(4 of 5)
The U.S. is no more prepared to build 2.9 million houses a year than it was prepared in 1940 to build 50,000 planes a year. A national effort was required to accomplish the plane program, and the same will obviously be required for housing. As yet, the effort has not got under way. The required size of the effort has not even been recognized.
But if the work on housing is not pressed, the people who might live in them will be without homes, and the people who might build them will be without jobs—and so will many others. For there are factories today which cannot operate because there are no homes for workers, there are other factories which cannot be built if construction is too difficult or costly.
If the U.S. is not able to organize the job of building homes, the primrose path will be only a bath of briars.
Mantrap No. 2. But the biggest job of organization is not the bringing together of brick and mortar. It is the far more complicated matter of bringing together management and labor. A growing series of strikes, particularly a steel strike, would hamstring production.
The argument that industry should pay higher wages because it had made a net profit of $37 billion during the war made no more sense than an argument that labor should take less because it had been paid $405 billion in wages & salaries. Both had profited from the war.
More pertinent was the argument that labor should be paid more in accordance with its increased productivity. If labor would guarantee more productiveness, particularly by offering guarantees against wildcat strikes, featherbedding, etc., then higher wages would be well justified.
But if the U.S. did not find means of bringing management and labor to agreement, the unfilled demand for goods would become a liability. The present threat of more inflation would become a reality.
Over the Horizon....When the U.S. begins to fill its needs by production, its conversion problems will still be far from over. The materials and the manpower of the nation will have to be drastically reallocated. There will not be enough steel to go around, nor enough lead, nor lumber, pipe, tiles, brick.
A New Day? Compared to the distribution of 1939, the reallocation required in 1946 may be almost as far-reaching as it was in converting to a war economy. The reallocation in 1942 was accomplished by Government fiat—by issuing priorities, by rationing, etc. The U.S. would not stand for such re-allocations in peacetime. The postwar reallocation of the nation's resources must mostly take place through adjustments in prices.
To meet a new schedule of national demands, new relationships of prices, costs and profits will have to be worked out. What price 1,600,000 new houses? What price 1,000,000 bunches of red carnations?
Production alone could furnish the answers. If industry did the job in peace which it had done in war, then the answers would sound pleasant to businessmen. They would have their profits. And labor might well have a larger slice of the national pie. There was no reason why industry could not do the job as long as it realized the size of the job to be done.