11. The Future—Your Share in Its Promises

A problem can be a promise. The revolution in our employment structure which, as you read in Chapter Ten, has erased hundreds of thousands of jobs also has, as you II read in this chapter, made our over-all economy more depression-proof than ever before.

The jams in our cities which have forced tens of millions into the suburbs also are compelling our cities to realize that their survival is endangered. As they rebuild and redevelop, there are faint but convincing signs of a trek back to the metropolitan areas. As there is a problem to industry in the rising intensity of competition, so there is a promise to the consumer in the stabiliz­ing of prices. As the pocketbook pinch created by the skyrocket­ing teen-ager population in our lands presents a problem to one industry so it presents a promise to another. Inherent in every problem is a promise.

A New Era—And What It Means to You

We are now living in an economic era unlike any we've ever known before.

It's really new. The decade of the 1960s has no parallel in the decades before World War II and certainly not in any year since the thirties. Actually, this new cycle has been developing for the last few years, but only a comparative few recognize even today how profound the changes have been. Most Americans still are thinking of today in terms of a repetition of yesterday. Yet to every American—wage earner, businessman, housewife, professional —this new cycle will mean changed circumstances and challenges. It will demand revised attitudes toward the position of and prospects for the United States dollar, the value of savings in a bank or high-grade bonds, investments in the stock market, specu­lation in land, the purchase of a home for profit as well as desir­able shelter.

It also will bring benefits to groups who have been at the bottom of the pile for a generation and slash the advantages of those who have had it easiest.

What is this new cycle?

It is an era of no shortages and thus of no need for businessmen or consumers to try to hoard to beat shortages. Younger Ameri­cans living today can't remember anything like this. During World War II, there were shortages of everything from hatpins to houses; during the fifties, some scarcities continued and the fear of them remained dominant. But what is scarce today? Not raw materials or finished materials, not steel or cars, not hatpins or houses. Even in the service fields shortages are drying up. This is new and it dictates a new attitude on our part toward stocking up on goods.

It is an era of no inflation. Neither the pace nor the caliber of the climb in the consumer price level these days may properly be called inflation—no matter what the headlines seem to say. A cycle of reasonable price stability has emerged. This shift from World War II and its prolonged aftermath is one of the most significant of all changes.

It is an era of few pressures for manpower and therefore of pay hikes which are and will continue to be "moderate." While the pressures for manpower aren't present, there are built-in forces for annual wage and salary increases and built-in protections against joblessness which vitally distinguish this era from the days before World War II.

It is an era of fierce competition for the consumer's dollar among all domestic businessmen and from foreign producers. This competitive phase has been developing for years, of course, but competition now is the toughest yet. It demands that busi­nessmen control costs and puts a premium on efficiency. It is a powerful factor working against price increases.

it is an era of growth around the world. Industrial nations the globe over are roaring ahead, producing enough not only to supply themselves but also to move into our market. The expan­sions abroad are a protection for our economy in the sense that they are creating customers for us and simultaneously a challenge to our economy in the sense that we have rough competitors.

It is an era of high money costs yet of general availability of credit. Lenders are getting some of the highest prices for cash in decades, savers are being rewarded as they haven't been re­warded in years. But although money is expensive, it is available. This is not a credit squeeze.

And it is an era in which the expressed aim of the Federal government is a balanced budget at a record and rising level of spending—including tremendous spending for defense. Most young adults have known only war and inflation. Most older adults associate peacetime with deflation. This is new, neither war nor inflation nor deflation.

Your Dollar's Value in This New Era

In coming years the United States dollar is not going to lose value rapidly. Barring another global war—in which case no forecast has any meaning—basic forces of demand and supply will restrain inflationary price rises. Intense competition and in­creasingly efficient productive capacity will keep a lid on prices. The availability of manpower will hold wage hikes within a moderate range. Sophisticated policies on taxes and credit will prevent an excessive supply of credit from stimulating another blow-off. These are not casual guesses. It is clear that we have moved into a new economic era which demands new attitudes toward our dollar's value.

The point I'm making here is not that we are entering a phase of rigidity in prices and the dollar. The odds continue to favor a modest over-all year-to-year climb in prices and decline in the dollar's purchasing power. But the sort of price rises that appear likely cannot properly be called inflation. What's more, the trend is shaping up as world wide.

What does this mean to you?

It means that there is no longer any valid reason for attempt­ing to stock up on goods to beat scarcities and inflation. This will permit you, as an individual, to return to (or try to learn for the first time) normal buying habits. This will permit you, as a businessman, to adopt and maintain major changes in your inventory policies, which may be particularly significant in view of the high cost of borrowing money these days to carry extra goods on your shelves.

It means that money you deposit in a savings institution or invest in United States Savings Bonds should give you not only a fair return in interest, but also a relatively stable buying power. The individual who put savings in a bank account or in United States Savings Bonds back in the forties and who has stayed put ever since has been among the greatest losers in the cycle now closing. The interest he has received has not come close to off­setting the erosion in the buying power of his dollars and the income tax he has paid on the interest. But the prospect in this new cycle is that the average annual loss in the dollar's buying power will be minor. Interest should more than offset this loss and the tax. You may have more confidence in saving via tradi­tional forms than in a long time.

