Os Economics and Society

...In the United States, severe monetary contractions after 1929 brought on the greatest depression in history, spreading a shock wave of depressions around the world because of international financial linkages...

...He caused such trouble at home the Russians had to throw him out of the country, he looks like a hippie dope-freak, and Dobrynin says he drinks...

...He exposes its central implicit assumption—that the episodic economic problems of the 1930s were somehow typical or inevitable in capitalism, rather than being disastrous effects of particular governmental decisions at particular crucialpoints...

...Disaster and doom have been thriving industries for centuries, with religious, political, and environmental subsidiaries—and this long before Hollywood began making movies that allow them to share in the profits of doom...

...But these aro surface blemishes on a basically ver: good and valuable book...

...Nonetheless, in an age when the courts are creating, determining, and applying policy, choosing among alternative theories of equality, and weighing benefits for and burdens upon particular groups, Justice Fleming's analysis of the shortcomings of judicial legislation deserves serious consideration...

...Experience has shown...

...I have taped interviews with hundreds of crazy people, and—a real breakthrough here—I have taped conversations with cows from all parts of the country...

...My problem is how to leak this information expediently to the concerned citizens of Washington without raising any more criticism from the kept politicians in Washington...

...You must get this information into the hands of the intellectual leaders of the Washington community...

...I looked into Solzhenitsyn and found that he was just an egghead malcontent...

...For example, the existence of a price system means that any resource facing a realprospect of exhaustion would also be facing the prospect of a future price rise—and that would immediately cause a present price rise (due to speculation), which in turn would curtail its current consumption and ration its use over time...

...that legislatures are better equipped, better informed, possess greater sensitivity, and exercise a broader vision in making new law than do the courts...

...There may be something in the human psyche that creates a demand for disaster—or at least for predictions of disaster...

...Views to the contrary are based on considering as "usable" resources only that tiny fraction of the available supply which can compete at present prices under present conditions...

...Harding was to give the nation a quiet period of thought...

...McKuen would even strum a ballad for Susan Ford, though she is so sensitive that too much introspection could be damaging...

...Your real problem is that you have angered Mr...

...Inflation "works" only by fooling people, and you cannot fool all the people all the time with a fixed rate of inflation, which they will eventually adjust to and plan for...

...Recognizing the oligarchic and trendsetting nature of the Supreme Court's role, Fleming's recommendations are almost entirely limited to the suggestion that tenure for members of that body be limited to 16 years...

...The President has got to do something to propitiate them...

...These are more connected than they might seem to be at first, for economists are a special interest group like other intellectuals, and their own self-serving vision of the world affects both their theory and the policy derived from it...

...The general problem of poverty and income inequality is one on which Harry Johnson has a lot of sound things to say which are usually not said on this subject, but his impatience and disgust at the "naive and basically infantile" ideas common in this area make him less thorough than he could be in exploring why so many arguments are "emotional rather than rational," and why "superficial and irrelevant statistics" are the norm in discussions of income distribution...

...He refused to break the spell of public thoughtfulness by calling a special session of Congress...

...Johnson does not go into this in the detail he might, probably because—as in the case of income distribution—the shrill voices are saying such utter nonsense...

...Do you suppose the Democrats are behind this joker...

...Essentially the CIA has been doing this through three very powerful front groups, the American Psychiatric Association, the National Association for Mental Health, and the Associated Milk Producers...

...Professor Johnson brings out the point that many environmental complaints are made "from an extremely egocentric view of society"—objections to others having life-styles different from one'sown (they want more bowling alleys while we want more trees) or laments for the loss of differential gains, such as wooded seclusion in national forests to which others had little access before the rise of more general affluence...

...Even Henry was against letting him into the White House...

...On the other hand, there are the "theoretical" books in which rarefied "models" and high-powered mathematical techniques rigorously prove conclusions already implicit in the arbitrary assumptions and value judgments of the authors...

...Nessen: As I see it the momentum is with you...

...The intellectual history of the "Keynesian revolution" and its aftermath is almost as fascinating as its economic and political impact...

...Apparently he is stirring up the immigrants and now George Meany is getting into the act...

...However, one is entitled to hope for something different from someone as unconventional as Professor Harry G. Johnson, who is in the remarkable position of being simultaneously on the faculty of the University of Chicago and of the London School of Economics, as well as being celebrated for making wood carvings during conferences on economics...

