Books

Production And Consumption

During periods of upheaval and extravagant claims it is always heartening to observe the cold-blooded professional investigator hovering a round ready to stop an argument with a convenient little batch of troublesome facts. We have been told that if we would all get up around six o’clock, work an hour or two, and then come in to a good breakfast of scrambled eggs, toast, and coffee, we could make a comfortable living and spend the rest of the day in lazy languor; if so, why — if not, why not, asks the skeptic. How much are we actually producing and how much more could we produce, asks the economic investigator.

PRODUCTION AND CONSUMPTION

Among those who have made contributions are Walter Rautenstrauch, Professor of Industrial Engineering, Columbia University, and the Brookings Institution, Washington, D. C.. two volumes of whose series of four on ‘The Distribution of Wealth and Income in Relation to Economic Progress’ have already been published.

In Who Gets the Money (Harpers, $1.00) Mr. Rautenstranch thinks he has set himself to doing something nobody else has ever tried. I think so too. He has appointed himself efficiency engineer to Uncle Sam, Inc., and set out to find what is the matter with the national plant.

He finds that fifteen years ago the overheaders constituted a third of the working population and got half the money spent in operating the national plant, and to-day they constitute half the working force and get two thirds of the money. Therefore, overhead expenses are eating up gross revenues. We have taken too many who were ploughing corn, picking cotton, raising wheat, and making brick, which was something, and converted t hem into overheaders making out tickets and writing form letters to keep up with clerks who are looking out for superiors who are acting as commission men for financiers and speculators, who are all trying to get us out of debt by loaning us too much money, which is nothing.

The first third of the book is in popular style and New Testament arrangement. In the left-hand column is the biography of the overheaders before the depression, and in the right-hand column their story after it. The second third talks in ordinates and abscissas as an engineer would, but tells the same story. The last third is plain figures set up in columns which anybody who can count ten can interpret. All told this little book of one hundred pages is almost as good a preface as the Brookings Institution’s researchers could write to the volumes which they are turning out.

America’s Capacity to Produce, by Edwin G. Nourse and associates (Brookings Institution, Washington, $3.50), takes live lines toask itself the compound question of how much America is producing and how much she can produce, and less than five to give the simple answer that in 1929 she could have increased her production by 19 per cent with just a little straining at the bellyband. The remaining six hundred pages are devoted to minute analyses, weighing facts, arranging data, correcting series for the sake of comparability, and a thousand and one other of those things necessary and known to the technically trained. The answer to the question seems modest compared with what we have been led to believe, but a 19 per cent increase in output would increase the income of the 16 1/2 million families which now get less than $2000 a year to that amount, and that is startling.

America’s Capacity to Consume (Leven, Moulton and Warburton, Brookings Institution, Washington, $3.00) is a more human book than its companion volume, which had to be as impersonal as a bag of oats. It abounds in surprises. Its conclusions — some of them, anyway — prick bubbles, but it is a polite book, in no way dogmatic. It suggests. Its authors undertake to find out how much we are consuming, of what, and who is doing it.

Adopting the conclusion that America could turn out some sixteen billion dollars worth of consumption goods more than she is doing, these gentlemen discover a potential market right under our noses. They uncover some hot spots that could be cooled by that tidy additional output of sixteen billion dollars if it could be placed.
They learn, for one thing, that America is n’t eating her head off. Three quarters of all the families in the* United States did not spend enough on food in 1929 to buy what the Department of Agriculture calls an adequate diet at moderate cost. Nine tenths of them didn’t, buy a liberal diet. Here, indeed, is a ready market if somebody can devise a scheme for getting purchasing power in the hands of the underfed. They conclude also that we were n’t living too high in 1929; that the big-income ladles are getting bigger and the little ones littler; that some seventy or eighty billion dollars’ worth more of good things than we are now producing might make all of us reasonably comfortable, but that we can’t increase our output by that amount, and that the adoption of the thirty-hour week under the existing state of development of the mechanic arts would lower our standard of living; and finally that really before we can live well we have got to produce the living.
Finding out all this old-fashioned stuff is not very pleasant, but what is to be done about it? The Institution promises some possible help in the two remaining volumes of the series on The Formation of Capital, now in the hands of the editor, and on Income and Economic Progress, to appear in a month or so. This series of books is the most respectable to make its appearance in many moons. It would be extravagant, perhaps, to call it monumental, but it would be precisely correct to call the task monumental. Some big men have taken on a big job.