Reprinted from THE COMMERCIAL AND FINANCIAL CHRONICLE Thursday, February 17, 1944 The Illusion Of The War Boom By DR. L. ALBERT HAHN Undoubtedly an increasing number of people begin to consider the war boom as a highly beneficial phenomenon. They see in its mechanism a simple remedy, if not the remedy for most economic difficulties and especially unemployment. "The war has proved that full employment can be created through government spending. It will be hard to convince the American people that what can be done for war, can- not be done theoretical experience of cen- for peace." turies. It is, indeed, easier and Such and sim- more comfortable and popular to ilar ideas can indulge in new spending schemes be found, not and to promise the "compensa- only in utter- tion" of economic difficulties ances by lay- through Government spending men but also than to show the basic reasons by men who for these difficulties and to advo- claim to have cate their elimination. I think been trained that it is high time to replace in economic the "compensation idea" by a science. sound "correction theory." For Neverthe- not only will the compensation less, the argu- idea, if applied in practice, lead ment is of a to implications entirely unfore- typical vulgar seen by most of its adherents; it economic will also prove the more ineffec- tive in any severe crisis the more character Photo: H. N. Rubien one has relied on the govern- Dr. L. Albert Hahn which means ment power to "compensate" ex- that it is listing maladjustments. based on popular economic mis- Coming back to what may be conceptions rather than on a sci- called the "war boom in peace entific approach. time" idea, it seems to us to con- It has always been considered tain several basic fallacies or as the chief duty of economic illusions. science to demask and fight pop- War Time Activity Contra ular economic illusions which ap- peal to the masses because they Peace Time Productivity are simple and, allegedly, pana- If man works he does so not ceas. To fight against the "em- just to be busy but in order to be ployment through spending" idea able to consume, to live. The has undoubtedly become increas- worker produces goods which he ingly difficult in recent times, al- either consumes himself or which though its fallacies have been he-as it is the rule in modern demonstrated by practical and times-exchanges for goods pro-