BEYOND STAGNATION:

...Wasteful defense spending coupled with the Vietnam war was instrumental in creating the inflation we suffer from today...

...Experience, however, would show that subsidies, tariffs, and depletion allowances have not led to such development, nor have they encouraged the corporations to seek substitute forms of energy...

...Simon for example, who saw in the barely emergent factory system the germ of full-blown industrial society...

...5. Nationalization of industries of vital importance which cannot be run by private business (e.g...

...Failure on the part of the government will make the public listen to fascistic appeals...

...That unchallenged superiority has vanished...

...capitalist system, shared the tenets of laissez-faire...

...Yet it seems unthinkable that the government should take steps to take the situation in hand, by threatening the existence of a system which simply doesn't work...

...We must face the need for transformation in a coherent, national way...

...The era of mass production and of the democratic revolution had begun...

...In 'a sense, this reluctance is profoundly rational: it might presage a rejection of consumerism in its worst sense...

...This, of course, doesn't help when the system is in the process of disintegration...

...A similar situation exists in the defense industries...

...There is no reason to expect that the relative passivity of the American public during the years of the Great Depression would be repeated...

...It is unnecessary to try to predict what issues a demagogue might seize upon...

...It is as if we have too much talent and ability, too many qualified people...

...Even before it was generally realized that the country was in a recession, there were millions of people on welfare and hundreds of thousands of college graduates and M.A.'s and Ph.D's reduced to competing with the poor for the lowest paying jobs...

...The rising crime rate could also become a focus of attention...

...The corporations know that new tariffs won't cut their profits or lessen dependence on foreign oil...

...And yet, this rationality threatens ruin for the auto industry and ruin for the economy as a whole, which can only function through irrational consumption and expenditures...

...The feelings of anger against a system that had failed led millions of Germans to flock to Hitler (but it was not only Germans and not only Hitler...

...One dreads to think of what might happen in a full-scale economic crisis...

...Out of his methods, and the theories of Keynes, emerged the theory and practice of the "welfare state," which has become the new orthodoxy...

...3. Control of utilities not only with respect to price but also in terms of the search for alternative energy exploration through the funds derived from tax exemptions, etc...

...Workers in an advanced economy will not function to their full unless they gain some real control over their work.ss they gain some real control over their work...

...Men must feel that by their actions they are making history...

...In this struggle, it has often had the support of labor-and it is the head of the UAW who now defends the policy of not reducing prices to stimulate demand...

...It is hard to see what cheap money or increased taxes will accomplish if corporate pricing behavior is not affected...

...Not only is wasteful use of resources expected, but so is wasteful use of human resources...

...In other countries, the results were less fortunate...

...even many European socialists, sworn enemies of the...

...2. All tax subsidies, allowances, credits, etc...

...In that case, governmental deficits on all levels might become disastrous...

...When old Adam Smith wrote the Wealth of Nations, he argued that each individual pursuing his self-interest would in fact be acting for the interest of society as a whole...

...It might imply development of rapid transit, the conservation of the environment, the salvation of our scarred cities...

...Consumption is encouraged by advertising and necessitated by built-in obsolescence...

...9. The development of human resources and the elimination of the fear of technological unemployment through the creation of a fund to support workers who lose jobs through technological unemployment and a priority program of job training...

...Underlying problems don't go away unless we make them go away...

...The result was Nazism for Germany, five years of total war for the world...

...The ramifications of this situation are no secret...

...In the end, rational development of resources on a national global level, the emergence of a new technology which can restore a sense of meaning to work and make possible the fulfillment of America's historic role: the development of the undeveloped world for the benefit of both America and everyone else-these are surely goals which can give sense and direction to the American nation...

...This recession is not just a periodic downturn in the business cycle which can be alleviated through judicious fiscal manipulation...

...We cannot and should not accept such consequences today...

...Fascism involved the ability of a charismatic leader to get support from both members of the established but threatened elites and confused, anomic masses, who took the leaders' claims to be anti-establishment at face value...

