Radical Wisdom

...She scores not so much by novelty as by her unrelenting common sense and her uncommon fidelity to the old-fashioned Socialist mission of exposing the brutalities and inanities of laissez-faire...

...If memory serves, this notion dates in Labor circles at least from 1957...

...she warns at the start of her lucid account of "the economic problem that bites most nigh to every citizen...

...A Keynesian with a vengeance, on the subject of international finance she advocates Keynes' old concept of bancor, the super-reserve currency of a super-central international bank to supercede gold...

...But Mrs...

...Simply though ever so penetratingly she reviews the great subheads of economics—incomes and prices, the balance of trade, international finance, employment and growth, monopoly and competition, work and property...

...Acidly noting that Britain's expenditure on armaments "absorbs as much as the whole of its industrial investment in money terms and takes more than a proportionate share of high technical skill and scientific ability," she condemns the use of monetary policy to curb inflation as a brutal remedy that kills the patient by imposing a periodic halt to industrial growth each time growth quickens...

...Finally, Mrs...

...Written in 1966 and just published here, Economics: An Awkward Corner is is as timely as its very English title is apposite...

...She argues that the resultant rise in the price of imports—both raw materials for production and consumption goods?exerts an intolerable pressure on demand for labor and higher wages, "so that before long the competitive advantage of lower home costs is completely lost...

...It is a measure of her Socialist zeal that she barely acknowledges the remarkable postwar growth achievement of the bad old capitalist West...

...As for advertising, she snorts at the level of commodity information it supplies, ridiculing its value and, with a twinkle in her eye, scoring its mendacity?for instance that tigers are good at driving cars or that drinking stout promotes muscular development...

...Such goals, she contends, distract attention from the more crucial questions of employment for what purposes, and from questions of "allocation of resources between public and private uses and of the distribution of income between families...

...Robinson's career in perspective, identifies the highpoints of her argument, and fires the reader's interest by suggesting how importantly it bears upon American issues...

...Robinson is stubbornly skeptical, too, regarding any advantage to Britain's joining the Common Market (eec), "so far as mere trade is concerned...

...and is embodied in the now tabled Industrial Development Act bill...

...It is impossible to understand the economic system in which we are living if we try to interpret it as a rational scheme...

...Here she comments, "There would of course be a great outcry about incentives, but incentives are relative...

...Mrs...

...An alternative to nationalization, this would allow the state to enjoy some ownership without directly controlling management, thus insuring the freedom so dear to the managerial class...

...Keynes, she recalls, dismissed the rationale that "the stock exchange channels finance where it can best be used" with the crack that successful market operators actually make their gains by "anticipating what average opinion expects average opinion to be...

...Shades of FDR's suggested S25.000 limit...

...Then, "perhaps in the end the facts of life, like a sheep dog with an awkward flock, will finally nudge democracy towards common sense...

...Abetted by race prejudice, automation has precipitated the structural unemployment at the heart of the urban social disruption being fomented by the black ghetto jobless...

...Her examples are the psychological obsolescence producers build into their models, and the retailers' loyalty to the manufacturer who offers the largest margin, not to the consumer to whom they sell...

...Robinson's pulse rises most noticeably when she confronts the fundamental questions of employment and growth policy...

...Robinson has an extraordinary ability to make a knowledge of economics seem imperative for understanding what is important in the world...

...Robinson, "arises from the need to readjust the organization of society to the fantastic capacity for production of material wealth that the application of science to technology has made possible...

...Joan Robinson, the 63-year-old doyenne of British economists and quite possibly the greatest woman economist ever, does not grapple directly with these events in her book...

...And this emotional quality no less than its sustained acuity sets her book apart from those of her confreres in the dismal science...

...Robinson rejects any sophomoric notion that revolution in economic theory and practice will save the world: Keynesian that she is, she implicitly accepts the West's remarkable postwar mixed economies...

...A Labor government simply could not forcibly—using soldiers, for example, to move the eight-week pile-up of exports—break the strike that so largely created Britain's record $300 million balance-of-payments deficit in October...

...the problem of the wage-price spiral...

...Robinson embraces the evidence of the younger generation's resentment of privilege and readiness "to shed the last rags of empire" for peace and neutrality...

...from more constructive activities...

...She is grim about the unfavorable balance of trade, seeing as the only real remedy "a miraculous upsurge of zeal and energy in British industry," which may be beyond any government's capacity to inspire...

...It is of course far too early to apply this generalization to devaluation, even though its delay was inexcusable...

...Assuming successful state investment, "rentier consumption would be pro tanto stabilized, and its erstwhile growth could be devoted to public expenditure, public saving through a budget surplus, or reduction of taxes on earned income...

...And, in an English mood so alien to the American ethos, she even questions if it's worth it to be forever "strenuously efficient...

...The "great apparatus of jobbers, brokers, advisers and financiers" who constitute the stock exchange, created to assist the rentier in placing his wealth, is deplorable because it absorbs much high-class brain power (like Keynes...

...crusade against Communism and the population explosion...

...Robinson, who so sanely balances received wisdom and radical insights...

...But in the ticklish months ahead, the Wilson government can anticipate bedevilment by precisely the kind of conflict posed in the fuel white paper: social and political costs versus market costs...

...Robinson, whose celebrated earlier work on monopoly clarified the virtues of oligopolistic competition, is much too eclectic and pragmatic to deny all the market system's achievements...

...The thrust of her gloss of current economic practice is that virtually every major expedient, from incomes policy to the international monetary system, reflects internal contradictions and perpetuates some needless social injustices because these expedients are anachronistic hangovers from earlier laissez-faire doctrine...

