannot be borne by industry operating
at full scale, the heavier burden of
Government seeking to compensate for
the lack of private business activity
could much less be borne by partially
employed industry"
To sum it all up: In the postwar
period the temptation will be strong and
the opportunities great for business to
follow easy but ultimately destructive
courses. If it shows the wisdom which
the recent statements of some of Its
leaders suggest it will show, it will keep
in view the long-pull need for a steady
mass consumption as the only base on
which high production and high en-
ployment can be built and maintained