Henry A. Wallace, America Can Get It

Selected Works of Henry A. Wallace

Introduction | Essay | Documents | Resources

America Can Get It

Henry A. Wallace

Delivered at Los Angeles Seattle on Wednesday, February 9, 1944
From Henry A. Wallace, Democracy Reborn (New York, 1944), edited by Russell Lord, p. 30.

There once was a man by the name of Job. Job had a lot of hard luck, and worst of all had to listen to the false consolations of three so-called friends. After it was all over, the Lord was pleased with Job and gave him twice what he had had before.
The United States in some ways is like Job. We are now going through great adversity, but after it is all over we can have nearly twice what we had before. The problem with us, as with Job, will be largely a spiritual one. Once we get our minds clear and our hearts pure with regard to certain fundamentals, we shall make extraordinary progress. I am not talking about human perfection; I am talking about a little more vision in our own long-range self-interest. Heretofore we have never been permitted to use to the limit our reserve of natural resources, manpower and technological skill. Now we have no choice. There is no halfway point. It is "Pike's Peak or bust." Curiously enough, the full utilization of our resources, manpower and skill is the formula both for our necessity and our blessing. Its application will require a great spiritual strength, and in the process of developing that strength in a practical way we shall bless ourselves and the world. The problem of full utilization of all resources is first economic and second political.
The economic explanation of how civilized nations drifted into practices of scarcity goes back to the rise of factory mass production, the great corporation, vast investment and banker control in behalf of investment security. Modern factory civilization has become highly geared and there is always danger of tremendous over-production unless mass purchasing power is geared to match it. This fear can vanish only if as much imagination is put into the art of distribution as into the science of production. Many who have tried to finance a business in Wall Street have found that scarcity economics is the very heart of the system. The Wall Street financing house will demand control of the most important type of stock issue, and then will want to make sure that a loan to the new concern will not imperil, because of competition and new methods, the loans to older concerns. Wall Street calls this system "businesslike." I deny that it is businesslike, and say that it is the dead hand of the past trying to make a profit by blocking the progress of business. The day has now come when we must release the business system to act through increased production for the benefit of all the people. Many businessmen now understand this as they couldn't have understood it in 1929.
I have asked several friends who have visited Russia during the past eighteen months what we could learn from Russia to make our system work better. Invariably the answer has come back, "Give our workers more incentive, more free enterprise, more initiative. Hold the profit motive out to them in the same way as the Russians." Donald Nelson tells me that he visited a number of towns in eastern Russia and western Siberia which three years ago contained less than 200 thousand people but which today number from 600 thousand to a million. There he saw steel furnaces as large and well-equipped as any we have in the United States. There he saw production goals scientifically set for different groups of workers. There he saw large cash prizes given to the men who went furthest beyond their quotas. The Russians can't understand how we can get along in the United States without giving our workers incentives of this kind. Nearly everyone in Russia feels he is directly working for the welfare of the whole nation. He has no fear whatever that he is being exploited for the sole profit of the management or stockholders.
Another friend, a Latin American who is living in Russia at the present time, wrote me under the date of last November, "What you in the United States preach on Sunday the Russians do here every day."
That the Russians could go so far in the past twenty years and evoke such an extraordinary response from the people in time of stress is the greatest indictment I know of the scarcity economics as practiced by those who believe that profit and free enterprise are only for the few.
We are not going to use the Russian political and economic system here in the United States. It was made for Russia and not for us. But the system of rewarding men for inventing improvements in their own jobs is already well established in some progressive American industries. Once the management and the workers learn to trust each other and to work together, it is proved that they can get a spectacular increase of output. Both Russia and America are showing the advantages of good engineering. Under free competition we may hope that the less progressive companies in America will be obliged to catch up to the best practice. The problem is whether we can modernize the backward areas in our present system so as to make it stand from top to bottom for full use of resources, full use of skills, full use of inventions, without the bottlenecks created by cartels, unfair banking control, unwise labor restrictions, or unenlightened farm leadership. As we face the future, the leaders of the great pressure groups must ask themselves continually, "Is my pressure group in its demands helping the general good? Is my corporation in its program doing what it can to bring about full employment? Or are we just trying to get a rake-off by obstructing full activity? Are we fighting for the biggest piece of the pie as it is, or are we also trying to increase the present size of the whole pie?"
