Invitation to Chaos

Many a U.S. businessman is beset by the nagging fear that wartime controls will be kept on postwar industry too long for the nation's good. But last week businessmen were firmly told that what they should really fear is that controls may be dropped too soon.

This advice came from Columbia University's John Maurice Clark, author of Demobilization of War Economic Controls (McGraw-Hill; $1.75), third of a series of postwar studies sponsored by the Committee for Economic Development. Said he: "To follow lines of least resistance . . . and disband all controls instantly at the end of hostilities would be an invitation to chaos. This mistake was made after the First World War with results which were bad."

Professor Clark is sure that the U.S. will step off into peace on the wrong foot if it throws off every control over wages, prices, etc. as soon as "a moment arrives when it is not pressingly needed." Instead, said he, controls should be lifted on a conditional and piecemeal basis and should be kept ready to slap on again if needed.

Thus, he argued, price ceilings on such consumer goods as textiles, which will probably be plentiful soon after war's end, should probably be dropped at once. But ceilings on scarce durable goods, such as autos and refrigerators, will be needed to hold prices in line until production comes up to demand, perhaps as long as three years after war's end. Ceilings would prevent buying power from being wasted on small production, at sky-high prices.

Stream v. Dam-Burst. Similarly, said Economist Clark, a postwar version of the War Labor Board will be needed to keep a temporary grip on wages, and WPB will have to keep a light touch on raw materials to: 1) make sure that small business is not squeezed out in the first buying rush; 2) prevent a speculative boom such as helped bring on the postwar collapse in 1920.

But no matter how carefully reconversion is plotted, Professor Clark has small hopes that the U.S. can be shifted to peace in such a way that all industries will slip, their controls at the same time or that all business will get off to an even start. Said he: inequities are inescapable.

Professor Clark firmly believes that wartime controls on the economy must be eliminated so that free enterprise can make needed postwar jobs. Nevertheless, says he, businessmen should not look upon controls as such evils that they must be done away with in short order. Rather they should see them as tools which, skill fully used, will unstopper the economy so that the forces for full employment, i.e., war-created markets and huge savings, are freed in a steady stream, not one dam-breaking burst.

To many a U.S. businessman, this made fine theory but not necessarily good practice. Living in unwelcome intimacy with Government controls, during the war they had found them often used ineptly, feared they might be used for ulterior political and other purposes. The question was still: will postwar controls be different?

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