Mass Production Economy
WHICH METHOD WILL WORK BEST?
By MILO PERKINS, Executive Director, Board of Economic Warfare
Before the Graduating Class of Swarthmore College, Swarthmore, Pennsylvania, May 25, 1942
Vital Speeches of the Day, Vol. VIII, pp. 631-633.
*Mr Perkins spoke extemporaneously; these excerpts from his address represent the official summarization of his remarks.
OUR country is settling down to the grim business of smashing the Axis powers. We are beginning to realize that the national problem is an individual problem. There is a growing sense of personal responsibility for winning this war. Total victory cannot be left to the other fellow to work out in his own backyard. Each of us must contribute personally and with a whole heart to the utter defeat of our enemies. That individual determination and effort are all that stand between us and slavery. They are so important that nothing else matters for now. This is as it must be but there is deeper, more significant meaning to this conflict.
We are engaged in a struggle that transcends the present war. This is a long, long fight to make a mass-production economy work. The battle started when machines becameimportant in the lives of men. It should be over within the generation following this conflict. The battle will be won when we have built up mass-consumption to a point where markets can absorb the output of our mass-production industries running at top speed. Then, so far as our physical needs are concerned, life can become a journey to be enjoyed rather than a battle to be fought.
Our minds are now creating neat little time compartments labeled prewar, war, and postwar but these are like the labels of childhood, youth, and manhood to the individual who lives through them. This is a single and continuous struggle to achieve one goal. Complete victory will not be won until there is a full and increasing use of the world's resources to lift living standards from one end of this planet to the other. The twentieth century is a time set apart for the winning of this total triumph. Humanity is not going back to the wolf stage.
Men lost their battle to avoid this war. It was lost primarily because the world was unable to distribute whatit had learned how to produce. This failure was as true of trade within countries as it was of trade between countries. The nightmare of under-consumption was the black plague of the pre-war era. We put up with a civilization which was commodity-rich but consumption-poor too long to avert the present catastrophe.
Today we realize as we never did in peace-time how important an all-out production effort is to our national strength. We are going at it like men killing snakes. We are building the machines with which to wipe the tyrants from the face of the earth. Our young men are fighting like tigers to keep this a free world.
Their courage will bring us final military victory at the end of which we shall have the greatest production of raw materials, the greatest industrial plant and the greatest number of skilled workers in all history. All this will exist side by side with intense want throughout every land. The bridging of that gap will present the greatest challenge any generation of young people ever faced.
Better than half of our industrial output at the end of this war will be going to one customer—our own government. The business will exceed 70 billion dollars a year. Any attempt to stop that purchasing power abruptly would result in complete bankruptcy. There must be a gradual and sensible unwinding. Government must encourage business to regain its peace-time markets as fast as it can and business must encourage government to taper off its activities slowly enough to keep production going full blast. The heavy demand for civilian goods in the immediate postwar period will make it easier to accomplish this transition.
Capital investment in heavy goods for reconstruction must replace capital investment in armaments at a rate adequate to maintain full employment. Any wavering in this course will bring on a tragedy worse than war. We can and we should have open discussion about the various methods of using our resources to the utmost. But that is quite different from questioning the absolute necessity of their full utilization. Failure to use those resources to the utmost would be the one sure way to lose the way of life for which our sons are now willing and ready to die.
Full blast production for a gradually rising standard of living will be as necessary to win the peace as all-out production now is to win the war. It will be physically possible. Our number one postwar job will be to make it fiscally possible. If we can do that, private enterprise will enter upon an era of unparalleled activity.
The greatest untapped markets industrial capitalism has ever known will open up before us. Their development will be the one hope for our profit system. Industrial capitalism cannot survive without those markets. Of course it won't be easy. There will be complicated distribution problems to be worked out. There will be the problem of how to get purchasing power into the hands of potential customers so they can become real customers. There will be the problem of how to develop a peace-time job for every displaced worker in our armament industries. It will be hard, but it won't be any tougher than winning this war.
The plain people of this earth know what they want in the postwar period. Above all else they want to be wanted; they want a chance to work and be useful. They want an income which will give them enough food and clothing and shelter and medical care to drive the fear of want from the family fireside. And they want these simple things within a society that guarantees their civil liberties.
