Guns, Not Circuses
I
AT the beginning of the second century a tight-lipped Roman, Juvenal, rasped his scorn of the frivolity of a populace that demanded both bread and circuses. Generations of schoolboys have accepted, without seeming skepticism, this castigation as fairly symbolic of the cultural decadence which, they were told, was responsible for the fall of Rome.
As Puritanism has lost caste in our day, it has become the fashion to question both the moral interpretation of Rome’s decline and the justice of Juvenal’s indictment of a democratic demand for circuses along with bread. It has been argued that it is quite reasonable to expect an economic order to provide the general population with pageants for the spirit as well as nourishment for the body. Much may be said for this argument — in ordinary times.
The present times, emphatically, are not ordinary. Today our civilization is being challenged by force of arms quite as fundamentally as was that of Rome. We are faced squarely with the issue of whether or not we have the moral fibre to make whatever sacrifices may be necessary to the building of the guns, and planes, and tanks, and ships upon which the outcome of World War II hangs. Quite literally, our cultural heritage is at stake, and in such circumstances guns become bread, if bread symbolizes that which is of prime importance, and any dispensable thing that interferes with the production of guns must be considered an unwarranted luxury.
It would be well to make four general observations about our defense effort that may serve to keep the overall picture in reasonably accurate perspective. There is particular need for this because of an expansive extravagance that is a peculiarly American characteristic. In public discussion of the defense program to date, there has been a well-nigh universal tendency either to romanticize it as a constructive triumph of unparalleled dimension or to damn it as a miserable and all but complete failure. Neither generalization is true, and public understanding and support have suffered from both exaggerations.
First, then, our achievement to date is a very respectable one in terms of anything we have done in armament production in our recent history. The span of nineteen months, from the start of the effort in June 1940 to the end of December 1941, will show actual expenditures of nearly 20 billions of dollars. This is substantially larger than the accomplishment of a corresponding period from April 1917 through September 1918 in World War I, and formidably larger when allowance is made for the fact that prices averaged almost 50 per cent higher in the earlier period and that the 1917-1918 expenditures included a much higher proportion of food shipments as against munitions production.
Second, there is little doubt that the combined armament production, in overall terms, of the British Empire and the United States (and this leaves Russia’s present production out of the picture) is proceeding at a rate faster than can be matched by Germany and Italy with all the forced drafts they are able to make on the subjugated areas. Furthermore, this advantage will steadily grow as our disproportionately large initial investments in plant and facilities bear fruit in vastly increased output of actual combat equipment.
Third, the problem is not one of merely outproducing Germany in current terms, but of outproducing her by a sufficient margin to make up, in the shortest possible period, for the enormous head start she achieved in the six years from 1934 through 1939, during which her military expenditures exceeded the combined total of Great Britain and the United States by two or two and one-half times.
Fourth, once it is granted that the task calls for maximum effort, then it is clear that comparative achievement must be judged in proportion to relative potentials. It is upon this score that there is just ground for criticizing our 1941 performance. With defense expenditures for the calendar year 1941 approximating 16 billions, we shall have devoted only slightly more than one sixth of a total national income of 92 billions to war effort. If our diversion to this end had been comparable to that of Great Britain or Germany, our 1941 defense expenditures would have been more than 45 billions. Since the conversion of a peacetime economy to military production inevitably takes time, we should criticize ourselves as a nation for not having started sooner quite as much as for not having achieved more in the period in question.
It is not intended to suggest that there is a 45 billion dollar ceiling for our ultimate war effort. Government expenditures tend to push up the national income, and, even upon the basis of the much more modest program covered by our present planning, our national income for the calendar year 1942 seems certain to be in excess of 100 billions. If we were to make use of today’s potential labor force to a degree comparable to that which was achieved in 1917-1918, the resulting national income, according to certain current estimates, would soar to such unprecedented heights that to name the figure would inevitably engender skepticism as to the sobriety of this article.
In any event, our ability to mobilize 50 per cent of a national income beyond a certain figure raises sharply questions as to the availability of requisite industrial materials, fabricating facilities, and skilled labor. Suffice it to say that there would seem to be reason for confidence upon every score in our ability to support a balanced military program of at least the 45 billion dollar level mentioned. An intelligently planned effort of this magnitude, thrown into the balance at the present juncture, not only would set a goal quite beyond the capacity of the Axis powers to match, but would rapidly eat up the initial advantages they have been allowed to effect. If we can produce even more, and we probably can, it will shorten the time needed to achieve a decisive matériel advantage over the Axis. Since months, and even days, are critically important, since every moment of respite allows for a consolidation of position and a mobilization of the conquered areas that will require ever-increasing force to dislodge, the case for doing as much as we can, as quickly as we can, is unanswerable.
