Tomorrow’s Business. By Beardsley Ruml. Farrar and Rinchart. $2.50, The Public Debt. By William Withers. The John Day Company. $1.75.
It is a little hard to catalog Beardsley Ruml. He is or has been a psychologist, executive officer of two philanthropic foundations, university dean, department store treasurer, bank director, and advisor-at-large to Congress on tax matters. There has been considerable uncertainty as to what his real location is on the spectrum of political opinion. Some left wingers seem to feel that he is business’s secret weapon, citing his stand for virtual elimination of corporation taxes and the windfall effect of his tax forgiveness plan on large incomes. But he must be even more suspect by conservatives who have heard of his connections with the National Resources Planning Board and his support for the principle of the Murray full employment bill. “Tomorrow’s Business” will probably perform the unusual feat of winning friends and influencing the more reasonable people in both wings.
The book, as he says, is “about business as an instrument of authority and power, as a source of direction and decision. It looks at business as one rule-maker among many rule-makers, providing in part the pattern of organization and activity in which each human life takes form.” Probably it comes as a shock to some businessmen, who are accustomed to berate government and its rules, to be told that they too are in the business of governing and rule-making. Where they see the dualism of government versus business, Ruml sees the pluralism of a system of rule-making in which public government shares its authority with the private government of the family, the church, the corporation, the labor union. Ruml recognizes that all rule-makers, public and private, have a high responsibility for the maintenance of order and freedom, and his book is an attempt to spell out that obligation for business.
“We are interested in business as a rule-maker,” Ruml says, “not because we are interested in business, but because we are interested in .freedom.” And so the book begins with Ruml the psychologist analyzing the feeling, the fact, and the attainment of freedom, to the end that private rule-makers may be able to test their rules against the standard of conditions required for individual growth and development.
There follow the two major sections of the work. In the first of these, on business as “private government,” the discussion deals, in a fashion so simple and lucid that one may easily underestimate its sophistication, with the nature of the social tasks which business performs, the way in which business “governs” its stockholders, vendors, customers, and employees, and the structure of business. In this latter connection he has some comments on the inadequacy of the board of directors as a corporate institution, and makes some interesting proposals for its strengthening.
But major interest in this section probably attaches to the chapter on labor. The position of private business government as rule-maker has recently been seriously challenged by private labor-union government. Public government has been used—and abused—by these two contestants for power over the conditions of work. The government has enforced its authority during the war, but afterwards Ruml frankly »
sees an extended period of conflict between the rival rule-makers. In the course of this struggle, and as a partial solution of it, will come public regulation of unions, aimed specifically at preventing discrimination in membership (the Supreme Court is already beginning to discover that the Constitution has something to say on this point), prohibiting union rules which cause excessive costs of production, and requiring the reporting and auditing of union funds. Eventually conflict will be superseded by order, as the role of unions becomes established and accepted. They will have a place in the management of business, Ruml forecasts, not unlike that of its auditors, and the problems they raise “will be neither more frequent nor more troublesome than those raised by the auditors today.”
Because sick business serves the cause of freedom badly, and because a high level of business activity is conditioned on a sound governmental fiscal policy, Ruml proceeds to that subject in his second section. lie is quite clear that the national budget must be used to influence the level of purchasing demand. The tendency of purchasing power “to cool off, to come to rest,” must be counteracted. The “blind forces of atomistic private economic activity” must be “interrupted” by national fiscal policy. Tax policy must be revised to this end, and in this connection he outlines his case against the corporation tax. He approves spending for public works, but contends that public works are inadequate to stabilize the whole economy.
Ruml’s lack of attention to the public debt makes it clear that he is not particularly worried about it. He simply notes that interest payments and amortization of the debt must be so managed as not to have a depressing influence on the level of business activity. But many good people are scared to death about the debt, so it is well that William Withers has prepared his primer on the subject, “The Public Debt.” Withers, like Ruml, is a “planner.” He believes that democracy cannot be preserved in an economy which does not provide full production and employment. There is little room to hope that this goal can be achieved without government assistance, in other words, economic planning. But is economic planning itself a threat to democracy? Withers believes that if the public debt can be made a productive rather than a destructive element in our economic life, political democracy and planning can be combined.
His book outlines the historical development of the public debt in this country, examines the economic theories that have been formulated concerning public debt, and sketches in the position taken by three important schools of thought on the present debt problem—the liberal Hansen view, the conservative Moulton position, and the extreme debt phobia of Flynn. Withers’ view is that the public debt is an essential instrument in balancing the economic system. It is an enormous mechanism for the redistribution of wealth, and requires exceedingly careful management. He lays down three principles for this task. First, the great expansion of bank credit which is behind the debt must not be allowed to cause an excessive rise in prices. (This means price control for some time after the war is over.) Second, postwar tax systems must encourage business activity. The tax load necessary to service the debt could, if unwisely planned, stifle business initiative. Third, if there is any retirement of the debt, it must avoid deflationary effects. It will be a neat trick if we can do it. Books like these will help.