Jobs, prices, and unions


/'rcej <?4«/ Cf*t/oKr

By

RT. REV. MSGR. FRANCIS J. HAAS, Ph.D., LL.D.



The pamphlets in the Social Action Series
, of

which this is the nineteenth number, are edited

by the Social Action Department of the Na-

tional Catholic Welfare Conference. They
represent an effort to present to the general

public, and especially to Catholics, a discussion

of current economic facts, institutions and pro-

posals in the United States in their relation to

Catholic social teaching, particularly as ex-

pounded in Pope Pius XI’s Encyclical “Forty

Years After—Reconstructing the Social Order”
(Quadragesimo Anno.) In the spirit of that

Encyclical they are urged upon and recom-

mended to individuals, study clubs, discussion
groups and school classes.

Copyright, 1941, by The Missionary Society of St. Paul the Apostle
in the State of New York

PRINTED AND PUBLISHED IN THE U. S. A.

BY THE PAULIST PRESS, NEW YORK, N. Y.



JOBS, PRICES, AND UNIONS

By

Right Rev. Msgr. Francis J. Haas, Ph.D., LL.D.

Dean
f
School of Social Science

Catholic University of America

SOCIAL ACTION SERIES

No. 19

Published for

THE SOCIAL ACTION DEPARTMENT
N. C. W. C.

by

THE PAULIST PRESS
401 West 59th Street
New York, N. Y.



FOREWORD
The intricate, fundamental relationships of Jobs,

Prices, and Unions are here diagnosed, and the di-

rectives prescribed are both realistic and hopeful.

Monsignor Haas presents disturbing facts on un-

employment, and his discussion of its major causes

throws light on the evil effects of economic dicta-

torship operating through price and production

control, and of the consequent lack of price parity.

He analyzes the problem of business controlled
prices and shows that unions are a necessary and

neglected factor in the solution of both the price

problem and the job problem to which it con-

tributes so heavily. The full solution advocated

—

that of Pius XFs occupational group system—is set
forth in terms of its immediate and remote possi-

bilities in the actual condition of American indus-

try today.

SOCIAL ACTION DEPARTMENT
NATIONAL CATHOLIC WELFARE CONFERENCE

Nihil Obstat:

Imprimatur:

New York
,
January 7

,
1941.

Arthur J. Scanlan, S.T.D.,
Censor Librorum.

* Francis J. Spellman, D.D.,
Archbishop of New York.

DescJfe
.;

f



Jobs, Prices, and Unions
By

Right Rev. Msgr. Francis J. Haas, Ph.D., LL.D.

rPHE title of this pamphlet—Jobs, Prices, and Unions

—

**• indicates both its subject matter and its order of treat-

ment. Jobs and prices will be discussed as problems, and

unions as one of the means, in combination with other means,

to solve them.

The “problem of jobs” will be taken to mean the task
of providing gainful employment for all of the eight or nine

million jobless able and ready to work. The “problem of
prices” will mean the search for and the use of the means
to abolish business controlled prices which prevent in a

major way full utilization of men and resources.
The purpose will be to show that if the liberties of all

citizens are to be protected, unions, together with other

organized bodies, not only can but must play an indis-

pensable part in banishing unemployment and unfair prices.

Indeed in a wider sense, unions have a contribution to

make—and one which they alone can make—toward estab-
lishing a just and stable social order.

There will be no extended analysis of unemployment and

price control except to show that these are evils to be at-
tacked and stamped out. Nor will there be any discussion
of the emergency relief measures including the Federal Pub-

lic Works Program (WPA, CCC, and NYA), farm aid,
RFC loans, local public relief, and others—necessary as
these were and are to alleviate human suffering. The re-
lation of unemployment to National Defense will be referred

to only briefly, but more attention will be given to showing

how unemployment and price controls can be made to give
way to and even be replaced by full employment and fair
prices. The program proposed will be the occupationally
organized society advocated by Pope Pius XI in the En-
cyclical Forty Years After.

[ 3 ]



The latter portion of the pamphlet will be devoted to the
subject of unions in order to demonstrate that they are

vital in any plan to procure work for all and an abundance

of goods and services for the entire population. It is not

maintained that unions alone can achieve this result. The
reason for emphasizing the part which unions must be

permitted to play in directing the national economy is that
for various reasons—in particular employer opposition

—

they have not hitherto been accorded their rightful place

along with the highly organized activities of management
and government in guiding our economic life.

Even at the present time not more than a fifth of the
total labor force of the United States are organized in unions.

In consequence, the vast majority of the wage and salary

workers are not permitted through representatives of their

own choosing to participate in the determination of their
own wages, hours, and working conditions; and are denied
any voice on national policies regarding jobs, prices, or other

matters in the economy in which they and the rest of the
population work and live.

I. JOBS

The more basic facts about employment and unemploy-
ment may be stated as follows:

While about 36,000,000 persons are employed in non-

farm occupations and about another 10,500,000 in farming,

an additional number of between 8,000,000 and 9,000,000
are unemployed and unable to find work. Even during the

present period of National Defense with the large numbers

that it will undoubtedly place back in industry one cannot

be oversanguine. In Great Britain under the terrific strain

of war production, unemployment has been reduced to only

about seven per cent of the entire normal working force, and

if the same rate of reduction were to be applied to the

United States, some 4,000,000 would still be without jobs

in this country.

Prior to 1929 the number of unemployed fell or rose ae-

[ 4 ]



cording to whether times were good or bad, but the annual

average number even in the most prosperous years of the

1920’s was not less than 1,700,000. Since 1929 there has

also been a rise and fall with a peak of 15,000,000 out of

work in the Spring of 1933 and a “low” of 6,000,000 in the

Fall of 1937. Approximately 25,000,000 persons are now
either unemployed or dependent on someone who is jobless,
and perhaps more than half of the unemployed are included

in families containing no employed member. The unem-
ployed represent about one fifth of all workers in urban and

about one sixth of those in rural areas, and about one half

of the total number of unemployed have been out of work a

year or longer. Because of the falling birth rate the num-

ber of “gainful workers” has increased more rapidly than

the whole population particularly since 1930. Over the past

ten years a total of some 4,000,000 young persons between

15 and 24 years of age have continued to be unemployed,

and young workers together with the older are less likely

to have jobs than the middle aged. Perhaps more than a

fifth of the jobless are women, although the proportion of

married women working has more than doubled since 1930.
Negro unemployment is more serious than white, the 1937

Census showing nearly 30 per cent of all Negro workers out

of work as compared with nearly 20 per cent of all white

workers. Of all the unemployed approximately one eighth

had been self-employed.

