10. Investment planning and guided lending
The considerations so far have shown the need for investment planning and guided lending. They have also shown that an appropriate share of housing construction in the overall volume of investments is possible and necessary. Who, then, will make sure that housing construction gets its share? Orthodox doctrine would say that this has to be decided by the interest rate, that is, the return on the various investment plans. This would require, first of all, that housing construction be able to compete for funds on an equal footing with the other types of investment. Quite clearly, this prerequisite currently does not exist. Second, it would require that the pricing for the primary bidders for investment loans is decided by the free market. That is also not the case. In coal mining as well as the transportation sector, and in the energy industry, prices are constrained, set by, and controlled by the public authorities. The same is true today of housing construction. Today, the urgent demand for housing is in no way reflected in the rents, and it could not be, even if rents were decontrolled as long as the command economy of the housing offices continues. Therefore, the logical consequence is that the state itself has to decide how much of the economically possible loans it will give to the chief bearers of investment, but especially also to housing construction. For this, the state will have to be guided by general economic, but also socio-political considerations. Moreover, in making these investment decisions, the state will also have to take the availability of labor and building materials into consideration as guidelines. At any rate, reconstruction cannot be simply left to the automatism of the free market, since no social housing construction would come about even with the restoration of a completely free economy under the sway of the principle of profitability. This by no means relieves us of the need to make sharp calculations, also in housing construction, but it should preserve us from illusions when it comes to credit procurement.
Therefore, we demand large-scale investment planning so that social housing construction will also be given its due. Incidentally, we share the expert opinion on guided lending and investment control formulated by the scientific advisory council of the administration for the economy.
It says, among other things:
“The continuous coordination of investment policy in all areas of economic and social life is indispensable. The responsibility for this must lie with a supra-ordinated, centralized office, whose directives are binding for all administrations involved in its implementation.”
A soon-to-be-established administration for reconstruction must represent the objectives of the housing economy as part of the general economic planning and especially the investment planning for West Germany, and, in accord with the states, establish the general guidelines for the implementation of a housing construction program.
The principles of investment planning and guided lending must be opened up to public discussion. Enshrining them in law is urgently needed in order to endow them with the necessary authority. If we wish to create a social democracy, the people must be able, through their elected representatives, to exert a decisive influence in determining the major lines of economic policy.
11. This is socialism
The present studies show that the implementation of a program of social housing construction is entirely possible both materially and financially given the current state of our economy. However, a program of 750,000 to 1,000,000 housing units over the next four years should be seen as merely the initial plan to remedy the housing shortage. With focused exertion, it must be possible, after housing construction has gotten under way and after the transition to modern construction methods, to raise housing production within the foreseeable future well above the level set for the initial years. However, this achievement can be expected only from a government that does not inquire about private-capitalist profit, but rather about economic necessity. To the socialist, the human being is our economy’s most valuable good. All economic possibilities must serve him. Social housing construction is one of the things most urgently needed to restore a humane standard of living. Making economic possibilities a reality is a matter of political will. The Social Democratic “Plan A” shows us the way.
Source: AdsD, Bestand Bibliothek, Broschüre “Plan A. Aufgabe Nr.1 Wohnungen bauen!” [The SPD’s Housing Construction Program for the Trizone, published by the SPD party leadership (Hanover 1949)]; reprinted in Udo Wengst and Hans Günther Hockerts, Geschichte der Sozialpolitik in Deutschland, Volume 2: 1945-1949: Die Zeit der Besatzungszonen. Sozialpolitik zwischen Kriegsende und der Gründung zweier deutscher Staaten. Baden-Baden: Nomos, 2001, pp. 578-83.
Translation: Thomas Dunlap