The Economic Illusion

...His favorite trick is to say that a writer would or would not have been outraged by a certain political development...

...Concord was a hive of intellectual activity...

...The chapter on Henry James is particularly misleading...

...PROCESSION Alfred Kazin/Alfred A. Knopf/$18.95 George Sire Johnston We know that we should have stayed home, that Alfred Kazin's American procession is going to be a grim parade, a sort of anti-Fourth of July, a few pages into this endless book...

...Emerson possessed, in concentrated form, that American strain of innocence, that blindness to what most of mankind has experienced as History, which Europeans have always found so exasperating...

...to challenge the belief of most economists that there is a trade-off between fostering economic growth and promoting egalitarian outcomes...

...They shared with Poe the kind of literary temperament that is not happy anywhere outside of a vale of Kashmir or an opium den...

...Drawing on the experience of other Western nations, he argues that large governments can actually enhance economic health...

...There is no indication anywhere of a critical intelligence bearing down hard on the texts at hand...

...If taxes levied on capital are borne by someone else, there's no reason they should impede capital growth...

...Not, mind you, the young Henry Adams, the brilliant writer, lecturer, and social figure, but the bitter octogenarian, whose favorite topic of conversation was "the total failure of the universe...

...Unfortunately, Kuttner isn't above the conventional kinds of distortion...

...While she emphasizes that she never intended capitulation on enemy terms, but wanted an "honorable policy" to secure her husband's return, others were perfectly willing to "sacrifice Saigon" to free the prisoners...

...Kazin instead serves up the late, ailing Hawthorne during the Civil War, when his imagination had run dry and he had become disgusted with American politics...

...The Economic Illusion is nothing if not ambitious...

...If Poe had spent his life drinking absinthe in the sixth arrondisement, his desolation would have been no less acute...

...His book is also marred by maddeningly poor documentation...

...What distinguishes me from [President] Johnson is that I have the will in spades...

...He approved of the art and rituals of the Anglican and Roman THE AMERICAN SPECTATOR APRIL 1985...

...He chides Henry James for his "total surprise" at the outbreak of World War I. But one is hard pressed to think of a single European writer--or statesman, for that matter--who was not similarly dumbfounded...

...Despite its resolute wrongheadedness, it is also crisply written and often cleverly argued...

...Kuttner also peddles the fatuous myth that the explosive economic growth of 1982-83 was a classic deficit-fueled, consumption-led, Keynesian recovery, when the truth is that it witnessed the largest increase in capital spending in postwar history...

...Britain, with slow public-sector growth, was the worst performer...

...This involves considerable biographical distortions...

...Fiscal and monetary policies that once seemed to work perfectly well began producing a bewildering mix of inflation and anemic growth, while bold new programs to eradicate poverty reaped mostly disappointment...

...Britain's has grown very little precisely because its economy has been too sickly to finance an expansion...

...Most of mainstream economics and much of the newer discipline of public policy, wittingly or unwittingly, serve as handmaidens of deep political conservatism...

...Faced with this unappealing state of affairs, Robert Kuttner fulminates not only against conservative economists, but against nearly the entire economic profession, which has committed the sin of reaching judgments he finds inconvenient...

...At its most fundamental level, Clausewitz reminds us, "war is an act of force to compel our enemy to do our will...

...But he has shown how hard it will be for those on the left to construct a sound economic case...

...If Kuttner's book is any evidence, the illusions are still theirs...

...It probably made the place more interesting for resident mandarins...

...Poe would have been just fine, according to Kazin, if he had had the good luck to be born in Paris...

...He writes, for example, that...

...Drawing strength from his fellow prisoners-ofwar, he would not allow even the worst his captors could do to break his .patriotism or his spirit...

...Kazin writes literary criticism the way Henry Steele Commager writes history--he is all gush and unction...

...Admiral James Stockdale also had the will in spades...

...And he disputes the orthodox economic case for free trade...

...It would be difficult to find two drearier Grand Marshals for a parade...

