The Coming Economic Collapse
Rosenberg, Harold
My friend S, a renowned Austrian economist, banking expert and financial ambassador (if there is such a title), insists that the U.S. is dashing toward economic disaster through...
...In every equation involving human beings the "old mole" of creation may be at work under the ground...
...The decade and a half of growth which has forever altered its scale does not put it beyond question...
...For uneasiness, no actual experience of catastrophe is required...
...It may even be using the "contradictions" that condemn it to extinction as a tool for enlarging its burrow...
...To this program of retraction I raise a double objection: 1) Too much possibility would be sacrificed, inherent in the climbing statistics of American productivity and wealth-might not the expansion be ended too soon, since it would have been just as logical to end it ten years ago...
...That it might even be demonstrated that, humanly speaking, a crisis tends to improve things here, that it is the state in which Americans are at their best...
...In the meantime Time has something to say, and against the advice of reason Israel exists...
...No wonder he would rather see production go back down the hill than choose, like everyone in the U.S...
...The problem of the relative possibility of continuation is often overlooked or dismissed in ideological politics...
...Even "in those very rare instances when the future somehow gets itself on the agenda...
...Accepting S's prognostication, I see on every side the psychological fruits of a good fortune that may continue to defy it...
...If prosperity continues but without winning the argument as to the likelihood of its continuing, the penalty will be a permanent state of uneasi ness, as is also the case with Israel...
...To TALK about after-the-crash and the concept of the Highest Bottom makes no sense to S not because he is an economist but because he is a European...
...Would they say that now...
...A reversal of the old joke: the operation was a success but the patient died...
...Of course, this would not make them very popular in the business world but in the long run it might pay off...
...when he speaks of bust he is speaking of the void...
...Besides, who is going to institute S's restrictions on production and wages and enforce them against the power of industry and labor...
...Without being an economist I find myself agreeing, rather automatically, with S's prediction of a crash, although we have been in dispute for years about his program for preventing it...
...If there's going to be a crash it's for causes deeply laid in the system that does so well, and even below these arrangements...
...from the NAM to the last radical, to gamble on "a better America...
...S's belief that a racing economy pointed toward a leap over the edge can be stopped short by reason seems to me the typical unreasonable op timism of the expert...
...If a crash is in evitable because of a "departure from valid economic principles" was not that departure itself likewise inevitable...
...Except in those very rare instances when the future somehow gets itself on the agenda, to be guided by prognostication is to change living into waiting...
...This leads to inconsistency, double talk and even sadism...
...But isn't it a fact that in regard to solutions it is always "in the meantime...
...A whole lifetime...
...Take the old Marxist argument againt the Zionists: "What...
...Yet, especially among those who have long since given up expecting that socialism will solve any problem, one still encounters the habit of judging situations, whether of American economics or Israeli politics, by unconditional "Marxian" prophecies, with their indifference to Time and their implications of intransigence...
...With respect to intellectual energy and social feeling, is it deniable that the American of The Depression was superior to that of today...
...To believe that the higher we go the farther we fall is to be misled by metaphor...
...The passage of time would not, of course, make the breakdown any the less inevitable...
...Without a dictatorship strong enough to defy the pressure of everybody, wisdom might not behave very differently from stupidity...
...He quotes figures on the rise in the installment debt, on American per capita consumpt:on of steel and rubber as against European and Far Eastern, etc., etc...
...No matter how long it took to prove it, S and I would still be right...
...What is history, even dialectical history, but the fact that a certain condition, be it an expansion of pro duction or an individual or collective existence, has established itself in a temporal crack in the reasonably predictablefor is there any other place for it to establish itself...
...No, the higher production mounts the less serious are likely to be the human consequences of collapse...
...That in the face of this void one should prefer the risks of possibility to the cautions of analysis is to him incomprehensible, a kind of voluntary dizziness which he has come to expect in American industry (though this does not prevent him from addressing arguments to it) but which in an "intellectual" simply dumfounds him...
...To S, however, breakdown recalls not the sudden appearance of an amazing popular sophisticatedness and "the gains of the New Deal" but billion-mark notes that would not buy a loaf, the fall of government, the boots of the Red Front and of Storm Troopers...
...The only solution for the Jews is the total solution of World Socialism...
...And in the meantime...
...Set up a new national community now, in the 20th century, when the old, established states, England, France, Germany, are themselves losing their capacity for independent life...