One aspect of modern scarcity economics is the belief that men will work only when they are hungry and that they will stop work when they have enough money to keep their bellies full for three or four days. This cynical attitude of exploitation of the many for the benefit of the few has no place in modern civilization. The moment the many are taught to read and write, to build better homes, to eat better food, to see an occasional movie, to listen to the radio, desire is created and markets are enlarged. People want more and are willing to work to get what they want. This increased longing of the people for light and abundance is going an at an increased tempo all over the world.
The modern Russians, as well as enlightened employers everywhere, have never believed in the "Keep them hungry—keep them in darkness" system of economics. When they evacuated workers by the hundreds of thousands from Leningrad, Kiev, Kharkov and Stalingrad, to escape the advance of Hitler's armies, they evacuated the artists along with the workers. As a result you find today the finest Russian drama and concerts in towns with names which not one of us in a hundred in the United States can pronounce or locate on the map. The Russian art is for the people, not merely for those who can afford to pay five dollars. The Russians know, and we know, that man cannot live by bread alone. We have been accustomed to think that it was the United States that was prepared to give all men food, education and an opportunity to work and live in freedom. Let us live up to our own national ideal. Once all of us whole heartedly adopt the doctrine of economic abundance instead of economic scarcity, we can have nearly twice as many of the good things of life as we had before. Incidentally, it's the only way in which those who have can hang on to what they've got. We must pull together for a glorious future. We must not pull at cross purposes until a time of dark despair is upon us and archangels rather than ordinary men will be needed to get us out of our mess.
One serious danger of unemployment, for example, is in those industries producing machine tools and machinery for big construction jobs. These industries did a marvelous job preparing us for a magnificent war effort. Their services will be needed all over the world—in China, Russia, India, all Latin America and Africa, and in the United States, building flood control, irrigation and power projects, building roads and equipping factories. At the end of the war we shall have a tremendous surplus of these goods and services. The whole world has a great hunger for them. The question is to discover some sound method by which the world can pay for them. Our young men shall open undreamed-of frontiers which will unleash tremendous purchasing power to keep the world economy revolving for a half century. But these dreams will not come true unless the world can discover some practical method of paying the United States. The basic method of payment is of course through goods. If we keep our people fully employed, we shall require fully twice as much in the way of imports in 1949 as in 1929 in order to keep our factories running. Furthermore, from the standpoint of national security we must purchase certain strategic materials. The United States must build up large permanent stockpiles of those materials of which this country has been proved to be short in time of war and which can be preserved without loss.
Russia wants machine tools. All right, let Russia pay in terms of manganese and platinum, of which she has a surplus. China wants an irrigation system. She has more tungsten than she needs for her own use. Let her pay in terms of tungsten. Persia wants a power project. She can of pay in terms of oil, which we can store in underground reservoirs. Chile wants to build some airports. Let her send us copper and nitrates. There are at least twenty strategic materials of which we are seriously short in the United States as a result of our tremendous war effort. One of the best ways to make sure that there will not be another war is to build up in all the peaceful countries of the world such large supplies of the materials of which each is short that no friendly nation anywhere in the world will ever be caught helpless by sudden attack. The manganese, the copper, tungsten, platinum, oil, etc., will be of great value to us in terms of security and real wealth. The export of these machine tools, equipment and construction services will greatly increase the wealth and production power of friendly nations all over the world. If this is properly done the result in fifteen years will be to draw the world together by highway and airway so that every man in truth will be the brother of every other man. We shall appreciate economic interdependence as we never have before. We shall know that a prosperous Asia helps to make America prosperous. We shall know that the prosperity of the poorest is of great significance to the most well-to-do. It has to be that way in an economy of abundance. It is only in an economy of scarcity that the few can sit on top and scorn the misery of those below.
