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But, as a businessman, he contends that the time is not ripe for the rapid extension of the union shop. His reason: labor leadership is "not competent to use this great power wisely." Moreover, because it is a monopoly power, Ruml argues that the union shop must inevitably lead to Government regulation of unions to bar racial discrimination, excessive production costs through "feather bedding," etc. Until "the majority of labor leaders . . . are willing to accept such regulations as the price of the union shop ... too much haste [in extending it] would cause bitter, wasteful and unnecessary strife."
Up Profits. Ruml bluntly reaffirms the principle that the great energizer of business is profits. But he candidly admits that "public opinion today is skeptical of accepting the highest obtainable profit as a desirable social standard." But he firmly believes that it is time the public learned that high profits are socially desirable.
How high should profits be? "If the goods are priced competitively, if costs are fair ... if there is no subsidy, then the higher the profits the better the interests of all are served." Without high profits—and he feels that they are now far too low—no one will risk his cash in the new enterprise which the U.S. must have.
Down Taxes. Another basic principle set forth by Ruml is that business can function consistently at a high level of productivity and jobs only if the U.S. adopts the proper fiscal policy. This means that the chief instruments of fiscal policy, the U.S. budget and taxes, should be planned primarily with an eye to maintaining purchasing power and employment. In effect, the raising of revenue through taxes should be a secondary object.
Ruml tends toward a "compensatory budget," i.e., heavy governmental spending in depression years to keep up purchasing power, diminished government spending and consumption taxes in boom years. More specifically, Ruml would levy taxes which would balance his estimated postwar budget of $18 billion only at a high level of employment (probably around a national income of $140 billion).
Below this level, the budget would show a deficit; above it, he hopes for a surplus to pay off the national debt. Taxes, once set, would be left alone. In addition he would reform the tax system along the lines of the now familiar Ruml-Sonne plan to abolish corporation taxes (TIME, Aug. 7), put the tax burden on income taxpayers. As a corollary, he would reform the policy on public works.
Ups & Downs. Ruml is sure that public works as a method of stabilizing the ups & downs of business might as well be abandoned. His reason: public works on the vast scale required would be impracticable. Instead, he would use public works as a means of stabilizing the construction industry. His hope: if this seasonal, up & down industry representing 8% of the national product could do a steady volume business, it would give stability to the whole economy.
But even there he is against Government spending as long as the industry holds to its present policy of high costs, restrictions on output, etc. Ruml would have Congress investigate the industry, reform it into a quasi-public utility.