Defense, controls and inflation : a conference sponsored by the University of Chicago Law School

352 Pages·1952·25.034 MB·English

by  Director, Aaron

Defense, Controls, and Inflatio1~

Defense, Controls, and Inflation
A CONFERENCE SPONSORED BY
THE UNIVERSITY OF CHICAGO LAW SCHOOL
Edz'ted by
AARON DIRECTOR
THE UNIVER.SITY OF CHICAGO PRESS
THE UNIVERSITY OF CHICAGO PRESS, CHICAGO 37
CambridgeUniversityPress,London,N.W.1,England
W. J. Gage & Co., Limited, Toronto 2B, Canada
Copyright1952 by TheUniversityofChicago. Allrights
reserved. Published1952. ComposedandprintedbyTHE
UNIVERSITYOFCHICAGOPRESS,Chicago,Illinois,U.S.A.
FOREWORD
THE current mobilization program raises issues which are of
obvious importance to law and economics. These issues
concerntheeffectivenessofalternativemeasuresto achieve eco
nomic mobilization as well as the influence of these measures
on the more permanent objectives of public policy.
The conference held at White Sulphur Springs, West Vir
ginia, on April 5-8, 1951, was planned to achieve a discussion
of these issues: and to clarify the areas of agreement and dif
ference. It was sponsored by the University of Chicago Law
School. The following committee was in charge of the confer
J.
ence: Walter Blum, Milton Friedman, Wilber G. Katz, Ed
ward H. Levi, W. Allen Wallis, and Aaron Director, chairman.
I am indebted to Mr. Ward S. Bowman and Mr. Harry Kal
ven, Jr., of the Law School staff, and Mr. Milton Friedman, of
the Department of Economics, for their considerable assistance
in preparing the Introduction.
The University ofChicago Law Schoolis grateful tothe Wil
liam Volker Fund of Kansas City for a grant to cover the ex
penses of the conference and for further financial assistance
toward publication of the transcript.
AARON DIRECTOR
UNIVERSITY OF CHICAGO LAW SCHOOL
v