After the last war several groups of hardheaded businessmen decided that they would make profits for themselves without regard to harmonizing, their individual activities with the needs of our foreign economic policy. One group did its best to expand its sales of goods and services to the world. It made money. Another group loaned money to foreigners and sold bonds to the Americans. It made money. The bonds sold by the second group furnished the money which paid for the goods sold by the first group. Europe got the goods and the services without paying us what she should have paid, for the simple reason that we made it impossible for Europe to pay in the only way she could pay. Because Europe couldn't pay, the unsuspecting investor in the United States got bonds that often turned out to be worthless. The hardheaded businessmen made their profit but they helped destroy the general welfare not only of the United States but of the entire world.
The same type of so-called hardheaded businessmen will exist after this world war as after the First World War. Some of them will have the same kind of unsound finance to sell. We must not let them lead the world astray again. We must not let such men lead us headlong toward another worldwide depression and World War III. The best brake on such men will come from other businessmen who see the world picture more clearly. Such men will help this country to rise to abundant prosperity and in that way will give other countries a greater chance to sell their goods to us. The trading of the United States' goods and services for huge stockpiles which can be unlocked in. times of national emergency is one way of making sure that we get paid for our exports. Another way is to encourage tourist travel.
The furnishing of our goods, services and engineers for the building of great construction jobs all over the world is only a small part of our task of making full employment here in the United States. The big job is to supply to the 135 million people in the United States a standard of living which is at least forty percent higher than it ever was prior to the war. That's the greatest single contribution we can make to greater foreign trade. We must have no business booms, no business busts.
We want efficient planning but without regimentation. Our chief need is the green and red light kind of regulation. We want carefully designed rules of the road which will not block traffic but release it.
In order to get full employment, together with the maximum of free enterprise and profits for the many instead of the few, it will be necessary after the war to use our taxation system for economic objectives much more skillfully than we have in the past. There is just one basis for judgment of our taxation in the postwar period and that is, "Will this system of taxation over a period of years give us the full employment of people producing the kinds of things which the people of the United States most need and want?"
Undoubtedly we shall have to continue with heavy, steeply graduated taxes on personal incomes after the war. But in the case of corporations it would seem to be wise policy to tax in such a way as to force corporate reserves either into the building of plant and equipment or into distribution as dividends. Huge corporate reserves, beyond legitimate business needs, which are held out of use are subtracted from the purchasing power of the nation. In a time of unemployment each billion dollars stored up as savings means at least half a million men unemployed for a year. Unemployed men mean less goods produced and a smaller market. By our taxation system we must encourage the small and rapidly growing enterprise because such enterprises are the seedbed of the employment of the future. But corporations which have lived far beyond the life of the founding father, and which have huge corporate reserves and which no longer expand, represent the dead hand of the past. They should be prodded awake by the right kind of taxation system so that they will find incentive for putting their money to work instead of letting it lie idle.
To get full utilization of all resources for the benefit of all the people, the most important single economic readjustment is to do away with internal trade barriers. I am referring to those monopolistic practices on the part of some manufacturers, bankers, labor unions, doctors and farm organizations which serve their own welfare without regard to the welfare of the unorganized. I don't say that each member of each of these groups deliberately practices scarcity economics. But enough of them do it so that there is continually sand in the bearings of the economic machine. There is enough sand so that ten million families are continually living in poor houses with inadequate clothing, without enough to eat. Except in time of war, ten million families, whether living on the land or in the city, are given an opportunity to produce only about one-tenth as much as their more fortunate fellows. The war has demonstrated what these families can do for themselves, and for the entire nation, provided they are given an opportunity to work without the continuous imposition of bottlenecking controls.
It is not necessary to break up the big organizations which have deliberately produced bottlenecks. But it is necessary that in time of peace there be created a moral climate, backed up by a big stick in the Department of Justice, to convince every monopoly group that in the future its welfare can be served only by that all-out production which serves the welfare of all.
