Maintaining Productive Output: A Problem in Reconstruction
The problem of industrial reconstruction is primarily the problem of turning our resources from the channels of war-time production into those of peace-time production. Secondarily it is the problem of utilizing this period of change to bring industrial process into closer conformity with our ideal industrial program by conserving what we have learned through our war experience. The most important and difficult task of reconstruction is to make this readjustment and still maintain the productive level of which we have found ourselves capable during the war. There is evidence that we have increased our output of products from 25 to 30 per cent over the pre-war period through the complete utilization of our natural resources, our plant and machinery, and our labor. If production is allowed to return to the pre-war level output will slump off by 20 per cent. This would mean a corresponding waste of productive resources and a decrease of $I4,000,000,000 per annum in our national income as measured by the present price level; even if prices should fall 30 per cent the decrease would still be approximately $I0,000,000,ooo. In view of the magnitude of this waste the government can well afford to spend several billion dollars per annum if necessary to maintain the level of productive output. The essence of the process would be that we would waste two billion dollars of our productive capacity in order to keep ten to fourteen billion dollars' worth of resources from running to waste because of unemployment. The result is a net addition of twelve billion dollars to our national income. The alternatives presented by this situation are not government expenditure of this amount as against private expenditure; they are government expenditure of several billions as against a waste of productive resources many times as large. A decline of the high level that we have reached during the last two years will bring about a lowering of the standard of living which
- DOI
- 10.1086/253156
- Volume
- 27 (2)
- Pages
- 117-126
- Language
- en
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