Outline for a Managed Economy

From American Affairs Volume VII Number 1, 1945

Outline for a Managed Economy
by Garet Garrett

IN THIS issue will be found the speech delivered by Marriner S. Eccles at the 264th meeting of the National Industrial Conference Board on November 16th, last. Mr. Eccles is Chairman of the Board of Governors of the Federal Reserve System and the Federal Reserve System is the institution
that now controls American banking in the public interest. The speech bears evidence of having been prepared with unusual care. If it is not the blueprint it is at least an authentic outline of what you may expect, and its words for that reason deserve to be thoughtfully weighed, beginning with these:

"The government should underwrite and guarantee a national minimum of income, education, health and old age security for all citizens. By so doing, the government can place a floor of purchasing power under the economy. This in turn will place a floor under the market for the goods and services of business, industry and agriculture.

It would be difficult in fewer words to state the formula for a planned economy controlled by the state. The image they create is one of comfort and security, provided by the government. The floor image. A floor for income, a floor for business, a floor for industry and one for the farmer. A government plank under everything. But a government that undertakes to guarantee a minimum of income for all citizens must be prepared either to fail in a feeble manner or to go the whole way—when and if necessary. To go the whole way means to control wages, prices, profits, production, distribution, consumption, and at last what a citizen may do with his own money. The speech continues:

"Such a guarantee is not the impractical dream of the social reformer. Modern governments, including our own, have long since assumed a primary responsibility for the economic guidance and progress of their peoples"

Modern government and their peoples. In the modern case, who or which belongs to whom? Is it the American government and its people or the American people and their government? What a slight change of grammar it takes to invert the idea of government!

The full-text of the editorial, and the rest of the magazine, can be found at Mises.org: http://mises.org/resources/3365