A Look at 2049

The world is so full of a number of things,

I'm sure we should all be as happy as kings.

The professors of the "dismal science" have always scotched this sunny Stevenson couplet. To such economists as Thomas Robert Malthus and John Stuart Mill in the 19th Century and John Maynard Keynes in the 20th, the world did not seem so full. Any economic system, said the Mill school, would either become static or it would fail to provide for its own. Lesser Cassandras, including New Dealers, have foretold the depletion of the world's oil and coal reserves, the exhaustion of soils, have pronounced the U.S. economy to be "mature," i.e., incapable of further expansion. Most of these experts offered some laws whereby, they held, a limited number of things could be fairly shared and regularly produced. They denied the possibility of burgeoning plenty; instead, they promised "stability."

Economist Harold G. Moulton, president of the Brookings Institution, challenges this position in an important new book soberly titled Controlling Factors in Economic Development (397 pp.; the Brookings Institution, Washington, D.C.; $4). On the strength of 30 years of his own study and the institution's voluminous research, Moulton declares: 1) there is no known limit to the potential wealth of the world, and 2) there is no known method to assure economic stability.

Pleasure Boats & Violins. Potentially, says Moulton, the natural resources and the productive capacity of the U.S. could, in the year 2049, support a population of 300 million at a standard of living eight times as high as today's. In this bright future, each American would spend eight times as much as he does today for food, 16 times for housing, 20 times for clothing, and 33 times for recreation and travel.

To supply these things, America's factories and mines would have to produce between five and ten times as much as today, and its farms almost three times as much. Moulton points out that, even with present knowledge, vast new areas can be brought under cultivation, swamps and deserts reclaimed; he believes that certain crops could be raised in the fertile bed of the ocean. Fertilizers could increase farm output as much as the "discovery of a sixth continent."

Better built, more attractive homes, more stylish and durable clothes could also be readily available. With precise enthusiasm, Prophet Moulton gives such detailed examples of potential progress as non-warp, non-scratch, non-splinter pleasure boats, and plastic violins which might all but rival the Stradivarius in tone.

Potential Paradise. The basic materials for such expansion seem adequate in the U.S. for centuries to come. U.S. coal seams will last for "thousands of years." Known high-and medium-grade iron ore deposits in the U.S. will last 40 years, lower-grade ore some 600 years. Moulton also expects new deposits to be discovered. New techniques will further stretch existing supplies. Example: gas turbines are so cheap and efficient that one day a turbine the size of a dial telephone may power the American automobile.

About the world outside the U.S., Moulton is less sanguine. The classic economic equilibrium of the 19th Century was shattered by the World Wars and the Great Depression. The economic weakness which resulted is prolonged by nationalism and communism. In such "backward" countries as China and India, labor is so cheap and plentiful that there is still little inducement to introduce machinery. Nevertheless, Moulton believes that the tillable area of the earth might readily be doubled. The "natural endowments of the earth" are adequate to support standards of living far higher than today's.

This is Moulton's documented vision of a potential paradise on earth. Whether man can ever realize it is another matter.

Unfulfilled Desires. Assuming that man can avert war, how is he to organize the plenty that is within his grasp? Moulton examines the possible systems, discards communism as killing incentive and invention, rejects "democratic socialism" as hopelessly divided against itself; he accepts, with reservations, a capitalism in which enterprise is free of government control but subject to certain "rules of the game" (chiefly laws against monopoly). But such an economy, concedes Moulton, faces many dangers, of which depressions are only one form. The most serious is faulty distribution of income.

In the U.S. in the 1920s, too few people earned too much money, used it for sterile savings and speculation rather than for buying goods. When too much money is saved and not enough spent, argues Moulton, consumption--and production for consumption--slows down. After World War I, when millions of families had moved out of the low-income into the middle-income groups, consumer demand and production rose sharply. Concludes Moulton: "The unfulfilled desires of the masses constitute the great potential markets of the future."

To achieve a proper distribution of income, Moulton advocates a remedy that will sound simple to believers in competition: more & more goods at lower & lower prices.

Have We the Stomach? Moulton also believes that under sound free enterprise, 1) unions must abandon policies cutting workers' productivity; 2) dreamy theories of decentralization of industry must be given up; the world is stuck with large-scale enterprise; 3) taxes must be held low enough to preserve business incentive.

Can depressions be prevented? Moulton replies with a realistic no. Neither government nor business can forestall or check a depression, but they can greatly ease it. They can also get together, decide when a "tenable bottom" has been reached, and by an act of will resume the upward path.

Progress under capitalism, as Moulton sees it, is jerky but gigantic. The dizzy distance between the crest of the economic wave and its trough can be greatly shortened, but not eliminated. That is all right with Moulton: he does not believe that man can move forward on the becalmed seas of controlled economy.

The question is whether man has the stomach to sail capitalism's rich but rugged course.

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