It means that families depending on social security, private pensions, and insurance for support in their older years also may have greater faith that their retirement nest eggs will hold their value. The hardest hit by the post-World War II inflation has been the older person living on a fixed income. His position will be vastly improved by a stable dollar—plus the prospects for more liberal social security benefits in this decade.

it means that you can buy far more house per dollar than at any time since 1940. Prices are being shaved on old houses the nation over. Builders are offering much more quality for the same new house dollar. Mortgage money has become easier and cheaper too.

This is the first real, broad buyer's market in our country in over twenty years, meaning that you, the buyer, dominate the market place. You can translate this into benefit for yourself and your family, as a shopper for quality, quantity, and price bargains, and as a saver of dollars which will hold their value and earn a living wage while they are in your nest egg.

Your Stocks in a New Era

If you had invested $10,000 in an across-the-board list of stocks in 1950, the value of your nest egg would have swelled to at least $25,000 by now. Even if you had indiscriminately bought a share or two of each stock in a familiar market aver­age, you would have been a top gainer in the past decade of general business boom, inflation, widespread fear of continuing inflation, and zooming stock prices. Your profits would have kept you far ahead of the decline in the dollar's buying power.

If you had put the $10,000 in a typical one-family house or piece of farm land, the value of your investment would have swelled to at least $15,000 to $16,000 by now. Even if you hadn't been particularly shrewd in your selection, the general rise in house and land prices—spurred by inflation and fear of inflation —would have kept you well ahead.

But if you had put your money in a marketable United States Government bond—say the 2.5 per cent United States bonds sold during the war loan drive of 1942 and due to mature in 1967—the value of your nest egg would have shrunk to around $9,000 as of this day. Your conservation would have made you a major loser. Your nest egg would be smaller and the buying power of the dollars in the nest egg would be smaller. The 2.5 per cent interest you would have collected each year would have been cut by the tax you owed on it and wouldn't have come near offsetting the drop in the dollar's value.

What are the odds this performance of the 1950s will be re­peated in the decade of the 1960s? Very slim, very slim indeed.

This forecast assumes a general rise in stock prices. History emphasizes that the long-term trend of stock prices is upward. In only two decades since 1871 have stock prices ended lower than they began. It also assumes that the growth in our economy, in our population, and in earnings of corporations will justify higher stock prices. History emphasizes that economic growth is the fundamental behind rising stock prices—and we will grow strongly in this decade.

But the vital point is that we have moved into a new economic era, in which reasonable price stability and not inflation is the probability. The dollar will not lose value in the 1960s as it did in the 1950s and 1940s. And inflation psychology is not warranted by the outlook for production, competition, wage in­creases, etc.

This will mean that profitable investing in stocks will demand much more know-how and selectivity than during the past decade. Many a corporation management was rescued from what might have been devastating stupidity in the forties and fifties by its ability to raise prices and by "windfall profits" from inflation. Inflation won't rescue them in the next few years. The successful investor will have to find the stocks of corporations which have superior products and efficient managements and therefore the brightest earnings prospects.

It will mean that investing in highest-grade bonds will be a lot safer than in the past ten years. On top-grade bonds, you can get interest rate returns of 4 or 5 per cent and more. Even after the tax bite, these annual returns will more than protect you against the probable decline in the dollar's buying power over the years ahead.

It will mean that the purchase of a house or land for quick profit won’t be the cinch it has been. In the inflation forties and fifties, speculators made fortunes in real estate and land, home­owners found it easy to sell at a profit. Now the rise in prices has slowed, many sales are "sticky."

Your Wages and Profits in a New Era

What will this new era mean to you and your own pocketbook?

it will mean that you II find it harder to win pay hikes in this era and those you win will be more modest. Even though the pay trend continues upward this year, the increases are moderating.

It will mean that more of the pay increases you win will be translated into higher living standards because the rise in the cost of living has slowed. Workers who beat the inflation of the fifties did so only because their pay increases were so steep. Now the prospect is the average annual increase in the cost of living will be within the 1-2 per cent range, perceptibly lower than the average pay hike.

It will mean that businessmen must control costs much more carefully if they are to prosper and maintain their margins of profit. Managements won't be able to bail themselves out of their extravagances or mistakes by raising prices at their own will. It won't be so easy to impose price increases or make them stick. In a phase of fairly stable prices, control of costs becomes of vital importance.

It will mean that tremendous profits may be made by industrial­ists who come up with new, improved, and attractive products. This is no longer the anything-goes-at-any-price era; it hasn't been for some time. But it is an era which promises great rewards to corporations which invent new products, produce and market them.