Nearly half of those now employed work more than 44
hours per week, and many of the mass production industries
can operate without loss at about one half of their actual

capacity. As a result in depression they keep only one
half of their employees at work. Some industries as com-
pared with others have a higher upswing in good times and

a deeper drop in depression. In order of greater stability

of employment the various industries rank as follows: gov-
ernment, agriculture, trade and finance, service (hotels,

restaurants, etc.), public utilities and transportation, manu-
facturing, mining, and construction. Over one fourth of the
unemployed are on the Federal Public Works program

[ 5 ]



(WPA, NYA, and CCC)
;
nearly another one fourth are not

seeking work for a variety of reasons, for example, illness

or residence in a “ghost” town; while the remaining one half

are looking for work but unable to find it. Finally, perhaps,

one half of all the unemployed are receiving some form of

public assistance, including unemployment compensation.1

Major Causes of Unemploymenf

Unemployment is the end result of a host of causes. The
more fundamental causes may be set down as follows:

1. Economic Dictatorship. The major causes of unem-
ployment are centered in what Pope Pius XI calls despotic
economic domination, to be distinguished from political

dictatorship, in any of its totalitarian forms of Communism,
Fascism, or Nazism. Of economic dictatorship Pius XI
writes:

In the first place, then, it is patent that in our days

not alone is wealth accumulated, but immense power
and despotic economic domination is concentrated
in the hands of a few, and that those few are fre-
quently not the owners, but only the trustees and
directors of invested funds, who administer them at
their good pleasure.

This accumulation of power, the characteristic note

of the modern economic order, is a natural result
of limitless free competition which permits the sur-

vival of those only who are the strongest, which often
means those who fight most relentlessly, who pay
least heed to the dictates of conscience.2

The structural details of this description as they apply
to the United States may be found in The Structure of the
American Economy

,

Part I, Basic Characteristics, June,

1939, of the National Resources Committee. Here it is

shown, for example, that eight “interest groups” control
1 The current unemployment data given here and elsewhere are for the first

half of the year 1940, and are based on various government publications, e. g.,
Facts About Unemployment, published by the Works Projects Administration,
1940, and checked by Wasted Manpower by Corrington Gill, Assistant Com-
missioner, Works Projects Administration, W. W. Norton & Company, Inc.,
1939.

2 Pp. 32, 33, Forty Years After, Reconstructing the Social Order, N. C.
W. C., Washington, D. C. Succeeding references are to this edition.

[ 6 ]



industrial and bank assets of $61,025,000,000, which is

62 per cent of the assets of the 200 largest industrial con-

cerns and 50 largest financial concerns. It is not to be

understood that the men who form these interlocking groups
arbitrarily decree unemployment. Yet they can by no

means be excused from all moral culpability. They wield
tremendous power over the life of the nation and in pro-

portion to their power have done little in a positive way to
abolish unemployment.

The other causes of unemployment do not originate in

economic dictatorship directly, but like it, represent viola-

tions of morality, for which all sections of the population

must share a greater or less responsibility. Accordingly,

Pius XI insists that there is need not only of a reconstruc-
tion of the social order, but also of a renovation of moral

life and virtue. Assuredly, unemployment should not be

viewed simply as a disease, or as a natural phenomenon
like a blight or a flood. It is caused by human beings,
and human beings are under obligation to remove it.

2. Artificial Controls of Prices and Output. It is com-
mon knowledge that powerful corporations employ such de-
vices as Trade Associations, Price Leadership, Basing Points,

and Patent Pools to control prices and output. Usually the
purpose alleged in justification of these activities is the

necessity of preventing “unfair competition,” “selling below
cost/’ and “market instability.” Generally, as the decisions
of the Federal Trade Commission show, the purpose is to
secure monopoly control over prices and the volume of goods
that can be obtained by consumers.

The effect on employment is, however, unmistakable.
Pegged prices and curtailed production cause unemploy-

ment. First, workers’ families, who must buy these goods
at “administered” prices, buy less of them or do not buy
them at all. They as well as the establishments in the
non-administered price industries, notably agriculture, be-

cause of their reduced purchasing power, cause the em-
ployees in the administered price industries to be under-

employed or to be laid off. Secondly, the corporations pur-

suing these practices may and often do accumulate from

[ 7 ]



profits large surpluses charged especially to depreciation,

which may lie frozen and thereby be prevented from flow-
ing into the normal channels of circulation to keep the

system functioning and providing jobs and goods for the

whole population. It is generally agreed by students of

prices that the sharp drop in employment in the Fall of

1937, was due in considerable measure to drastic price rises

which began to be put into effect, in anticipation of a com-

ing boom, in the Summer of 1936. Actually a boom did
not materialize in 1937-1938, but rather widespread de-

pression and unemployment.

3. General Low Wage Levels . Perhaps the most direct
cause of unemployment is the relatively small share (from

year to year about 65 per cent) of the national income that

is paid out to wage and salary workers in cities and on farms.

The National Resources Committee in Consumer Incomes
in the United States

,

August, 1938, reports that in 1935-

1936 one third of all families and individuals in the coun-

try had an income for the year of less than $780, a second

third of between $780 and $1,450, and a final third of

$1,450 and over. The National Industrial Conference
Board, an employers’ agency, in Conference Board Studies
in Enterprise and Social Progress

,

1939, divides the popula-

tion of the country into tenths, and shows how the national
income was distributed from 1910 to 1937. The highest
three tenths received a “low” of 56 per cent of the na-

tional income in 1910 and a “high” of 61 per cent in 1921,

whereas the lowest three tenths received a “low” of 8 per

cent in 1937 and a “high” of 14 per cent in 1910.

Inasmuch as at least two thirds of all workers, within

families and without, receive inadequate income, they are

unable to buy all that the existing mass production regime

can produce for them. Their underconsumption prevents

or reduces employment opportunity for vast numbers of

other workers in addition to themselves. It is apparent

that it is only by providing the underpaid with adequate in-

come that any drastic reduction in the number of the un-
employed can be effected.

[ 8 ]



4. Imbalance Between Farm and City Prices. The
farmer’s wages come from the money which he gets for his
products. Accordingly his income will depend generally

on the conditions under which he must sell. If he has a

sizable number of competing buyers he may come off
fairly well. But if he must sell to one of a given number,

all of whom agree not to underbid one another, he may
and usually does fare very badly. Farmers engaged in

one-crop farming are particularly subject to this disability.

In July, 1940, the Anti-Trust Division of the U. S. Depart-

ment of Justice charged that 82 per cent of all real cheese

produced by American farmers must pass through the hands

of six companies, and that tobacco products are “bottle-

necked” on their way from farmers to consumers through
control of eight companies.

Moreover, the farmer is a buyer of city products, and as

such is compelled to buy under the same price restrictions
as is the city dweller. The movement of prices of farm
machinery and of building materials for farm homes as
compared with that of prices received by farmers for their
commodities is especially in point. From 1910-1914 to
June, 1940, the price of farm machinery rose to 152 per

cent and that of building materials for farm housing to

157 per cent, although prices received by farmers dropped

to 95 per cent. Reviewing the period of 1912 to 1938 the

National Bureau of Economic Research reports in Bulletin

80 of September 9, 1940: “Since 1912-1914 when the trading

position of farmers was at a peak after a long period of

steady gain, there has been a net loss of almost 20 per cent

in the physical volume of goods for which a stated quan-

tity of farm products could be exchanged.”

The net result of this pressure on farmers, both as sellers
and as buyers, is that they are rendered unable to pur-

chase a larger volume of manufactured goods than they

would otherwise be able to purchase, and to that extent

city industries are deprived of an important market. The
final effect is both urban and rural unemployment or un-

deremployment.

[ 9 ]



Of similar importance is the existing lack of parity
among industrial prices themselves. This phase of the
question will be considered in the next section.

