Free Enterprise and Full Employment

Abstract

IT IS inconceivable that any one should not want full employment, or at least should express his dislike openly. The wage earner wants it, because it means the maintenance of his standard of living. The man wants it, because it means the continuous operation of his productive unit. The general public wants it, because it means an unbroken and maximum flow of the goods and services upon which it depends for the maintenance of the good life. True, there may be a small number of moss-backed, casehardened industrialists who would welcome a constant pool of unemployed as a means of breaking down labor resistance and keeping wages low. But in these days they are not likely to say much about it in public. It follows that those who are now opposing proposals to insure full employment, by legislative or other measures, must do so because they object to the means rather than the end. Almost invariably the means that are opposed represent an extension of governmental (usually federal) activity or authority, and it is upon this that the objections are based. This would seem to indicate that governmental measures to secure full employment are deprecated either on the ground that they would not be effective for the purpose indicated, or else that the extension of governmental activity into the field of is so abhorrent in itself that it is worth avoiding even at the high price of depressions, failures, and untold human suffering and degradation. For it is very generally admitted today, not only by far-seeing liberal leaders like Henry Wallace, but also by intelligent men and the orthodox economists who are their theoretical mentors.and practical protagonists, that free by itself cannot guarantee full and continuous employment for the total working force of such a highly capitalized country as the United States. Even the most assured and vociferous exponents of the leave everything to free enterprise school would hardly want to back up their protestations with an ironclad promise not to go running to the government for relief should a blue Monday arrive, nor even to accept the assistance voluntarily offered by a paternally-minded administration. The business cycle, with its recurrent extremes of boom and depression, is now recognized by the more emancipated of the conventional economists as an unavoidable feature of a capitalistic, or price-and-profit, system. This relationship is accepted with varying degrees of complacency or resignation by those who regard the capitalistic system as the perfect flower of social evolution and cannot conceive that any other arrangement could possibly be on the whole preferable. Explanations of the process, and of its manifestations, vary. Some students find the central cause in the essentially unworkable and paradoxical character of the price-andprofit system itself. It has been conclusively demonstrated,' that monetary profits on a society-wide scale are a physical and mathematical impossibility. Even some writers of essentially orthodox economics textbooks admit this, as, for example, Gemmill and Blodgett when they say that, In the long run, therefore, we expect to find that the profits of a competitive industry just about balance the losses of that industry.' Mr. R. H. Doane, in his book The Measurement of American Wealth, has demonstrated the proposition by the statistical approach, showing by carefully correlated figures that over the long stretch of time the profits of American industry as a whole are almost precisely balanced by the