Why Not Try Capitalism?

June 30, 1952

The other night I saw the new British film, The Man in the White Suit.^* It is a comedy with rare merits. (See the review in Newsweek, April 14.) But it is based on the implicit acceptance of an immemorial economic fallacy—the belief that new inventions destroy jobs and disrupt the economy.

A brilliant but erratic chemist, according to the story, develops a synthetic fabric that will neither stain nor wear out. But as soon as government officials, textile industry leaders, and the textile workers get wind of the discovery, they combine in their determination to suppress it. They argue eloquently (and no one in the film attempts a real answer) that once suits and dresses of the new material are put on the market, nobody will have to buy more than one, and that thereafter the whole textile industry will practically cease to exist, with a consequent permanent loss of capital and employment.

Let’s overlook its convenient forgetfulness of such sources of demand as style changes, personal size changes, and the desire for a varied wardrobe, and grant the picture’s central assumption that the invention of a stainless and wear-out-less fabric would permanently reduce the demand for clothing to, say, one-tenth of its present level. Then consumers would spend on clothing only one-tenth as much, say, as they do at present. This means that they would have the remaining nine-tenths left over to spend on other things—more and better food, housing, furniture, roads, parks, gardens, entertainment, education, travel. The workers dropped from the textile industry would be absorbed in other industries to produce the added commodities demanded from those industries, As mankind could meet its needs with less effort, the working week might be still further reduced.

These consequences are not a theoretical dream. They are what has always followed historically from each new invention. Less than a generation after the introduction of Arkwright’s cotton-spinning machinery, forty men were employed in the production of cotton textiles for every one that had been employed before. Nylon already represents today something close to the material of which the white suit was supposed to be woven. It makes, for example, a nearly indestructible man’s sock. But it has helped, not hurt, the textile industry. And the cotton growers and silk producers were not able to do anything to prevent its development, production, or sale.

But an even more conclusive answer to the convictions and fears of everyone in the White Suit picture is supplied by the tire industry. Here is an industry, consisting mainly of big units, that constantly increased the life and durability of the product, constantly improved the quality, and constantly lowered the relative price. Some of us can still remember the days when a man who went out for a Sunday drive would reconcile himself in advance to one or two flats before he got home. Here is the startling record, over forty years, of the increasing average number of miles of life of a tire, and the decreasing cost per hundred miles of wear of a “Ford size” tire:

Tire quality, safety and durability are still being improved. Yet where only 2,300,000 tires were sold in 1910, 30,000,000 were sold in 1920, 59,000,000 in 1940, and 100,000,000 in 1950. More tires were sold, it is true, because there were more automobiles. But better and cheaper tires helped to make better and cheaper—and therefore more—automobiles.

Economic and technical progress does not destroy jobs, and capitalism (contrary to the implication of The Man in the White Suit) does not oppose or retard economic and technical progress. On the contrary, capitalism—the system of free, competitive enterprise—is the indispensable condition of maximum economic and technical progress.

[^*The title of the film was corrected in the following week’s column to The Myth in the White Suit.—Ed.]