AMERICA’S GREAT EXPERIMENT.

Evening Star, Issue 21992, 30 March 1935, Page 26

AMERICA’S GREAT EXPERIMENT.

TO THE EDITOR. Sir, —The new departure in the theory of government ushered in by Mr Roosevelt in the form of tbo National Industrial Recovery Act, lias a much wider and deeper signficance than is indicated in your article. Due tu its vast and efficient industrial equipment, and its large population, the failure of the world market created a situation even more acute than the economic crisis in other countries. Capitalism in the United States was in a desperate condition, and required a desperate remedy. The policy of “ rugged individualism,” or less euphemistically—“ every man for himself and the devil fake the hindmost,” had served admirably in a period of expanding markets, but required drastic revision, when. Giving to vanishing markets, the devil seemed likely to catch everybody. Innumerable bank failures, millions of farmers driven off the land, and colossal unemployment with its consequent poverty; these were danger signals that could not be ignored. The apparent solution was a mighty extension of the homo market in conjunction with increased foreign trade. To bring this about was the essential purpose of the “ New Deal.” It necessitated government interference with private enterprise to an unexpected extent. The Administration set out to control credit, production, prices, and the conditions of labour in every phase of industry. The National Industrial Recovery Act was in fact a last desperate effort to save Capitalism by disciplining the individual Capitalists in the interest of Capitalism as a whole. It failed because it conflicted with an essential Jaw of the system—free competition. The competitive nature of Capitalism is too strong to be controlled. Like nil projects where fundamental facts are ignored, the results of the plan are the opposite of those desired. These are chiefly the much more rapid concentration of capital and the accompanying bankruptcy of smaller businesses. The magnates of the great combines could defy the administration and defeat its purposes while the small man was crushed by the increased cost of production, in these circumstances the natural ally of the President was the organised worker, but by the very nature of the system he could not be brought in; It is tme that regulations wore passed encouraging independent rade unions as opposed to the company unions, but the economic and political power of the trusts was sufficient to defeat these. There have been mass strikes on a larger scale than ever before, hut under the “ New Deal ” the employers have been able to use the armed forces of the State for their suppression. Yet, paradoxical as it may seem, it is only the militancy of the workers that has hitherto saved the Capitalist class from suicide. The competitive nature of the system forces the standard of living down, and every decrease is reflected in frozen capital and stagnating industry. It destroys the market, which is neither more nor less than the combined needs and purchasing power of the masses. The great American experiment has finally proved that a planned national economy

is incompatible with the conflicting interests of Capitalism and can only be achieved where the whole machinery of production is under Social control.—l am, etc.. March 30. A. B. Powell.