What’s Wrong
ARTHUR POUND, economist and author of The Iron Man in Industry, draws an interesting comparison of four new books which seek to help a sick world.
WHAT’S WRONG
CAPITALIST society being sick, the doctors gather. Hosts of doctors, almost enough to suffocate the patient, the proposed treatments differ, yet four of the experts agree on one point. — that the patient will have to change his way of life in order to return to power. A little more of the old diet, and the funeral can go forward to the tune of the ‘Internationale.’
John Maynard Keynes is the great authority, the doctor with a reputation invited in as consultant and a bit condescending. Well, he has a right. Did n’t he, in The Economic Consequences of the Peace, call the turn on Reparations when they were in the making? Of course. And again in his Treatise on Money? If statesmen had but heeded Keynes, the patient would not be in this parlous plight.
Keynes has earned the right to say ‘ I told you so’ far more often than he does. His Essays in Persuasion (Hareourt, Brace, $2.50), a collection of hard-hitting articles and speeches appearing at various times from 1919 to 1931, might deservedly have been called ‘Essays in Recrimination.’ Here, as before, he argues for managed currencies, the stabilization of internal prices, and the vesting of economic power in politically responsible institutions short of the State-in-the-saddle. As a Liberal and a discerning economist, he distrusts the State. Admitting that laissez faire is done for, he seeks a middle ground.
Leaving philosophy for practice, Keynes blames the State for both inflation and deflation. The former is unjust, the latter inexpedient; but, of the two evils, deflation is generally worse, ‘because in an impoverished world’ it is worse ‘to provoke unemployment than to disappoint the rentier.’ ‘Individualistic Capitalism presumes a stable measuring rod of value, and cannot be efficient—perhaps cannot survive without one.’ Folly for Great Britain over to return to the gold standard after the war; folly to think that ‘Safety First’ lies in continuing millions of men in idleness, with their potential power to produce wealth evaporating day by day.
Experiment, experiment; get the best advice and experiment; read Keynes and experiment ! Fear not the dead hand, the ghosts of old ideas, the mumblings of the mobs or the snides of finance ministers! Draw intelligent men together and experiment in raising a new order before the old one falls of its own weight. Such is the advice of Keynes; and no modern has a better right to feet sure of his message.
Paul Mazur is more tentative. An earnest young analyst, in New Roads to Prosperity (Viking, $2.00) he proposes with good courage a thoughtful programme. Society, he says, cannot digest the goods it creates; he thinks consumption will have to tie financed more heartily than ever, more credit put behind it. He notes the tyranny of gold, discusses international money hopefully, and America’s foreign trade prospects dolefully, but believes trade might be helped by reduced tariffs and cancellation of Treasury debts. As prompt remedial measures lie has some hope of relief from the Reconstruction Finance Corporation, the loosening of Federal Reserve discount regulations, and the formation of a Federal Home Bank to discount mortgage paper and encourage home building. For the longer view he recommends the creation of a National Economic Council, as the first step in consistent economic planning.
In all, a shrewd and knowing book, perhaps a little light in factual ballast for the heavy cargo of ideas it carries.
In The Way Out of Depression (Houghton Mifflin, $1,00), another expert, Hermann F. Arentz, takes after the old family practitioner who always prescribes castor oil; the patient may be suffering from many things, but first purge him of the single gold standard, says he, and the collateral ailments will be found less important. Economic society may still have fainting spells when it overdoes, and wheeze on damp days, but it nevertheless can get around to do business and earn our daily bread. This book is a brief, deft, calm argument for the restoration of bimetallism, using silver equally as legal tender with gold at a recommended ratio of 30 to 1. The virtue of this treatment is its simplicity; but if Keynes and Mazur are not altogether quacks, there would still remain several things to be done later on to keep the old gentleman fit and going.
C. C. Furnas’s method in America’s Tomorrow (Funk & Wagnalls, $2.00) is the bland one of the faith healer, and is aptly subtitled ‘An Informal Excursion into the Era of the Two-Hour Working Day.’ Says this hopeful physician, ‘Arise and shine; the best is yet to come.’ It is the old method of bidding the Janie walk, of charming the invalid to the window by describing the view. A jolly book, in which immensities are juggled with a light touch, and burning discords are healed by time and all lacks vanish before the inventor’s wand. The patient will certainly feel better-—at least temporarily — after reading it.
Four men, four methods. The cure of the world might really be advanced a little if we could get all the statesmen to read Keynes, all the industrialists to read Mazur, all the bankers to read Arentz, and all the croakers to read Furnas.
Yet there is not an index in the lot. Is this an example of the baleful influence of depression — publishers’ economies? I hesitate to think that saviors of society are as lazy as the rest of us.
ARTHUR POUND