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Jack Ranger

Tapping the Wall Street Wire

(16 June 1947)

From Labor Action, Vol. 11 No. 24, 16 June 1947, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

“Psychological” Economics

Practically every economist in the nation has, in the last two months, had his say about what the immediate future holds for American capitalism. I have before me the predictions of 87 capitalist economists. The consensus is that this nation is entering a period of “recession,” which will last for from three months to a year or more.

The sounder ones keep close to the facts – business inventories still rising – capital expenditures leveling off – a blow-down in the post-war boom – the widening gap between our immense exports ($4.9 billions for the first three months of 1947) and our imports (less than $2 billions) – the lack of consuming purchasing power.

The crack-pot economists are in the majority. Even when they are right, they are right for the wrong reason. Almost the most stupid school of economics is that which holds that “we have talked ourselves into a depression.” This is what I call “psychological” economics. It is typified by such persons and groups as Ray Moulden, of the Washington bureau, Chicago Journal of Commerce, and the U.S. Chamber of Commerce. Moulden writes that “economists have successfully talked us into” the recession.

Is it true that the capitalist system can be “talked into” a depression – or a recovery? If it is true, then we socialists are indeed Utopians, and the capitalist system is guaranteed a very long life. Capitalism enjoys a firm monopoly on all the important avenues of information. It has thousands of spielers and hucksters. According to the psychological economists, all that is necessary to control the capitalist cycles is to “talk” prosperity.

What does this remind us of, if not the silly campaign headed by Herbert Hoover in the early 1930’s. Do you remember? That vast yawning crack in the capitalist system that began in 1929, we were then told, was caused by pessimism and lack of faith. Recovery was just around the corner. Legions of businessmen followed Hoover in issuing reassuring statements. Luncheon clubs from coast to coast would have song fests and comedians to cheer them up. The Democrats yodeled “Happy Days Are Here Again.” Telephone operators were instructed to answer calls with cheering greetings ... 1932 ... 1934 ... 1936 ... 1937, a little upswing ... 1938, whoof, the bottom again ... 1939, still 10,000,000 unemployed. Then came the war and its insatiable demands for goods, and the system recovered on this artificial basis.

The point to remember is this: All the professional optimism of the capitalists affected the economy not a jot. What people say or think or feel has little impact on the business cycle. Economics has its own laws. These laws have best been explained by Marx and his followers. These laws are as impervious to “psychology” as are the laws that govern the swing of the planets and the stars.

Capitalist economists who believe that a depression is something that can be caused by talk or thought are like savages and little children who believe they can harm other persons by thinking evil of them.

What great fools most capitalists are! Here is the president of Dun & Bradstreet, saying it will be an “utter disgrace” if the United States has a depression in the next three or four years. Who will be disgraced? The capitalists who try to rim the system? The people who are victims of the system? He does not say. But this man, Arthur D. Whitekide, has got conditions figured out. “The fact is,” he says, “when we quit buying English shoes at $58 a pair, as against the prewar $22, and do only selective necessary buying, prices will come down. They told me I had to pay $35 for a dress shirt, so I’m doing without a new dress shirt.”

This ignorant and unfeeling person believes, I am sure, that the people are paying $58 a pair for shoes and $35 for dress shirts. Imagine the following scene taking place in any factory locker-room in the late afternoon. Two workers are preparing to leave for home.

JIM: Say, that’s a nice pair of kicks you’ve got, Jack. What’d they set you back?

JACK: Aw, I picked ’em up for fifty-eight simoleons down at the Fair. Why, I can remember before the war, I used to get the same pair of gondolas for twenty-two bucks. Things are sure out o’ line these days. Why, I was shopping the other night, and do you know what they wanted to soak me for a dress shirt? Thirty-five smackers. I told ’em where to put it, you can bet. I’m doing without until they get down to $20.

The Stupidity at the Top

For generations the capitalists have energetically spread the great myth that they are at the top because they are smarter than the masses. How smart ARE the businessmen who love to hear themselves described as “top-flight executives?” Why, they are so dumb that today there are 15,000 management consulting firms in existence in the United States – management engineers, they call themselves – who make a good living hiring themselves out to capitalists, telling them how. to run their businesses.

The Wall Street Journal had a good article recently on these business “doctors” and some of their cases. One heavy-goods manufacturer, for instance, was making 256 copies of every order received, though less than half of them were used. He was spending $85,000 a year just to hire plant guards to watch the gates, even though there was nothing to hide. He was avoiding standard size parts and paying 40 per cent extra because of this. Numerous other cases of similar waste and inefficiency and ignorance were related. And these are the idiots who own this country and run this government and control the atom bomb and hold the fate of mankind in their hands. The alternative is socialism.

Economic Notes

The output of the British coal mines, Which recently changed from the old six-day week to a five-day operation, has already reached the old level despite the shorter work week ... Royal Dutch Shell is planning to invest about $26 million in new subsidiaries in Holland which will make plastics, fertilizers and synthetic materials ...

Big Business in this country has contributed over $500,000 to a new research organization, Business History Foundation, Inc., which will glorify the history and “statesmanship” of Big Business. The first project will be a study of the Standard Oil Co. of New Jersey, which, by mere chance, made a gift to the foundation to facilitate its work ...

On May 26 the Army held a closed meeting with industrial leaders at the Pentagon in Washington, to explain its new emergency mobilization plan. Some 2,500 volunteer units with a total of 300,000 men will be organized and affiliated with the Army’s reserve corps, ready for duty whenever Congress declares a national emergency. Units will be set up in telephone companies, railroads, construction firms, manufacturing plants, chemicals, petroleums, even bakeries and laundries. General Hall, of the Army’s organization and training division, said the Army wants trained manpower which could expand immediately “the existing military structure.” “National emergency” covers wars – and big strikes, too.

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