An era dominated neither by war nor inflation nor deflation will be new to most of us. Prosperity without inflation seems ideal, and it should be. But as even these reports have underlined, this era will also have its problems. We'll have to learn to live with it and conquer its challenges too.

The Boom-Bust Cycle

Have we conquered the boom-bust cycle?

We have not. For the twenty-sixth time in the past hundred years, we went into what the economists ponderously call "a cyclical economic fluctuation" in 1960—meaning simply that business generally fell off and the rate of unemployment climbed after a phase during which business generally advanced and the rate of unemployment fell.

Have we learned how to tame—to moderate—the boom-bust cycle, though?

Yes, I think we have. Although at this writing in late 1960, business is on the downbeat, it should be on the upbeat at this date in 1961.

What makes me so sure that we have learned how to tame the business cycle? I could submit a long list of reasons but I'll pick out just some of the big ones which are persuasive to me.

First, we have the determination not to let a serious depression ever happen here again. I name this reason first because the great crash of the thirties wouldn't have happened if we hadn't let it happen. Now we have on our books a law which specifically places on the Federal government the responsibility to do its utmost to maintain maximum employment, production, and in­comes in our country. Now we will not hesitate to insist on steps to keep the economy operating and expanding at a high level. Our very attitude toward a business decline is, I believe, a weapon against it—just as I believe our attitude toward a calamitous stock market collapse is a weapon against a repetition of 1929. (See page 99.)

Second, we have "built in" an arsenal of economic stabilizers and these begin operating the instant a downturn develops. Our system of unemployment insurance is shamefully in need of overhaul and updating, but the signal fact is that the system exists and it helps buoy personal incomes when unemployment mounts. Our system of social security benefits is a tremendous spur for maintained spending in our country. In 1960, as wages and salaries declined in reflection of rising joblessness in major industries and the shortened workweek, the total of our personal incomes actually continued upward, primarily due to stepped up social security payments and jobless benefits. Our system of bank deposit insurance guarantees us against a bank panic. There are many other stabilizers to cushion a downturn, ranging from farm price supports to mortgage insurance.

Third, there is the fact that our Federal Reserve System can stimulate our economy by making credit easy and cheap to get —thereby spurring spending by businessmen, home builders, home-buyers, etc.—just as it can help curb a boom by making money tough and expensive to get. In recent years, the Federal Reserve System has vastly refined its techniques, and as far back as early spring of 1960 it was shifting its credit policy from re­straining expansion to combatting recession.

Fourth, there is our knowledge that the government's budget can be a key business stimulant. When the Federal budget is in the red, it means that the Federal government is putting more cash into the economic stream than it is taking out in the form of taxes, and this spending directly helps to make jobs and pad paychecks.

Fifth, there are our great needs for public services on which the Federal government can accelerate spending in periods of downturn and thereby stimulate the economy as well as meet the needs.

Sixth, there is the massive power of a tax cut which can release billions of dollars for spending by consumers and businessmen.

We have not abolished the business cycle. We probably can't ever achieve an economy which goes up without interruption. There are rhythms in our economy as well as in our lives. But we have tamed the cycle with marked success since the 1930s and I hope and believe we'll continue to tame it more and more.

Our New Capitalism

A Wall Street Journal cartoon showed a man walking on a picket line carrying a sign "Strike for Higher Wages!" and speak­ing to the striker behind him. The caption read: "I feel like a darn fool—I own 50 shares in this corporation."

That hits the target. For with this one picture and sentence, the artist has underlined one of the most revolutionary economic trends now spreading through our land—a trend which I am convinced will transform the American capitalistic system into something new, never known before. All over the country this payday, an army of 1,340,000 Americans will be automatically adding to their nest eggs in stocks under employee stock purchase plans offered by their corporations, a development which in itself helps explain why stockownership is becoming a mass movement among America's middle-income families.

A whopping 27 per cent of the millions who have become stockholders for the first time in the past three years began their buying through corporation stock purchase programs. Of the record total of 13,500,000 individuals who own stocks now, one out of five got into the market via this route, and of all women shareowners a full 25 per cent acquired stock through the corporations they work for. Of shareowners employed by public corporations, 83 per cent—or 2,580,000—are stockholders in their own companies.

This startling growth of employee stock purchase is far from recognized or understood. For while Sears Roebuck's employee stock buying plan goes back to 1916, the plans all but disappeared during the depression thirties and their renaissance has come only in the past few years. Now, though, almost half the companies listed on the Stock Exchange have adopted stock buying plans for their employees. Additional corporations are constantly join­ing the parade. The biggest names in industry offer the programs. And although the plans vary greatly in detail, the key points are these.

1. They are stimulating stockownership among average people by making it convenient and relatively easy for an employee to buy shares regularly either of his own company or of other corporations.
2. They are steadily shifting employees from being owners just of United States Savings Bonds or cash in the bank to owners of stocks too.
3. They are attracting workers by providing special safeguards against stock price declines or discount or bonus deals, etc.

What does this development mean?