5. Other Causes. The foregoing causes of unemploy-
ment by no means complete the list. Most basic among
those not within the province of this pamphlet is the fall-

ing birth rate—which unemployment in turn aggravates.
Such causes as “technological changes,” “labor saving ma-
chinery, “speed up,” “frictional unemployment” (time lost
after a layoff in finding a new job), mergers, and lack of
investment opportunity, though they contribute heavily to

unemployment, are in reality the effects of one or other

of the causes considered above.

II. PRICES

From what precedes it is evident that jobs and prices
are inextricably tied together. Prices too high or too low,

no less than wages too high or too low, throw workers out

of jobs. Actually, however, the great number of com-

modity prices that cause unemployment are those that are

too high rather than too low. It will be of interest to in-

quire into the question of prices, especially into the adverse

effect of business-controlled prices on employment, the

mechanisms which employers use to “stabilize” prices, and

why they seek to “stabilize” them.
The following discussion gives only the barest outline

of a vast and intricate subject, and one upon which a

tremendous amount of research remains to be done. More-

over, illegal price fixing and production control, like other

unlawful acts, are veiled in considerable secrecy. In addi-

tion, corporations indulging in these practices have had to

keep themselves from running afoul of the Sherman Anti-

Trust and Federal Trade Commission Acts, to say nothing

of overcoming public opposition. In some cases, for ex-

ample, the dissolution of the Standard Oil trust by the U. S.

Supreme Court, the Government ruled against one form of

restriction of competition, and subsequently a new device
was discovered. Finally, it should be frankly said that it

[ 10 ]



is difficult to determine in any given situation the extent to

which a price-fixing policy is due to conscious action on the

part of the corporations enforcing it, and the extent to which

it is due to impersonal forces within the system, which forces

the corporations themselves have little or no power to over-

come. Whatever the means and motives, the fact remains

that price and output schedules are artificially estab-

lished over large areas of manufacturing and distribution,

that many of these prices remain uniform and inflexible, and
that as they are now determined they are an important cause
of unemployment and underemployment.

Price and Output Control

The following are some of the more salient data with

respect to price and production control in their relation to

employment.

1. Existing Conditions. The consumer, urban or rural,

is obliged to pay an “administered” or set price for nearly

every commodity he buys, regardless of whom he buys it.
The names of the industries and of the corporations pro-
ducing these goods may be found in the files of the Federal
Trade Commission, of NRA, in court decisions, and in the
reports of the TNEC. The list of articles sold under con-
trolled or “influenced” prices can be extended almost in-

definitely, including meat and meat products, seafood,

biscuits and crackers, milk and milk products, confectionery,

alcohol, building materials, cement, soil pipe, household

furniture, sewing machines, spectacles, gasoline, auto tires,

aluminum, farm implements, electrical machinery, and office

equipment.

It should not be supposed that it is necessary for any

one corporation in an industry to absorb all other corpora-

tions in order to secure price or output control over the

industry. Actually, outside of aluminum, no such monopoly

exists. Yet the result of monopoly is largely achieved
over a substantial part of American industry, and the con-
trol rests in the hands of a small oligarchy of a few hundred

business executives. Such control is made possible by the

[ 11 ]



fact that in most manufacturing industries from three—and
in some cases two—to six companies have the dominant por-
tion of the business in the industry and can compel their

rivals, who perhaps may be quite willing to submit, to follow
their lead in prices.

In a few industries, building construction for example,

monopoly restrictions are illegally enforced at times through

collusion between manufacturing companies and labor

unions. The Department of Justice recently reported that
low-priced plumbing is kept off the market by such agree-
ments. The technique is simple. The union which has a
monopoly or a near-monopoly over the plumber’s craft, in

return for a closed shop, refuses to work on supplies not
made by the manufacturer who is directly or indirectly a
party to the agreement with the union. The Department of
Justice also cited the recent Chicago milk prosecution in

which the Anti-Trust Division secured an indictment of the

milk producers, milk distributors, milk wagon drivers’ union,

and the officials of the Municipal Board of Health for con-

spiracy in keeping independent distributors out of the mar-

ket and stopping the sale of milk in stores in order to require

home delivery of milk. The Government successfully liti-
gated the case, with the result that milk can now be bought
at 8J4 cents per quart in comparison with 14 cents in

some other cities, and Chicago consumers save a sum esti-
mated at between $4 and $14 million dollars per year.

The effect of price control on employment may be seen
by considering two facts. First, industries that hold their

prices inflexible relative to other prices which are falling,

actually raise their real prices in comparison with these latter.

Because consumers either substitute other goods or simply

refuse to buy, the market for rigid-price goods is narrowed,

and employees in these rigid-price goods industries are laid

off either temporarily or permanently.

Again, because many manufacturing concerns have huge
overhead and fixed capital costs they find themselves under

pressure especially during depressions to operate at a con-

stantly decreasing “break even point” of production, that is,

[ 12 ]



the percentage of capacity at which they can operate and

cover direct and overhead costs. The “break even point”

indicates to producers the lowest percentage of total pro-

duction that is possible without a loss. Accordingly during

business recessions, manufacturers aim to adjust their prices

to about this point. Actually, some large manufacturing

corporations are now at a “break even point” of approxi-
mately one half of their capacity. Obviously, to that extent

goods are not produced and men are separated from em-
ployment.

2. Control Devices Used. Price and volume controls

are exercised in numerous ways, varying from industry to

industry. The mechanism may be one of absolute monopoly
or of mere gentlemen’s agreement among competing firms.
Amalgamation of competitors, holding companies, price

leadership, patent pools, basing points, apportionment of

market, open price publication, and tying clauses are only

some among a wide variety of devices used.

Almost any of these instruments could be singled out for

discussion, for example, the use of the patent on tetraethyl

to fix the price of nearly all gasoline purchased. On the
other hand, one mechanism—price leadership—because of
its widespread use calls for special consideration. Its work-

ings may be best illustrated by conditions existing in farm
machinery manufacturing. Of this industry the Federal
Trade Commission reported on July 6, 1938:

The concentration of production resulted in the es-
tablishment of a price level by the dominant manu-
facturers [International Harvester Company, 41 per
cent of the farm-machinery sales of all reporting com-
panies, and Deere and Company, 21 per cent], which
all manufacturers had to observe in the sale of farm
implements. The small companies could not sell
their products for more than the established prices of
similar products of the large companies, and they
hesitated to sell for less than the established prices
for fear of setting up a price war in the industry in
which their larger and financially stronger rivals

[13]



would have all the advantages. As a result of this
situation the small companies awaited the announce-
ment of prices by the leading manufacturers before
making their own at the beginning of the season and
followed the price changes of the large companies dur-
ing the selling season. The years of depression saw
sharp reductions in employment and production
throughout the industry, but only slight reductions in

prices. (Investigation of Concentration of Economic
Power, pursuant to Public Resolution No. 113, 75th
Congress, Part 5a, p. 2388).

In addition to concentration of production, whereby from

two to perhaps six enterprises whose dominance in an in-

dustry enables them practically to dictate its prices, there

is also the important instrument of employers’ associations.

