The American Way
PESSIMISM FOR POST WAR ERA ASSAILED
By HENRY J. KAISER, Industrialist
Delivered before the New York Herald-Tribune Forum, New York City, November 16, 1942
Vital Speeches of the Day, Vol. IX, pp. 118-120.
I THINK I will be different from the rest of the speakers. I think I want all the credit. You have heard so much about what can be done, and I could tell you many things that have been done, and by whom they have been done, but as you are willing to give me all the credit, that is all I ask. I am prepared to let them do it, and there is so little that I ask. . . .
The mind and heart of America are now with our troops in the war zone. The long-awaited action has brought an immeasurable sense of release from the stifling anxiety of waiting. And now that we are on the march, we can breathe more easily. But there are factors no less important than the destruction of Rommel's army and the domination of the South Seas. America's most difficult task at this hour may be fully to understand what this war really means, and to comprehend the import of its consequences. For we could win the war with arms and lose it by economic, political and social blindness.
We must recognize now that post-war reconstruction and development are an integral part of our present effort and that the plan of the post-war world is as vital as the grand strategy of today.
A Vital Five Years
This war is only a phase of a world-wide social upheaval which has been under way since the turn of the century, probably longer. What happens in America in the five years after the war will determine first whether we can escape the very evils against which we are fighting, and second, our ability to assume world leadership in the advancement of human freedom.
Post-war planning is no new term. There are today hundreds of American organizations and individuals attempting to sketch the design of the post-war world. The British reconstruction agencies are just as numerous. Staid old England has definitely come to grips with the problems ofthe new world. This war comes at the close of the most astonishing decade in our history. If we could only filter the prejudices out of our experience, the decade would be the prelude to the finest chapter in our history.
The experiments have been costly, the mistakes many, but the instructions have been priceless. To all this we add the negative lessons of war, for war has been one, if not the greatest, teacher in human experience, a negation of all that we recognize as good and, at the same time, the essential process whereby evil is destroyed.
Pessimism Toward Peace
There is a dangerous pessimism abroad about the coming of the peace. A vivid illustration is the tragic fact that the countless men and women in America, England and in the British Dominions, are for the first time in their lives enjoying the opportunity to work and to save. To put it broadly, war alone has thus far accomplished full employment.
There is actually a vast number of workers today who dread the thought that it will come to an end. And unless we can devise conditions of peace that will give men the opportunity to work, to create and to enjoy the fruits of their efforts, there will be no peace.
I suggest that we add another freedom to the four enumerated by our President. Namely, a fifth freedom; the freedom to produce. I know there is a suggestion of materialism about this proposal and some will proclaim that there is no hope for the future on such a foundation, and with this view I take issue.
The whole concept of human welfare, which includes security, opportunity, the standard of living, appreciation of and participation in the arts and every creative release of the human mind and spirit, are today dependent on the production and the conservation of wealth. Without abundant and profitable production our institutions of learning could not be sustained, her life-giving research be pursued. Without the means to train and develop scientists, engineers, physicians, technicians, organizers and managers, our civilization would collapse.
Production, Conservation Required
Let us admit that the expanding needs of men have made possible our economic progress. No individual and no people can consume all they produce and expect to progress. Production and conservation are the essentials underneath all of our hopes for the good life, and in these two forces are the spiritual attributes which we call "the American way."
There are those who proclaim that this war will be followed by the greatest depression in history. If such a disaster occurs it will be because the American people have lost their courage and their faith and their confidence. Our record throughout more than 150 years gives the lie to all such fears.
New Records Every Hour
Consider some of the negative lessons of the war. To begin with, we are learning for the first time our capacity to produce. Three years ago the experts told us that America could not spend a half a billion dollars a month and today we are expending in excess of a billion dollars a week. To be sure, expenditures are only an index, but American industry and agriculture are establishing new records every day and every hour. The resources of raw materials are proving far more abundant than the most generous estimates; indeed many new sources are daily in the process of discovery.
We have become the supplier of all the materials of war, of a considerable part of the food, the clothing, and even some of the shelter for the nations which fight the aggressors, and those subdued by the aggressors. This gigantic task has been accomplished largely on borrowed money. The drains on the Treasury have demonstrated its extraordinary vitality and yet the United States Treasury is not inexhaustible.
We cannot build an enduring peace, nor engage in a promising reconstruction, nor hope for full employment in peace time by the continuation of war methods of financing. The only way to service our vast debt and measure up to the postwar challenge is to produce wealth on a scale never before envisioned; to produce it at new lows in costs, and to accomplish an abundance and a variety which will call out our total energies and our finest creative powers.
Purchased Prosperity Is False
To do this, production must be profitable. The theory that you can generate wealth, peace, or prosperity by the lavish expenditure of money, is utterly false. And when production is genuinely profitable, there is something to tax; there is something to save, and there is something to the stimulation to investment which is one of the basic essentials in a dynamic society.