...Before all surface coal was used up, any coal underground was likely to be too "uneconomic" to be counted by "practical" men, however many centuries' supply that might be...

...He did not divert the public mind from its own thoughts to his thoughts...

...Henry Ford in the Dearborn Independent, August 18, 1923, on the occasion of the death of Warren Harding...

...In this he showed one of the qualities of a great executive—When there was nothing to do, he did nothing...

...But most young people will eventually become middle-aged parents themselves—without any revolutionary new social theories or any massive government programs...

...Intellectuals are constantly discovering urgent social problems whose solutions invariably require an increase in the demand for intellectuals...

...Judges often enact their own personal predilections into law, under the guise of applying the requirements of due process or equal protection to a particular case...

...Johnson puts his finger on the fatal flaw in most of these theories: they extrapolate blindly from past behavior without any allowance for feedback mechanisms which automatically modify that behavior...

...The Chicago economists argue that it is illusory to think that a given set of unemployment rates corresponds to a particular set of inflation rates, because only ever-increasing inflation can maintain artificially high levels of employment...

...And, second, when they rewrite laws this way, the courts act as legislatures, a role that they are poorly equipped to perform...

...Three broad topics dominate these essays—economic policy, economic theory, and the role of intellectuals...

...There are points on which a reviewer could disagree with Professor Johnson—his use of "society" where this anthropo morphic metaphor confuses crucial as pects of the actual decision-making proc ess, his willingness to see the govern ment tinkering in some areas where th( prospects seem dim ("incomes policies,' for example), and his refusal to conside the longer-ruh effects of certain short-rui "humanitarian" policies...

...Lacking access to accurate and unbiased information, provided with a limited staff and almost no money, the courts frequently pronounce general laws based upon narrow and distorted perceptions of the issues...

...For exOn Economics and Society by Harry G. Johnson University of Chicago $12.95 ample, much of the statistical "inequality" is between young people just starting to work and their middle-aged parents with decades of work and earnings behind them...

...Therefore, a fifteen years' supply of petroleum does not mean that we are going to have no more petroleum in sixteen years: There was only a fifteen years' supply of petroleum thirty years ago, and there will probably be only a fifteen years' supply of petroleum a hundred years from now...

...Newsweek did a piece alleging that Solzhenitsyn is mad, and I think Cosmopolitan is with you...

...Sincerely, Ron Nessen Dear Mr...

...The best way to do this is to leak it immediately to the editors of the Washington Post Style Section...

...GWP The Alternative: An American Spectator October 1975 27 its accuracy, and Fleming concludes that "the deterrent effect of swift and certain punishment is lost, the feeling of just retribution disappears, and belief in the efficacy of the system of justice declines...

...instead, the courts' information usually comes from two partisans—each armed with an axe to grind—who appear before the Great American Series The great service of Mr...

...But it would (continued on page 34) Bootblack Stand by George Washington Plunkitt Dear Dr...

...But if the Chicago economists do not accept the Keynesian "solution," they also reject the Keynesian problem...

...Maybe Mr...

...The basic guts of the difference between the Keynesians and the "Chicago school" monetary economists is the question whether government spending is needed to maintain "full employment" or some approximation of full employment politically defined by some corresponding level of "acceptable" inflation...

...Courts have limited access to information and pressures essential to the solution of general problems...

...He had a horror of what he called "undeveloped idealism," by which he meant fine words that were never realized in fine actions...

...Real poverty is what we usually have in mind when we think about inequality or when we set up social programs...

...Why these doom-and-gloom predictions have persisted or recurred is another good question...

...Real poverty is something we can all be concerned about, but the whole point is that there is a vast difference between real poverty and the statistical inequalities which the shrill voices are always pointing to...

...Thus, for example, an ever-popular solution to the poverty problem is "forcing the children of the poor to stay in school" (consuming the products of teachers, writers, administrators, and researchers, at the taxpayer's expense), even past the point of diminishing returns, to the point of actual psychic damage to the child...

...For resources with high discovery costs, such as petroleum, the number of years' supply known to exist is a function of the number of years' supply it pays to explore for, given the price of the product, the cost of the exploration, and the rate of return on a similar investment somewhere else in the economy...

...John Kenneth Galbraith's books are perhaps the best examples of this genre...

