The Socialization of Risks

Abstract

Transition to a war economy is, in its very essence, a shift of economic responsibilities from business to government. This shift covers almost all activities: initiative, planning, execution, coordination. Still the change in our capitalistic structure brought about by governmental leadership and numerous diversified controls should not be overstated. The new frontiers drawn between the private and the public sector do not alter the dualistic character of our economy. It is not “the opposite of free enterprise” since successful entrepreneurs are still allowed to reap the profit of their venture, restricted only by taxation and by some of its efficient supplements, particularly renegotiation of contracts and war bond drives. War profits, moreover, have been so substantial in almost all social groups that the stream of private capital-formation flows broader and deeper than it did in peace time, broader and deeper at any rate than in the public sector where the government has been burdened with an unprecedented federal debt. Broadly speaking, our economy is a hybrid with a collectivistic head and an individualistic heart.