Milestone

This week when Leon Henderson officially stepped down from head of the Office of Price Administration, U.S. business saw not just the departure of an able public servant but another blow at an economic philosophy which has already stubbed its toe on hard economic fact and hard, economic law.

In the years when Henderson bossed prices the official Administration policy (as revealed in action) made two tacit assumptions: 1) that prices could be held tight by the use of direct price controls and ceilings unsupported by a strong, courageous fiscal policy; 2) that the U.S. could fight a major war without having higher prices exact the inevitable economic sacrifices of war from its citizens.

This philosophy, which directly contraverted past experience and the basic law of business--the law of supply & demand --worked well enough so long as it was never put to the critical test;--namely a rapidly diminishing stock of consumer goods such as the nation faces in 1943. Today many a ceiling has cracked. No matter what official Washington may promise, the best that the U.S. can hope for and fight for is not an inflationless war but an inflation that is controlled.

This file is automatically generated by a robot program, so reader's discretion is required.