Dr. Coleson is Professor of Economics at Taylor University, Upland, Indiana.
During World War II in Europe, the belligerents on both sides performed miracles of production to try to keep their forces in the field and supply the general population with at least enough to keep soul and body together. This seems all the more amazing when one recalls the nearly impossible conditions under which this was accomplished. Always there was a shortage of everything—except enemy bombers and blockbusters. Yet hardly had the planes droned out of sight before repair crews climbed out of the catacombs to clear away the rubble and make necessary repairs so that work could go on. In spite of the fact that they were woefully shorthanded both in workers and technicians, somehow they managed to keep their industrial machine going long after it should have stopped, according to any reasonable calculations.
Many of us remember another day a dozen years before the collapse of Hitler’s Germany when our own industries had well nigh ground to a halt. This time there were no air raids to hinder or material shortages to delay the productive effort. A few sparrows twittered up in the eaves and there was a film of dust over everything, but no visible evidence that anything was out of order. Apparently, the machines needed only to be tidied up and oiled to be ready to resume production, and surely there was no lack of operators or engineers to keep them going. Why didn’t our industries run?
These two scenes are but symbols of the paradox of our time.
There’s an old saying that the pen is mightier than the sword. In contrasting the record of our own inability to keep our economy going and the European wartime success in continuing production with a scorched and battered industrial machine, one might conclude that cobwebs were mightier than TNT! Outwardly, there was nothing stopping our presses, lathes, and assembly lines except an occasional gossamer thread; but we couldn’t get our machine cranked up and going for more than a decade, until driven to it by World War II.
Post Sputnik Madness
Since Sputnik went into orbit, we Americans have been obsessed with the notion that there’s nothing wrong with the country that can’t be figured out on a slide rule or surely with an electronic computer and that all will be well when we’ve splattered a big blob of red ink on the moon. Therefore, all the country needs is more scientists and technicians, and no expense should be spared to produce them. As a matter of fact, science and mathematics, like most other serious and difficult subjects, have been neglected in the last several years, and our students should go back to work along with a lot of other folks in America. But it simply is not true that the great problems of our time are "scientific" in the usual sense of that much abused word. The writer has no quarrel with science as such, since he was a mathematics and science major as an undergraduate and worked as a technician in a large industry for several years. But to a multitude of people science is a sacred cow, or like "Duz," does everything. It is difficult to believe that it is the true scientist who feels this way about it; rather, we find a lot of panicky Americans who have at last caught on that somehow something is amiss without being more than vaguely aware what the trouble is. However, if our problems were only technical, we could always find someone, a man with a big wrench or a makeshift engineer, who could make the necessary repairs or adjustments, even in an hour of extremity like Hitler’s decline and fall.
Unlearned Lessons of the Last Half Century
When one ponders our present-day problems and the nationally advertised panaceas for them, he is impressed or depressed with the conviction that, as a people, we Americans have learned nothing and forgotten nothing since 1929 or, indeed, since World War I. While there are heartening signs that we may be catching on at last, so much of what passes for bold new thinking today is still the same "cheap money—make work" sort of New Dealism which failed through long dreary years to bring us out of the Great Depression. Nor is there any excuse for this on the part of us who are old enough to recall at least a generation of human experience. In addition to the lessons of the 1930′s in the United States, we have had time to observe what a "managed economy" would do for people and to them around the world. The results to date, whatever the label or location, have not been impressive.
Nor are the lessons of the recent past wholly negative, concerned only with the unfulfilled promises of a century of socialist dreamers. We have also been privileged to see what hard work, sound money, and free enterprise could accomplish in the revival of West Germany since World War II. Lest we forget the utter depths from which the Germans have risen and the economic philosophy which sparked the German miracle, here, briefly, is the story in the words of Dr. Ludwig Erhard himself:
"We decided upon and reintroduced the old rules of a free economy—the rules of laissez faire. We abolished practically all controls. . . . Thereby I met with a lot of opposition and doubts, both inside and outside of Germany. Statisticians and experts considered the application of the rules of laissez faire under the prevailing circumstances as practically fantastic—since the situation was such that a person could buy in those times only one dinner plate every five years, one pair of shoes every ten years, and one suit every 90 years; while only every fifth baby had a chance to get diapers and only every third German could hope to be buried in a coffin."
The Population Issue
This "case study" is of particular interest because the German people found themselves in 1945 in a state of abject poverty and destitution like unto the so-called underdeveloped nations of the world. These unfortunate countries, only now emerging from colonialism, have blamed all their problems on their foreign masters. The Germans are not yet truly masters in their own house, and even the Allied Powers continued to demolish what industries survived the war for years after the end of the conflict. Western Germany also had a population problem. It is not commonly realized that in the postwar era she found herself with about twice the population density of India per square mile and has had to absorb millions of refugees on top of that. Indeed, the "teeming millions of Asia" theme has been much overworked. Even Switzerland with all her waste land has as great a population density as India per square mile.
While unquestionably the monsoon area of Asia needs to stabilize its population, one could make a good case for the argument that there are not too many people in the world even yet. There are just too many of the sort that are—too many on the other side of the world who produce little and too many on our side of the globe who can produce abundantly, but who hold to the ancient mercantilist superstition that we are enriched by limiting output. Apparently, according to their mathematics, America will become infinitely wealthy as our productivity approaches zero.
What makes the German "experiment" particularly fascinating from a scientific point of view is the fact that just across the Iron Curtain is another group of Germans—a "control group," as the scientist would say. It is hard to imagine a fairer comparison or a more striking contrast. Both are German, yet West Germany literally has risen from its own ashes to be the going concern it is today in scarcely more than a decade, while East Germany has stagnated. Think what we could accomplish for ourselves and the world if we could but free ourselves from the mercantilist and socialist fallacies which strangled us for a dozen years during the Great Depression and have hampered our economic activity as long as anyone can remember. The way lies open. The world has nothing to lose by a mighty revival of freedom—nothing but its communist chains. What if the Russians do get to the moon first? We could more than gain on earth what might be lost in outer space.
Ideas on Liberty
Each in His Own Way
The free trader holds that the people will employ their labor and capital to the best advantage when each man employs his own in his own way, according to the maxim that "A fool is wiser in his own house than a sage in another man’s house";—how much more, then, shall he be wiser than a politician?
WILLIAM GRAHAM SUMNER, What Is Free Trade?