II
As soon as we start thinking in terms of an all-out effort, it becomes necessary for us to think at the same time of the readjustments that must be made in our standards of living. No nation in history has ever been able to mobilize half of its production for war purposes and at the same time maintain its population upon a level both equally high and of the precise pattern that obtained in times of peace.
The fact that it is possible even to consider now a military production program of a magnitude comparable to our total national income in the lean years from 1931 through 1935 is an index of the inefficient use made of our economic resources in the recent past. Nevertheless, although our total national income in 1941 will be well beyond twice what it was in 1932 and 1933, we should have been forced to make substantial readjustments in our civilian economy if we had mobilized anything like one half of our production to the defense program in the past year.
Actually, we shall have diverted, by the end of the year 1941, something less than one fifth of our total resources to this purpose. This has been almost exactly covered by the increase of national income over 1940, so that, in production terms, our year’s defense program may fairly be said to have cost us nothing but effort. But before attempting to examine in detail what has been happening to our civilian outputs, let us look briefly at what an approximate 50 percent war effort has meant in Great Britain.
Great Britain has a population a little more than a third of that of the United States, and although under war stimulus she has been able to increase her national income to a point almost 40 per cent over its 1938 level, her 1941 income upon a per capita basis is much less than ours. In dollar terms it will approximate 24 billion dollars against 92 billions for us. Yet her war expenditure, in the current fiscal year that ends for her on March 31, 1942, will amount to almost 60 per cent of her net national income. This accountancy is complicated by the fact that she has been able to finance a substantial proportion of her war effort by drawing upon overseas capital representing past investment, but when due allowance is made for this it still appears that her war expenditures within the British Isles will absorb in the fiscal year something over 45 per cent of her total domestic resources.
To effect this formidable diversion from peacetime to war activity, Great Britain has made drastic cuts in her civilian economy. In the current fiscal year it is estimated that the money value of output for civilian goods, services, investment, and civil government activities will be something like 82 or 83 per cent of what it was in 1938, a mild depression year. With allowance for the rise in prices that has occurred, and on the assumption that they will be held at approximately their present levels, the real value of these civilian outputs in 1938 terms will be well under 70 per cent.
A fair index of what the British public is actually using in the way of commodities is to be found in the statistics of retail trade. In presenting these an adjustment is made for price increases, since they result in smaller quantities of goods for a given expenditure. With 1938 as a base (100 per cent), total retail sales rose to 108.5 per cent in the third quarter of 1939 and fell to 81.5 per cent in the second quarter of 1941; food sales rose to 109.8 per cent in the third quarter of 1939 and fell to just under 85 per cent in the second quarter of 1941; clothing sales rose to 110.3 per cent and fell to 62 per cent in the corresponding quarters.
Clothing rationing was imposed at the end of May 1941. Under this system each individual is allowed sixty-six coupons per year, and must give up a specified number of coupons for each purchase made. The rationing was based upon a calculation of the average person’s need for replacement of garments. How strict is the interpretation of what replacement is essential may be judged from the fact that a man newly and fully dressed for winter, with overcoat, suit, shirt, undergarments, socks, collar, tie, two handkerchiefs, gloves, and shoes, carries upon his person 95 per cent of his yearly clothes ration.
Essential foodstuffs and gasoline were rationed before the system was instituted for clothing. What the gasoline ration means is indicated by the fact that the family of a high-ranking government official of my acquaintance is allowed five gallons each month (five imperial gallons — equivalent to six and a quarter gallons in our measurement), and this allowance is higher than average because the family lives in the country, some five or six miles from the nearest railway station.
Other controls are exercised through a variety of measures restricting the use of raw materials and labor for production judged extraneous to the war effort, through the licensing of imports and the purchase or sale of plant and machinery, and through mandatory powers to confine civilian production to specified establishments, thereby releasing the facilities and labor of their erstwhile competitors for war work. During the current summer, the allocation of steel for all civilian uses amounted to just 6 per cent of the available supply. Since October 1940, the manufacture of civilian automobiles, except for export, has been completely prohibited, and the present export quota, which is tolerated because it brings in needed exchange, amounts to about four hundred cars a month, about one per cent of the number produced in Great Britain in 1938. There is not even provision for the production of maintenance parts for civilian automobiles.
III
‘Merrie England’ clearly has been willing to tighten the belt of civilian indulgence in order to pursue the grim trade of war and arms. What, meanwhile, have we been doing of like pattern in the United States?
