with best regards from the author Reprinted from THE COMMERCIAL AND FINANCIAL CHRONICLE Thursday, January 25, 1945 Don't Predict Post-War Deflation-Prevent It! By DR. ALBERT HAHN Holds Profits and Employment Go Hand in Hand and if Governmental Policies Make It Possible for Entrepreneurs to Thrive There Will Be Jobs for All; Otherwise Not, and Deflation Will Follow. Declares "New Era" Economic Theories Will Not Bear Analysis. The country is swamped with predictions about Post-War Busi- ness. They run all the way from lasting prosperity to hopeless de- goods to be produced are nothing pression. How but a toying with figures. There much weight is little that is scientific about it. should be at- All calculations about the so- tached to called deflationary gap-the gap these predic- between the purchasing power tions? needed for the maintenance of In this au- full employment and the pur- chasing power to be counted on- thor's opinion will prove to be fallacious; as their value is fallacious as all the calculations very limited. of the inflationary gap during this All estimates war have proved to be; and post- about how war planning based on such spe- many millions cific calculations will turn out to of workers be impractical. will be re- During the last few months the leased and proponents of the pessimistic how many school of thought-which predicts can be re- depression and deflation-seem to absorbed have gained in popularity. It has Photo: H. N. Rubien Dr. L. Albert Hahn by industry been adopted by an important after the end group of economists in this coun- of the war must be considered as try as well as abroad. Lately, it highly questionable. The respect has been propagated by the dis- they command in this country- tinguished Swedish economist, more than elsewhere-is not jus- Gunnar Myrdal, in the Swedish, tified. Unlike Communist and Swiss and American press. Fascist economies, a free economy This school of thought is not is not directed by government only pessimistic, it is fatalistic. It orders but by the calculations, describes post-war mass unem- hopes and fears of millions of ployment as something that fol- people; the objective conditions lows more or less forcibly from with which these people will have the working of the capitalist sys- to reckon, and the subjective re- tem. Such an approach has ob- actions, even more so, are as vious dangers. Let us, therefore, unpredictable as the future in examine the validity of its argu- general. Therefore, estimates of ments a little more closely: future billions of working hours, The arguments seem to be of the national income and the threefold. They are: (1) The