...It also has a cutting edge, for there is something Hardy-esque in Mrs...

...Lekachman at once places Mrs...

...Britain will remain both socially unjust and in economic jeopardy, in her view, until rational planning with teeth is able to divert skilled labor into export industries and to use growth both "to clear up the hideous legacy of the industrial revolution" and to modernize industry...

...Mrs...

...What she insists is that Britain be rid of self-contradictory, partial laissez-faire...

...On the dark side, she notes threats to world well-being such as the U.S...

...When she wrote the book in 1966...

...As might be expected of the star of the Cambridge economics faculty, Mrs...

...she also had doubts, not very persuasively founded, about Britain's ability to benefit for long from devaluation (July of that year, the time of the wage and price freeze, was when devaluation might best have come...

...gropes its way through its new social revolution it could use a mentor like Mrs...

...Democracies are selfish," she muses...

...Robert Lekachman's nine-page introduction opens the volume with a grace and precision that are the telltale signs of mastery of subject...

...An ill omen, editorialized the London Observer, interpreting the Government's action as another doctrinaire concession to the coal miners, who are heavily represented in Parliament, since the white paper had certified the cheapness of oil and nuclear power over coal...

...In conclusion, Mrs...

...She urges the use of wartime knowledge of how to set up the machinery needed to mobilize the national economy...

...The Western world is at an awkward corner because it remains saddled with the habits of mind and institutions of the economy of scarcity of the 19th century, when the capitalist classes were creating immense accumulations (they saved, and mostly eschewed conspicuous consumption) of fixed capital, railroads, factories, etc., and when the division of wealth between capitalist and labor was scandalously inequitable albeit essential in founding the modern industrial world...

...Yet it also underscores the enormously different emphases in an American agenda of economic issues: We share the British concern over the international monetary system, over a workable welfare system, etc...

...Reviewed by EDWARD T. CHASE Contributor, "Harper's," "Atlantic," and other magazines Immediately after the British devaluation of the pound in November, the Labor government withdrew a just-completed white paper on national fuel policy with the explanation that the paper now needed re-examination...

...She has not forgiven the Americans for rejecting it and for establishing an International Monetary Fund that allows exchange rates to be "the sport of national and international pressures, with the unsatisfactory results that we see...

...So she's for it...

...At the same time, asserting what coincidentally is the central thesis of Galbraith's latest work, The New Industrial State, she says private enterprise "is run for the benefit of producers, in which the advantage to consumers is merely incidental...

...There is guidance for American policy throughout this book...

...In her discussion of the rentier Mrs...

...But an exhortation to American business to compete, innovate, be efficient would seem very odd...

...Nonetheless, with a pragmatism that rescues her from too stubborn allegiance to Socialist dogma, she acknowledges that an incomes policy, indifferent though it may be to social justice, is crucial to Britain's control of rising costs relative to those of competing nations in world trade...

...And high on our agenda would be automation and the dislocation of the traditional labor market...

...The game can be played just as well for lower stakes once the players are used to them...

...The case can be made, in fact, that what triggered devaluation was the government's prostration before the wildcat London dock strike...

...She considers progressive taxation a farce in Britain and is all for truly confiscatory death duties and a ceiling on executive salaries of a certain multiple of the average wage...

...Her book is really a deceptively sophisticated primer...

...She feels that her cherishing the ideal of a little Britain, disentangled from both Empire and from the strain of offering sterling as reserve currency "is a selfish ideal...

...Typically she cites as a "fall-out of benefit to the consumer from the competitive search for profit stylish ready-to-wear clothing which has contributed to democracy by breaking down class distinctions...

...More frequently than the British have for some time been able to afford, compromise is reached exasperatingly late when maximum gain from a decision is frustrated and the mollification of opposing interests rankles all around...

...It is this polarization not only between parties and classes but within the Labor party itself that makes the resolution of conflict in Britain so often a recourse to muddle...

...This is because the relationship between prices and wages today depends on what the market first established anyway, no matter how arbitrarily...

...Here she scorns the voguish deification of full employment and growth, however essential...

...Simultaneously the New Stales-man welcomed the paper's withdrawal, emphasizing that the lower costs of oil and nuclear power "will be more than offset by the costs and miseries caused by the premature closing of marginally uncompetitive coal mines in Durham, Scotland, South Wales, etc...

...The present awkward phase in historical development, writes Mrs...

...The British labor movement was built up through a struggle for a larger share of the cake, and whatever its knights may privately believe, they cannot openly surrender and agree to the laissez-faire doctrine that the 'factors of production' each get are just what they deserve...

...Like Galbraith, she responds to events as a moralist whose language happens to be economics...

...She doubts British exports would gain from freer access to eec markets, whereas imports from them might well increase...

...Yet she puts them in sharp perspective because her special forte is the cool appraisal of the external economies and external diseconomies of all activities with an economic component...

...This, in turn, has triggered a dialogue, unthinkable two years ago but now including even Republican industrial leaders, about a guaranteed income or, at the very least, guaranteed Federal employment for the hardcore jobless...

...Such a voice of sanity, wise and informed, unwaveringly sharp and critical yet always humane and never apocalyptic, is refreshing today...

...Robinson's just-controlled sense of outrage at nature's as well as man's inhumanity to man...

...Her contempt for the rentier is equally keen...

...Mrs...

...As the U.S...

...Characteristically she emphasizes that an incomes policy, whereby the regulated rise in wages and prices is tied to productivity, is no contributor to social justice whatever its other contributions...

...Robinson advances the idea, so novel to Americans, of the state acquiring shares in private corporation...