(4 of 5)
Third, the Government will likely continue some form of surveillance over wages and prices. In his economic report to Congress two weeks ago, President Nixon implied that controls will remain at least until the end of this year and perhaps longer. Beyond that, the U.S. will probably have some looser form of Government wage-and-price supervision more or less indefinitely. At his farewell press conference in December, Paul McCracken, the President's outgoing Chief Economic Adviser, said that the Government may have to take steps to moderate prices "for a long time to come, even after Phase II has done its thing."
Many economists and businessmen favor a system of voluntary wage-price guidelines, such as existed with varying success during the Kennedy-Johnson years. Companies and unions would probably be reluctant to transgress these guidelines, if for no other reason than that the Government, having set a precedent for peacetime controls, could always go back to them. Says Walter Heller, a member of TIME'S Board of Economists: "Things will never be the same again. Even after controls are lifted, there will be the threat of their reimposition. As Al Capone put it: 'You can get so much farther with a kind word and a gun than with a kind word alone.' "
If the Government, whether under Republican or Democratic auspices, can curtail inflation and revive the economy by using such tools as controls and guidelines, free enterprise will be greatly strengthened. When the economy is growing, entrepreneurs have a much greater opportunity to start and enlarge businesses. When costs are stable, established businessmen find it much easier to lower the prices of their own products in pursuit of competitiveness.
Free enterprise should be valued, preserved and strengthened. It is not fundamentally endangered by Government attempts to set rules or goals for business to solve social problems or by efforts to straighten out the economy by setting wage-and-price controls. The real threat comes from quite another source: the steady increase of economic power concentrated in large corporations and large unions. Today the 100 biggest industrial corporations control about half the nation's corporate manufacturing assets, an even greater percentage than the 200 largest companies controlled 20 years ago. These corporations may be beneficent and efficient, though smaller firms are often better in both categories. The sheer size of the giants, however, hampers new entrepreneurs from entering some industries and expanding in others. A handful of companies dominate auto, aerospace, steel, aluminum and computer manufacturing so thoroughly that new companies find it nearly impossible to break in. If the U.S. wants to expand free enterprise in these and other basic areas, the Government will have to be come more vigorous in pursuing antitrust policies.