...Johnson depicts the meteoric rise of Keynesianism as due both to an obvious socioeconomic problem of massive dimensions—the depression—and to characteristics of the theory which allowed ambitious younger scholars with mathematical training to upstage and bypass their elders in the economics profession...

...Still, this part of the book will not be light reading for anyone but professional economists (and not even all of them...

...Ford's more sophisticated constituents...

...Thus we end up with such absurdities as graduate students with very high earn' ings potential receiving food stamps paid for by taxpayers with far less rosy prospects...

...On the one hand, there are the "factual" books, in which information, assumptions, and rhetoric are jumbled together and policy positions tacked on, in the outward form of logical conclusions...

...He is big with those true-believer types who wanted the President to meet with him in June...

...Ultimately the Keynesian revolution faced a counterrevolution from the monetary theory of the Chicago economists, which likewise offered "a degree of difficulty of understanding just sufficient to deter the old and to challenge and reward the young...

...It is refreshing to see the 1930s portrayed as a peculiar decade, rather than seeing virtually all the rest of modern economic history portrayed as unusual periods during which special circumstances (the frontier, mass immigration, etc...

...Sincerely, Michael J. Harrington, M.C...

...Perhaps Fleming should not be faulted for this omission, for if his analysis of the roots of judicial activism is correct, there is scant hope for improvement...

...He was not a noisy President...

...Plunkitt: Who is this beatnik Solzhenitsyn and what should we do about him...

...But the President's schedule was chock-full of important political meetings with groups like the Junior Farmers of Atherton, Wisconsin, the Schenectady Girls for the E.R.A., and the La Leche League of Skokie...

...Do it today, but try to protect the identities of those cows...

...Although Justice Fleming offers the reader a great deal of keen, and often witty, criticism of the errancies of contemporary judicial action, he suggests little to improve the situation...

...It is no answer to say that education is "necessary" in amodern complex society...

...Marxism certainly had similarly novel features at one time, though its priesthood has long since exhausted everyone's patience with its attempts to see how many "contradictions" could dance on the head of a pin and with its various sects' attempts to be more-dialectical-than-thou (not to mention such declarations of moral bankruptcy as the Berlin wall...

...Keynesian economics' sweeping array of strange new intellectual categories created a priesthood of interpreters with a vested interest in keeping the religion alive, while the fact that these categories lent themselves to mathematical and statistical elaboration opened up whole careers to the ambitious young adepts in these areas...

...Indeed, many doubt that the government can get the right channel, much less engage in fine tuning...

...He did not feel called to do great acts but to prevent small wrong acts from being accomplished...

...There is no single outstanding example of this genre, for this has become the common pattern of modern policy economics...

...Fleming is skeptical, for two reasons...

...vironmentalists use is to attack, not the other groups who want to live differently but the intermediaries who represent those other groups' demands—i.e., "de velopers," "commercial interests," anc others who lack the aura of sanctity sur rounding the Sierra Club...

...Apparently he is one of those guys always popping off about what's wrong with Russia and never what's right about it...

...Plunkitt: I have finally come across "hard evidence" that the Central Intelligence Agency has for twenty years ardently and secretly been attempting to overthrow the Constitution and perhaps even gain access to the mailing list of the Harvard Alumni Association...

...On Economics and Society closes with an analysis of "environmentalism" and its related "over-population" and exhaustion-of-resources hysteria...

...many chemicals are absolutely essential to human life and yet become harmful or even fatal when increased beyond a certain proportion...

...According to Fleming, the major reason for the poor quality of most judicial solutions to legislativeproblems is that the "courts are extraordinarily inept instruments for political brokerage...

...34 The Alternative: An American Spectator October 197...

...Firmly convinced that absolute power is corrupting, Fleming argues that a limited tenure will to some degree limit the proclivities of justices to decide cases on the basis of personal predilection...

...The trick the en...

...In short, the enthusiasm with which Keynesian economics was received was due partly to a de26 The Alternative: An American Spectator October 1975 sire to save the world and partly to a desire for self-aggrandizement—a potent and often explosive combination down through the ages...

...The damage to the "student" who has come to hate school ultimately becomes damage to society, because his antisocial reactions to continued educational force-feeding have "the effect of inculcating irresponsible habits and antagonistic attitudes toward authority" which plague him and society for years to come...

...Apparently some of the major news magazines are coming around to your side...