Another negative lesson of the war is the impetus given to invention. Never before has there been such progress in speed, capacity and the materials of the machine. New metals, new combinations of metal, new processes, new applications of natural laws forecast airplanes that will fly 500 miles an hour, a ship that will out-maneuver both the torpedo and the bomb, and land-borne transportation that will carry the goods of the world over super-highways on high-speed trains and on the Berkeley Hills of California there is now nearing completion a laboratory which will house the greatest atom smasher yet constructed. And out of that laboratory may come the knowledge which will enable us to capture as much energy from half a brick as we now extract from a ton of coal.
Fanciful Utopia Discounted
There are those who proclaim a fanciful post-war Utopia in which the state will give every man a house, a car, a refrigerator and a radio. The authors think in terms of distribution of bounty, rather than of man's innate need to produce for himself and to be the source of his own security. But men of power, ability and courage do not want a handout. They ask only the opportunity to work, to create, to save, to spend, to be independent of restraints, and to have their greatest energies released for the great business of living.
If you could be with me as I am and see the 200,000 people that I occasionally see, you'd know the very truth of that statement.
The last negative lesson of this war, which I must mention, is that war is a destroyer. Domestic markets will be exhausted. Our surpluses will disappear. Our machine-conscious people will be starved for automobiles and other mechanical devices. But this is not all; the war devastated areas of the Old World must be restored, for America has learned that she cannot enjoy a high standard of living while millions of people throughout the world live on the margins of starvation. If she had any illusions of prosperity at the expense of other nations, a $200,000,000,000 debt will be evidence that any such prosperity is now in liquidation.
If this lesson dispels some of our prejudices as they were set forth in the iniquitous tariff legislation, perhaps the war will be worth it.
Twenty Years Work Ahead
Our vast capacity to produce must find outlets in world markets. By sound finance, sound business methods, sound politics, we can take part in a reconstruction of any war torn area. And in such efforts there will be sufficient demand to keep every wheel in America turning for twenty years.
Such a pronouncement will straightway raise the pessimistic response: "What will the devastated nations use for money?" The answer is simple. On the morrow of the war, the millions who have been dispossessed and starved into submission by tyranny, will look for an opportunity to go back to work. Little by little their efforts will be productive and many of them will begin to save. And as they produce and save, new capital will be formed.
I have no part in the theories that envision a world made of super states, co-ordinated by a super state, where a man will be told what to do, and how, and where, and when, and how much. I have no faith in any such schemes. The production that is necessary to sustain mankind comes about when men operate under a minimum of restraint; when they are given the opportunity to risk and to venture; to lose as well as to gain; to strive, yes, to compete; and most of all, to escape the compulsions of excessive government.
This is no idle plea for a return to laissez faire. We have already learned to temper the brutality of competition by the spirit of fair play. From long personal experience I know that even the most competitive of men has the capacity and the will to co-operate.
Labor's Stake in Enterprise
Closest to my own hope for the future are the prospects of labor, but I know that the real interest of labor lies with an independent economy, rather than with the socialism which has again and again destroyed labor's opportunity. Organized labor has a greater stake in the private enterprise system than either management or capital, for that system is the unions' chief hope of survival.
Post-war planning is no job for Utopians and dreamers. It's a job for men who come to grips with the realities of production, who know how difficult it is to organize the productive process on a solvent basis, for men who work with their hands as well as their heads. I have no desire to discredit the theorists. They have played an important part in our
advancement, but war production as we now see it could not have been organized and carried on by theorists.
We should now be actively engaged in real, vital, workable plans for post-war employment, plans which must be divorced from the fantastic and the useless speculations, which are geared to known patterns of human behavior, plans which can be realized.
We know what we can do. There is nothing which reasonable men undertake which cannot be accomplished. There are no barriers or obstacles which can stop the productive forces of America, once they are organized and released for reconstruction and advancement.
Metallurgy an Example
But lest I seem to be generalizing, let me give one of a hundred specific illustrations of our prospects. The progress of metallurgy in this war forecasts a practical automobile that will weigh less than half of the present models and will travel 100 miles on a gallon of gasoline. I don't think you believe that.
The Pennsylvania Turnpike
The Pennsylvania Turnpike and the parkway system of Greater New York foreshadow a super-highway system which could be self-supporting and self-liquidating. Not only its construction but the business it would generate would far exceed the impetus given American industry by the automobile.
We must plan now. Delay will be immensely costly. The extent to which we succeed in programming full employment on a solvent and profitable basis will mark the degree to which our people can enjoy independence and freedom from bureaucracy. It will measure both the economic and the political liberty which we can possess, and will fix the sources of the welfare we so much desire.
Social welfare is a noble concept, but it cannot be achieved by either borrowing or spending, unless those two factors are immediately related to the vast and profitable production, courageously pursued in a true spirit of self-reliance and under a reasonable freedom from restraint.
I cast my lot with those who believe in the American way of life, who are unwilling to see it compromised, who know its potentials for good, and who believe that we can now enter upon the greatest period of constructive building the world has even known.