Briefly, employers are highly organized. The latest direc-
tory of employers’ national and interstate trade associations

issued by the U. S. Department of Commerce ( Selected
Trade Associations of the United States: 1937 Edition) lists

the names and addresses of 2,400 such national organiza-

tions. The Introduction of this publication states that there
were 50 such associations in 1875, 100 in 1900, more than

1,000 in 1920, and 2,500 in 1935. Besides the 2,400 now
operating on a national basis, there are 6,000 state and

local bodies, exclusive of chambers of commerce.

It is not to be understood that all these associations are

engaged in price fixing and output restriction. Some of
them are devoted almost entirely to product research and to

simplification of varieties in shape, size, and quality of

product. In actual practice, many of them would find it
difficult to compel their members to adhere to any prede-
termined price or production policy, and obviously they

could apply no compulsion at all on strong concerns which

refused to join the association. But they may

,

through the

statistical data on production and markets which they col-

lect from their members, propose price policies which are

actually carried out, and prepare information which may
be of controlling value to the dominant corporations in the

[ 14 ]



industry in aiding these latter to fix their own prices,

which, because the corporations fixing them are “leaders,”

smaller producers follow willingly or otherwise.

In regard to employers’ associations a matter should be

emphasized that is all but overlooked. It is that employers,

in contrast with employees, are free, without any restric-

tions, to form organizations of their own choice. Without

resorting to invidious comparison it should be stated that

in organizing, employers are under no threat of court in-

junctions such as unions have been under in the past; that

the Government has never found it necessary to protect

the employers’ right of free association by establishing any

agency for employers comparable to the National Labor Re-

lations Board for employees
;
and that they are subject to no

limitations on the exercise of their power to select their di-

rectors, executive secretaries and other officials in the way
that workers are required under the typical company union

to limit their choice of spokesmen to their fellow employees

on the company payroll.

In a word, employers and all their financial and dis-

tributing associates enjoy unquestioned and unrestricted

freedom to organize in any way they see fit, and they have
exercised this freedom to the fullest. On the other hand,
employees, chiefly because of powerful employer and finan-

cial hostility, have not been free to organize, and even now
are organized up to only about one-fifth of their number.

The almost complete organization of employers on the
one hand and the relatively small degree of organization

among workers on the other are stressed here in order to lay
bare an underlying reason for the highly unbalanced power

now existing between employers and workers, not only in
the important market in which workers sell their labor to

employers but also in the no less important market in

which they buy finished commodities from employers and
distributors. Because of the concentrated power on the one

side, and the relative absence of power on the other, de-
cisions regarding price levels are made by the former with-

[ 15 ]



out any effectual resistance from the latter. Clearly in de-

cisions on wages the former hold the dominant power.

Even assuming the highest motives of justice and hu-

manity on the part of employers, it is quite unlikely that

under existing conditions they could as individuals do any-

thing other than they are doing. As things are now, in the

widespread absence of workers’ organizations, the employers

of about four fifths of all workers deprive themselves of the

thinking and planning which intelligent union officials would

be able to contribute not only to their own industries but

to all of industry. Clearly such labor officials—and it
would be intolerable arrogance to say that they are not

to be found among workers—cannot make this necessary
contribution until workers in general are permitted through

the democratic process of organization to sift out their best

spokesmen, and until employers are ready to meet them and

deal with them after they are selected. In any event un-

employment prevails and will doubtless continue to prevail

until this root cause of the evil—absence of workers’ organi-
zations—is removed, and all parties, labor included, are
permitted to participate in the making of national policies

on wages and prices.

3. Why Price and Output Controls. The business con-
trols just described are rooted in the business thinking of

the past, if not in what is incorrectly called “The American
Way.” This philosophy is one of “producerism” with little
or no attention to “consumerism.” It holds that “private

enterprise” is to be preserved inviolate, and that there must

be no “interference” by government or by labor organizations
with the enterpriser’s freedom of action. It concentrates on

getting goods produced at a maximum profit without con-
sideration of the effects on employment.

American industry has followed this policy to its own
interest, but in doing so almost totally disregarded an ele-

ment which is no less essential than production to the self-
preservation of the individual enterpriser. That element is

consumption. Manifestly, reduced operations and unem-

[ 16 ]



ployment must follow when markets are insufficient to pur-

chase goods produced.

Viewing the matter from another angle, the control de-

vices under consideration give those who operate them a

sense of self-security and protection against losses—not to
mention the opportunity in some cases for huge profits and

ruthless exercise of power—but the end result is the same.
Consumption is reduced and unemployment follows. To the
individual establishment the essential conflict is between

profit efficiency in terms of maximum earnings, and social
efficiency in terms of maximum employment and maximum
volume of goods. Clearly, with no outside checks to coun-

ter-balance the private control powers now exerted by indi-
vidual corporations, the public weal is subordinated to pri-

vate profit. In a word, uncontrolled profit seeking does not

lead to public well-being.

Nevertheless, the position of the individual employer in

this matter is frequently trying and one to be genuinely

sympathized with. He is caught in a difficult dilemma.
The reader may be asked, “What would you do if you had
to decide in the presence of a set of facts like the follow-

ing?” Assume that the final decisions for the corporation
rest with you, and that you can sell your product at $20
per ton while operating at 40 per cent capacity, at $5 per

ton while operating at 90 per cent capacity, and at $18 per
ton at the “break even point” which is 55 per cent capacity.

Where would you fix the price? Before replying, you may
not forget that if you decide on the “break even point” rate
of $18 you are taking more conservative care of your stock-
holders than if you decide on $5, at 90 per cent operation.
On the other hand, contrary to your expectations, the mar-
ket may go up, and you may lose some good customers,
and perhaps your own job. But whatever price you decide
upon—$20 at 40 per cent, $18 at the “break even point”
of 55 per cent, or $5 at 90 per cent—you are reducing the
number of employees on your payroll, either 60 per cent,
45 per cent, or 10 per cent.

Thus the individual enterpriser in the price controlled

[ 17 ]



industries who would wish to decide in favor of maximum
employment and maximum output, is prevented as an indi-
vidual from doing so by forces operating upon him from
which, practically speaking, he cannot escape. The average
manufacturer is compelled to fix a price for his product that

will (1) yield him a profit after he has met his variable
costs plus his fixed costs for unused as well as used equip-

ment, and that will (2) permit him to avoid laying up
an inventory that he will have to sell at a loss in the event

that general price levels fall in the future.

Obviously it is not easy for him to fix upon the price
and the volume of output that will meet all these conditions.

At times “overenthusiasm” about a business boom ahead or
perhaps plain greed will prompt an employer to announce

a price beyond what the market can stand. If he does this

he may have to unload his inventory at a loss, and either
lay off some of his employees, or even shut down entirely.
But whatever decision he makes—provided his concern alone
makes it—can have little or no effect in the way of re-
ducing unemployment generally in other industries or occu-

pations, or very frequently even in his own industry.
The reasons given here for price “stabilization” apply

primarily to the control devices of “basing points” and

“price leadership” in the durable goods industries, but with

proper modifications, they are applicable to all the other

contrivances employed to determine price and production in

industry in general. Because of the rigidities and stresses

which result, and especially the curtailment of purchasing

power among the masses of the people, unemployment fol-
lows of necessity.