To millions of employees, the plans offer a way to build a nest egg in stocks to help them benefit from the nation's pros­perity and protect them against future inflation. The United States Savings Bond campaign acquainted all of us with payroll deductions to buy securities, so the method is familiar. Employees are understandably intrigued by their corporation's pledge of a contribution or a safeguard against loss and consider this a valu­able fringe benefit.

To a large and growing number of corporations, the plans offer a way to improve employee morale and loyalty, encourage habits of thrift, and educate workers to the virtues of capitalism. And to some big corporations, this is a source of new money from the "inside."

To unions, the obvious advantages of the plans are dimmed by the divide-and-conquer angle, but unions are increasingly de­manding generous stock buying plans as a fringe benefit.

The trend clearly is toward employee stock purchase plans. Significant is the disclosure that nine out of ten shareowners believe, "It is a good thing for employees to own shares in their own companies," because this "encourages greater employee in­centive and interest in the company's activities."

So, to the nation, the plans telegraph wider and bigger owner­ship of stocks by middle-income Americans. It means the emer­gence of an employee-owner society unlike any we've ever known.

You don't need too vivid an imagination to foresee what might happen if the millions of workers who become owners of their corporations—either through their own stock buying or the pur­chases of their pension funds—ever start trying to dictate man­agement's policies. As yet there is no sign of the armies of employees attempting to take over, but the possibilities are there!

The Upside-down Job Structure

Dramatized by today's job figures is the story of one of the great revolutions of mid-twentieth century—a revolution of pro­found personal meaning to us as individuals and as a nation.

The revolution is this: for the first time in our entire history, far fewer of us are employed in the production of goods than are employed in other areas—government, services of all types, retail and wholesale trade, transportation and utilities, finance, insur­ance and real estate. Until a relatively short time ago workers in industries producing goods heavily outnumbered workers in trades, services, and all levels of government. Now the opposite is a fact. Our work force has turned a complete somersault. Against the background of America since 1776, our employment structure is upside down.

The significance of this cannot be underestimated. For em­ployment in goods-producing factories can and does fluctuate violently. When a factory loses a contract or customers it prompt­ly lays off workers, as the employment statistics during the 1957-58 recession clearly reveal. Jobs in factories turning out hard goods have plunged 12 per cent since March 1957; a full 1,200,000 of the total 1,700,000 drop in non-farm employment in the past year reflects the loss of jobs in plants manufacturing durable goods.

But employment in non-goods areas always is much more stable. A business downturn has to be severe before stores fire large numbers of workers, before jobs shrink in finance and insurance firms and the like, and through good times and bad government payrolls appear in an inexorable uptrend. Again, the employment statistics of this period are completely revealing. During the 1958 recession employment actually rose almost 300,000 in wholesale firms, in services, in government, in insurance and real estate.

Now the meaning of the revolution emerges. The somersault in our work force explains why total employment in April 1958 was only 2.5 per cent below the March 1957 peak in the face of shuddering slumps in such industries as autos and steel, the long-term decline in agriculture. And the shift explains why our econ­omy showed heartening resistance to general depression in the face of major economic trouble in such critical centers as Detroit and Pittsburgh.

So quietly and yet steadily has the revolution developed that few, outside expert circles, realize we are living through the second gigantic employment upheaval in our history. Until late in the nineteenth century, we were a people primarily engaged in agriculture. As recently as 1880, half of all Americans who earned incomes worked on farms. Then came the first industrial revolution and we began the great shift from a nation predomi­nantly occupied in turning out farm products to a nation pre­dominantly occupied in turning out factory products. Today, only 10 per cent of our labor force works on farms.

In the forties, the second industrial revolution was born and we began another great shift from a nation mostly devoted to producing goods to a nation more and more devoted to provid­ing services. In 1940 less than 49 per cent of all workers were in services; now almost 57 per cent are in the non-goods fields. At the start of World War II more than 51 per cent were in pro­duction; now only about 43 per cent are in manufacturing, con­struction, mining, and agriculture. Since 1952 the number of workers in manufacturing actually has dropped from 16,000,000 to 15,400,000 now. Since 1952 the number of workers in serv­ices has climbed from around 28,000,000 to over 32,000,000 now.

The miracle of productivity has made this revolution possible —but that's another story. My key point here is that in our job structure itself lies the reason employment is holding up as well as it is, and in the way we earn our living today lies a major basis for belief that we are more "depression-proof" than ever before.

Buy a Second Something

Buy a "second refrigerator" was the shrewd selling pitch of a couple of European manufacturers who caused quite a stir at the World Trade Fair in New York in early 1960 with their display of small-sized refrigerators. Said the promoters, the smaller size of the units compared with the familiar American models makes them ideal for use in a basement recreation room, an office, a motel room, etc.

Buy a "second home" is the increasingly insistent message of builders of vacation houses, travel trailers, and mobile homes. Douglas Fir Plywood Association, which has been running a series of ads emphasizing that every family should have a second home, reports it has received over 450,000 requests for leisure home blueprints and confidently declares that the day is approach­ing "when the second home will be as common as the second car." Right now, builders in some areas disclose sales of vacation houses are up 100 per cent over 1959.