...GWP Dear Dr...

...When the value of that kind of wisdom is recognized, Warren G. Harding will have the credit which is his due...

...Apparently Fleming believes that the bad justices so outnumber the good, that he is willing to make such sacrifices...

...So we nixed the meeting and all hell broke loose...

...Although Justice Fleming's suggestions would have had the meritorious consequence of removing justices such as McReynolds and Douglas, would also have sacrificed the services of justices such as John Marshall and Frankfurter...

...Yet to treat this nonsense as beneath discussion is only to allow it to continue to flourish...

...I suggest he invite Rod McKuen over for cookies and milk...

...Harry Johnson is perhaps at his best in tracing the emergence and dominance of "Keynesian" economics, and its recent political and intellectual vicissitudes...

...And then he had that session with little Davison ChalmersMuncazzio, the Boston schoolboy who wrote that moving ecology poem "When Pretty Butterflies Get Squashed on Trailer Truck Grills There's Something Wrong Somewhere...

...Dear Congressman Harrington: This is indeed chilling information, and to think that I have been serving the CIA's dastardly ends all these years by having three, sometimes four, glasses of milk a day...

...That hope is not disappointed in this volume of Professor Johnson's essays, On Economics and Society, though it is disquieting to realize that the unconventional aspects of this book are sobriety, balance, and intelligence...

...It is certainly true—and important—to say, as Johnson does, that history has shown a "consistent falsification of the prophecies of successive schools of doom predictors," but perhaps also we need to know why they have been so wrong so often...

...HARRY J OHNSON) (continued from page 27) have been completely misleading to talk about the impending exhaustion of all "viable" sources of coal just because the surface coal could last only a few years...

...Often, a court is shown only a small part of a general problem and solemnly assured that the part comprises the whole...

...court making frequently outrageous and exaggerated claims on behalf of their causes...

...The concept, Fleming argues, has given judges a theoretical mandate to boldly rewrite laws of every description—from criminal procedure to rights of inheritance, to regulation of personal conduct, to parole revocation, to abortion...

...My evidence isastonishing...

...He did not regard himself as a national entertainer...

...It is an intriguing suggestion that such features explain why some theories suddenly seize the imagination of a whole generation of intellectuals...

...One is an extremely articulate Guernsey that actually witnessed her owner accepting monies from CIA Director Colby...

...Actually, practically nothing—not even petroleum—is facing exhaustion in the near future, where "near" includes the next couple of centuries...

...Justice Fleming believes that the idea of judicial perfectibility has carried with it the related concept that "judges are the chosen instruments for the achievement of perfectibility by means of the constitutional doctrines of due process and equal protection...

...Indeed, he points out that for England these catastrophic decisions occurred in the 1920s, when an overvalued pound sterling brought chronic deflation and mass unemployment...

...In short, Fleming concludes that "Judicial legislation is all wrong because it is ineffectual...

...Moreover, as Johnson bluntly puts it, their "solutions" involve "seeking to create a society more deferential to people like themselves," so that they profit psychically as well as financially—and all in the name of the poor or of democracy...

...The technical aspects of Keynesian theory and of monetary economics generally are summarized in as lucid and straightforward a way as their intricate complexities will permit...

...postponed" this "inevitable" occurrence, which would now be the norm except for providential salvation via Keynesian economics...

...There is nothing new or astounding about either of Fleming's contentions...

...Mass unemployment is not the "normal" state of unregulated capitalism, nor is governmental "fine tuning" necessary to keep the economy on an even keel...

...That x percent of the people receive y percent of the income or wealth tells us very little about poverty or about real inequality in any meaningful sense of people whose whole lifetimes are constrained within different socioeconomic conditions...

...By pinpointing the quest for unattainable perfection as the motivating spirit of modern judicial activity, Fleming links contemporary legal theory to the dominant utopian strain of modern thought, for which prudence and moderation are outmoded concepts, and the best idea is the most recent...

...But the fatal flaw in much thinking and in many governmental programs is the lack of correspondence between the kind of people we have in mind and the segment of the population defined by the laws and measured by the statistics...

...Since the heyday of ecoonomic due process, many students of the courts have similarly warned of judicial usurpation of the legislative role, even though informed opinion is frequently willing today to overlook the manner of a judicial determination and the indignities inflicted upon the separation of powers, when it approves of the outcome...