The plain people will be understanding about the problems of readjustment. They will work hard for all this and they will walk any reasonable roads to these ends. But the chains of the ages have snapped. The one thing they won't do is to take "no" for a final answer to their cry forfull employment. Not after all this suffering; not when they see themselves surrounded later on by too much of what they need most and yet might not be able to get. Idleness, be it of men or money or machines, will be the one unforgivable sin of the postwar world.
"But," some people ask, "how are we going to do all this?" The question sounds reasonable enough at first glance. Actually, however, only the timid ask it. The courageous ask, "which method do you think will work best?" In the first case, the questioner really doubts that much can be done to make the world work any better in the future than it worked in the past. In the second case, that hurdle has already been cleared, and the concern is with the most efficient and business-like ways of getting the job done. It makes an enormous difference. The "how" people are afraid of the future. The "which" people welcome it! And make no mistake about it, the future belongs to them.
I could talk to you about ways of financing housing in the postwar world. I could talk to you about an imaginative use of long-term credits to industrialize the backward areas of three continents. I could tell you that if the peoples of Asia alone earned an extra penny a day it would open up a new market of four billion dollars a year for somebody. I could talk to you about what a decent diet for everybody would mean to farm income throughout every country. We could talk for hours about these things. As soon as the political shape of things to come in this world gets clearer, workable methods and programs must be considered in great detail.
But there will be time for that. Hundreds of preliminary blueprints for economic readjustments in the postwar world already have been drawn. We are not short on blueprints. What we are short on is faith in the future of our own country. Let's not put the cart before the horse. What we need first is a new buoyancy which comes only to those who know there is a solid basis upon which to welcome tomorrow with a sense of adventure.
Once that is re-awakened in us as a whole people, a thousand and one individuals will come forward with a thousand and one business-like projects for making a mass production economy work. The magnificent fight of Secretary Hull for a freer flow of goods in this world is going to be won. Every farmer, every worker and every businessman will be needed to get the job done. Personal responsibility for economic victory at the end of this conflict will be as necessary as personal responsibility for military victory is today.
That's the way we conquered the West and that's the way we built our magnificent industrial empire. That's the way we're going at the winning of this war and that's the way we're going to win the peace. When a whole people is dedicated to one goal no obstacle on earth can stand against the singleness of purpose. These are times of great crisis but we needn't be terrified by them. The Chinese write the word crisis with two characters, one of which means "danger" and the other "opportunity." That's worth remembering.
When the history of this period is written a couple of centuries from now, the present war may be treated as an incident of adjustment to the scientific realities of our times. In every civilization of the past, bar none, if men took the most that it was possible to produce and divide it among all who were alive to share it, the answer was always a miserable standard of living.
Within your lifetime and mine, however, men have entered an era dominated by the machine and the test-tube. If we take all that can be produced at the end of this war and divide it among the people who will then be alive to share it, we shall be within reach of a very good standard of living for the first time in all history. That will be themost important material thing that's happened to the human race since the discovery of fire and the invention of thewheel.
The job of the future will be to build up a mass consumption great enough to use this mass production. That will require a bold and daring use of long term credits by every enlightened government of the world. Governments must enter fields where private finance cannot enter without assuming risks that are too great to take with other people's money. By that very act, however, the area of private investment will be broader and safer than it was in the last two decades. A world at work at decent wages is a world of economic stability. Idleness is the greatest of all threats to confidence.
Of course there are changes ahead but this evolutionary progress need not destroy our system of private enterprise. On the contrary, those changes can provide an environment in which industrial capitalism can be strengthened enormously. We have it in us to measure up to this job of maintaining full employment. The war is toughening us for the greatest conquest men have ever faced—the conquest of backwardness and unnecessary poverty. We are learning to live like men who are conquerors to the core.
What does all this mean to us as individuals? It means that our personal fortunes will be tied to what happens to groups of other men in this world as those fortunes never were in the past. It means that what today does to us^ as individuals is probably not very important. What is important is what we do with tomorrow by way of keeping the whole world at work on all-out production for a century to come. If we can lose ourselves wholeheartedly in that job, we shall find personal completeness as men have never found it before.
If we cannot, the tides of life will leave us to one side; we shall become isolated in a world where men are growing closer to each other. I don't think that will happen to very many members of this senior class. Swarthmore teaches men and women the inward significance of a diploma. It teaches them that true graduation is never finished, that it is a perpetual becoming.
After all, the only lasting security for any of us lies in moving constantly forward. Those who have won to this understanding welcome a changing future every morning of their lives—and love it. They alone have the competence to lead us through the rest of this dramatic epoch which the world has now entered.