...Kuttner, having offered his brief for egalitarian economics, concedes that fostering a "politics of equality" is "a little harder...

...I knew I was going to be home right away...

...THE AMERICAN SPECTATOR APRIL 1985 Western European ones are more generous and efficient because they cover the middle classes...

...They apply the word "evil" only to political arrangements which they do not like...

...This allows him to indict America for shortcomings which have nothing to do with the literary personalities being discussed...

...But these two desiccated figures, who projected their melancholy onto everything around them, set the tone for all that follows...

...He castigates Ronald Reagan for a tax program that was an "exceptionally good deal for the well-off" and--you guessed it--a gyp for the poor...

...Economists know that as people grow richer, they generally demand more government services as a proportion of their income...

...But Professor Kazin has one set of standards for judging Americans, and another for Europeans...

...He pretends that cuts in social programs are automatically harmful to the poor, even though the evidence of the last twenty years suggests this is true only in the narrowest sense...

...In a footnote, Kazin then gives us all of Section 3 of the Espionage Act...

...Writing of these bombings, Admiral Stockdale notes that "one look at any Vietnamese officer's face . . . told the whole story.., the shock was there...

...Kazin just gushes on, apparently pleased with Emerson's version of secular humanism...

...On Stephen Crane: "He was never heard to protest America's maneuverings against Spain in the name of Cuban 'freedom.'" These are surely issues, but they belong in another book...

...Sybil Stockdale takes exception to then Secretary of State Dean Rusk's 1967 observation that "captured Americans are not prisoners but hostages," but Rusk, who served as Assistant Secretary of State during the Korean War, knew what he was talking about...

...He isolates and builds his discussion around the least happy epochs of a writer's life...

...When Carter enraged Helmut Schmidt by asking why the Germans simply couldn't get together and tear down the Berlin Wall, the pale ghost of Emerson was hovering nearby...

...Kuttner gets the government/growth connection exactly backward...

...THE ECONOMIC ILLUSION: FALSE CHOICES BETWEEN PROSPERITY AND SOCIAL JUSTICE Robert Kuttner/Houghton Mifflin/S19.95 Stephen Chapman The 1970s were not kind to liberal economics...

...Despite the recent growth of government spending in Japan, its public sector is still well on the small side: In the 1970s, taxes took less than 11 percent of Japan's gross domestic product, about three-fifths of the level here, and its economy grew some 67 percent faster...

...He notes that West German corporations "pay the preponderance" of social security taxes...

...One of Kuttner's chief complaints with the Reagan tax program is its drastic reduction in the effective rates on corporate profits...

...But Kuttner finds himself in an uncomfortable box...

...But most of his criticisms suggest that Kuttner, wittingly or unwittingly, misunderstands what economists say...

...it would not have been in Adams's character or in his philosophy to worry over the two thousand prosecutions under Section 3 of the Espionage Act...

...In the end, The Economic Illusion fails to persuade, burdened by its misrepresentation of evidence, prudent evasions, and preference for assertion over demonstration...

...Some of our great writers have, of course, been what Melville called "isolatos...

...And not the mellow, spiritually reconciled Eliot of later years, who rejected his early poses of disaffection, but the young nervous wreck who wrote The Waste Land...

...This book does neither...

...For Kazin, solitude and desolation are the hallmarks of being a writer in America...

...This is an odd test of the hypothesis that an excessively large government inhibits growth...

...In both Korea and Vietnam (and more recently in Lebanon) American prisoners-of-war became important enemy bargaining chips...

...The Stockdales rightly blast the State Department, and Averell Harriman in particular, for trying to appease Hanoi by keeping silent on North Vietnamese torture of POWs, but their outrage needs to be put in the context of the horns of the dilemma upon which American negotiators were impaled...

...So what if Concord also contained its share of hard-drinking and unlettered Yanks...

...It is not so much the rate of growth of government but its overall size that bears scrutiny...

...Britain's government has grown slowly, but then it was bloated to begin with...

