The Road Back

Will the U.S. and Great Britain stand for free trade and competition at the end of the war, or will they tolerate restriction and monopoly?

Two articles last week pointed up this question, one of the biggest and toughest of all postwar issues.

Secretary Morrison. Article No. 1, in the May 15 issue of the London Economist, took as its text a recent speech by British Home Secretary Herbert Morrison.

Mr. Morrison minced no words in pointing out that between World War I and World War II an increasing number of British industries were being run by tight trade associations, which fixed prices about as they chose. (In England this practice has not been regarded as quite so antisocial as it has in the U.S.) Said he:

"It must be the duty of the Labor Party to drive these facts home to the whole population so that every time anyone mentions the words 'Federation' or 'Association,' the public gets on its guard and begins to ask itself, 'Should those words be translated Monopoly, Price Ring, Restrictive Group.' "

Praising Morrison's frankness, the Economist goes on to praise the U.S. antitrust laws, to suggest that Parliament pass a declaratory act reviving the old common-law doctrine against restraint of trade. The Economist also calls for the appointment of a Royal Commission to explore the "jungle" of British trade associations.

Professor Simons. Article No. 2, in a 15-page pamphlet put out by the American Economic Review, was written by Henry Calvert Simons, associate professor of economics at the University of Chicago.

Mr. Simons is a tough economist of the old liberal school who believes that price fixing and restriction are just as bad when practiced by big Government (as in the case of the AAA) as when practiced by big business. Last year he won fame among brother economists when he smashed and hacked away at the spending theories of New Deal Economist Alvin Hansen. In the present article he gives his own postwar program: Its points:

1) Dismantling of tariff barriers by all democracies (starting with the U.S., Great Britain, Norway, Sweden and the Low Countries); 2) an all-out program to dismantle cartels and to regulate corporate monopolies; 3) the setting up of a minimal supranational Government to enforce the peace.

Obviously, says Simons, no one of these proposals is new. The difficulty lies in making people see that there is no middle ground between these old-fashioned liberal prescriptions and a general slide towards Socialism or Collectivism.

Place to begin reform (and where it will be hardest) is the U.S. tariff: "American tariff policy is obviously the crucial, immediate factor in postwar planning. . . . The great world power cannot remain even moderately protectionist without squandering, its opportunities and repudiating its international responsibilities. Our tariff structure must be dismantled immediately and as a whole."

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