The most forceful and dramatic proposal for economic plan­ning ever to arise in the United States came in the depression years of 1932 and 1933 as a result of the work of a research or­ganization known as Technocracy.

Under the direction of Howard Scott a group of economists, architects, and industrial engineers were organized for the pur­pose of investigating the physical resources of the United States made available in" the past quarter century through the develop­ment of modern machine methods or technology. The survey was known publicly'as the Energy Survey of North America. No plan of economic reorganization was specifically recommended by the "Technocrats"—as members of the organization were called— but they believed that the facts presented made certain conclu­sions inevitable, for example, that the price system alone stood in the way of our utilizing for everyone's benefit the tremendous productive power which modern invention and discovery had made available. One basic fact brought out by Technocracy's in­vestigations was that by the use of machines and non-human sources of power we were increasing production at a rapid rate but at the same time utilizing the services of fewer and fewer men. The Technocrats also showed that the volume of debt had been increasing faster than either the rate of production or the rate of population increase. This latter fact was due entirely to the constant process of borrowing and reinvestment necessary to sustain and improve the mechanical equipment of the nation's business enterprises. They argued that the pressure upon business men to increase the efficiency of their plants and equipment ac­celerated artificially the rate of obsolescence and led to the scrap­ping of machines long before their period of usefulness was ended.

Through current methods of financing, new loans were secured to purchase new machinery long before the old loans had been met. Thus business enterprise, although far more efficient than ever before, could never make savings available to consumers- be­cause all additional earnings were gobbled up by creditors and investors. Sooner or later, the Technocrats believed, the gravita­tion of business incomes into the hands of owners and lenders would result in the accumulation of unsaleable surpluses of goods, for neither the working" man nor the consumer were benefiting by the increased efficiency of business since the depression. The fundamental conclusion of Technocracy was that bankers, mer­chants, and industrialists in pursuit of profit were no longer capable of managing the economic system. This function, the Technocrats believed, should be delegated to those whose tech­nical knowledge and professional attitude would qualify them to direct economic activity in the interest of society—namely, the industrial engineers.

Technocracy appeared at the time of greatest pessimism in the economic outlook of the American people. The time was ripe for a simple formula to guide the people back to the prosperous years of the late 1920's. For a brief time Technocracy seemed to fill this need. But closer examination of the facts showed that the Technocrats had been a bit careless with figures and too sweeping in their generalizations. Reputable economists deprecated their efforts and the radical implications of their conclusions did much to destroy their popularity.

It should be clearly understood that economic planning is primarily a matter of practice rather than ideas. Whereas in pre­vious chapters our main concern was with what men thought about certain economic matters, in this chapter we must deal with what is being done. There is room for a difference of view­point on only two issues in economic planning; the goals to be achieved and the extent of planning—the rest is a matter of ac­quiring knowledge and choosing the most effective means to achieve the ends in view. Once having accepted a planned econ­omy as an alternative to laissez-faire capitalism, techniques and procedures become paramount and relegate theories to a very minor role. Planning represents a pragmatic approach to eco­nomics: whatever works is valid. To a large extent, then, this chapter will deal with the practical measures taken by govern­ment to control economic enterprise.