Buy a "second telephone" line, invites A. T. & T. The tele­phone company's drive is not designed to encourage you just to add an extension, but to make you want to put in an entirely new line. In view of the explosion in our teen-age population and the capacity of the teen-ager to monopolize the home phone, A. T. & T. has no qualms about the desire of millions of parents for a second phone.

And buy a second furnace, get as much heat for lower operating costs . . . Buy a second kitchen, make outdoor living a pleasure . . . Buy a second car, of course . . . Buy a second radio, second TV set, second air conditioner, second this, second that.

It's a new theme in American advertising to the masses. It's a distinctly new recognition by American manufacturers that millions of middle-income families already have one of each of the familiar items—including an item as big as a house—and that a way to maintain our buying until the bulge in marriages in the mid-1960s sends demand soaring again is to cultivate our desire for two of each of the items. It signifies the degree to which we are a nation of climbing incomes, increasing leisure time, broadening discretion in spending, expanding awareness of material luxuries, and mounting willingness to borrow to upgrade our way of living.

Does the development give you an uneasy feeling that our "affluence" is reaching a danger point? If so, consider these points before you leap to what I suspect will be a popular conclusion.

We are a nation in which the middle-income class is becoming ever more dominant and in which millions of husbands and wives work and earn enough to have money left after the neces­sities are paid for. We also are being constantly exposed through our reading, television, and the movies to the ways of opulent living. It is entirely natural that families which have discretionary spending power should want to use that power and their credit to add measurably to their comforts.

We are a nation in which leisure time is expanding sharply, through longer vacations, a shorter workday, a shorter workweek. The greater leisure time makes it "practical" to want such luxuries as the second kitchen, the vacation house for weekends, and the once-a-year holiday. The improvement of roads on which to drive the second car to the second house is a subtle but essential spur too.

We are a nation in which the teenage population is ballooning. Teen-agers in a house can put the second telephone and the sec­ond car almost in the category of life-preserving essentials.

Most important, we are a nation in which industry has managed to build production capacity to a point where stimulation of new demands is important to support jobs and paychecks. This was not true in the 1940s and through most of the 1950s. It is true now.

The trend from "I have one" to "I have two" is in its infancy, but it's a trend made to order for the convenience-loving seekers of status that most of us are. Watch it grow.

Among the most impressive of all the trends from "I have one" toward "I have two" or "I have three" lies in the automobile industry, of course. In fact, a giant reason for forecasting that annual auto sales in this new epoch of the specialized car will be moving toward 8,000,000 in the mid-sixties and will be zooming past 9,000,000 by the 1970s is the American family's growing need as well as desire for more than one car.

The Trek Back to the Cities

"We're moving back this fall," I heard the man behind me say as the Westport-New York commuter's special roared toward Manhattan. "I just can't stand this daily commuting any longer and Marge is screaming about the dull weekdays. The hell with it! We're moving back."

"What about the kids?" asked his companion.

"They'll adjust fast enough. Anyway, in a couple of years, they'll both be going away to school, and then Marge will rattle around in that house, go crazy with boredom, and drive me batty with her."

As I listened in, I said to myself, "Why, of course. The trend is starting to reverse. What I'm overhearing is a little anecdote illustrating why many suburbanites are trekking back to the cities." And it is happening all over the country. The move back from suburbia is on a small scale so far but it's certain to mount.

Item: New and attractive apartment houses are springing up all over my home town of New York. "More and more of the occupants are families coming back to the city," said the man­ager of several of the biggest buildings. Who are they? "Older couples whose children have grown and who have money to afford the rents." Then he pointed to a patch of grass. "They tell us they love that patch more than they ever loved their big lawns. One man calls it his 'patch of freedom.' "

What is true in New York is true in Philadelphia and Pitts­burgh, in Chicago and St. Louis, in Detroit and Los Angeles, and other cities.

Item: A significant percentage of buyers of new homes on the immediate fringe of the city are ex-suburbanites. A recent poll of hundreds of home-buyers in a new development within subway distance of Manhattan's heart revealed one in six had come directly from a suburban area and three out of four cited the difficulties of commuting as the reason for the move.

These families can't afford or find apartments in the city's heart or they want to own a home because of their children. But they also are part of the trek back—and they use the shopping, restaurant, and entertainment facilities of the city.

Item: One of the nation's top business advisory services flatly forecasts that a surge back to the city will develop simply be­cause of the changing nature of our population.

The biggest population gains in this period will be among the over-fifty and in the upper-teenage-to-twenty-five age groups. In neither case will young children be a force impelling a move to the suburbs. These couples will, in many instances, want to live within the city's limits—and they will, if they can find satis­factory places to live.

One of the greatest housing and population stories of the post-World War II years has been the rush of millions of fam­ilies to suburbia and exurbia. This has been the power behind the fabulous growth of the shopping center, the climb in rural land prices, the lagging performance of the downtown stores, the deterioration of our central cities.

