Tertiary Production as a Postwar International Economic Problem

Abstract

IT might at first seem a little odd that there should be any hesitation or embarrassment in suggesting to academic colleagues in another country advisability of investigations, which might ultimately issue in practical action, along lines rather different from those which on their own initiative they seem disposed to pursue. But there is one important sector of economic analysis, of far-reaching general interest, which has hitherto been largely neglected and which it is now peculiarly appropriate to press upon attention of American economists. And it also happens'that effective action in this sector would make much easier at least a partial solution of other problems which have been mentioned and of whose pressing importance we are all so painfully aware, while it is without any doubt within setting of American economy that a scientific examination of this sector could now most hopefully be undertaken. Let us suppose that by some miraculous accident we had an absolutely free hand to determine critical point within American economy upon which in immediate future whole resources of creative thought of that country were to be directed. In such unexpected and highly improbable circumstances what should our decision be? Many would undoubtedly vote for a still closer concentration of attention upon techniques of full employment, while others would urge a still more penetrating study of significance of United States commercial policy for establishment and maintenance of world equilibrium. A plausible case could, however, be made out for view that problem which now most urgently calls for attention and solution of which would incidentally go far to meet requirements of those who are most concerned to see effective action taken in regard to these two obvious great outstanding isues is to be found in a field to Which so far little more than passing notice is usually given, a field, moreover, which at first sight might appear exclusively, or at least mainly, one of merely domestic concern. The general principle of international economic interdependence is now a commonplace, though its formal acceptance is still no guarantee that concrete policy will not in certain important respects be based upon deeplyrooted prejudice that it may be dangerous to allow peoples of other countries to become prosperous, especially if their prosperity seems dependent upon expansion of lines of production in which we ourselves already have a lively concern. To maintain national product at a level commensurate with our capacity to produce, it has been said, the American people will have to advance their standard of living as a whole by somewhere around 50 per cent. 1 And it is most direct and immediate interest of people of other countries that this unique objective should be realized with minimum of friction and delay. Its expeditious attainment will not, indeed, by itself either afford complete protection against risks of violent employment fluctuations in United States, prospect of whose repercussions elsewhere frequently cause so much alarm, or guarantee a speedy reorientation of United States tariff policy. Probably, it is in nature of things that yearnings for complete protection must always be disappointed, but if United States succeeds in reaching high standards of living postulated, employment fluctuations will probably be less violent than they might otherwise be; and even if awkward fluctuations persist, shifts of national income above and below a highlevel may still permit a demand for exports of other countries sufficiently great to prevent repercussions elsewhere from being overwhelmingly embarrassing. The vested interests which