GERMAN ECONOMICS

Evening Post, Volume CXXVII, Issue 76, 31 March 1939, Page 9

GERMAN ECONOMICS

EMPLOYMENT RAISED

SURVEY OF EVENTS

The present leaders of Germany, coming into power when one worker in three was unemployed, rushed in where our own rulers had for years feared to tread. Those members of the Mac Donald Cabinet who in 1930, taught by Mr. Lloyd George, wanted to borrow and spend £200,000,000 to get some of our unemployed men arid resources at work were, as one of them said, "spoken of in terms of something like ridicule," states a leading article in the "Manchester Guardian." The National Socialist Government of Germany a year or two later* in a country denuded of financial reserves, passed over the objections of those holding the "Treasury view" (as it was called here) and audaciously created the spending power to get its workless back to work and its factories humming. In "The Economic Recovery of Germany," just published, Mr. C. W. Guillebaud collects and interprets the facts and figures of this German experiment, bringing together much hitherto scattered information. Already, before Hitler's Chancellorship, the Papen and Schleicher Governments had begun creating special finance by circulating tax-exemption certificates for future years which could be discounted at once. The National Socialist Government followed this up with much more grandiose programmes for road building, land settlement, and public equipment of all sorts. At this time, Mr. Guillebaud thinks, the rulers were concerned to make millions of jobs, but preoccupied lest they should provoke an economic boom to be followed by a slump. They therefore strictly controlled the extension of plant by industrialists, giving every encouragement to plans for enlarging the output of producers' goods —iron, steel, cement, and so on—but checking the provision of extra consumers' goods which had never been markedly curtailed. Through an organisation which our agricultural marketing boards palely reflect they conspicuously raised the farmers' and peasants' incomes, thus ensuring a market for the full quantity of consumers' goods on offer. EFFECT OF. RE-ARMAMENT. . On this programme of inventing jobs supervened at some period in the first four-year plan the undertaking of a gigantic job for its own sake —re-arma-ment. This was acknowledged in 1935. but was already far advanced, Partly to improve the country's military situation, partly to save on imports—for the payment of which the authorities could invent no major financial device except evading foreign debt obligations—the parallel task of developing every possible local supply of raw materials, natural and synthetic, was conjoined -with that of rearmament. For both aims fresh labour and resources had to be exploited without any corresponding yield of saleable goods. "The State," says Mr. . Guillebaud, "has now assumed virtually unlimited powers over German labour." Yet this student is prepared to maintain on the strength of German statistics that the basic sgndard of living has been rising in recent years. He demonstrates with German statistics that in 1937 Germans had more per head of flour, meat, sugar, cigars, and cigarettes, and even of butter than in 1929, which he calls "the last boom year."

On balance Mr. Guillebaud gives the whole vast plan an unmistakable certificate of success. Other serious students in this country have qualified the verdict with a doubt whether a cessation or slowing down of armaments would be possible within the framework of the scheme.

Mr. Guillebaud says that the rearmament side can •'perfectly well be reversed at any time, and with its reversal most of the difficulties will automatically disappear." Mr. Thomas Balogh, in his notable recent study in the "Economic Journal," thinks that the transition would be "very difficult." Perhaps the answer is altogether outside the sphere of economics.