Now, many of these families have found the dream of suburbia a nightmare of exhausting and expensive commuting by train or car, of zooming local taxes, of snooping neighbors, of small­ town jealousies. Increasing numbers want to come back to the city and will; at the same time, increasing numbers are deciding against moving out of the city in the first place. The reasons range all over the lot—commuting horrors, the appeal of the city's shops and cultural activities, the privacy of a city home— but the big point is that for the first time in years the reasons are being mentioned out loud and without apology.

Are the cities seizing the opportunity to make the most of the comeback trend? To some extent, yes. From coast to coast cities are rebuilding and redeveloping, are turning slums into modern apartments and parks, are tackling problems of traffic, schools, utilities, and the like. From coast to coast the giant downtown stores are fighting to hold and gain new customers in hundreds of new and important ways.

But much, much more must be done. The problem of middle-income housing in our cities has hardly been scratched, for in­stance. If our cities are not to be left to the wealthy and the very low income groups, vast strides must be made in middle-income housing construction—and fast.

The rush to the suburbs is slowing, the reverse trend is appear­ing. And to all the suburbanites yearning to come back, let me promise there are few thrills to match the one you'll get that first evening you look out your city apartment window and in comfort watch the commuters struggling to make the 6:02 or reach the expressway that leads toward home.

The Four-Day Week

Of course the four-day week will come in our land. Of course the trend will develop gradually and selectively, and the four-day week will be the result of union-industry bargaining, not of legislation or violent depression. Of course as the shorter work­week spreads, individual industrialists and spokesmen for organized business will condemn it as a dangerous step toward socialism and national paralysis, an invitation to "maladjustments in the economy which could lead to disaster." (Precisely these remarks have been made by nationally known businessmen recently.)

The question is not whether any of these things will take place; they will. The question is only when they will occur.

If trends simply continue naturally—meaning they go on as they have been going on for the past hundred years—the four-day week of eight or nine hours a day will be standard in industry in another two decades. If the trend is given the push powerful unions undoubtedly will give it, the four-day week will be stand­ard for millions of workers in a wide variety of fields long before this—say in the sixties.

Considering the history of the workweek in our country since the middle of the nineteenth century, what's astounding about businessmen's reaction to talk of the four-day week is that they are astounded. For the record shows that since 1850, the work­week has grown shorter and shorter. From an average of 69.8 hours in 1850 to 64 hours in 1880 to 60.2 hours in 1900 to 49.7 hours in 1920 to 44 hours in 1940 to 40.2 hours in 1955 . . .

What's more, a study of the trend shows that the reduction in work hours has been steady, averaging around three hours a decade. The five-day week, which we accept as so natural today, has been in vogue only about a decade. The six-day week didn't last very long; it began to disappear around World War I. The five-and-one-half day week started to go out of fashion in the twenties, really became the exception by the end of World War II.

And history also tells us that a significant stimulus to shorter workweeks in the past has been economic depression. Yet, while hard times have spurred the cut in hours—to share what work was available—the shorter week has remained the rule when good times returned.

As worker productivity has risen through the years (each worker has been able to turn out more per hour), workers have taken the biggest chunk of the reward in cash income, but they also have persistently taken a healthy share in increased leisure time.

Each time a major move has been made toward a shorter week, businessmen have cried that there were "impossible" obstacles: crippling expenses, the difficulties of applying it in such fields as retailing, utilities, etc. But the barriers always have been sur­mounted, and industry after industry has followed the leader­ship to the shorter week. And each time the shortening of the workweek has given a tremendous boost to all manufacturers catering to the leisure-time market and to the housing, auto­mobile, and do-it-yourself industries too.

Actually, a government survey in 1955-56 revealed that 17 per cent of all workers in seventeen major labor areas already are working on a schedule of fewer than forty hours. The standards are changing right now.

This is the way it has been. This is the way it is and will be.

The Value of Your Leisure

Let's say that at the start of your vacation this summer, you are smashed up in an auto accident and you not only lose your vacation, but also are away from your job for another two months. Under today's laws and legal traditions, you can sue and be compensated for your resulting loss of earnings, your expenses, and pain. But what about the "value" of your lost vacation? Shouldn't you be able to recover something for the enjoyment you forfeited when your long-anticipated holiday was smashed along with your body?

It may sound fantastic, but the time is approaching when the courts of our nation will recognize that in our society there are leisure values as well as property values. And they will direct that you be compensated when your leisure values are reduced or wiped out.

Or let's say you are an amateur flower gardener who gets deep personal fulfillment out of watching your flowers grow. Since the commercial value of your flower garden is nil, you couldn't collect much cash in damages if a cruelly careless neighbor per­mitted his dogs to destroy your flowers. But what about the mental peace that was destroyed when your flowers were de­stroyed? Shouldn't you be able to recover something for this?