III. UNIONS

Before discussing the part that unions should play in a

program to correct the evils of unemployment and price

fixing, it seems desirable to identify the goals that a right

functioning economic order should set before itself. Slight

reflection will make it clear that the whole economic
mechanism can have only one justifiable purpose. It is to

[ 18 ]



produce an abundance of goods so that all the people can

live decent, virtuous lives. This bars the false notion that

the ultimate aim of production is profit, or more correctly,

profits for those who can make them. Compensation in the

form of profit has a place in a satisfactorily operating sys-

tem, but it is a means rather than an end. The end is full

and abundant production. Only a system based on this

purpose, assuming that the principles of Christian living are

adhered to, can hope for lasting permanence and stability.

Pope Pius XI, in Forty Years After, stresses this point

when he declares:

For then only will the economic and social organ-

ism be soundly established and attain its end, when
it secures for all and each those goods which the

wealth and resources of nature, technical achieve-

ment, and the social organization of economic affairs

can give. These goods should be sufficient to supply

all needs and an honest livelihood, and to uplift men
to that higher level of prosperity and culture which,
provided it be used with prudence, is not only no
hindrance but is of singular help to virtue (p. 25).

The Holy Father also makes it clear that this result can
be attained only through an oganized society. Employers

would be united in their organizations, wage earners in
theirs, white collar workers in theirs, professional persons

in theirs, and agriculturists in theirs, all in each industry

and in each profession working together, and all industries

and all professions working together, through the internal

motives of justice and Christian charity (and not through
the external compulsions imposed by a totalitarian state)
to advance the welfare of their own occupation and through
it the welfare of all. Clearly, the structure and the sinews
of the papal program is organization rather than individual-
ism or what is ambiguously called “private enterprise.”

[ 19 ]



SOME QUESTIONS AND ANSWERS

This statement of objectives raises a series of questions

which will be discussed in the order: Have workers a stake
in employment and prices? What did workers do in the past?
By what right did they form unions? Are all union officials
“clean” and just? Can either unions, management, or gov-
ernment alone meet these problems? What should be done?

1. Workers
9
Stake in Employment and Prices . Have

workers a stake in having unemployment and price fixing

by employers abolished? The question answers itself em-
phatically in the affirmative insofar as about one fifth of

all workers are concerned. They are the unemployed,
cruelly denied the opportunity of earning a self-respecting

livelihood and of securing their fair share of goods. The
other approximately four fifths likewise have a stake because

the inability of the unemployed to buy reduces the money
wages of roughly these four fifths, and because “controlled”

prices reduce their real wages. The entire population, too,
has a stake in these matters. Unless it demands that the
workers’ stake be protected, or more correctly that the work-

ers be permitted to use the democratic means of protecting
their stake, a host of evils fly back at the public, only one of

which is the crushing tax burden to care for the unemployed.

2. What Workers Did in the Past . In the past workers
used the device of association to protect themselves. On
farms they banded themselves in organizations, the earliest

of which was the National Grange of Patrons of Husbandry
founded in 1867. In cities and villages they formed unions.

The first labor movement of a national character was the
Knights of Labor, established in Philadelphia in 1869, which

reached its peak of membership of 750,000 in 1886, to be

succeeded by the American Federation of Labor. The
Federation, with the exception of the Railroad Brother-

hoods, occupied the field alone until 1935, when what was
later to become the Congress of Industrial Organizations

split off from it. Now the A F of L and the CIO each
has a membership of about 4,000,000, a large percentage of

[ 20 ]



whom, however, because of unemployment, are not in good

standing. In addition the Railroad Brotherhoods have ap-

proximately 300,000 members.

A significant feature about the labor movement in the
past was that, for reasons that will presently appear, it

limited itself to securing higher wages, shorter hours, and

better working conditions. It did nothing, or more accu-

rately, it was not permitted to do anything to help solve

the problems of general or cyclical unemployment and to

prevent price and output control. Exceptions, like the short-

lived NRA, in which the unions, though without a voice
as to price and production, participated in establishing

minimum wages and maximum hours over a wide field in
order to reduce unemployment, or the Bituminous Coal Act

under which the United Mine Workers of America play a
leading part and act regarding prices need not detain us

here. They represent only minor deviations from the
general trend. If it is alleged that unions have created

employment by establishing the standard working day,

by penalizing overtime work, and by demanding a division

of available work during slack periods, it should be remem-

bered that beneficial and laudable as these measures are

in raising income and thereby increasing buying power and

reducing unemployment, these measures when considered
as hours restrictions alone, do not effectuate any important

addition to the total sum of employment.
All in all one may say that unions—except to the ex-

tent that they more or less openly supported labor legisla-
tion—have restricted themselves to working for better wages,
hours and conditions and have done little or nothing to

abolish general unemployment and price and output con-
trol. The reasons are not far to seek. Taken as a whole,
unions were and are too weak numerically to gain general
recognition from employers and to muster up sufficient eco-
nomic strength to support even what they regarded and re-
gard as fair wages and hours. Moreover, there was the prac-
tical matter of doing first things first, which was to win bet-
ter wage and hour standards.

[ 21 ]



In 1899 Samuel Gompers, President at the time of the

A F of L, testified (Report of the Industrial Commission,
1901, Vol. VII, p. 643): “We view the trust from the
standpoint that they are our employers, and the employer

who is fair to us, whether an individual, or a collection of
individuals, an aggregation of individuals in the form of a

corporation or a trust, matters little to us so long as we
obtain the fair conditions—that condition that we regard
as fair compensation or reward for our labor.” In effect,

the Gompers’ philosophy that the labor movement should
concern itself primarily if not exclusively with getting

“fair compensation” has dominated labor-union thinking

down to the present time. True, the A F of L issued
a comprehensive charter in 1923 entitled “Industry’s Mani-

fest Duty,” which holds that labor must have a fuller

participation in making decisions that shape human life
than mere “commanding of better wages and better con-
ditions of work, vital as those are and have been.”

It concludes: “We commit ourselves to greater efforts
in the organization of all workers, we urge upon all useful
persons the imperative need of organization and finally, the

coming together in working bodies of all organizations

through representatives who shall speak for organic group-
ings.” Nevertheless, organized labor has all but disre-

garded the call of the Manifesto since 1923.

3. Origin of the Right to Organize . Feeble in their

strength and narrowed in their activities as unions have

been, it is in place to ask by what right have workers com-

bined in unions.

In Catholic social teaching the worker’s right to or-

ganize derives not from conditions outside the worker but

from those within him. It is rooted in the impulse which

God has implanted in man to secure his inmost needs
through association with his fellows. (Leo XIII, On the
Origin of Civil Power, June 29, 1881). This impulse and
these needs explain man’s universal establishment of gov-

ernment, as they also explain his more or less successful

efforts in industrial society to form unions. The source of

[ 22 ]



the one right is the source of the other. Accordingly, Leo

XIII and Pius XI call the right to associate in unions,
like that to form states, an inborn right ( jus nativum), and

the present Holy Father, Pius XII, in the Encyclical, To
the Church in the United States, November 1, 1939, declares

that “since man is naturally gregarious” ( cum homines
natura sint congregabiles)

,
workers no less than employers,

may not without injustice have their freedom to form as-
sociations either denied or restricted.

3

4. Not All Union Officials “Clean” and Just . It is appro-

priate at this point to discuss whether or not all union officials

have been “clean” and just. By “clean” is meant free from
criminal or underworld influence and by “just” is meant hav-

ing due regard for the public interest, and in particular for

the legitimate rights of consumers and employers.