Everyone must recognize that it is sound government policy, even in terms of the large monopolistic groups themselves, for government to stimulate the economic activity of the weak on behalf of abundance economics while restraining the economic freedom of the strong to practice scarcity for temporary self-profit. There is a growing and vigorous support of this position within industry itself.
The experience of Russia during the past ten years and in the United States during the past two years has demonstrated what a tremendous job of production can be done once the monopolistic bottlenecks are effectively broken. In the investment of money, in determining volume of output, in setting prices, in bargaining for wages and hours of labor, the decision made must be the one which best promotes full employment, full production and full consumption.
The leaders of the respective groups must become experts in determining how the activities of any particular group are affected by the public good and how they affect the public good. When the respective pressure groups are led by men who know that the size of the whale pie is more important than the size of the slice they want for themselves, our fear of bread lines and soup kitchens will be over. Then every worker in the United States will have the creative satisfaction of doing his part in helping the common cause.
In many parts of the world there is a small land-owning military clique, composing one percent of the population, sitting on top of the pile exploiting the rest of the population, part of whom are workers and part farmers. The task of the century of the common man is to bring these oppressed people into the market. As their productivity and consumptive power are gradually increased, they will within a few years create for the postwar world new frontiers of unimagined richness—new frontiers of peaceful abundance. It is up to us in the United States to demonstrate by our own example the tremendous productivity and happiness of a general-welfare economy. Latin America will follow our example faster than we think, and as she follows it her economy will benefit ours and our economy will benefit hers. Speaking here in Seattle, I may say the same applies to our relations with China and Siberia. Here at the port which is the closest of all American ports to the Far East, it is important to mention that general-welfare economics and modern technology will make the Far East a market of such vast proportions that eventually there will be as much trade across the Pacific Ocean as there is now across the Atlantic. Private enterprise is dependent upon these broadening markets for its very survival.
The political aspect of getting full utilization of all our powers is more important in some ways even than the economic. By politics I mean the mechanism whereby the people, themselves, thinking in terms of the needs and the welfare of all of the people, make clear their will to the state legislatures and to Congress so that the lawmakers will serve the people more than they do the high-pressure groups which are continually selling the people down the river. The people, standing for just one thing, namely "the maximum use of all our resources in the service of the general welfare," must guide Congress to stand for that objective at all times and to resist all pressure groups except the one big pressure group—the general-welfare pressure group. In action this means that constituents will have the good sense to re-elect Congressmen more for their national statesmanship than for their service to their local groups which are a minority even in the particular Congressional district.
The general-welfare pressure group must believe in democratic planning and must engage in it at the precinct level, the county level, the state level, the regional level. Wall Street and the Wall Street stooges say that such planning is un-American. I say that it is only by such planning that we can preserve and further develop the American way of life. It is only by such planning that we can prevent American fascists from taking us over. When I refer to American fascists I mean those who believe that Wall Street comes first and the country second and who are willing to go to any length through press, radio and demagogue to keep Wall Street safely sitting on top of the country. American fascists at this very moment are desperately striving to control the delegates to the county conventions so that they may in turn control the delegates to the state and national conventions of both parties.
Operating on the precinct level, the people, thoroughly aroused, can at any time they wish throw the American fascists out of control. They can put the man above the dollar and march straight up from the precinct to the county, to the state and to the national convention. They can see that the right men are nominated for Congress and the Senate. They can see that the Congressmen and Senators after they reach Washington are kept informed and eager to respond to Main Street instead of to Wall Street. Dollar principles are all right insofar as they serve human principles, but when they fail in such service they have no meaning except to American fascists.
The issue is very simple. The question is whether the people, keeping themselves fully informed, can operate through democratic government to keep the national interest above the interest of Wall Street. Or will the old-line politicians, financed from Wall Street, again succeed in making Washington the servant of Wall Street. What we need in this country is a new partnership in which Main Street and Wall Street, as well as Washington, will put nothing ahead of all-out production in our America of tomorrow.