...Between S's rationality and the mad ness of American industry I therefore choose the mad businessman...
...The argument was sound enough, it is still sound...
...Con stantly increasing production at least creates the chance that the bottom we hit will be the highest bottom in history...
...For S it is enough to denounce "stupidity in Washington," but of course that is not the root of the trouble-to-come...
...Human life consists not only of what is but of what is to be expected...
...Just as the blow falls the victim has vanished...
...The American economy is the most marvelously consistent in the world with the irrationality of capitalist production-in this, it seems to me, lies its strength...
...The prosperity founded upon unreasonable relations of production would continue to be an aberration, which the laws of economics would be sure to catch up with...
...This applies equally tc the endurance of a marriage or of a dictatorship...
...Or five...
...2) The worst of the reality would be kept, since the uneasiness about the future could not be banished by measures that merely restrain the productive mechanism without changing it into a more logical one...
...To interfere with the flight of this economy by attempting to tie it down to "valid principles" would only cause it to crash more quickly...
...S was not in this country in the '30's when experienced foreign travelers commented that they found more men of good will on our streets than anywhere else in the world...
...Ordinarily, it seems more im portant to estimate whether a thing that exists will exist long enough to matter than to make certain that it will cease to exist...
...The situation ends as foreseen, but the lives in it have been ending too...
...is dashing toward economic disaster through overproduction and inflation...
...In his experience collapse contains no gradations...
...EXPOUNDING the causes of the impending crash, S deduces from them a program for averting it...
...For those who exist within limits of time the foreseen is always being made irrelevant by daily practice...
...Doesn't this introduction of the measure of a human life, or of a significant portion of one, make all predictions that do not set a definite date to some degree absurd...
...Let these metamorphoses go on long enough, the formula of the whole will have to take account of their sum-as the South at long length has had to take account of the new status of the Negro, or Marxism of the disruptive power of the classless lumpenproletariat...
...Since it is overproduction and inflation that threaten us, S wants to cut back manufacturing and agriculture, freeze or roll back wages, reduce working hours and shift to turning out leisure goods...
...In fact, both of us have been taking it for granted for so long that the crash is on its way that I have begun to wonder what our prophecy means...
...NEVERTHELESS, the sword of the verdict of reason hangs over the American economy...
...With the maximum of wealth around us, and the maximum means for creating more, it is conceivable that economic disaster might be restricted to matters of form...
...Perhaps we have right now the worst product of the collapse to come...
...But where is World Socialism so that it may solve things for the Jews...
...Or for people who have identified themselves with timeless abstractions, like the human race, the nation, a class...
...Suppose through the same irrational expansion of production, oversaturation of the market, loose credit, American prosperity happens to last another decade...
...The event may come to pass for persons who have used up their time and no longer care if it happens or not...
...the logic that points to catastrophe is sufficient...
...Seventy years of a prosperity that "contained the seeds of its own destruction" could constitute a lifetime of economic anxiety though not one of the "seeds" ever matured...
...How explain to S that a crash in America is not synonymous with the end of the world...
...Economists like S could be more useful if instead of arguing about how to prevent collapse they took collapse for granted and applied their special ized knowledge to devising programs for after the crash...
...Such a new nation is doomed in advance, one might as well collect the Jews and lead them into the Red Sea...
...In this untenable location it works local changes, none in itself significant for the whole, perhaps just enough to keep it surviving from day to day, and sure to be ignored or scorned by the Big Eye adjusted to the grand pattern...
...My friend S, a renowned Austrian economist, banking expert and financial ambassador (if there is such a title), insists that the U.S...
...But if the crash is inevitable what good is getting the economy stuck at some level below the top...
...As a result, phenomena "condemned by history" have to be dealt with, when theoretically they should be left to execution by Time-for instance, the Communist attitude toward fascism-and often long after they should have disappeared...
...Yet a whole generation is born, lives and dies within the abnormality and under the very nose of the analytical Cassandras who keep demonstrating that it can't go on...
...How much longer," he demands, "can we go on using up raw materials and raising wages and prices, in order to flood the market with goods that nobody needs-at least nobody who can afford to pay for them...
...A Jewish state will be ground to dust between the friction of the continental powers and the rising nationalism of the Arabs...
...PROPHECY makes sense fully only for immortals...
...Even those born to the fact will suffer from distrust of it...
Vol. 4 • July 1957 • No. 3