Unfortunately, not all union officials have measured up to

these standards. Some few have fallen pitifully below them.
Nevertheless, one should not overlook the important fact that

while the number of labor racketeers is relatively small, that

of honest and upright labor officials is overwhelmingly large.

There are literally thousands of union officers in high posi-

tions and in low who have brought to their duties unusual
gifts of mind and heart, and who have spent and are spend-
ing their lives in devoted service to their fellow workers.

Still, it is the fact that some labor racketeering exists.

One thinks at once of the ex-convicts who until recently
were national officers—one in the building service workers’
union and one in the union in a branch of the movie in-

dustry. The recent convictions of extortion of certain local
building-trades union officials in Cleveland also come to
mind. The U. S. Department of Justice announced on
November 20, 1939, that it was proceeding against five
different kinds of “unreasonable restraints” in which labor

unions were involved. While some of these restraints, e . g.,

3 For a fuller exposition of this right and its relation to the facts and insti-
tutions of our economic and political structure, see the author’s The American
Labor Movement

,

Social Action Series, No. 6. The Paulist Press, N. Y.; and
The Why and Whither of Labor Unions, The Sunday Visitor Press, Huntington,
Ind.

[ 23 ]



requiring additional helpers on trucks, represent efforts by

unions to secure employment for their members, and in that

sense cannot be condemned as racketeering as such, other

of these restraints, e. g., imposing a tax on commission mer-

chants in return for being “let alone” or “protected” in their

business, clearly indicate the presence of criminal or gang-

ster activities.

It is hardly necessary to add that in cities in which

labor officials have been found to be leagued with corrupt

political machines and even organized crime, such condi-

tions do not necessarily grow out of the inherent nature of

unionism. Assuredly these conditions indicate moral turpi-

tude on the part of certain labor union officials, but they

are at the same time a sad commentary on the enforcement

zeal and even on the moral integrity of certain local district

attorneys, police officers, and judges.

Another aspect of unions to be considered in this con-

nection has to do with Communist leadership and Com-
munist domination of labor organizations. The extent of
Communist influence throughout the labor movement as a
whole is probably very small. Certainly the proportion of

Communists to the entire organized labor body is very

small. Many national unions exclude Communists not only
from office but also from membership. Other unions take

the position that they cannot prevent Communists from

joining the union so long as the employer keeps them in his

employ, but are careful to bar them from office. A very
small number of other unions have Communists in office
“near the top,” who manipulate the sentiment of the union
to get a man of unquestioned character elected to the office
of president as a “front.”

But apart from the matter of extent of Communist
numbers and influence, it is manifest—and clear sighted
labor leaders recognize the fact—that labor unions cannot
make common cause with Communists. The philosophy of
the labor movement and that of Communism are at opposite
poles. Labor unions seek, and bind themselves under, writ-

ten trade agreements running for a year or longer, thereby

[ 24 ]



establishing a marked degree of permanency in industrial

relations. Communists, on the other hand, oppose perma-

nence and peaceful relations and almost invariably seek to

undermine an agreement as soon as it is signed. The labor

union, too, operates from within, making its own decisions,

whereas the Communist must “follow the line,” that is,

take orders from without. Accordingly, no Communist-

dominated union is internally free and autonomous. From
the standpoint of self-preservation, no well regulated union

—and this is true of the vast number—does or can tolerate
Communist influence within its councils. It recognizes that a

house divided against itself must fall, and that unified inter-

nal self-determination, free from outside orders, is essential

even to its own existence. This fact was publicly recognized
by the 1940 Convention of the CIO which by resolution
condemned Communism, Fascism, and Nazism.

To advocate the abolition of unions, as some anti-union-
ists do, on the grounds that some few unions are criminally

controlled, some few indulge in dishonest restraints, and

some few are Communist “tainted,” would be manifestly

short sighted and absurd. The indicated remedy is rather
that outlined by James Bronson Reynolds in Labor and
Capital

,

in 1902, when he said: “If unions are sometimes
narrow or arbitrary the remedy is not the abolishment of

the union, any more than anarchy is the remedy for bad
government. The remedy for bad government is good gov-
ernment, and the remedy for bad unions is good unions.”

It must be obvious that most of the activities discussed
in this pamphlet are not merely economic but are full of

moral import. They are characterized by such expressions,
among others, as “good,” “bad,” “just” and “unjust,” and
practically all of them have some moral implication, and as
such are subject to the moral law. Indeed unless individuals

hold themselves to the laws of private and public morality
there can be little hope for any solution of existing social
injustices, even if an ideal economic structure were to be
established.

Pius XI says to the point in Forty Years After that “two

[25]



things are particularly necessary: the reform of the social

order and the correction of morals”; that “social reconstruc-

tion must be preceded by a profound renewal of the Chris-

tian spirit”; and that “otherwise, all our endeavors will be

futile, and our social edifice will be built, not upon rock, but

upon shifting sand” (pp. 26 and 40).

5. Unions
,
Management

,
or Government Alone Helpless .

The next question, whether unions alone, management alone,

or government alone, can work out and maintain a program

that will both safeguard human freedom and abolish unem-
ployment and business controlled prices, can be answered

briefly. Unions alone are powerless. They include only

about one fifth of all workers, and, as they do not represent

the remainder, they could not exercise any control oyer

them. Employers alone are likewise powerless. As indi-

viduals, regardless of what they might have wanted to do,

employers could not have solved unemployment and price

restrictions in their relation to unemployment. As members

of organizations, even those employers who might have
wanted to abolish unemployment and price restraints were

helpless, mainly because they could not enforce compliance

on fellow employers unwilling to comply. Government alone

—that is democratic government—is also helpless. Our
Federal Government took the lead in the N R A, and its
purpose was to create employment by increasing wages and
reducing hours, and by correcting imbalances among prices.
But employers in return for their co-operation with the pro-

gram demanded and secured notable relaxations of the Anti-
Trust Acts. It is evident that none of the three groups is

able alone, with due regard for personal freedom, to work

out and execute a program of full production and full em-

ployment. It is equally true that no two of the three groups

working together to the exclusion of the third, whether the

combination be Employer-Union, Government-Employer, or

Union-Government, can achieve these results.

6. What to Do. Naturally the question arises, why not
try the three working together? In substance this is the

[ 26 ]



proposal of Pius XI in Forty Years After. He is very care-
ful to have his program preserve human liberty, and while

he would have the three bodies co-operate continuously, he

would have each organized from within on a democratic

basis, each freely choosing its accredited representatives en-

tirely independent of any dictation from the other. Workers

would select their spokesmen without interference of any

kind from employers or the Government. Employers would,

as they do now, select their spokesmen without interference

of any kind from employees or Government. Government

likewise, as now, would be free from interference of any kind,

and public officials would be elected to office by the whole

citizenry. Thus the program is free from any suggestion

of totalitarianism, as has been falsely alleged.4 When the
three bodies meet, they meet as autonomous organizations,

each through its own democratically selected delegates
representing those who elect them.