The people can come out on top provided they remain continually awake and really believe they can have a higher standard of security and a higher standard of living, and if they will not let up in their fight until they get what they want and must have. They must hold their Congressman responsible for getting that higher standard of living. They must make him feel responsible at all times to the general welfare and above everything to the principle of complete utilization of all resources, all manpower, all skills, in the service of the common man in his search for jobs. In this fight of the people it is quite possible for those who control the big corporations to gum up our system so that it cannot work. It is possible for an incipient American fascism to precipitate a depression which will defeat all the desires of labor and government and most of business. Personally, I think the big corporations are too enlightened today to do a thing of that kind. Statements by the Presidents of the United States Chamber of Commerce and the National Association of Manufacturers indicate that they realize there has been a great change in the moral as well as the business climate. Thousands of businessmen subscribe wholeheartedly to the principle of full utilization. And so I am sure that the managers controlling our great corporations will not deliberately produce a situation where there are twenty million men unemployed. Nevertheless, the people will smash their system unless they are willing to furnish such active leadership in wholehearted co-operation with labor and government as will prevent serious unemployment.
We are in for a profound revolution, partly as a result of the aftermath of two great wars and partly as a result of 150 years of modern technology and democratic thinking about the rights and duties of man. Those of us who realize the inevitability of revolution are anxious that it be gradual and bloodless instead of sudden and bloody. We believe it can be gradual and bloodless if the makers of public opinion, if the politicians, if the pressure-group leaders will only influence their millions of followers on behalf of the public good instead of regional and class prejudices. It would be simple if light could come down from heaven, but we all know that. God helps those who help themselves. The people themselves will have to educate their leaders on behalf of the general welfare, measuring every article in the press, every statement over the radio, every act of Congress by the one yardstick: "Does this help use all our resources, employ all our men, develop all our skills?" If the people everywhere hold these judgments up as a measure, we shall gradually find this principle of "goodness" permeating our national life like a leaven. In no other climate can there be profits for our private-enterprise economy. We must fight with all our might to do this thing. Otherwise we shall have a bloody revolution and slavery. Time is pressing. Victory will bring problems on us so thick and fast that we must be prepared to make instant and correct decisions.
Today we can take the necessary steps. Tomorrow will be too late. We have the resources, both material and human. We have the machines, the tools, and the skills. We have a hundred billion dollars of savings. All we need to do is press forward in confidence, believing in the complete use of all our resources. That confidence must come first; once we have it, the many specific actions on many specific fronts will all add up to a total picture that makes sense.
But if we do not press forward toward total peace in the same complete spirit as we have pressed toward total war, the 100 billion dollars will melt like snow in April and the machines and skills will become a mockery. I can't over-emphasize the time factor. We must have the full-employment, total-use peacetime system ready to begin its march the moment the wartime system slackens. Halfway measures will produce chaos, and a democracy which is afflicted with pressure-group sickness does not have the vitality to stand that chaos. There is one yardstick by which we can judge those who would lead us in the future. Are they or are they not in favor of using our resources to the utmost? When they oppose this or that specific program, are they ready with a concrete alternative to achieve the same end? It is the job of the common man to ask these questions again and again in the years ahead.
Job, before he could enter into his period of abundance when he was to be twice as rich, had to go through his time of misery and then have a change of heart toward God. We are not yet through our misery, but I have faith that we will have sufficient change of heart in all sections of the country and among all groups of our people to correct our pressure-group sickness. We are eager to save ourselves. It was never easier, and it was never more urgent. If all groups know how vitally important is a complete, full-use peace system, if we put the same energy into the peace effort as the war effort, all the rest will be easy. We are the hope of the world. We must set our own house in order so that our light may shine as a comfort and a beacon to the whole world.

Introduction | Essay | Documents | Resources

Selected Works of Henry A. Wallace

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