The time also is approaching when the courts will formally recognize you have personality as well as property rights. You'll be able to collect damages for loss of such values as your enjoy­ment of beauty.

Recently the Honorable Bernard Botein, Presiding Justice of the Appellate Division of New York State, delivered the nine­teenth annual Benjamin N. Cardozo lecture in New York City on the future of law in the United States. I attended, expecting to hear a talk that was thought-provoking but far off my specialty of economics. Instead, I sat spellbound as Justice Botein took a long, forward look into the historically unique leisure society we are developing and touched on the fundamental economic-social problem this society will create.

"Already the shapes of the future challenges are clearly dis­cernible," said the brilliant Justice when I interviewed him after the lecture. "With the workweek heading toward an average of only 30 hours by 1975, we are moving into an economy in which most of each man's waking time and energy will be devoted not to earning a living, but to activities of his own choice. . . . The phenomenal rise of a leisure society will bring with it new values, and the law must find ways to treat with them."

A historic step in the direction of recognizing new values was taken when the Supreme Court of Michigan ruled that a wife had the right to sue for the loss of consortium—marital comfort and companionship. "A husband certainly can't be called the property of his wife but when the wife in this case lost her husband's comfort and companionship, she lost a 'human value/ " said Justice Botein.

Another clue to the trend appeared in Justice Botein's own court recently when a woman bookkeeper who also was an amateur singer was awarded moderate damages for the loss in an accident of her sense of pitch and thus her capacity to enjoy and benefit from her amateur singing. "We couldn't compensate her for her loss of fun and satisfaction because of the impairment of her proficiency," emphasized Justice Botein. "But the time will come when we will be able to."

The first breakthrough on the recognition of leisure values may come within five years, according to Justice Botein. You might be compensated for your loss of leisure time, or for im­pairment of your capacity to engage in a leisure-time activity, or for the loss of property which has little commercial but great personal value to you. "In a leisure society, you will have leisure values and rights—which our courts will accept and legally protect for you."

Your Pay for Not Working

Another little-known part of the leisure-time revolution in our country is the startlingly large number of Americans now getting paid for not working at all.

A huge 18 to 20 per cent of all the personal income being paid in this country today is going to Americans who are not working for the incomes. They are dependent neither on a job nor on their own business nor their own profession for the cash they receive.

A full 7 per cent of all personal income in our land is being paid by the Federal government to individuals, primarily in the form of social security pensions, veterans' benefits, and the like. Another big chunk is being paid by private corporations to owners of stocks in the form of dividends. Other chunks repre­sent interest going to people who own bank accounts, bonds, etc., and to investors who have properties which pay them rent.

So important is this type of personal income becoming that "not working" has been called the fastest growing major "oc­cupation" in the United States today. The number of nonworkers has about doubled in the past ten years and easily may double once more in the next ten.

The swelling army of Americans getting paid for nonwork is not just a phenomenon of concern to those in the army. The nonworker is an economic force, a new and increasingly potent stabilizing factor in our country. In a real sense he is transform­ing our society in a way I doubt was even imagined only a few decades ago.

Let's be specific. When the Department of Commerce issued its September 1960 report showing our personal incomes running at an annual rate of over $400,000,000,000, it, as always, broke down the total to show the sources of the income. By far the largest percentage, of course, consists of wages and salaries. Al­though profound changes are taking place in how we earn our wages and salaries-—with the proportion being earned in the service industries and government jobs climbing at a dramatically fast rate—the key point is we're still getting most of our incomes from jobs. And the next biggest amount consists, as you might guess, of payments to individual businessmen, doctors, lawyers, and other self-employed.

After wages, salaries, and proprietors' incomes are subtracted from the total, though, a substantial amount of the $400,000,-000,000 is left, and here is where the story lies. For a tremendous $29,500,000,000 a year in personal incomes is going to individuals in the form of "transfer payments"—officially defined as "payments not resulting from current production" and consisting "mainly of social insurance benefits and veterans' payments." This represents 7 per cent of the total as compared with under 5 per cent as recently as 1951, under 4 per cent in 1940, under 2 per cent in 1929.

These billions are clearly being paid to nonworkers today, and those receiving the incomes get them regardless of whether busi­ness is in a boom or a bust. What's more, these billions are spent by the nonworkers regardless of whether the economy is soaring, slumping, or moving sideways.

Another $14,000,000,000 a year in personal incomes is going to individuals in the form of dividends on stocks, triple the amount paid in dividends twenty years ago. Those getting this income aren't directly earning it. Another $27,500,000,000 a year is being paid in the form of interest income, another $12,500,-000,000 in the form of rental income.

There may be some argument about the precise percentages of personal income going to nonworkers, but the fundamental point is indisputable. Not ever in our economy have so many received so much income without currently working for the in­come. Not ever could our economy depend so heavily on auto­matic and immediate spending of the incomes by the nonworkers.

My fingers fumble on the typewriter as I write that the non-worker's income is becoming a vital stabilizing force in the great­est middle-class society the world has ever known. But it is so and will be more so.

