As inflation mounts and tempers shorten, as world economic and political crises inexorably reduce our already limited avenues of action. The American public nears a state of vengeful pointing and shouts of "J'accuse." Opinion has not yet singled out the scapegoat from the rogues' gallery of Business or Labor, Wheat Speculator or Foreign Sinkhole. But when blame settles on any one group, Americans will be guilty of self-delusion. For just as "get all I can" is an inalienable right of free enterprise, so is our inflation a result of many factors, some avoidable, others not, but all incontestably interrelated.
The War gave us an enlarged industrial machine, great pent-up demand in the form of cold cash, but no new goods in the store. Living tastes and standards rose as many came to appreciate steak and an extra suit. With peace and reconversion, farmer, worker, and entrepreneur cemented their war-won gains of higher wages and profits, but the war-forged incentive to work hard and long naturally but unhappily vanished. The pot of gold seemed within easy reach.
With the economy still unrighted, controls were removed and taxes cased in the fond belief that "the law of supply and demand" would provide incentive and disperse inflation. But platitudes bowed before the perverseness of the economy. Removal of controls, in some cases, failed to increase production, for management or labor sometimes find it profitable not to produce more. Thus shortages have continued in certain lines. For the nation as a whole, however, productive capacity increased, but indefatigably like a shadow, larger incomes and greater demand followed, continuing the overall shortage of goods and the inflationary trend. Finally, a delayed but inevitable cost of the War-European chaos and need-hit our partially reached recovery.
With European industry and agriculture laid waste, not only is self-sufficiency in food impossible, but the industrial goods needed to pay for food imports cannot be forthcoming for several years. Political considerations spurred by rampant socialism, and complimented by humanitarian qualms, have goaded America into sending aid without repayment in goods. As food and goods are siphoned out of our economy, incomes and savings continue to mount, further fortifying the already healthy inflationary infant.
Summing up, the underlying causes of our inflation can be attributed to: swollen purchasing power flowing from full employment and higher incomes; the continual lag of purchasable goods and food behind demand; the aggravating intangible of national selfishness; the absence of anti-inflationary taxation or monetary policies; and finally, the sapping drain on the economy caused by export of goods without imports in exchange. The interplay of these factors causes the present state of prices.
What more, then, in the light of these facts, can we do to assay the relative blame of any one group or factor? And to what purpose? For of far more importance is the question whether there is any single corrective or punitive measure to be taken to halt inflation now. Unfortunately, there seems to be no simple answer, no resolvable black or white dilemma, no precedent in the past; only unpleasant alternatives for a general policy which pose troublesome questions. Would ending European aid to check internal inflation be worth the political, economic, and moral risks Could controls he restored without black markets, or taxes raised without lost elections; or are voluntary cuts the practical answer Because inflation is no longer a symptom of prosperity but a portent of danger, Americans, in forming their opinion, will have to forget the easy way, examine the alternatives and act.