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Susan Green

Capitalism Plans for the Post-War Period

A Brilliant Example of Utter Futility

(16 February 1942)

From Labor Action, Vol. 6 No. 7, 16 February 1942, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

A brilliant example of the utter uselessness of all capitalist plans for the post-war period is contained in the widely heralded publication, After the War – Full Employment, issued by the National Resources Planning Board.

Working people who are dividing their worried thoughts between their present troubles and those to come will find little to console them here. The publication was prepared and written by Dr. Alvin H. Hansen, professor of economics at Harvard and special economic adviser to the board of governors of the Federal Reserve System. You can hardly expect a capitalist economist, even of such note, to make sense. Dr. Hansen doesn’t.

In the first place Dr. Hansen bases his plan on the proposition that:

“No country need be impoverished if its productive resources (both capital and human) are intact. The productive resources of this country will be on a considerably higher plane when this war is over than ever before.”

Every person with only normal reasoning ability will be unable to accept Dr. Hansen’s basic proposition. The idea that total war can be waged in this day and age and leave the productive resources not only intact but on a “considerably higher plane,” is too ludicrous to need argument. Already upward of 150 billion dollars have been appropriated for the business of pure and simple destruction. Already several millions of the best in manpower have been drafted, also for the same purely destructive business. Already the labor power of the workers in the factories is being used to exhaustion.

Drain on Resources

This is only preliminary. Senator Taft expects the war to last at least five years. Senator Pepper thinks it may be ten years. Before the war is over, the drain on the productive resources of the country will be multiplied many times. Any plan that does not start with the proposition that the war will leave the economy of the country drained, twisted and disorganized for peacetime production deserves to be thrown out of court.

But let us suppose the fantastic: that the resources of the country will be left intact by the war. SO WHAT? Does capitalism go into tailspins because of lack of productive resources? Quite the contrary is the case!

Industrial crises have been marked by great abundance of productive resources, both capital and human – BUT UNUSED RESOURCES. That is the socialist indictment against capitalist anarchy. People starve in the midst of plenty because capitalism is geared to production for private profit.

Apparently Dr. Hansen is worried about the anarchy of capitalist production and even hopes to stop it because, according to Dr. Hansen’s plan, the government will retain “its far-flung controls over all groups and economic segments.” But at the same time Dr. Hansen says:

“We do not want the government to run the whole show. We do not want a totalitarian state. We want freedom of enterprise.”

Here, in a nutshell, is the contradiction all capitalist economists find themselves in. They make plans .for totalitarian control – which is the only way post-war capitalism can try to pull itself together. Then, they become panic stricken. “Good heavens,” they proclaim, beating their chests, “we must have freedom of enterprise too.”

“Positiveness and Vigor”

This is the “positiveness and vigor” with which capitalist economists like Dr. Hansen are planning. Not that the workers want totalitarian “positiveness and vigor.” That spells slavery. Neither do the workers want “private enterprise.” That spells unemployment, misery, anarchy – as in the past. THE ONLY WAY OUT FOR THE WORKERS IS THROUGH SOCIALISM.

But the capitalist professors burst a blood vessel at the mere thought of socialism. So they swing like a pendulum between a future totalitarianism and the played-out system of the past. This is supposed to be post-war planning.

If Dr. Hansen’s plan is scrutinized for the practical measures it proposes, it is found, according to the press accounts, that they are the good old-fashioned ones known as “priming the pump” or government spending. There is to be a huge program of public works, for highway construction, reforestation and flood control. Dr. Hansen also plans a social program for public health, cultural and recreational facilities, old age pensions, and so on – in fact a veritable paradise of good things.

If a socialist society were to plan for public expenditures, that would be the normal way, because all resources would be owned in common. But when a capitalist government proposes to go on a spending binge, the question always is: “Where will the money come from?”

Capitalists and Taxes

Dr. Hansen very well understands the capitalists’ aversion to paying high taxes and he very much respects their sacred right to undiminished profits. He says:

“It must be recognized that there are certain limits on how far profits can be encroached upon ...”

So he proposes that there be a relaxation of corporate taxes. And how, then, is the government to get money? Simple, my dear Watson. The high rate of taxes on individual incomes would be retained. The broad base of taxation would also be retained. Which means that Dr. Hansen proposes to tax every working stiff until his eyes pop out of his head.

This again shows how capitalist economists are caught in a vicious circle.

According to Dr. Hansen’s own figures, there will be 57,000,000 to 59,000,000 employable people in the post-war period. So many of them will be jobless that it will be necessary to institute this extensive “pump priming” program to keep them from starving. Yet, according to Dr. Hansen’s plans, these people, themselves needing help, will the the ones taxed to pay for his “humanitarian plan.”

These capitalist economists – with their grandiose but futile plans – dare not face the fact that all future progress lies on the road to socialism. When all they can produce is a plan for a public debt mounting into the stratosphere, to be lessened by taxes on the impoverished people, it means that their system of private enterprise has definitely failed.

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