Economic planning

“ I contend that any business or corporation, public or private, which operates and expects to get an income of several billions of dollars a year from its operations, deserves much attention, and requires thoughtful planning, in order to perfect the machinery of its organization. [Pg 19] The aim should be to make it function smoothly in order to satisfy the self-supporting multitudes, by providing them with regular employment at a living wage which will assure the American standard of living. ”

“ The major problem in planning has been posed by the need to balance supply and demand, not only with regard to the final consumers but also at all stages of the production process and for each individual enterprise. This task entails detailed decisions on the allocation of thousands of different materials, machinery and equipment items, specialized labor skills, energy, and investment funds. With the expansion and growing complexity of the economy and, more particularly, of industry, the balancing task has assumed dimensions that defy solution by traditional means. ”

“ But on the whole it may be said that where all the general conditions are favourable, and point conclusively to the possibility and probability of fairly rapid economic development, a bold financial policy may and should be adopted, even although it may not be easy to prove beforehand by very exact calculations that any special project under consideration will be directly remunerative. ”

“ The ultimate objective of our economic policy is a balanced agro-industrial economy. This is why we are shifting slowly to the 11 principal industries which are needed for the fulfillment of this objectives. ”

“ Large corporations, which can afford the best machinery; which control abundant capital, and which can plan with scrupulous economy all the details of producing and selling an important product or service, are actually able to reduce the cost of production to a minimum; and in the cases of certain American corporations such results have actually been achieved. The new organization of American industry has created an economic mechanism which is capable of being wonderfully and indefinitely serviceable to the American people. ”

“ It’s a plan that will save or create up to four million jobs over the next two years, ignite spending by business and consumers alike, and make the investments necessary for lasting economic growth and prosperity. ”

“ We will work to increase effective demand, shore up weak links, and give full play to the leading role of domestic demand, particularly consumer demand, in driving economic growth.
Second, we must adjust the structure of the economy to raise it to a higher level of development. In changing the pattern of development, we will continue to focus on economic restructuring and independent innovation. ”

“ Capital offered facilities for the planting of new industries, the development of trade, and the opening up of mines and other natural advantages; so that the means lay at hand for promoting material progress of every kind. Hence new questions of economic policy came to the front. The efforts of traders were no longer confined to retaining exclusive commercial rights; but they began to consider how the various resources within a given area might be developed, so that by the interaction of different interests the greatest material prosperity might be attained in the community as a whole. ”

“ The final stage in the planning process, as in the past, continues to be the assignment to each enterprise of specific tasks bearing on all aspects of its operations. These tasks, generally known as plan indicators, spell out in minute detail such items as the production and investment program, the size of the labor force and the wage bill, costs of production, and profits. They also specify norms for the use of all materials, equipment, and labor and set goals for raising productivity. In the case of large enterprises the number of indicators runs into the thousands. ”

“ We will continue to implement proactive fiscal policy and prudent monetary policy, develop new approaches to macro regulation, strengthen range-based, targeted, and well-timed regulation, use fiscal and monetary policies and industry, investment, and pricing policy tools in a coordinated way, and implement structural reform, particularly supply-side structural reform, so as to create an enabling environment for economic development. ”

“ In accordance with this general policy the control of industry is shifting from the hands of engineers into the hands of financial experts "who are unremittingly engaged in a routine of acquisition, in which they habitually reach their ends by a shrewd restriction of output ”

“ The efficiency of the new manufacturing processes has provided a large surplus of goods that must be taken somewhere, exchanged for food and raw materials, which must, in turn, be brought to the producers of manufactured goods. In the course of these transactions, a generous share of the values produced goes, in the form of profit, to the owners of the industry, another considerable portion goes into reinvestment, thus swelling the volume of productive capital.
The increased wealth, the larger capital and the greater amount of surplus all make possible the maintenance of a larger population. ”

“ The essential features in the adoption of any plan should be that the returns of the private owner should be in proportion to the skill and economy which he exercises in managing his business; that competition and its resulting waste be done away with; and that the industry be placed on such a safe and stable basis that the capital invested in it shall receive the lowest possible rate of interest, thus leaving the greatest possible amount for the payment of wages of labor and permitting sales of the product at a low price. ”

“ In so far as the present economic life was planned, it was planned locally, by the directors of one industry, by the chamber of commerce of some city, by a far-sighted banker or financier who insisted upon thinking in terms of the coming business generation. For the most part the system grew, however, like stalks of corn in a field, each stalk drawing its own nourishment from the soil and making what progress it could along its own path toward the zenith.
Another serious drawback in the growth of the present economic system is that much of it was developed as an underground organization. ”

“ To ensure success of the government's work this year, we must act on the following principles.
First, we must boost domestic demand to sustain economic growth. We need to steadfastly take reversing the downward trend in economic growth as the primary goal of macro control, and make boosting domestic demand a long-term strategic principle and a basic point of departure for stimulating economic growth. ”

“ These are some of the reasons why the economic life of the modern world has grown at haphazard. Each industrial director put his own ideas into his business, and as it grew in response to them, the various businesses differed as much in shape, size and character as did the early factory buildings.
The time seems to have arrived when a new working plan of economic life may be adopted. The faults and failures of the old are glaring and the clamor for the new is reasonable and insistent. ”

