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United States. Office of the US High Commissioner for Germany. Information Services Division / RIAS, Berlin

Economics commentary by Dr. Anton Schoepke,   pp. 39-42 PDF (1.7 MB)

Page 40

- 39
"Let us apply the example of the pie to the complicated total reality.
If there is a general and even rise of income in the form of wiages, salaries,
pensions, prices etc. in an economy without a concurrent and corresponding
increase in the gross national product, no more is gained than when I refer
to 1/6 of the pie as 2/12. Only that type of income which leads the upward
trend may have an advantage momentarily, but this will be more than offset
by rapid and considerable increases in the other brackets. Temporary or
rmore permanent dislocations which usually follow such developments, more-
over, mostly cause irreparable damage. The mere demand for increases in in-
come not based on any increase of real productivity can therefore never lead
to a lasting and secure improvement of the socio-economic situation unless
it is intended to bring about a fairer distribution, i.e. the pie is sliced
in a different manner. But let us leave this appetizing picture now.
"In a sound economy all partners have a definite function to perform.
Our economy, in spite of all interference and controls by the superimposed
state and social forces, is based on the principle of free enterprise. Now
if one of the social partners, let us say labor, is to have a larger share
in the national product - which remains constant - then by necessity.
another partner - the entrepreneur, in all probability - will have to do
with a smaller share.
"Well, what are the entrepreneur's problems? First of all he is cal-
led upon to maintain the sound and viable position of the enterprise. It
his responsibility constantly to undertake renovations - and, iwhonever ne-
cessary, expansions of capital goods in order to keep abreast of technical
developments and assure the competitive position of the enterprise. He is
also called upon to maintain inventories or expand them whenever necessary.
In the final analysis the entrepreneur must be granted a special income as
an incentive, to reward him for his efforts and also to reimburse him for
his special risks. The enterprising spirit, which after all can only cause
an increase in the national product, is to a large extent dependent on the
chances of success expressed in chances of profits.. But these are not the
only incentives: pride in a growing enterprise, the satisfaction of crea-
tive effort, social impulses, high idealism, the feeling of running an in-
dependent enterprise - all these are important aspects of the activity. If
the curtailment of the entrepreneur's share in the national product
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