In July 1940, just as the defense effort was getting under way, national income for the month as represented by income payments was approximately 6.3 billion dollars. Total defense disbursements, including Britain’s purchases of war materiel upon its own order, were approximately 0.4 billion; margin for civilian uses — 5.9 billions. In September 1941, total income payments were up to 7.7 billions and defense disbursements were 1.5 billions; civilian margin — 6.2 billions, or just 0.3 billion more than for the period eighteen months before. For the fiscal year 1940, in which income payments totaled 73 billion dollars and defense expenditures for the entire year were only a shade higher than in the single month of September 1941, the civilian margin averaged just under 6 billions per month, or slightly higher than in July 1940 and slightly lower than in September 1941. And the national income in the fiscal year 1940 was the highest that we had achieved since 1929.
It is clear that through the first three quarters of the current calendar year at least there has been no overall sacrifice of civilian consumption for military. In fact, the statement that we have been maintaining the consumers’ share of income payments at around 6 billion dollars a month, or 72 billions a year, grossly understates the present consumer position. Under the military expenditures are funds for the maintenance of the armed forces, which now number about two million men, including their food, clothing, and other items normally supplied from the civilian budget. The military disbursements include also considerable expenditures of government funds for new facilities, and not all of these, by any means, are completely specialized for military production. A substantial proportion has been allotted to processing facilities for aluminum, magnesium, steel, and a variety of other metals. These, and probably also an important proportion of the aircraft factories, will fill future use as capital equipment for civilian production.
The point becomes even clearer when we look at the direct evidence of the consumption markets that this year are achieving record highs for all time. Retail sales for the first nine months of 1941 were running 20 per cent higher than for the comparable period in 1940. Currently, they are running at an annual rate which, with both measured in 1939 dollars, is about 34 per cent higher than retail sales in 1929.
It is not relevant to stress the point that, while the British public has been sharply curtailing its food and clothing expenditures, we have been expanding ours. For there has been no need for us to retrench in these fields, and it is quite likely that there will be no need for us to do so even with a defense effort of a magnitude comparable to Britain’s. For we are by far the more self-sufficient country, and happily we do not have Britain’s problem of feeding and clothing our people out of imports. But the field of consumers’ durable goods is another story. For these, of all civilian purchases, are most directly in competition with military production. They compete for raw materials. They compete for fabricating facilities. They compete for skilled labor. And again we are looking at all-time highs. Consumers’ durables sales for 1941, even with the reductions under quotas established for the end of the year, promise to be over 10 per cent higher than in 1940, and 60 per cent higher than in 1935-1936. Sales for refrigerators in 1941 will be higher than ever before — perhaps 15 per cent higher than in 1940, more than twice as large as in 1939, 500 per cent of the 1929 level. Washing machines and ironers will sell 30 per cent above 1940, double the 1929 level. Gas and electric stoves this year will top last year’s sales by 15 per cent, 1929 sales by more than 40 per cent. Passenger automobiles will have higher sales for 1941 than in any years except 1929 and 1937, and they probably will be within 3 per cent of the latter year’s record. If the automobile companies are able to get sufficient materials to build up to the limit allowed under the announced 50 per cent cut (which is doubtful) their 1942 production will just about equal the level of 1938.
However, let no one think that, because we have not been called upon to forgo our civilian luxuries to date, we shall not be forced to in the near future. Our defense effort is only now commencing to assume substantial volume. Upon the basis of our presently planned production schedules, defense disbursements for 1942 will about double this year’s achievement. That will represent 30 per cent of the augmented national income which may be anticipated as a concomitant of an effort of that proportion.
But, if signs are read correctly, America will not rest with the doubling of an annual 16 billion dollar program. It is not the temper of the administration, the armed services, the men who are working in defense agencies, or the country, to be content with anything less than an effort that is at least comparable to that of those with whom we have cast our lot.
There is no virtue, and much folly, in needless sacrifice, but if we are to pull a proportionate share of the load for which we have assumed responsibility we shall be called upon to make sacrifices aplenty. We shall be forced to divert metals and other industrial materials — drastically — from civilian uses; we shall be forced to make comparably severe diversions of facilities and man power; we shall be forced to work harder and longer, and without interruptions; we shall be forced to do without our accustomed quotas of the new and shiny gadgets that have been the special hallmark of our industrial culture.
Surely we can live, for a time, on our stocks of refrigerators, and toasters, and stoves, and washing machines, and typewriters, and shoe machinery, and printing presses, and steam shovels, and elevators, and office buildings, and even houses. Surely our 27.5 millions of registered passenger cars will carry us over the roads adequately enough for a few years, without the necessity of building millions more. Surely, in this time of world crisis, we shall show the Juvenals of this age that we are able to discriminate between bread and circuses.