...Fortunately, in this country Franklin D. Roosevelt made the political decision that such a program was unacceptable...

...If the economists of the 1920s were blinded by an almost religious faith in the self-regulating market, a totally ahistorical perspective which ruled out the possibility of a transformation of the,system as a whole, our postwar economists are in a similar position...

...Fascism was thus able to equate the opposition and the establishment, and claim to be both anti-leftist and revolutionary at the same time...

...Is it possible that the confusion of our own epoch parallels that of two centuries ago, that we too are moving into a new historical epoch without quite knowing where we are going...

...Today, the facts have outrun the theories...

...The coming together of real leadership and public concern will bring about the momentum necessary to transform and to create...

...The Watergate mentality provides a key to a potential "solution" of our problems along totalitarian lines...

...Profit-taking and speculation have tended to offset investment, and too many companies live off the State without being controlled by the State...

...Within a capitalist system, they proclaimed, there was nothing to do but to allow the laws of the market to reestablish equilibrium...

...This was facilitated by the failure of the old opposition to provide a way out of the crisis...

...Following the European example, funds of investment credits and tax allowances should be deposited in special accounts which can be closely watched...

...We who have lived through the deep polarization produced by the Vietnam war should be able to see how easily demagogues can equate both the system and its liberal opponents (the "Liberal Establishment" or "Eastern Establishment" argument...

...Strangely enough, steven philip kramer is on the faculty of Goucher College in Maryland...

...Today, in the post-industrial world, economic development cannot take place without human development...

...Social services, once instrumental for equipping men for jobs, now seem instrumental for keeping men off the job market...

...The American public is less sophisticated about economic issues than about political issues...

...It seems to be expected that the government will finance waste, guarantee defense profits, support bankrupt railroads in their continual drift towards greater bankruptcy and maintain an increasingly large population of unemployed and unemployables...

...It must channel national energies towards real change consistent with democratic ideals...

...Vietnam and Watergate may have cast doubts on some values (and rightly so) but a new set of values, a new mystique which might integrate the nation has not yet arisen...

...Another illuminating example of the current crisis of the American economy is the automobile industry...

...Facing unemployment or the fear of it, people are reluctant to buy cars...

...We cannot return to a competitive system, because history doesn't move backwards...

...If the administration is incapable of providing answers, then the future of democratic government in this country requires that the liberal congressional opposition develop an all-embracing program of what should be done, of what America should become...

...1. The development of an effective system of national economic planning, with real controls...

...Automation has not replaced the assembly-line...

...Demagogues naturally exploit existing social cleavages aggravated by economic disintegration...

...The Chances On the one hand, the result of the cheap money pumped into the economy-through tax reductions and rebates, easy access to credits from the Federal Reserve, or rapid shrinkage of interest rates-might be total failure...

...The industry is a prime example of monopoly capitalism: it has had the power to maintain high and uncompetitive prices and and to exercise enough political clout to head off changes desired by government or public opinion...

...When an economy is based on waste of both men and resources, the rhetoric of efficiency, of sacrifice, of "biting the bullet" sounds hollow...

...In doing so, they were adhering to the orthodox theories of classical liberal economics, which virtually equated the laws of the free market with natural law...

...An example of a potentially explosive issue is that of busing...

...And yet Vietnam was only a political and moral crisis...

...At a time of economic crisis, it is extremely important that the congressional opposition seem more than Tweedledum to the presidential Tweedledee...

...It does not, it cannot do so now...

...It has lived off its undoubted technological superiority of 1945...

...Its anxieties concerning the economy tend to be free-floating rather than highly directed...

...However inconsequential the Ford proposals may be, a restoration of confidence and a resumption of consumer spending may avert immediate disaster...

...A depression producing an accelerated crime rate would also produce an accelerated demand for law and order-which could easily be converted into the ideology of repression...

...This will certainly be the case if "normal" corporative investment doesn't take place...

...Now suddenly they discover that they no longer possess the levers of control over the economy...

