Group of Harvard Economists Enters Lists of New Deal Debate---Reviewer Shows Contrasts to Administration

The following review of "The Economics of the Recovery Program", a book by seven Harvard economists expressing their opinions on the President's Recovery program, which was released early this week, was written for the Crimson by Alan R. Sweezy '29, former President of the Crimson, and at present Instructor and Tutor in Economics.

THE ECONOMICS OF THE RECOVERY PROGRAM. Whittlesey House, McGraw-Hill Book Co., New York and London. 1934. $1.50. Depressions by Joseph A. Schumpeter, Purchasing Power by Edward Chamberlin, Controlling Industry by Edward S. Mason, Helping the Worker by Douglas V. Brown, Higher Prices by Seymour E. Harris, Helping the Farmer by Wassily W. Leontief, Economics versus Politics by Overton H. Taylor.

IT will be no surprise to any one already acquainted with the writers that the contributions to this collection of short essays on national economic policy are of a high order of professional competence. More than that, the writers have succeeded in expressing their views in remarkably short compass and without resort to that private terminology of the economist which is inevitably bewildering to the layman. Rather a novel appearance--at least in this particular part of the world--this joint sally into the melee of popular economic discussion merits applause, and will, it may be hoped, serve as a precedent for similar ventures in the future.

The authors are perhaps at their best in discussing popular fallacies; though there is also much straight exposition--for instance, Professor Mason's summary account of the main features of the National Industrial Recovery Act or Professor Harris' relation of banking and monetary events of the last year, or again Professor Leentief's admirably lucid grouping of the agricultural relief provisions which will be useful to the reader who is still trying to form some comprehensive picture of what has already been done. The papers do not pretend, of course, to break new ground, or even to give what from the economist's point of view would be regarded as an exhaustive exposition of the matters in hand.

Any contribution to the clarification of current thinking on economic questions is most heartily to be welcomed. It is, for instance, refreshing to hear some one deal with the subject of purchasing power without falling into the loose talk so characteristic of newspaper and magazine articles and political speeches. Professor Chamberlin yet the government itself is anxious that business shall be reassured, that capital shall have a chance to earn a fair return and that the volume of transactions may increase and more people shall be employed.

The answer to the dilemma is that everybody is anxious to get his own house in order, every industry and business is eager to get itself on an earning basis, but there are few who see the whole picture from the broad perspective of the National Government itself. If it were possible to do national planning in which every business would fit nicely into the groove set for it, there would be no problem. But economic adjustments are bewildering and baffling. Conditions change every day and government regulations and laws play a vital part nowadays in bringing about those very changes in circumstances that sometimes make all the difference in the world between profit and loss.

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Just now the most vital question ahead of us is whether the government of the United States is going to keep on borrowing indefinitely or is to place a limit on its own borrowings. If there is no limit, then faith in paper money will break down and regardless of what anybody in the government here says he wants to do, the printing presses will have to be turned on as the only way out.

Too many folks think of currency inflation as a matter of volition. When it comes, there is usually no way of stopping it. What is more important is how to prevent the series of circumstances that compel the printing press to turn out paper money in unlimited quantities.

Germany's experience with currency inflation did not begin when the paper mark started to decline rapidly. It began when her government borrowed excessively for public works and the investors saw clearly that not enough taxes could ever be collected to pay back the debts incurred. The only answer then was repudiation--which is only another word for printing press inflation.

The President in the next few days will reveal to the country his financial plan for the American Government. Too much emphasis in recent weeks has been put on monetary reform--not enough on fiscal policy.

The budget message to Congress will tell the story. It will be a turning point in Roosevelt policies. If it shows there is to be a limit to spending--even if it is two years or three years off--and a plan for raising revenue is included, the investing public will accept the program as feasible, for they know Uncle Sam has unexampled resources. If there is no such sign of a let-up in spending and the country is to drift on, the reaction will be unfavorable. Washington is guessing that the President will be found on the side of restricted expenditure and a limitation on the present era of dangerous borrowing