A National Policy—Public Works to Stabilize Employment

Abstract

D URING the war period large amounts of necessary public works have been deferred on account of lack of material, labor and capital. The War Industries Board has diverted the material needed; the draft and munitions plants have taken the labor; and the Capital Issues Committee has prevented the raising of the capital. Thus the war forced the adoption of the excellent policy recommended for peace times but never adopted-the policy of doing less public work during periods of great industrial activity and of speeding up the construction of public works during periods of general unemployment. Now comes the time to carry out the second half of this policy. In ordinary years of peace the amount of public money spent in the United States on public works is prodigious. It comes to $600,000,000 a year. Suppose that we should adopt the policy of spending nine-tenths of this and of putting the remaining onetenth each year into a reserve for a bad year of unemployment.We would at the end of five years have a sum that would employ 800,000 workers in a bad year of unemployment at average wages for a period of three months. As two-thirds of the whole sum expended for public works in the United States is by the governments of cities, these 800,000 workers would be employed in every part of the country and the larger groups in the industrial cities where unemployment is ordinarily most acute. This would be a peace order quite worthy to be compared with any of our great war orders.2