...Yet at the same time, the technological level of the auto has barely changed in forty years...

...To be sure, the situation does not yet approximate that of England, which seems headed for disaster...

...It has been corrupted by the easy profits of the cold war and Vietnam, by an assured home market and federal support...

...Of course, it is possible that there will be no depression...

...And it is carrying hypocrisy too far when Roy Ash, sometime head of Litton Industries (a conglomerate of the most dubious sort) prates about the need to avert social security increases lest we go "socialist" in the year 2000...

...Congress would set up a watchdog committee to see that such funds are used exclusively for the purposes to which Congress gives highest priority...

...The inability of economists to evolve solutions which work-the fact that their formulas for solving unemployment and inflation are mutually exclusive-would seem less astonishing if we recognized that this is not the first time that conventional economic wisdom has proven useless...

...The following action program offers some first steps intended to put the country back on course...

...It is impossible to appeal to the old virtues of sacrifice, frugality and hard work when these values, once part of the process of economic development, are now counter-productive to the whole system, which is geared to waste...

...He began to search, almost by trial and error, for new methods to reduce the social cost of the crisis and to get the economy back on the track...

...This nation can once again become the motor force of world-historic change provided it can find its own motor force...

...For want of an alternative program, the German center and left were powerless to stop the rise of Hitler, who drew support both from established but threatened elites and a mass of confused and disoriented people, what Hannah Arendt calls the alliance of "Capital and the Mob...

...The terms freedom and free market have long been intertwined in American consciousness...

...The public has come to believe that the government will not only maintain existing standards of living, but will guarantee social mobility...

...If it is true that the underlying problems of the economy must be solved, it makes all the difference in the world whether this solution is brought about in a genuine and generous way by the mpbilization of the nation for a high goal, or whether the "solution" is attempted through manipulation and repression...

...Likewise, the textbook controversy in West Virginia...

...Nor can we abandon the need for rapid technological change, unless the U.S...

...The revolt against feudalism in the 18th century involved both freedom for the individual entrepreneur against guild and mercantilist restrictions and freedom of thought, conscience and political action...

...People will no longer blame themselves for being unemployed...

...should be tightly controlled...

...Every great breakthrough in technology requires a massive redistribution of the working population and of national resources...

...Now the situation has changed...

...It presupposed unlimited resources to waste, plenty of easy credit, a constantly rising demand and an environment always available to be sacrificed...

...The free market of Adam Smith is only a dream...

...The 19th century had its prophets of modernization, Marx and St...

...The choice is now between the myth of free enterprise and the reality of freedom...

...At the time of the Great Depression, the best economists supported deflationary governmental programs, so that the crisis would touch bottom...

...The automobile industry has come to represent conspicuous consumption, the throw-away ethic and status-seeking...

...8. An attempt by Congress to establish a coherent and integrated foreign policy...

...It may well be that the present crisis will not become a full depression...

...Their theories were far in advance of the concrete realities around them...

...Private enterprise once provided that force...

...Thus, other countries, like West Germany, may actually be able to invest more in capital improvement than the United States...

...And since foreign oil is a source of super-profits, it is preferable to domestic investment involving much greater capital expenditures than the oil companies are willing to make...

...is prepared to sink towards obscurity...

...The economy is too big, too complex, the problems too important to be solved except by a powerful State in the service of the Nation...

...On the other hand, additional taxes on petroleum products would make sense only if the money acquired were channeled towards the development of new energy sources...

...In the short run, at least, profits from crude oil and natural gas are more enticing...

...They have common origins...

...It is impossible to exaggerate the danger to freedom in this country if neither the administration nor the Democratic congressional opposition provides such a program, if both major parties are identified with an economic system that does not work...

...Advanced technology does not call for a nation of machine-tenders and clerks but a nation of professionals and technicians...

...Less than two hundred years ago, the Industrial Revolution-perhaps the first basic change in economic history since men began to farm-destroyed the fabric of traditional society...