It should be made very clear that in this tri-partite
parliament the role of the Government is not that of dic-

tator. Actual power over economic matters rests with the

employer organizations and the worker organizations. The
authority of Government is restricted, for example, to see-

ing that the organized employers and organized workers in

one industry do not, through unwarranted rises in prices

or wages, exploit those in other industries. “A reasonable
relationship between different wages,” says Pius XI, “here

enters into consideration. Intimately connected with this

is a reasonable relationship between the prices obtained for

the products of the various economic groups, agrarian,

industrial, etc.” (p. 25).

If the papal plan were placed on a chart each occupation

would be represented by a single block, each block includ-
ing the freely chosen representatives of all persons pro-

ducing a major product. For example, the block for the

textile industry would include the spokesmen of the 8,200
textile employers and the spokesman of the 1,026,000 tex-

4 See, for example, the Atlantic
, December, 1935, pp. 659-668, and reply, the

Atlantic, April, 1936, in the “Column.”

[ 27 ]



tile employees, working out together, with Government

sitting with them, prices and production schedules, together

with wages, hours, and other problems in this industry.

Another block would show the steel industry, another ship-

ping, another construction, another agriculture, and so on,

each functioning as in the case of textiles. The industry
blocks would be connected with a block at the top of the

chart which would include freely chosen representatives of

the various industries below, and again with Government

sitting with them. This national body would seek to main-

tain proper price and wage relationships among the various
industries below, but in no sense would be a dictating au-

thority. Whatever dictating there would be would be

purely self-dictation.

The broad aims of this program can be summarized
briefly: (1) It enables the system to secure full produc-

tion. (2) It provides the machinery for joint action to

establish maximum-employment wages and maximum-em-
ployment price-levels. (3) It establishes the necessary

safeguards for human liberty against autocracy, and pro-
vides for the extension of genuine democracy into the eco-

nomic field. (4) It permits each occupational group

—

which better than any person or persons outside the occu-

pation knows its common problems of wages, hours, prices,
and employment—to promote its own group interest up to
but not beyond its legitimate rights, and through its group

interest, the interest of all. (5) It makes possible the es-

tablishment of fair prices and fair profits. (6) It offers

consumers protection of quality and quantity standards.

Since the foundation stone of the foregoing program in-

sofar as workers are concerned is the right of free repre-

sentation, certain responsibilities rest with both employers

and the general public as well as with workers themselves.

These responsibilities include: (1) Employers who are pre-
venting workers from organizing should, as a duty of justice

and of conscience, permit them to do so and should deal

collectively with their freely chosen representatives. (2)

Government should not relax its protection of the worker’s

[ 28 ]



right to organize and bargain collectively, by weakening

the National Labor Relations Act through enfeebling amend-

ments. (3) Every person should inform himself of the

true nature of unionism, and of its necessity in an indus-

trialized democratic nation. (4) Those eligible to union

membership should join the union of their choice and take

ian active part in its management. (5) Unions should rid

themselves of criminal and dishonest officials, wherever

such exist, and not only as unionists but as God fearing
Americans should exclude Communist influence from their

ranks.

The essential ideas of the occupationally organized so-
ciety as here outlined, that is, (1) free conferences, (2)

called by the Government, and (3) consisting of freely

chosen representatives of employers, employees, and farm-

ers, together with government representatives, can be put

into operation now with no little likelihood that as time goes
on these conferences will find the solution for unemploy-

ment and price controls. Certainly such conferences can be

undertaken at once in those industries in which workers

are well organized, namely, steel, clothing, coal, building

construction, transportation, printing, textiles, autos, and

rubber. Some of the N R A codes, the railroad industry,
coal mining, and especially the Industry Committees of the

Wage and Hour Division of the U. S. Department of Labor
illustrate the benefits of employer-employee negotiations

held under the auspices of Government.

It is in no sense suggested that these conferences should

replace the emergency agencies now established to relieve
human want and suffering, among them, the Federal Pub-
lic Works Program, A A A, R F C loans, public relief,
Federal Housing, and Federal prosecution of monopolistic

restraints. Nothing should be done to curtail these activi-

ties as long as there is need for their continuation.

The full program of an occupationally organized society
as outlined in these pages cannot be achieved in a month or
a year. But this fact should not deter us from taking the
first steps toward its earliest possible realization.

[ 29 ]



SUGGESTED READINGS

Hearings Before the Temporary National Economic Committee,
Congress of the United States, 76th Congress, Second Session.
(TNEC) . 20 vols.

National Resources Committee, The Structure of the American
Economy, Part I, June, 1939; The Consumer Spends His Income,
1939.

U. S. Department of Labor, Bureau of Labor Statistics, Labor In-
formation Bulletin (issued monthly).

Federal Works Agency, Works Projects Administration, Facts About
Unemployment, 1940.

Arnold, Thurman W., The Bottlenecks of Business, Reynal & Hitch-
cock, 1940.

Burns, Arthur W., The Decline of Competition, McGraw-Hill, 1936.
Chase, Stuart, Idle Money, Idle Men, Harcourt Brace, 1940.
Gilbert, Richard V., et al, Economic Program for American De-

mocracy, Vanguard, 1938.
Gill, Corrigan, Wasted Manpower, Norton, 1939.
Hansen, Alvin, Full Recovery or Stagnation, Norton, 1938.
Lewis, Ben W., Price and Production Control in British Industry,

University of Chicago Press, 1937.

Mead, J. E., and Hitch, J. C., Introduction to Economic Analysis
and Policy, Oxford, 1938.

Ryan, John A., A Better Economic Order, Harpers, 1935.
Schlesinger, Arthur Meier, The New Deal in Action, 1933-1939

,

Mac-
millan, 1940.

Thorp, Willard T. (Ed), Economic Problems in a Changing World,
Farrar & Rinehart, 1939.

Von Nell-Breuning, S.J., Oswald, and Dempsey, S.J., Edward W.,
Reorganization of the Social Economy (from the German),
Bruce, 1936.

N. C. W. C. STUDY CLUB OUTLINE

I. JOBS (Pp. 3-6)

1. What is the “problem of jobs”? The “problem of prices”? What
relation has the union to these problems?

2. Why is the role of the union emphasized?
3. How many persons in the U. S. are employed in farming? In non-

farming occupations? How many unemployed and unable to get
work?

4. Will National Defense activities eliminate unemployment?
5. Discuss the following statistics of unemployment: (a) Scale since

1929. (b) Number now unemployed or dependent on jobless,
(c) Proportion of all wage earners, (d) Effect of the falling
birth rate, (e) Age, sex, and color distribution, (f) Proportion
formerly self-employed.

6. What relation is there between hours of work and ability of
businesses to operate at less than capacity, and unemployment in
depression? What industries have the greatest stability of em-
ployment? What form of support do the unemployed receive?

[ 30 ]



Suggested Paper: Review of pp. 17-22 of Pope Pius XII’s En-
cyclical, “To the Church in the United States.” N. C. W. C.
Washington, 10c.

II. CAUSES OF UNEMPLOYMENT (Pp. 6-10)
1. Is economic dictatorship similar to political dictatorship? What

does Pius XI have to say of it?
2. Discuss figures given in “The Structure of American Economy”

as to dictatorial control of American industry. Are the persons
involved alone responsible for unemployment? Why?

3. How do powerful corporations control prices and output and
for what alleged and real reasons?

4. Why do pegged prices and curtailed production cause unem-
ployment ?

5. How much of the national income is paid out in wages and
salaries and how is this distributed among the workers? Why is
their low income responsible for unemployment?