TABLE OF CONTENTS
LIST OFPARTICIPANTS . viii
I. INTRODUCTION . 1
II. FIRSTSESSION, FRIDAY MORNING, APRIL 6, 1951 22
THEROLEOFMONETARYPOLICY
III. SECONDSESSION, FRIDAY AFTERNOON, APRIL 6, 1951 68
THEROLEOFFISCALPOLICY
IV. THIRDSESSION,FRIDAYEVENING,APRIL 6, 1951 122
THELEVELOFPUBLICEXPENDITURES
V. FOURTHSESSION,SATURDAYMORNING,APRIL7,1951 147
THEROLEOF DIRECTCONTROLS
VI. FIFTH SESSION, SATURDAYAFTERNOON,APRIL7, 1951 202
THEROLEOFDIRECTCONTROLs-Continued
VII. SIXTHSESSION, SATURDAYEVENING, APRIL7,1951 254
THEIMPACTOFREARMAMENTONTHE BRITISHECONON[Y
VIII. SEVENTH SESSION, SUNDAY MORNING, APRIL B, 1951 . 285
A. THE LONG-RUN CONSEQUENCES ON FREE INSTITUTIONS
B. SUMMARYSTATEMENTS
INDEXOF NAMES . 34]
vii
LIST OF PARTICIPANTS
GARDNER ACKLEY, Office of Price Stabilization, Washington, D.C.
THURMANW. ARNOLD, Arnold, Fortas&Porter,Washington, D.C.
LAIRDBELL,Bell,Boyd,Marshall&Lloyd, Chicago,Illinois
THE HONORABLE WALLACE F. BENNETT, United States Senate, Washing
ton, D.C.
RoyBLOUGH, EconomicAdviser to the President, Washington, D.C.
WALTERJ. BLUM, Associate Professor of Law, The Universityof Chicago,
.Chicago, Illinois
WARD S. BOWMAN, JR., Research Associate, The University of Chicago
Law School, Chicago, Illinois
OTIS BRUBAKER, Director, Research Department, United Steelworkers of
America, Pittsburgh, Pennsylvania
W. RANDOLPH BURGESS, Chairman, Executive Committee, The National
City Bank of New York, NewYork, NewYork
THE HONORABLE EMANUEL CELLER, House of Representatives, Washing-
ton, D.C.
JOHN CHAMBERLAIN, The Freeman, New York, New York
BENJAMINV. COHEN, Washington, D.C.
HERBERT C. CORNUELLE, The Volker Fund, Kansas City, Missouri
PHILIP CORTNEY, President, Coty, Inc., NewYork, NewYork
GARFIELD V. Cox, Dean, The University of Chicago School of Business,
Chicago, Illinois
OSCAR Cox, Cox, Langford, Stoddard& Cutler, Washington, D.C.
ELIW. DEBEVOISE,Debevoise,Plimpton& McLean, NewYork, NewYork
AARON DIRECTOR, Professor of Economics, The. University of Chicago
Law School, Chicago, Illinois
MICHAEL V. DISALLE, Director of Price Stabilization, Washington, D.C.
JAMESH. DOUGLAS, JR., Gardner, Carton& Douglas, Chicago, Illinois
PEYTON O. FORD, Deputy United States Attorney-General, Washington,
D.C.
DAVID E. FELLER, Assistant General Counsel, Congress of Industrial Or
ganizations,Washington, D.C.
MILTON FRIEDMAN, Professor of Economics, The University of Chicago,
Chicago, Illinois
MARTINR. GAINSBRUGH, ChiefEconomist, National Industrial Conference
Board, Inc.,NewYork,NewYork
LLOYDK. GARRISON, Paul, Weiss, Rifkin, Wharton & Garrison, New York,
NewYork
RICHARD B. GOODE, Assistant Professor of Economics, The University of
Chicago, Chicago, Illinois
GEORGEE.HALE,Wilson&McIlvaine,Chicago,Illinois
ROBERT L. HALE, Professor of Law, Columbia University, New York,
NewYork
viii
List of Participants ix
BERNARD F. HALEY, Professor of Economics, Stanford University, Stan
ford, California
ALVIN H. HANSEN, Professor of Economics, Harvard University, Cam
bridge, Massachusetts
Roy HARROD, University Lecturer in Economics, Christ Church College,
Oxford, England
FRIEDRICHA~ HAYEK, Professorof Social and Moral Science, The Univer-
sityofChicago, Chicago,Illinois
HENRYHAZLITT, Newsweek, NewYork, NewYork
LEON HENDERSON, Research Institute of America, Washington, D.C.
H. STRUVE HENSEL, Carter, Ledyard & Milburn, New York, New York
CHARLESJ. HITCH, The RAND Corporation, Santa Monica, California
JOHN JEWKES, Professor of Economic Organization, Merton College, Ox-
ford, England
HOMER JONES, FederalReserve System, Washington, D.C.
HARRY KALVEN, JR., Associate Professor of Law, The University of Chi
cago,.Chicago, Illinois
WILBER G. KATZ, James Parker Hall Professor of Law, The University of
Chicago, Chicago,.Illinois
MEYER KESTNBAUM, Hart, Schaffner& Marx, Chicago, Illinois
FRANK H. KNIGHT, Morton D. Hull Distinguished Service Professor of
Social Science and Philosophy, The University of Chicago, Chicago,
Illinois
FRED LAZARUS, JR., Federated Department Stores, Inc., Cincinnati, Ohio
I-IAROLDLEVENTHAL, Price StabilizationAgency, Washington, D.C.
EDWARDH. LEVI, Dean,The University of Chicago Law School, Chicago,
Illinois
BERNARDD. MELTZER, ProfessorofLaw, The UniversityofChicago, Chi
cago, Illinois
EUGENE MEYER, The Washington Post, Washington, D.C.
LLOYD W. MINTS, Associate Professor of Economics, The University of
Chicago, Chicago, Illinois
LUDWIG VON MISES, Visiting Professor, Graduate School of Business Ad
ministration, New York University, New York, New York
H. GRAHAM MORISON,AssistantUnitedStatesAttorney-General, Washing
ton, D.C.
GEORGE M. MORRIS, Morris, KixMiller & Baar, Washington, D.C.
W. C. MULLENDORE, Southern California Edison Company, Los Angeles,
California
THE HONORABLE JOSEPH C. O'MAHONEY, United States Senate, Washing
ton, D.C.
PAUL A. PORTER, Arnold, Fortas & Porter, Washington, D.C.
WILLIAM WOOD PRINCE, The Union Stock Yard Company, Chicago,
Illinois
EUGENE V. ROSTOW, Professor of Law, Yale University, New Haven,
Connecticut
BEARDSLEYRUML, NewYork, NewYork
THEODORE W. SCHULTZ, Chairman, Department of Economics, The Uni
versity of Chicago, Chicago, Illinois
x List of Participants
CARL S. SHOUP, Professor of Economics, Columbia University, New York,
NewYork
ROSCOE T. STEFFEN, John P. Wilson Professor of Law, The University of
Chicago, Chicago, Illinois
HERBERT STEIN, Committee for Economic Development, Washington,
D.C.
HERMAN W. STEINKRAUS, Bridgeport Brass Company, Bridgeport, Con
necticut
GEORGE STIGLER,ProfessorofEconomics,ColumbiaUniversity, NewYork,
New York
GEORGE W. STOCKING, Professor of Economics, Vanderbilt Univel'sity,
Nashville, Tennessee
JR.,
THEODORE TANNENWALD, Counsel to the Special Assistant to the
President, Washington, D.C.
J.
CAMERON THOMSON, N.orthwest Bancorporation, Minneapolis, Minne
sota
JACOB VINER, Professor of Economics, Princeton University, Princeton,
NewJersey
w.
ALLEN WALLIS, Professor of Statistics and Business Economics, The
UniversityofChicago, Chicago, Illinois
LYNN A. WILLIAMS, JR., Vice-President, The University of Chicago, Chi
cago, Illinois
HENRYC. WINGATE, Intenlational Nickel Company, NewYork, NewYork