Growth in Freedom

As described by President Eisenhower last week, the U.S. economy in 1959 was surely the world's wonder. Never before in history had so many enjoyed so much of life's good things. Between the bare statistics in the annual economic report was ample evidence that the ancient alchemist's formula for making gold could hardly have matched the accomplishment of free men in a free economy.

Not even a 116-day steel strike had chained the U.S. output of goods and services that 1) soared to a record annual rate of $482 billion at year's end, 2) gave 66.2 million workers the dizzying sum of $335 billion in 1959 to spend in widening the margin of comfort in their lives. So familiar were prosperity and progress that the U.S. took in stride the President's prediction of a fantastic $750 billion gross national product by the end of the 1960s.

Wealth to Enjoy. Confidence was the keynote of the President's report. Set against a bright forecast for 1960 and beyond was a solid base of achievement, detailed in a unique statistical appendix ("The Diffusion of Well Being") that caught the sweep and quality of U.S. prosperity. Since 1946 public and private enterprise had achieved:

P: A decline in infant mortality from 33.8 per 1,000 live births to 26.3.

P: A rise in real income (in 1959 dollars) from $1,605 per capita to $1,891.

P: Ownership of a car by three families out of four, compared with slightly better than one out of two.

P: An increase in the number of life insurance policyholders from 73 million to 115 million.

P: A threefold increase in bachelor's degrees conferred by U.S. colleges and universities, while Americans were winning almost half of the Nobel prizes awarded in medicine, chemistry and physics.

Implicit in these unconventional indicators of a healthy economy was Eisenhower's philosophy of "shared responsibility" for growth. Almost 800,000 new jobs had been created annually since 1946; output of goods and services had increased by 3.2% a year, industrial output by 4.5%

Such growth can be sustained and improved, said the President, not solely by anything government can do but only if "management, labor leaders and consumers perform their economic functions." Budget surpluses must be applied to the federal debt; labor-management negotiators should aim for wage settlements that do not "exceed sustainable rates of improvement in national productivity." And the time should soon come when price reductions for consumers are "a normal and frequent feature of the U.S. economy."

In the U.S. sound economic growth does not depend on government alone. On the contrary, government may stifle the economy by taking for public use funds that could be used best by private citizens. Concluded Eisenhower: "It must always be borne in mind that we grow only by investing more and producing more, not simply by spending more."

Reserve to Grow On. Ike's emphasis on growth in freedom was no casual afterthought. White House advisers are well aware that the Democrats are starting to take up the refrain that Eisenhower's refusal to expand public spending has retarded the growth rate, when, say the critics, it should be expanding to keep pace with the Soviet Union. Pundit Walter Lippmann took off from the President's message most vehemently, accused the President of putting "private comfort and private consumption ahead of national need . . . The challenge of the Soviet Union," he wrote, "has been demanding an increase, not a reduction of the share of the national income devoted to public purposes. We are falling behind in the race because we are not allowed to run."

But Lippmann and those who echoed him seemed to slide too easily over a key point: gains made at the expense of increasing government interference with the economy might kill or strangle something more precious than the gain. "We are not slaves to our luxuries," said a member of the Council of Economic Advisers last week. "The workers have achieved a five-day week; they have taken part of their payment in leisure. If we need to produce more, we could go back to a six-day week and get a 20% increase in growth immediately." Said Special Economic Adviser

Donald Paarlberg: "The U.S. could compete in the index numbers racket with the Soviets by abolishing the 40-hour week, by drafting women and old men into the labor force, by getting rid of tailfins and hi-fi too, and by closing the churches. They've done it. But we don't have to, so why should we?

"If Khrushchev wants to challenge us, let him talk to his Parliament about raising the level of freedom in Russia. Let him compete on our terms. His government would go to hell."

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