Our Era of Research

Mr. and Mrs. America, wouldn't you like to have:

Laundry appliances that would not only automatically wash but would also automatically sort, iron, and fold your clothes?

A telephone with which you could dial numbers anywhere in the country and in many areas around the world?

A TV screen on your telephone so you could have face-to-face phone talks with your friends and business acquaintances?

A "stove" which actually would be a counter with a series of electric outlets into which you would plug your heating units and cook foods secure in the knowledge that, even though you didn't give the food another glance, it would come out neither underdone nor overdone?

Chemicals which would destroy only the plants in your gar­den that you wanted to destroy and would not harm those you wanted to grow?

Wouldn't you eagerly dig into your savings and borrow to buy such items and services? I'll bet you would! And I'll also wager that you'll be able to get them within a few years.

Within five years, we will be on the moon, and only a few years later, we'll be landing on Mars. Within five years, we also will be buying TV screens that can be hung on a wall, and the pocket-sized TV camera will be a commonplace item owned by millions.

In the life span of most of us now living, we will be living mankind's ultimate experience—travel through space. In the life span of most of us now living, we also will have the choice of living in houses which have movable walls, cooking in kitchens operated entirely by push buttons, sleeping comfortably in beds which need no blankets.

A ridiculous coupling of forecasts? Not to my mind.

For the successful launching of a moon rocket is of brilliant economic significance as well as of stupendous scientific, mili­tary, and political significance to all of us. It dramatizes as no other event of this era what may be the greatest of all forces for prosperity in the decades ahead.

That force is the research of the post-World War II era. It is the colossal, organized, scientifically planned effort by industry and by government to revolutionize the world in which we live —and revolutionize it in a matter of years rather than generations.

Russia's Sputnik came out of her postwar research, of course. And so did our own satellites, guided missiles, jet fighters, atomic weapons, etc. But projects developed for military purposes have their civilian applications too. The jet transports we're now rid­ing began as military products.

What will come out of the research being done by industry on civilian products can electrify the imagination almost as much as the thought of traveling in space. We may not be able to comprehend a trip to the moon, but we can comprehend a TV screen hung on a wall.

Of every $100.00 of goods you'll be buying only two years from now, at least $12.00 will go for products not even being made today—for absolutely new things or products so changed that they reasonably can be called new.

Of every $100.00 of sales that the transportation industry (largely aircraft) will be chalking up in 1963, at least $27.00 will represent products still in the blueprint stage now. And the elec­trical machinery industry expects $18.00 of every $100.00 of sales will be in new products, the chemical industry expects $14.00 will be in new products, the auto industry expects $11.00 will be.

Even the relatively stable food and beverages industries an­ticipate $7.00 of every $100.00 of sales in products not yet avail­able and probably not imagined by most of us today.

Startling though these projections are, they are likely to turn out exceedingly conservative. They are the forecasts of leading companies in the industries, and the companies traditionally tend to underestimate on predictions of this sort. Regardless of the precise figures, though, the vital news is that a flood of new products and processes will be roaring into the American market place in the next few years as a result of industry's ever-rising spending on research—spending which will hit an all-time high of $9,500,000,000 this year, will climb to a minimum of $11,500,000,000 by 1962.

This disclosure of the sturdily rising level of research spending is, I submit, the brightest note in industry's plans for spending on new plants and equipment through 1962 and beyond.

It's difficult to exaggerate the significance of this uptrend. For research will bring into being new products, thus creating new markets and, quite probably, whole new industries. It will spur us to want and buy things we never wanted or bought be­fore, because we couldn't even dream of the products or their availability. It will compel a continuing revolution in our way of living. It will be a new dynamic force for growth. It will help us maintain an advancing standard of living, absorb our millions of new workers.

Research is not just a part of industry today. It is an industry in itself, and a huge one.

The $9,500,000,000 spent in 1960 for research was 6 per cent more than in 1959, and compares with spending of less than $1,000,000,000 at the start of World War II. Every industry is planning more spending on research this year than last with the sole exception of the aircraft industry; this industry, as well as many others, gets a major part of its research funds from the Federal government. Close to one-third of all large manufacturing companies will be devoting "a significant share" of their 1960 spending for new plants or facilities to make new products. The chemical industry will be putting 55 per cent of all its ex­pansion funds into new product facilities.

If at this point you wonder when you'll be seeing all the new products, the answer is: at any time now. The boom in research by industry didn't start until the mid-fifties, and there is an average lag of at least seven years from the beginning of research on a new product to the time of large-scale production.

The upsurge in spending for research in 1953-55 should start to pay off now. The new consumer products and processes which were laboratory dreams seven years ago should be reaching us in these early years of the new decade. There well might be an explosion of new things. And the research spending isn't leveling off. Quite the contrary, the growth continues at a phenomenal rate. Here is the best good news of the reports on industry's plans. Here is the best hope for our nation's and our own bread-and-butter future.