Out of the Woods Again

"Please tell me, Caius, why are all these laws necessary to civilization? Why don't people weave cloth and bake bread of their own accord in return for payment?"

[Caius answered:] "It is the duty of the government to provide the necessities of life at a price the poor can afford; once you start doing that you have to fix the price of a good many other things as well, and compel people to work at the unpopular trades that lose money."

--The Little Emperors

It was 105 years since the Emperor Diocletian's price control edict (301 A.D.), and rigid economic regulation and manpower control had become a way of life in the Roman Empire. To Bureaucrat Caius Sempronius Felix (a fictional but true-to-history creation of British Novelist Alfred Duggan), his wife's question seemed unsophisticated. Felix could concede that controls discouraged production, halted expansion and bred more controls, but he found it unthinkable that society could ever again get along without them.

In the U.S. of 1953, it is still possible to think that society can get along without price controls. Last week the Eisenhower Administration's sixth decontrol order left the U.S. economy free of wage and consumer controls for the first time since the post-Korea freeze of January 1951. The latest order freed coffee, beer, home-heating oil, soybeans, animal feeds--everything except some nonconsumer products vital to defense: sulphur and sulphur compounds, iron and steel, scarce alloy metals, metal cans, machine tools. A few predictable price rises followed, but they barely rippled overall price indexes, which have been steady since the Administration began its "orderly decontrol" six weeks ago.

When the Truman Administration abandoned World War II price and wage controls in November 1946, some people predicted $1-a-loaf bread. Franklin D. Roosevelt Jr. predicted $20-a-pair nylons. Decontrol in 1953 brought forth no such hysterical forebodings, but it was actually a bolder step, because the pressure of rearmament and the Korean war have replaced the 1946 illusion that permanent peace was about to prevail. Although pressure for continued controls was strong, Eisenhower acted on his campaign statement that Government control of prices was not the only or the best way to fight inflation.

In the 20th century, nations have increasingly tended to meet inflationary pressure as the Roman Empire met it: by fleeing from freedom, taking refuge in authority. In deep, sudden crises, direct controls are sometimes necessary. But to let them linger on after the need for them has passed (and they always tend to linger on), or to impose them when there is no clear and present need, is to incur the danger that they will become a way of life, as in the Roman Empire. Any time a nation can shake off the shackles and prove that freedom does not bring $1 bread, it can demonstrate again that in the long run the most productive economy is a free economy.

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