The New Freedom

The Office of Price Stabilization was in the midst of grinding out a new price regulation last week when it got word of President Eisenhower's intention to bring an orderly end to all economic controls (except for rent and strategic materials controls). With an anguished clank, OPS and other control agencies shifted quickly into reverse, began to grind out new plans for orderly decontrols.

By week's end the Administration had moved to:

P: Take off ceilings on pre-1946 automobiles, on most department-store merchandise, meats, restaurant meals and drinks, and furniture (but to keep, for the moment, ceilings on major electrical and gas appliances, drugs and cosmetics, bakery products, milk and cereal).

P: Abolish all wage and salary controls.

P: Dismiss 1,700 employees of the Wage Stabilization Committee, and eventually abolish the jobs of 6,000 other controllers.

The abrupt loosening of direct controls --and the promise of more relaxation to come--sent an expectant shiver through the U.S. economy. As Ike Eisenhower predicted, it brought some early measurable ups & downs in prices (see BUSINESS). But the ups & downs were secondary to the historic significance of the move: the U.S. was moving consciously and positively toward a freer economy.

Many economists thought the move was more than overdue. Harry Truman had slapped on the most recent set of price and wage controls in January 1951--seven months after Korea, and after most of the damage had been done in the post-Korean surge in prices. Congress took off some price controls, and the Truman Administration administered the wage controls with an eye toward the 1952 election. And at the same time, Truman & Co. contributed to inflation--the excuse for controls--by their policies of deficit financing. The result was a lopsided economic system. "There are hazards in eliminating price controls too soon," the Committee for Economic Development once reported, "but the dangers of controlling it too long are even greater."

This file is automatically generated by a robot program, so reader's discretion is required.