...These epiphenomena are then suffused with all the emotional intensity of the economic crisis, but are peripheral enough so that the demagogue is not forced to take a position on the real issue, with which he cannot deal...

...Moreover, defense spending has resulted in a shortage of capital for more productive investment...

...The under-utilization of our productive forces stands in stark contrast with the developmental needs of America and of the world...

...Thus, no program worthy of the name will emerge from perusal of a Gallup poll...

...But there is virtually no public discussion of the solution, which entails effective controls or if necessary, nationalization...

...4. A strict limitation on expenditures by corporations, particularly in the energy field, outside this country...

...Public debt will threaten to become public bankruptcy...

...But whereas freedom remains the very basis of our philosophy, the free market has lost its former role...

...Development of participation by workers in their enterprises...

...railroads...

...We're better off facing them now...

...Inflation could rise beyond control...

...The full development of the most advanced forms of the New Technology have been impeded...

...But even if they do "succeed," they will not eliminate the need to deal with the basic problems of political-economy which have provoked this crisis, will provoke others, and which will make prosperity an illusion until they are solved., But there is no reason to think that the Ford program will work, nor that the present alternatives suggested will work either...

...No industry has better known how to create demand through advertising...

...Watergate has shown how certain practices we have used abroad have come home to haunt us...

...Politically speaking, the Democratic party, blamed for this cycle, might be buried under an avalanche of denunciations...

...Is it imaginable that the intensity of the Boston conflict is unrelated to the increasing unemployment and concomitant status anxiety among the lower-middle-class Irish...

...The level of defense spending and foreign aid must be based on such a comprehensive survey...

...It is amazing that a government so powerful when it comes to international affairs dares do so little in its own backyard...

...In particular, investment for environmental purposes and rational use of energy should be promoted...

...Indeed, what are the limits of governmental power over multinational corporations, corporations that constitute not only vertical but horizontal monopolies...

...6. Price controls, where the possibility of competitive pricing is illusory...

...The possibility of modernization has run up against the opposition of unions, which must fight vigorously to maintain obsolete jobs...

...BEYOND STAGNATION STEVEN PHILIP KRAMER Advanced technology does not call for a nation of machine-tenders and clerks It is not all that surprising that economists find it difficult to understand the nature of the present recession...

...Thence, their confusion-and ours...

...It is essential to take the extreme position that the survival of political democracy is no longer consistent with the continuation of the free market system-or what is left of it, since the free market has lost all meaning and has become a mere slogan...

...The task of the liberal Democrats is to develop a program capable of resolving fundamental issues, and to use the Congress as an instrument for educating the public...

...America believed in its unique productive potential a century ago when it invented the assembly-line and sent railroads across a continent, and yet now it seems unable to deal with relatively minor problems...

...The days of competition are largely over...

...Without a clear sense of direction, without a clear program, without a new sense of a historic mission, this country cannot gather together its enormous strength...

...Savings will be destroyed...

...But if not now, then later...

...Historians are aware that crime is often an anarchic form of revolt by oppressed and politically immature groups, who are unable to act as a group...

...Now we observe the paradox that unless consumer and government behave wastefully and irrationally, the whole economic edifice may collapse on our heads...

...It is related to fundamental and underlying problems...

...Individual work can have no purpose when it is not seen as part of a great collective project...

...The automobile industry, which originated the assembly-line and thereby helped thrust America into world power, symbolizes the past and present of American industry...

...He recently returned from an extended visit in Portugal...

...The Industrial Revolution brutally destroyed the peasantry and artisans of 18th century Europe...

...7. Development of an effective program of control over multi-national corporations through a program of international negotiations (especially with our European allies...

...This wouldn't be so bad if it weren't for the hard fact that the American economy has ceased being productive...

...They too take for granted the continuation of the new system, and tend to think in merely one-dimensional terms...

...The real question today is whether the Democratic party, in particular the liberal Democrats, will be able to offer a real alternative...

...Assumption of federal responsibility for welfare, health insurance, and basic social services beyond the capability of local government or the individual...