Searching for the Rational Community

...Lekachman also deftly conveys Keynes' profound exasperation with the errors and prejudices of classic economics that seemed destined to condemn the capitalist world to the recurrent savageries of the business cycle...

...The end effect is a better distribution of incomes and consequent increased ease in maintaining steady effective consumer demand...

...At the moment the "catastro-phists" like Charles Killingsworth, Theobald and Donald Michael are deemed to have been put to rout by Charles Silberman's and the Bureau of Labor Statistics' studies that show that blue collar employment has benefited disproportionately from the tax cut...

...He was equally outraged, one would suppose, by the Marxist expedients he witnessed on his 1925 honeymoon trip to the Soviet...

...Hopefully some schoolboy genius will be enticed into the field by this book and the promise of the Keynesian revolution, that rational community, will be fulfilled...

...Furthermore, the rationality of the guaranteed income concept may well be underscored in the decade or so ahead if the productivity rate from "automation" accelerates as it might...

...We are offered no hint that Keynes failed to hold this view to the end...

...it is simple economic rationality, if one accepts our federal system...

...These are essentials in upgrading people at the low end of the income hierarchy...

...The price-market system is small help...

...He writes that conversion of our "commercial community" into a Great Society will require a "move from Keynesian fiscal policy to the Keynesian vision of a rational community...

...Walter Heller speaks of having used this idea in his teaching some 20 years back...

...Lekachman himself is explicit on the point...

...hence the appropriateness of Federal funding...

...This includes more than efforts to reduce structural impediments through retraining as in the Area Redevelopment Authority, the Manpower Development and Training Act and various anti-poverty programs, ft also embraces expansion of housing and of education, health and cultural services...

...Lekachman does demonstrate in this lucid, wise, sophisticated study, enriched by his characteristically quiet humor and wonderfully sure grasp of the postwar scene, that Keynes' intent was unfailingly rational...

...A retrospective look at the whole 20th century experience can be even more sobering...

...Robert Heilbroner shows in his recent The Limits Of American Capitalism that the era from 1900 to the present has been marked by the most breathtaking increase in the output of goods-centered industries (power, mining, office machinery, manufacturing, transportation, communications, new metals, etc...

...The most Keynesian-like economic idea of all that may be forthcoming from the revolution the good Lord precipitated is the so-called Heller plan, to return surplus tax revenues to the states...

...I should say for a starter it would seem to require a major shift of emphasis toward manpower planning, investment in human productivity...

...Consistent with this aim, another development for post-Keynesian rationality could well be some version of the negative income tax...

...Clearly, in his personal life he never suffered fools gladly or found bearable the manifest irrationalities of great state policies...

...How, for example, can an economist gauge the true costs of an elevated urban highway as contrasted with a street level or submerged highway or with underground transit...

...There is compassion in his The Economic Consequences Of The Peace...

...This is to be accomplished under Heller's plan by what he calls "declaring the fiscal dividend," -providing the surplus revenue to the states that would otherwise create fiscal drag and thence recession...

...To be sure, this is always a national government's concern...

...Walter Heller emphasizes that these traditional state needs involve national interests that transcend local jurisdiction...

...It is the state and locality under our federal system that must cope with environmental pollution, educational needs, health, more highways, parks, etc...

...But the fact is, whatever "the Keynesian vision of a rational community," its attainment did not appear to involve a radical (or perhaps substantial is a fairer word) redistribution of income or of resource allocation between the private and public sectors...

...This requires no ideological wrench nor deference to social class...

...in all history...

...Keynes fashioned the key that would free us both from Alvin Hansen's "secular stagnation" ("sick recoveries which die in their infancy and depressions which feed on themselves") of the 1930s and from deficient growth rates in the '50s and '60s...

...So, in this rudimentary form at least, guaranteed income maintenance is by no means as radical a proposal as the opponents of Robert Theobald, the energetic leader of the movement, have tried to make out...

...The Bloomsbury Keynes, as Lekachman calls him, was above all perturbed by the Socialists' exaltation of the "boorish proletariat" (Keynes' words) over "the intelligentsia and the bourgeois," who "are the quality in life and surely carry the seeds of all human advancement...

...This is evidenced, he suggested, by the fact that economic growth, with its attendant benefaction of full employment, has been the dominating goal of postwar U.S...

...Although Lekachman is too prudent a biographer flatly to assert this, he does divide his book in half, the first "Keynes and Keynesian Economics," the second "The Keynesian Era,' so that he can bring Keynes up to date, as it were...

...And a very modest version of a negative income tax has been used in the state of Hawaii...

...Yet although one might infer that Keynes had a vision of what the rational community should be, for all the author's industry in recreating Keynes' times and thought, the reader may be hard put to discern what the Keynesian vision would consist of...

...But the dismaying contrast between U.S...

...But the productivity rate of the total private economy is at 3.7 per cent for the years 1960-1965 as compared with 3.2 per cent for the entire postwar period, a noteworthy enough increase...

...This latter half is an exposition of how the adoption of Keynesian economics has armed us to cope rationally with current socio-economic issues...

...Yet, given Keynes' only qualified faith in the efficacy (and his reservations about the justice) of the market system, it would seem fair to predict that had Keynes lived into the 1960s he would have comprehended redistributive efforts under "rationality...

...Daniel Bell permits himself a laugh (in the current American Scholar) at Michael Harrington's formulation, "Reactionary Keynesi-anism" (in Encounter), noting Keynesianism was once deemed a Socialist doctrine...

...domestic policy...

...In the whole area of environmental pollution, it has exacerbated matters rather than helped us to find our way, for the market's silence on social costs has misled the people into assuming they do not count...

...economic growth and Western Europe's and Japan's in the 1950s, along with mounting unemployment, made the goal of faster economic growth a veritable obsession...

...The New Economics," which Keynes sired, Alvin Hansen nurtured so it could survive, and Walter Heller et al articulated and put into operation with the tax cut, is an evolving idea...

...contributor, "Atlantic," "Harper's," "Reporter," "Commonweal" "The last quarter century will be known to historians as the years of the economist" John Kenneth Galbraith remarked recently...

...At this rate, as the computers begin to proliferate in the coming decades, the divorcement of income from work is likely to be the height of rationality...

...ft does not detract from Keynes' accomplishment, however, to observe that economic growth and full employment, though prerequisite to the solving of our domestic social problems, are means, not ends...

...As Galbraith has stated it, prosperity gives the Federal government the revenues, and the state and local governments the headaches...

...The "move from Keynesian fiscal policy to the Keynesian vision of a rational community"-what would it entail...

...The social ramifications of such decisions are enormous...

...Finally, quantifying the indirect social costs and benefits of given policies increasingly absorbs the attention of political economists...

...Lekachman provides many hints...

...If we are to achieve the Great Society within our capitalist economic framework, however, we will need a new Keynesian genius in the area of such social cost accounting...

...Nonetheless, so great has been the economizing of labor from use of new technology that goods-centered industries today still take only 40 out of every 100 workers, or almost exactly the same proportion as in 1899 when production was a relative trickle...

...It is an interesting comment...

...For whereas, with prosperity, the Federal coffers overflow faster than the demand on them, with relatively inelastic tax revenues the states simultaneously have become overwhelmingly burdened with metropolitan problems...

...Lek-achman's splendid study reveals how stupendously important economic theory can be: a world has been changed by it...

...The thrust of Robert Lekach-man's book is that but for John Maynard Keynes the goal would have remained unfeasible, and Lekachman is overwhelmingly persuasive in his claim...

...It is a neat rationale and as such surely would have appealed to Keynes...