6. Why is there a disparity between the farmer’s income and the
prices he must pay for manufactured products? How does this
imbalance affect employment?

7. Discuss the following causes of unemployment: Falling Birth Rate;
Technological Changes; Labor Saving Machinery, “Speed Up”;
Frictional Unemployment; Mergers and Lack of Investment Op-
portunity.

Suggested Paper: Review of “Economic Power in the U. S.,”
George Brown. Paulist Press, Sc.

III. PRICES (Pp. 10-13)

1. Are too high prices or too low prices responsible for greater
unemployment ?

2. Discuss some elements which make the determination of the ex-
tent of price and production control by large corporations diffi-
cult.

3. For what range of commodities must the consumer pay an “ad-
ministered” price?

4. How is the monopoly control of American business by a few
hundred executives made possible?

S How do labor unions sometimes contribute to monopoly restric-
tions?

6. Discuss: Effects of price control on employment, (a) Rigid
prices in relation to falling prices of other commodities, (b)
Tendency of large manufacturers to operate at the “break-even
point” of production during depressions.

Suggested Paper: Review of pp. 15-25 in Pius XI’s “Recon-
structing the Social Order.” N. C. W. C. Washington, 10c.

IV. PRICE CONTROL (Pp. 13-18)
1. Enumerate the types of control of prices and volume which are

used.

2. Discuss the working of price leadership through (a) concentration
of production, and (b) employers’ associations.

[31]



3. Contrast the freedom of employers to form associations with that
of labor and the extent to which both are organized.

4. What relation has organization to the unbalanced power of
employers and of labor in (a) the labor market, (b) the finished
commodity market?

5. How would labor organization benefit business and employment?
6. Why could the philosophy of business controls be called one of

“producerism?” And how does it lead to unemployment?
7. Discuss the difficulty of the individual business concern in price

controlled industries in making decisions in favor of maximum
employment and maximum output.

Suggested Paper: Review of “Prices in the U. S.”, John F. Cronin,
S.S., Paulist Press, 5c.

V. UNIONS (Pp. 18-27)

1. What is the only justifiable purpose of economic life? What has
Pope Pius XI to say of this?

2. What kind of organization is necessary for the attainment of this
purpose ?

3. Have workers a stake in employment and prices?
4. What did workers do in the past? How is the philosophy ex-

pressed in “‘Industry’s Manifest Duty” at variance with the prac-
tice of the labor movement?

5. By what right did labor form unions?
6. (a) Are all union officials “clean” and just? (b) What is the

extent of Communist influence in the labor movement and how
are the purpose and methods of Communism opposed to those of
labor?

7. Can either unions, management, or government alone meet the
problems of employment and price? Why not?

Suggested Paper: Review of “The American Labor Movement,”
F. J. Haas (Paulist Press, N. Y., 5c) and “The Why and Whither
of Labor Unions,” F. J. Haas. (Our Sunday Visitor Press,
Huntington, Ind., 5c).

VI. WHAT TO DO (Pp. 27-30)
1. Discuss Pope Pius XI’s plan of union, management and govern-

ment working together to solve these problems.
2. Why is not the Government a dictator under this plan?
3. What are the aims of the occupational group program?
4. What responsibilities rest on the employers, the general public and

the workers with regard to this program?
5. Can the essential idea of the occupationally organized society be

put into effect now in some industries? Which ones?
6 Is the full program to be achieved at once?

Suggested Paper: Review of “Organized Social Justice.” (Paulist
Press, 5c), and “New Guilds,” R. A. McGowan. (Paulist Press,
5c).

[ 32 ]



Catholic Action for Social Justice
*

HOW shall we know well the right moral principles and spreadthem?
We shall all be unified in our religious program and our work

under the Bishops (48).

We shall join a Catholic lay organization working with and
under the Church (31).

We shall get it to start, or we shall join, a program of train-
ing (31).

We shall take part in study clubs and industrial conferences
and the like (8)

.

We shall spread books, newspapers, magazines, and pam-
phlets (8).

We shall get the help of a priest trained in this matter (46).
We shall start work among youth (47).
We shall attend lay retreats (47).
We shall be apostles to our own associates—workers to work-

ers, employers to employers, and so on (46).

We shall ground all our ideas in the Encyclicals of the
Popes (48).

We shall take on the social charity of brotherhood in God and
in Christ (44).

We shall lead good Catholic lives (44).
We shall know the crisis facing us which has, with the grace

of God, put the destiny of mankind in our hands (47).

We shall have hope, because the Christian spirit of the people
is strong, ignorance and environment can be overcome, and even
the most abandoned have in them the sparks of “a natural Chris-
tian soul” (45) ; and because already much has been done to
make known and apply the social teaching of the Church (7-13;
45-6).

* Numbers refer to page numbers of Pope Pius XI’s Encyclical
“Reconstructing the Social Order” (N. C. W. C. edition).

For further information and assistance
,
write:

Notional Catholic Welfare Conference,

Social Action Department
1312 Massachusetts Avenue NW., Washington, D. C.



SOCIAL ACTION SERIES
All Pamphlets Contain N. C. W. C. Study Club Outlines

No. 1 —-New Guilds: A Conversation
By Rev. R. A. McGowan

No. 2—Rugged Individualism
By Rev. John F. Cronin, S.S., Ph.D.

No. 3—The Wages and Hours of American Labor
By Rt. Rev. Msgr. Francis J. Haas, Ph.D., LL.D.

No. 4—What Laws Must We Have?
By Elizabeth Morrissy, Ph.D.

No. 5—Consumers' Cooperatives
By Rev. Edgar Schmiedeler, O.S.B., Ph.D.

No. 6—The American Labor Movement
By Rt. Rev. Msgr. Francis J. Haas, Ph.D., LL.D.

No. 7—Credit Unions
By Frank O'Hara, Ph.D.

No. 8—The Constitution and Catholic Industrial Teaching
By Rt. Rev. John A. Ryan, D.D.

No. 9—Prices in the United States
By Rev. John F. Cronin, S.S., Ph.D.

No. 1 0—Economic Power in the United States
By George T. Brown, Ph.D.

No. 1 1—Our Rural Proletariat
By Rev. Edgar Schmiedeler, O.S.B., Ph.D.

No. 12—Debt System or Property System?
By Richard Dana Skinner

No. 1 3—Why the Guilds Decayed
By Henry Somerville

No. 14—Women in Industry
By Members of N. C. W. C. Social Action Dept.

No. 1 5—Balanced Abundance
By Rev. Edgar Schmiedeler, O.S.B., Ph.D.

No. 1 6—Sound Old Guilds
By Rev. Matthew Clancy, S.T.D.

No. 17—Negro Worker in Free America
By Rev. Francis J. Gilligan, S.T.D.

No. 18—The Rural South: Problem or Prospect?
By Rev. Edgar Schmiedeler, O.S.B., Ph.D.

No. 1 9—Jobs, Prices, and Unions
By Rt. Rev. Msgr. Francis J. Haas, Ph.D., LL.D.

OTHER TITLES IN PREPARATION

5 cents each, $3.50 the 100, $30.00 the 1,000
( Carriage Extra)

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