NAM Reflects Profiteers’ Dilemma (3 January 1949) (original) (raw)
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Susan Green
Reveal Unwillingness to Tackle Problem of Inflation Seriously
(3 January 1949)
From Labor Action, Vol. 13 No. 1, 3 January 1949, pp. 1 & 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Those who read the press more or less carefully must have noted that the 53d annual convention of the National Association of Manufacturers, held December 1 through December 3, as usual at the swank Waldorf- Astoria Hotel in New York, didn’t get the front-page coverage it normally gets. Perhaps this was because the NAM convention came too soon after the election won by “the little champion of the people against Wall Street and big business.” But probably the NAM convention was relegated to the inside pages because it really didn’t make news.
Certainly it was known before these businessmen convened that they would not admit that record-breaking profits have something to do with inflationary prices; that they are opposed to higher taxes on profits and in fact want existing taxes reduced; that they are dead against planning and government controls, even though they see the handwriting on the wall; that they will put up a fight for the labor-restricting principles of the Taft-Hartley law, even though here too the handwriting is on the wall.
One thing that newsgatherers were looking forward to in the NAM convention was to see how “the little champion of the people against Wall Street and big business’ would allay the fears that his election had aroused in the business community. Around the time that NAM met, newsmen asked President Truman whether business has anything to fear from his “new New Deal” so-called. Truman replied with another question: Did business have anything to fear in the last three and a half years? This gives an idea of the kind of deal Truman has in mind.
Still, Commerce Secretary Sawyer, speaking at the convention with Truman’s blessing and okay on his speech, was not as reassuring as the captains of industry would prefer. He said, for instance, that government controls might have to be imposed if the military budget for next fiscal year exceeds current expenditures. To sugar-coat this pill, he referred to the voluntary business-government program in effect the past year regarding allocation of certain materials in short supply, and said that “This program has given us valuable experience which will make easier the setting up of an expanded program of material controls if this should be necessary.”
Reflects Dilemma
Mr. Sawyer didn’t bring cheers either when he asked the body of businessmen to consider “the inflationary effect of large profits and high prices.” Calling for cooperative efforts to end inflation on this note and on this note saying that “business has nothing to fear from such a program,” were not too pleasing to the assembled delegates. Nor did Mr. Sawyer give business too much encouragement on the tax question, admonishing that “in an inflationary period we must build up a surplus in the federal budget, to be used to help retire our high national debt.” And again, “The result of recent tax reductions, made at a time when the federal government was assuming new and extensive responsibilities for foreign aid and national defense, has been a drastic decrease in the federal cash surplus.”
Undoubtedly, Mr. Sawyer would have liked to be more reassuring and undoubtedly his frankness was not based on any bias against private enterprise and private profit. Mr. Sawyer reflected the dilemma of the American government today, pressed on the one side by the self-interest of traditional private enterprise and on the other by the staggering demands of America as a world power preparing for atomic warfare. At the same time the government has to remember that labor has a loud voice and a big vote.
So, while Mr. Truman’s answer to business fears shows the basic trend, still business had to be shown in Mr. Sawyer’s speech that it can’t have it ALL its own way – for its own good.
Controls and Regulations
Business itself also reflects the dilemma of American capitalism, torn between rugged individualism and the steady intrusion of government controls. This was illustrated in the speech of Ira Mosher, former president of NAM and now chairman of its finance committee. The problem of government controls cannot be solved, he said, by “a recitation of the old platitudes about it’s being business’s business to produce and the government’s business to keep the hell out of it.” The government, he said, has been in business a long time and is going to be in business for a long time; and “what’s more, the public wants the government in business – if you can believe the election, returns (and some folks still do).” And how would Mr. Mosher solve the problem unplatitudinously?
One must make the distinction between government regulation and government control. Control is the forerunner of the socialist state, warned Mr. Mosher, but regulations could be approved. What regulations? Anti-trust laws, fair trade practices, conservation of natural resources, safe working conditions, pure food and drug laws, minimum banking requirements. Price control? No, absolutely, no; in that direction lies the socialist state. But even as to the regulations business has become enlightened enough to approve in theory, it is irked by the measures taken to carry them out. For Mr. Mosher wanted it understood that the Interstate Commerce Commission, the Federal Trade Commission, Security and Exchange Commission “have transgressed more and more the boundaries in which they were intended to operate.”
The outcome of the discussion on government controls was a resolution opposing all peacetime controls – as distinguished from regulations, but if the new Congress adopts any compulsory economic controls to strengthen “national security against possible aggression,” NAM wants the law to contain these restrictions: limiting controls to those absolutely necessary for national defense; administration in close cooperation with industry; provision for review by Congress from time to time to determine whether their continuation is warranted; their removal as soon as possible to meet civilian needs. Thus private enterprise tries to erase the handwriting on the wall.
Differ on Inflation
On the important subject of inflation, which all speakers agreed, is bad and is something about which something should be done, considerable difference of opinion developed. B.E. Hutchinson, chairman of Chrysler and an irreconcilable foe of the Wagner Act, was one of the main speakers on the subject. His remedies for inflation are: “hard money,” which means tightening up the issuance of paper; new methods of government financing; tax reductions – for workers too? – to encourage saving and capital formation; reduction of government spending. Not a word about the $33,000,000,000 of 1948 profits-before-taxes having to do with high prices – not a word!
But the payoff was that while Mr. Hutchinson and others wanted a resolution on inflation brought to the floor and passed upon, other NAM leaders felt that a definite stand should not be taken at this time. What should they wait for? The disclosures of the position taken by the Truman administration, by labor unions and by farmer organizations. So the captains of industry had nothing to offer on the question of inflation. Where, captains, is your “captaincy”?
No NAM convention would be complete without the normal amount of hokum about “capital and labor being lost without each other.” AFL Vice-President Matthew Woll was on hand to ladle out the syrup of class collaboration too. He assured business that now that the Taft-Hartley law is up for revision – though he didn’t mention the law by name – labor “will want to enlarge upon the freedom of both management and labor to the end that a cooperative relationship may be fostered and encouraged.” So now the lions and the lambs can lie down together.
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