...No writer, except his friend Thomas Carlyle, could be windier...

...Thus, in a sense, In Love and War is a cautionary tale, reminding us both of America's vulnerabilities and of the true foundation of American security-the "patriotism, valor, fidelity and abilities" of the men and women who make up our defenses, and their families and fellow countrymen who support and sustain their will and determination even in the face of the most terrible adversities...

...Practical failures ate away like termites at the intellectual foundation on which these policies were erected...

...I don't mean to pick on Emerson, who was a luminous phrase-maker, but Kazin's avoidance of such a glaring issue is symptomatic of a political bias which informs the whole book...

...The only question is whether we have the will to use that power...

...Emerson's neighbors were the likes of Hawthorne, Thoreau, Bronson Alcott, and Ellery Channing, and their ranks were swelled by visitors from Boston like Margaret Fuller...

...Sybil Stockdale's account makes it abundantly clear that we cannot emulate our enemies and write our POWs off...

...This is plausible in political terms--the more people involved, the greater the pressure on the government to provide decent service--though the American experience with the Postal Service argues against it...

...When dealing with a genuine social deviant like Poe, Kazin blames his subject's mental disorders on American society...

...He has nothing of interest to say about Emerson, for example, whom he rightly regards as the spiritual progenitor of American letters...

...This is completely false While James could not bring himself to believe in any church doctrine, he had a deep regard for organized religion, the more organized the better...

...Their relatives--and the American people--would never stand for it...

...As was illustrated by the more recent brouhaha over the release of Lieutenant Robert Goodman, Jr., the Naval aviator shot down over Syrian-controlled Lebanese territory on December 4, 1983, concern over our POWs does indeed create "severe obstacles" to the conduct of American foreign relations...

...But Poe's French counterparts--symbolist writers like Baudelaire and Rimbaud-were, if anything, even more neurotic...

...In fact, corporate income taxes, like the employers' share of social security taxes, are just as likely borne by workers or consumers as by stockholders...

...Emerson, the supreme "individualist," would have detested Marx's ideas about class struggle, and the fact that certain of Marx's early romantic writings, lifted from their context, sound like Emerson signifies nothing...

...In another instance, Kuttner offers a selective array of data to support his belief that large government sectors are perfectly compatible with thriving economies...

...our enemy's will was broken...

...It was impossible to be more honored and cherished, far and near," Henry James wrote of Emerson, "than he was during his long residence in Concord...

...This is palpable nonsense...

...Virtually every float in his parade is decorated with ash and cinders, with the subject furiously staring into space or grinding his George Sim Johnston is a writer living in New York...

...The prologue's title is "Old Man in a Dry Mouth," under which is an epigraph, "I will show you fear in a handful of dust," On that note, we are introduced to Henry Adams as an old man and Eliot himself as a young man...

...This is why, parenthetically, so few great writers since Flaubert can be described as liberals in the current sense of the word, for a vision of the world which eliminates half the equation has a hard time translating itself,into meaningful works of literature...

...Of Emerson, for example, Kazin writes that "his situation in rough, indifferent, harddrinking Concord was one of isolation...

...Kazin inserts sententious political squibs into the narrative at every turn...

...In recent years, most of the influential new ideas in economics, both among scholars and in the political realm, have come from neoclassical perspectives, not left-wing ones--a dramatic change from the preceding half century...

...The United States had below-average public-sector growth, and about average economic growth...

...He once told a Catholic woman that he envied her faith...

...They think that if the right social levers are pulled, human affairs will cease to be difficult...

...Surely this is the crucial problem for "radical democrats"--deciding whether univerAN AMERICAN salism or redistribution is more important, or else finding a way to combine the two...

...Emerson saw everything, even contemporary horrors like the Middle Passage, in a mellow light...

...He is oblivious to the most glaring fault in Emerson's philosophy, which is a complete unconcern with the problem of evil...

...Eliot...