“ By preparing careful and detailed budgets for all necessities with generous allowances to cover all possible exigencies and by relying upon our knowledge of regulated scientific cultivation of industrial manufacturing concentration, of conservation and preservation, and of nearly perfect and unwasteful arteries of transportation and distribution, we have not only solved production and equalized distribution, but we have also succeeded in overcoming and proving your old law of supply and demand. ”

“ Economic conditions require readjustment, important matters of trade must be regulated, vital questions of finance and taxation must be handled, in fact, the whole country must settle down to production, manufacture, distribution of merchandise, and the transaction of the nation’s regular business. ”

“ The aim of the plan is to build up an economic structure that will be efficient and at the same time sufficiently elastic to meet the changing needs of the times. Production is always necessary, but the methods vary from one age to another. The changes which occur in the economic activities of a population must find their counterpart in the changing economic structure of that community, otherwise disorganization and chaos will inevitably result. ”

“ But it seems to me that our physical economic plant will not expand in the future at the same rate at which it has been expanded in the past. We may build more factories, but the fact remains that we have enough to supply all of our domestic needs, and more, if they are used. ”

“ They are pre-eminently qualified to stimulate a brisk traffic in goods under conditions hitherto determined by natural economy and both are significant in economic history as mile-stones along the route of rapid dissolution of old economic organisations, of social crises and of the development of modern conditions, that is to say of the development of commodity economy to begin with, and further of the production of capital. ”

“ Improving and strengthening macro control and maintaining steady and rapid economic development We need to adhere to a flexible and prudent control policy to make our macro control more responsive to changes and more results-oriented. ”

“ The question of the play of economic forces thus generally reduces itself to a problem which may be thus stated: What are the conditions of industrial equilibrium? How must prices, rates of wages, and profit be related in order that the various classes concerned may receive such proportions of produce as are compatible with the maintenance of the existing system of organisation? If any specified change occurs, if production becomes easier or more difficult, if a tax be imposed, or a regulation of any kind affects previous conditions, what changes will be necessary to restore the equilibrium? ”

“ List then goes on to explain his theory of the stages of economic development through which the nations of the temperate zone, which are furnished with all the necessary conditions, naturally pass, in advancing to their normal economic state. These are (1) pastoral life, (2) agriculture, (3) agriculture united with manufactures; whilst in the final stage agriculture, manufactures and commerce are combined. The economic task of the state is to bring into existence through legislative and administrative action the conditions required for the progress of the nation through these stages. ”

“ The characteristic feature which is currently held to differentiate the existing economic situation from that out of which the present has developed, or out of which it is emerging, is the prevalence of the machine industry with the consequent larger and more highly specialised organisation of the market and of the industrial force and plant. As has been pointed out above, and as is well enough known from the current discussions of the economists, industrial life is organised on a pecuniary basis and managed from the pecuniary side. ”

“ The economic life of the country—agriculture, industry, commerce and transport—must be subjected to one unified plan, constructed so as to satisfy the individual and social requirements of the wide masses of the people; it must be approved by their elected representatives, and carried out under the direction of these representatives by means of national and local organisations. ”

“ The degree of protection which will be required for domestic industry beyond 1842, depends upon the reduction of wages, the accumulation of capital, the improvement in skill, the protection of machinery, and the cheapening of the price, at home, of essential articles, such as fuel, iron, and so forth. ”

“ There is no purpose to which public money can be more beneficially applied than to the acquisition of a new and useful branch of industry, no consideration more valuable than a permanent addition to the general stock of productive labor. ”

“ But if, on the other hand, growth in the supply of money does not keep pace with the economy's current production, then prices will fall, the nations's labor force, factories, and other production facilities will not be fully employed, or both. ”

“ In our endeavors to sustain labor, and equalize its opportunities with capital, we have gone much further than this. We hold that all public necessities of general demand, in the supplying of which large expenditures are required in fixed capital, and which are not strictly in the line of production, should be provided for by the government. ”

“ In manufactures, accordingly, the causes tending to increase the productiveness of industry, preponderate greatly over the one cause which tends to diminish it: and the increase of production, called forth by the progress of society, takes place, not at an increasing, but at a continually diminishing proportional cost. ”

“ PRODUCTION.
§ 1.⁠But money, no more than commodities in general, has its value definitively determined by demand and supply. The ultimate regulator of its value is Cost of Production.
We are supposing, of course, that things are left to themselves. Governments have not always left things to themselves. They have undertaken to prevent the quantity of money from adjusting itself according to spontaneous laws, and have endeavoured to regulate it at their pleasure; generally with a view of keeping a greater quantity of money in the country, than would otherwise have remained there. ”

“ The possibility of substituting the large system of production for the small, depends, of course, in the first place, on the extent of the market. The large system can only be advantageous when a large amount of business is to be done: it implies, therefore, either a populous and flourishing community, or a great opening for exportation. ”

“ Production is not a fixed but an increasing thing. When not kept back by bad institutions, or a low state of the arts of life, the produce of industry has usually tended to increase; stimulated not only by the desire of the producers to augment their means of consumption, but by the increasing number of the consumers.
We have seen that the essential requisites of production are three—labor, capital, and natural agents; the term capital including all external and physical requisites which are products of labor, the term natural agents all those which are not. ”