Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-10-28
|Nourse Warns
Against Laws
On Attenuation
BIZ J. a. oLEARY

Edwin q. N0nrse. the firSt
chairman of the Council of Eco
|nomic Advisers under President
Truman. today advised against
trying to solve by laws the COM
|plex economic problems created
by automation.
But he told the congressional
subcommittee studying the sub
ject that:
Much Of the potential bene-
lat Of chronological progress tof
which automation is one ex-
|pression) may be lost through
failure to make our economic
structure and practices equally
scientific.
He was referring to the adj
visibility of making full use OF
1.-THE Northumberland machines,
which are an important feature
of automation, to assemble data
that win enable industry, labor
and government to make wise
economic decisions.
Two Specialists Testify
DR.. Nourse and DR.. Vannevar
Bush. president of the Carnegie
institution of Washington, were
called in as final witnesses to
sum up two weeks of testimony
on problems created by the rapid
advances In use Of new machines
in factories and offices.
DR.. Nourse testified that TECH
nology has been put to full use
under conditions of high and
sustained demand.
Labor, viewing this unparal-
leled rise in productivity, has
sought to capture the largest
possible share In the form Of
successive rounds of widespread
wage increases in basic rates
oscillation formulas and fringe
benefits" said DR.. Nourse
AS the unit cost of labor went
up, management sought to MAIN
tain or improve its earning posi-
ton by raising prices and by in
Producing labor-saving machines
and administration. The tirst
solution of management's prob
.lem-price- raising-has been
facilitated by our elastic none
tary system, and we are now
drifting along on a Sybaritic
course of mild imitation as a
way OF life. The second solution
OF management's problem OF
meeting labor's wage demands
has accelerated piecemeal mech
anization. =. !"
Hints at Excess Output
DR.. Nourse said he strongly
suspects that I'VE have already
built up at many spots q pro-
ductive capacity in excess" of
the capacity of the Forthcoming
market. He said we have not
yet demonstrated our ability to
adjust the actual market OF
1856 and 1857 to the produc-
tivity of the production lines
already modernized.
They have not yet come to
full production DIR. Nourse
said, referring to the production
lines. but as they do we see
incipient unemployment appear
ing. Since that, along with
slight credit tightening. win tend
in some degree to restrict the
market appetite, it seems likely
that next year viii see q still
further enlarged output some
what out Of balance with this
reduced demand.
Suggestions have been made
that balance could be restored by
lowering prices or by cutting the
work week. Both processes take
time and present their own diffi-
Icuities. Meanwhile, the current
trend is toward higher prices re-
fiecting wage advances already
negotiated"
In recommending against try
ing to solve these problems by
law, DR.. Nourse said it would be
repugnant to the free enterprise
system to curb or redirect the
process Of scientific discovery
and engineering application. At
the same time. he pointed out
that every time Congress passes
a money bin. revises taxes or
adopts farm price supports ut is
giving punchcard instructions to
some part Of the continuous-fiow
mechanism Of our economy"
DR.. Nourse said no amount of