Looking at the Invisible Hand

...While he agrees with the radical critique that to abhor meddling with the market is to "favor the current holders of wealth and power," Solow deeply mistrusts current attacks on the doctrine of consumer sovereignty...

...Reviewed by Edward T. Chase Editor, New American Library FOR ALL ITS restraint, brevity and uncomprehensiveness, Capitalism Today clarifies where we are now and carries us to the threshold of the future as authoritatively as any comparable work of recent socio-economic commentary I have seen...

...Daniel Bell's long essay, "The Cultural Contradictions of Capitalism," brilliantly fills in the background for the critiques by Kristol, Heilbroner and Solow...

...My reading of history is that, in the same way as men cannot for long tolerate a sense of spiritual meaninglessness in their individual lives, so they cannot for long accept a society in which power, privilege, and property are not distributed according to some morally meaningful criteria...

...Observing that contemporary attempts to supply a social justification for capitalism fall into three moral categories?1) the Protestant ethic, success to the honest toiler...

...His most original emphasis is on what he calls the emergence of two major new "mass markets: (1) a mass market for capital and investment, and (2) a mass market for careers for educated people doing knowledge work...

...Lubitz shows that it is a "model" of tendentious evidence shuffling...

...If our dismay at the spectacle of today's unsatisfactory environment makes us despair over "individuals' judgments about their own welfare," then we must ask "what could be put in their place—presumably the judgments of an elite...

...He proposes that economics be reoriented toward explicit political and social goals in line with the late Adolph Lowe's instrumentalist approach...

...By eschewing overweening ambitious-ness, it offers a more enlightening and more profoundly disturbing account of the prospects facing the capitalist order than does a stridently critical study like, say, Christof-fel, Finklehof and Gilbarg's Up Against the American Myth: A Radical Critique of Corporate Capitalism...

...According to this scheme, the economist and his social-political colleagues would posit desirable social goals and the economist could then apply his scientific techniques to help us achieve them...

...In the modern era this claim has been spurned, as the capitalist ethic in America has become "degraded...

...Robert M. Solow of MIT says, in effect, not quite so fast...

...How does that grab you, Charles Reich...

...R. A. Gordon of Berkeley avers the continuing existence of the business cycle and allows that we are in the first "true" business recession since 1961...

...M. A. Adelman shows us the subtleties and complexities involved in analyzing trends in modern economic concentration...

...In such a society virtue loses all her loveliness...

...and (3) the Technocratic ethic, just reward for "performance"—Kristol systematically demolishes the arguments of each...

...Thus he concludes that to rescue our "spiritually impoverished civilization" we have no choice now but to abandon the political metaphysics of modernity and "start the long trek back" by restudying our Calvin, Hooker, Aquinas, Aristotle, Plato, etc...

...A possibly more immediate remedy to the economic maladie du temps is suggested by Robert Heil-broner...

...Martin Bronfenbrenner reviews "Japan's Galbraithian Economy" and sees trouble ahead, including environmental deterioration...

...Norman Macrae, an editor of the Economist, writes a shrewd account of British experience with "Neddy" (The National Economic Development Council), revealing that Europe's Social Democratic politician planners talk a better game than they play...

...2) the Darwinian ethic, only the fit survive...

...the rest of the book is more topical...

...Eli Ginzberg, Columbia's prodigy of productiveness, neatly portrays the realities of Sweden's mixed economy and wonders aloud, loudly, whether the elitist Swedish Establishment can cope with the restless new generation and the cracking alliance among the older groups in business, the unions, the professions and government...

...He identifies the paradoxes of the merger wave that has substantially altered America's economic structure in the past two decades...

...To the charge that meddlesome intervention into human affairs could result from "biased" elitist value judgments, Heilbroner retorts that "the passive stance of economists today in fact constitutes an affirmative vote for whatever goals are inherent in the given socio-economic mechanism at the moment...

