The Open Question

I am in full agreement with Alan Reynolds (NR, Sept. 24) as to the futility of, and enormous dangers in, any system of direct controls over prices and wages, which has now unfortunately become the official policy of the Nixon Administration. I also applaud his emphasis that it is the vast expansion of government activities of all kinds, and great variations in government expenditures and taxing, which account for many of our economic difficulties and which are the ultimate threat to our society. To add price and wage controls to the battery of government powers already in place is to pile Pelion on Ossa. What’s more, such controls do nothing to get at the real causes of persistent inflation combined with substantial unemployment.

Where I differ with Mr. Reynolds is his exclusive emphasis on monetary policy and fiscal policy in its broadest sense as the sole cause of our troubles and hence the sole cure for overcoming them. It is my conviction that our economy needs both sound money and open markets for products, labor and capital ifitisto perform satisfactorily. It is also my conviction that union monopoly power is an enormous distorting factor in the labor market, and that such power must be curbed if we are to achieve what most Americans want—namely tolerable price stability and jobs for all who are able and willing to work.

JD

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John A. Davenport

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I am in full agreement with Alan Reynolds (NR, Sept. 24) as to the futility of, and enormous dangers in, any system of direct controls over prices and wages, which has now unfortunately become the official policy of the Nixon Administration. I also applaud his emphasis that it is the vast expansion of government activities of all kinds, and great variations in government expenditures and taxing, which account for many of our economic difficulties and which are the ultimate threat to our society. To add price and wage controls to the battery of government powers already in place is to pile Pelion on Ossa. What’s more, such controls do nothing to get at the real causes of persistent inflation combined with substantial unemployment.

Where I differ with Mr. Reynolds is his exclusive emphasis on monetary policy and fiscal policy in its broadest sense as the sole cause of our troubles and hence the sole cure for overcoming them. It is my conviction that our economy needs both sound money and open markets for products, labor and capital ifitisto perform satisfactorily. It is also my conviction that union monopoly power is an enormous distorting factor in the labor market, and that such power must be curbed if we are to achieve what most Americans want—namely tolerable price stability and jobs for all who are able and willing to work.