6 MISC. PUBLICATION 570, U. S. DEPT. OF AGRICULTURE 



war period — not even in 1929. This suggests, perhaps, that if full 

 employment is to be realized in peacetime after this war, Government 

 action to create the kind of environment needed to encourage a stable 

 and expanding level of private expenditures will include at least some 

 modification of the past practices which led to business cycles, as 

 well as some change in the relation of Government to private 

 enterprise. 



HELPING PRIVATE ENTERPRISE MAINTAIN 

 FULL EMPLOYMENT 



Federal, State, and local governments will all want to follow poli- 

 cies in the post-war years which will provide the greatest possible 

 inducement to private employment. There will be much opportunity 

 for them to contribute toward this end in such fields as (1) main- 

 tenance of farm purchasing power, (2) revision of tax laws, (3) en- 

 couragement of competition, (4) stimulation of private investment, 

 (5) revision of the social security system, and (6) improvement in 

 the timing and coordination of public expenditures. 



Maintenance of Farm Purchasing Power 



Agricultural and other raw-material prices have a tendency to 

 fluctuate much more widely than the prices of manufactured goods. 

 This relative instability of agricultural prices has important reper- 

 cussions on total employment because agriculture is an important 

 segment of the total economy. Though full employment and full 

 purchasing power for nonagricultural workers is an essential con- 

 dition for a prosperous agriculture, full purchasing power for farm- 

 ers also contributes to the maintenance of full nonfarm employment 

 by maintaining a strong farmer demand for the products of nonfarm 

 labor. 



One significant way in which Government might aid private enter- 

 prise in the maintenance of full employment is to help farmers find 

 market outlets for full production. One way this can be done is through 

 the expansion of such measures as food-stamp plans and school-lunch 

 programs. Even under conditions of full employment, large numbers 

 of people in the lower income groups would likely be unable to pur- 

 chase the kinds and quantities of food they need for good nutrition 

 and health. By maintaining outlets for full farm production at fair 

 prices farm incomes could be maintained at higher levels than by 

 restricting farm production in order to maintain the same prices. 

 What is more, the farm market for the products of nonfarm employ- 

 ment would be greater, and malnourished people would be better fed. 



Government can do much to stabilize and expand farm purchasing 

 power in the years beyond the transition by establishing appropriate 

 ''floors" for farm income, and by long-range programs designed to 

 raise the level of living of farm people generally. It is not the purpose 

 here to describe these possibilities, but only to suggest that the type 

 of Government action in this field that will contribute most to a full- 

 employment economy will depend in part upon the action taken on 

 the nonagricultural front. 



Action to maintain farm purchasing power will be most effective 

 if it is part of a broader program to maintain balance between the 