...Fittingly enough, the book ends with Raymond Lubitz' demolition of Sweezy and Baran's Monopoly Capital, generally regarded as the only major updated Marxist model of American society...

...Solow seems to forecast increased reliance on wide-ranging social cost-benefit analyses as our society's technological interactions grow more pervasive and population densities rise...

...He proceeds to show that in its first century capitalism did lay claim to being a just social order...

...Kristol begins by pointing out that "our young radicals are far less dismayed at America's failure to become what it ought to be than they are contemptuous of what it thinks it ought to be"—in a word, to hell with the liberal, individualistic capitalist civilization even at its very best...

...One does not take lightly, for example, the assertion that "the inner spiritual chaos of our times, so powerfully created by the dynamics of capitalism itself, is such to make nihilism an easy temptation" —coming from an Irving Kristol, no less...

...Applying his general analysis to American capitalism, Bell shows that it "has lost its traditional legitimacy which was based on a moral system of reward, rooted in a Protestant sanctification of work...

...Bell focuses on what he sees as the historic crisis of Western society: the contradiction arising from the conflict between the characteristics of industrial society ?efficiency, least cost, maximization, optimization and functional rationality"—and our culture's "anti-cognitive and anti-intellectual currents which are rooted in a return to instinctual modes...

...Similarly, he mocks Milton Friedman's claim that competing free men achieve a national consensus in invisible-hand fashion, noting that in fact they merely achieve an "aggregation of selfish arms...

...Its detailing of America's social ills may be valid enough—they are also identified throughout Capitalism Today—but the redress of those ills cannot be based on a hyperbolic premise of corporate conspiracy...

...Daniel Seligman provides a brief review of the continuing institutional transformation of the stock market...

...Kristol gives due consideration to Frederick von Hayek, whom he calls capitalism's "most intelligent defender," and who held that a free society is incompatible with a society that demands social justice (in the sense of differences in rewards corresponding to differences in individual merit...

...The heart of Solow's contribution, "Science and Ideology in Economics," is that although the market mechanism functions well with private goods, it becomes increasingly inadequate as we try to cope with "consumption externalities"—when one person's consumption strongly affects others, or when different people consume the same public good, like clean air...

...In Kristol's view, the notion that material enrichment always leads to improvement in the quality of life is the fatal flaw in the modern concept of progress...

...Heil-broner's exasperation with the evasiveness and conservatism of economists, which he attributes to their upper income level and their exclusive attention to what is mathematically representable, is characteristically reflected in the title of his essay, "On the Limited Relevance of Economics...

...Peter Drucker's exceptionally lively section, "The New Markets and the New Capitalism," demonstrates again his capacity to elucidate masses of data...

...He relishes pointing out how dramatically the conventional wisdom—and even the assumptions of Galbraith's The New Industrial State—have been contradicted by events like the "takeover mergers" and the rise of the new "growth" ventures...

...I do not think so...

...Rigorous scientific method would be maintained...

...After scrupulously weighing the case for capitalism's moral innocence and conceding the absence of any compelling alternative, Kristol asks: "But can men live in a free society if they have no reason to believe it is also a just society...

...Indeed Kristol's essay, "When Virtue Loses All Her Loveliness," the wisest in this collection, verges on despair...

...It has substituted in its place a hedonism which promises a material ease and luxury, yet shies away from all the historic implications which a 'voluptuary system'—and all its social permissiveness and libertinism—implies...

...Moreover, the authors of Capitalism Today are for the most part middle-aged, sophisticated in history, tempered by 35 years of front-line polemical warfare...

...Together these four essays give Capitalism Today its enduring value...

...In this spirit, Kristol takes his title from the pre-Civil War apologist for slavery, George Fitzhugh, who wrote in an attack against the capitalist North: "In a free society none but the selfish virtues are in repute, because none other help a man in the race of competition...

...How we then avoid elitist judgments he does not make clear...

...But he rejects as insupportable Hayek's rationale that the historical accidents of the marketplace can be a proper base for privilege...