"Relax...Enjoy Yourselves!" E.W. Dykes

((RELAX ... ENJOY YOURSELVES!" t'J G. W. 2)gte6 OPTIMISM is a wonderful attitude but only to the point where it begins to blind us to realities for which real solutions need be found. As an example of what may be over-optimism we are told again and again that "the sixties" will usher in the most fabulous wave of pros perity we have ever enjoyed-so relax, and enjoy it. In one form or another this theme is being drummed by writers and other assorted observers. Recently, following the usual banquet fare, I heard an unusually talented speaker not only make the prophecy but support it with a number of detailed rea sons which deserve our attention. But if I understood him, three of his five principal reasons would actually work against prosperity, while the other two would have little meaning unless accompanied by the prime adjunct to prosperity-the creation of the tools of productionl Let's take a look at the reasoning which dominates the optimistic view of prosperity unlimited.

Mr. Dykes is an architect from Canton, Ohio. 182 "RELAX •••ENJOY YOURSELVES!" 183 REASON # 1: "There is an unprecedented increase in our birth rate and population." If this reason were valid, the people of China and India would be enjoying a prosperity so fabulous it would put ours to shame. Ask any family man if having another mouth to feed makes him thereby more pros perous. Clearly, quite the opposite is true. The increase in population, if present levels of living are to be maintained, means that capital investment must be sufficient not only to replace obsolete tools but also to provide all the tools needed by all the persons added to the population. Five million new job holders, for instance, would require tools costing between 50 and 75 billion dollars at today's prices-plus billions more to cover obsolescence-all this just to stay even. To in crease living standards would require still further in vestment in tools. An arbitrary increase in tools, say $1,000 more per job holder, would call for an additional 75 billion dollar investment. Since all this could come only from savings, the enormity of the task is obvious.

REASON #2: "Both political parties now are committed to the principle of (Full Employment.'" Again let's look at India and China. About nine per sons out of ten in these countries, including children, are busily engaged scratching a bare living from the soil while one of ten is left for all other forms of produc tion. This preponderant number of "farmers" is due to their primitive production methods. Full employment means little unless accompanied by full production. Full 184 E. W. DYKES production flows from the most efficient use of the best known tools. Full employment in those countries does not make the people wealthy. Actually, political parties, as such, have no control over "full production." Politicians aI-ways speak of "full employment"-not "full production." It is possible for the political party in power to "make" work to employ persons, and the taxing power even yields capital for such a purpose. However, it is capital which, in the hands of its rightful owners, might have created truly productive and lasting jobs for the unemployed.

To test this idea of "full employment," why not can cel all freight runs of the Pennsylvania Railroad and give jobs to the unemployed to carry the freight on their backs from New York to Chicago and points between? If we used all the unemployed people in the world, we might still be short of freight-carrying ability. But they would be "fully employed." Political parties, because of their mischief in the past, now have a job to do for full production: remove the roadblocks to investment which take the form of con fiscatory taxation-take away the barriers to incentive do away with the laws which give one group of citizens unfair advantages in "bargaining" with other citizens. And then let them stay out of the business world en tirely. That would be a real service. REASON # 3: uWe are in a period of controlled but con tinuous inflation/' Inflation, "controlled" or otherwise, is a deterrent to "RELAX •••ENJOY YOURSELVESl" 185 savers and therefore to investment in the capital tools which increase production. Few threats to prosperity are greater than that insidious robber which is inflation.

When persons are aware that their savings are losing value, they become spenders rather than savers. Strange ly, it is often our chief executive or high government officials who warn us about inflation-yet only the Con gress can do anything about it. And very simply, too. Just balance the budget-that's all. 1 For all practical purposes, inflation would end. REASON #4: UA utomation will increase the country's productive capacity so much that employees will have shorter hours and higher pay." This is true-if-if the immense sums of money neces sary to produce such equipment are made available. Neither political party has a record with respect to tax policies which encourage such savings and investment. If the money is not forthcoming, then automation, for the most part, will be a dream. Politicians, labor leaders, and citizens generally need to recognize this fact; most businessmen already know it.

REASON #5: u • •••Because of the tremendous capacitY7 energy~ and ingenuity of the American people." Americans, just because they are Americans, are not endowed with superman qualities. Freedom of the in dividual to invest, to invent, to keep most of the fruits 1 Balancing the federal budget, of course, would require some cooperation from the constituents of congressmen.

186 E. W. DYKES of his own labor is the factor which has made Ameri cans appear to be so energetic and ingenious. Recent political activity has done little but chop away at the basic American freedoms. It follows, of course, that only damage can result from such political activities insti gated, as always, "for the common good." In summary, then, may it be suggested that the large quantity of invested capital per unit of population pri marily accounts for our high level of living. With bare hands we could do no more, perhaps less, than savages can do. If there are more of us, it takes that much more capital. Automation, truly the wave of the future, re quires fantastic investments. Few of the spokesmen in either political party show any signs of understanding this basic economic fundamental, much less doing any thing about it. They often refer to our "free enterprise system," which is anything but free. What is needed, truly, is a return to the free market, a cessation of deficit financing, abolition of the progressive tax, and a whole new outlook oriented toward opportunity as the best path to security.