FOREIGN RELATIONS, 19 5 0, VOLJUME I


sharper cuts in durable consumer goods would, -of course, be neces-
sary in order to free materials for military production).
   8. Given a major labor effort over the next two years, and given a
 substantial investment in basic productive facilities, there can be no
 doubt that the force targets presented in the report could, from-the
 standpoint of our manpower and other resources, be maintained in-
 definitely; and that, even with the maintenance of these forces, the
 civilian consumption standards of 1950 could be restored and im-
 proved within a few years. This is hardly the time to give high pri-
 ority to improving the consumption standards of 1950. But the fact
 that such an achievement is within reasonably conservative bounds of
 feasibility casts light on the degree of long-term sacrifice and effort
 implied in the programs recommended in the report. Without passing
 any judgment upon the adequacy of the programs recommended in
 the report, which would be outside the scope of economic analysis, it
 follows palpably that these programs in terms of their economic
 implications fall about half way between "business as usual" and
a
 really large-scale dedication of our enormous economic resources to
 the defense of our freedoms, even when defining this large-scale
 dedication as something far short of an all-out war or all-out economic
 mobilization for war purposes.
   9. Aside from the basic economic conclusion just stated, it is neces-
sary to outline the economic policies which would flow from programs
of the size and degree of acceleration recommended in the report. It
is self-evident that defense, civilian (both industrial and consumer)
and international needs 'are of such: a size that none can be given an
absolute priority over another. Perhaps the most striking example
-of this is the fact that fulfillment of the manganese stockpiling goal
would require a very severe cutback in current steel production. A
.decision to attempt to achieve the full stockpile objective for copper
by June 1952, for example, would be tantamount to a decision to forego
any industrial expansion in this country, and to disrupt the economies
of allied nations. It is for such reasons that so great importance is
attached by Mr. Attlee in the current conversations to the establish-
ment of machinery for the international allocation of basic materials.
  10. The central and urgent requirement of economic policy, in-
-dispensable to the sound formation of policy in all other areas, is the
,continuing maintenance of an over-all inventory of supply and
requirements, accompanied by a continued basic programming to
determine the priority considerations which must determine the dis-
tribution of available supply among competing requirements. The
basic requirements are military, stockpiling, international, industrial
and consumer. These must all be serviced, in varying degrees, by the
totality of supply. Every specific economic program is directed, in the
final analysis, toward the matching of supply and requirements,


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