...Solzhenitsyn's account of the terrible fate of Soviet POWs "liberated" from German imprisonment in World War II), an American vulnerability is created which gives the enemy an enormous negotiating advantage...

...He claims that other countries, such as West Germany, "have reconciled robust economic growth not just with high taxes, but with high taxes on capital...

...Beyond a certain point, it is not possible to have both universalism based on citizenship and also redistribution based on need...

...Here he mistakenly assumes that, because corporations write the checks for these taxes, they also pay them in an economic sense...

...heels on the national flag...

...Apart from its slanted biographies and annoying political intrusions, An American Procession is filled with appalling errors of fact and judgment...

...Time and again, Kuttner cites some unnamed study that supposedly supports his argument, and then--oops!--omits the reference from his textual notes...

...Before the floats bearing Emerson and Hawthorne and Whitman pass by in due chronological order, there comes a banner, so to speak, in the form of two bleak quotations from T.S...

...His comparison of six Western countries (why only SEX...

...reveals that between 1973 and 1981, "the three.., with the best growth rates, Japan, Italy, and France, had the most rapid growth of public spending...

...Kazin has the bad taste to bring in Karl Marx six times as a gloss on Emerson...

...It is American will that transcends the "great difficulties" of which Tocqueville warned...

...It is inconceivable how he would have reacted to Dachau or the Gulag...

...In both Korea and Vietnam American POWs were used by the Communists to influence American public opinion and to put pressure on the United States government...

...As President Nixon said in 1972, "We have the power to destroy [North Vietnam's] warmaking capability...

...Likewise, Kazin's portrait of Hawthorne passes over Hawthorne's happy marriage--perhaps the happiest of any major American writer--and the pleasant years that Hawthorne spent in his beloved "old Manse" in Concord...

...Japan's government sector has grown because its economy has grown, not the other way around...

...Making this case forces Kuttner to hide the real source of this shifting of the tax burden, which was not Reagan's tax cut but the regressive Social Security tax increases enacted under his predecessor...

...Jimmy Carter is Emerson's degenerate posterity...

...Economic distribution is far too important to leave to economists," he says...

...But Kazin, in this critical-biographical survey of great American writers, tries to skew as many of his subjects as he can into their company...

...Kuttner, a journalist who edited the now-defunct Working Papers and is at present a contributing editor of the New Republic, has one main purpose: Stephen Chapman is a syndicated columnist for the Chicago Tribune...

...Kazin, who takes every shot he can at religion, declares that James had no respect for church religion...

...That is characteristic of Kuttner's approach...

...Stronger unions and more ambitious social welfare programs, he believes, can also contribute to general prosperity...

...His challenge is less likely to recall David against Goliath than William Jennings Bryan against Darwin...

...Each writer is depicted, implicitly or explicitly, as a victim of America's crass civilization...

...Melville, Poe, and Dickinson were not gregarious people...

...Thus, we get Hawthorne in his dotage, Mark Twain after his bankruptcy, Melville when he was an obscure customs inspector, Eliot before his conversion and happy second marriage, and Adams after the suicide of his wife turned his mind to distilling wormwood and gall...

...In Korea our negotiators had been taken off these horns by President Eisenhower's implied threat to use nuclear weapons to break the negotiating impasse- In Vietnam it was President Nixon's unexpected and unanticipated exercise of will in ordering--against the violent objection of the antiwar movement, the media, and much of Congress--the massive B-52 raids on the Hanoi area in December 1972...

...jective of securing the safe return of its POWs and the Communists cynically write off their own (cf...

...As the welfare state becomes larger and more universal, it becomes less redistributive...

...After a while, the reader gets suspicious...

...Kazin talks of Emerson's "genius for compression...

...There were certain complications in life," Henry James noted dryly, "which he never suspected...

...This is particularly dishonest for an author who accuses Reagan of plotting to dismantle Social Security...

...Kazin is an unreconstructed liberal in the debased sense of the word--he is a social democrat, really--and such liberals in their heart of hearts do not believe in radical evil...