Seeds of Change

...The latter presents the broad questions: What boundaries does business power set for change ? Will changes come that cannot be contained by the boundaries...

...Building on what he sees as a flexible consensus, Heller goes on to explain lucidly and urge effectively a next logical step in our economic system: sharing of Federal tax revenues with the states on a largely no-stringsattached basis...

...3.50...

...Heilbroner rightly gives great weight to what Eli Ginzberg and his associates documented in The Pluralistic Economy: that a third of the nation's productive activity now takes place in governmental and non-profit sectors of the economy...

...But for the foresee able future there are also limits be yond which change will not be allowed: "In a society that has no ideology other than that of the business system, plan ning cannot invade the domain of the market as the central organizing agen cy of society, or vitiate the rights of property as a claimant to income...

...Even when the White House intellectually favored economic modernism, it often hesitated politically...

...The seeds of such change, according to Heilbroner, are already present...

...In the longer run, Heilbroner sees the emergence of a post-capitalist social structure in which the dominant notions will be "the primacy of scientific discovery as a central purpose of society" and "an emphasis on rational solutions to social problems that are today not yet subject to human direction Indeed, the key word of the new society is apt to be control...

...His recounting of economic advice and Presidential actions in the past six years also shows, however, how slow, small, and numerous are the steps along the path from the present to the future...

...He may not always be rigorous, but he is always relevant—something that cannot be said of every social scientist...

...With goods no longer our major need, the power of business declines...

...He tackles large questions perceptively and thoughtfully, yet he does not allow his speculations to take off into the wild blue yonder...

...He thinks that a fair amount of change can be accomplished within the boundaries imposed by what he calls the "structure of privilege," a structure exemplified by large disparities of wealth, income, and economic power...

...Modern economics and Congressional and popular mythology were not easily reconciled...

...Economists are among the new elites Heilbroner describes, and Heller's discussion of the power of advice is particularly instructive on the growing alliance of professional knowledge with political power...

...In an intriguing vignette on the economic education of President Kennedy, Heller shows that for all of the President's receptivity to ideas, "the course of true economics was not always smooth and straight...

...Heller tells us, for example, that Kennedy admiringly mentioned Roosevelt's and Eisenhower's ability "to talk balanced budgets even in the face of repeated deficits...

...This idea, known for several years now as the Heller Plan, has met with both liberal and conservative approval and has been endorsed by most of the governors...

...Ambiguously, however, he also asserts that "the position of business within society was never more solidly entrenched...

...If the new age is to be one of social control with a scientific perspective, one can only hope that the controllers will be guided by advisers as humanely perceptive as these two men, whose books I strongly urge you to read...

...Seeds of Change THE LIMITS OF AMERICAN CAPITALISM, by Robert L. Heilbroner...

...172 pp...

...The future will see an even greater increase in the non-market-oriented sector and an equivalent growth in the societal importance of those associated with that sector...

...Putting the two books together, then, we can use Heller to illustrate Heilbroner...

...Then, in 1962, the Yale speech heralded the President's commitment to Keynesian premises...

...As for conservatives, Heller sees "a profound shift," consisting of "a growing acceptance" of government's role in managing prosperity, and a realization that liberty need not be endangered in the process...

...The boundaries will in time be burst...

...The former shows that the boundaries can be stretched and, as I have noted, Heller is apparently impressed by the depth of change in recent years...

...New elites are in the ascendancy—the military, natural and social scientists, government administrators—whose values are not those of the business world and whose operations take place largely outside of the market mechanism...

...In The Limits of American Capitalism, a slim volume thick with provocative ideas, Heilbroner first limns a broad-stroke picture of American capitalism as he sees it today and then extrapolates in speculative fashion about the flexibility of our business-oriented institutions in the face of prospective challenges...

...By happy coincidence, this publishing season has also brought us New Dimensions of Political Economy, a volume of essays in which Walter W. Heller (the midwife of the "new economics" as chairman of the Council of Economic Advisers from 1961 until the summer of 1964) relates concretely the steps taken, and the obstacles encountered at each step, in the past half-decade to push back the boundaries of conventional wisdom in national economic policy...

...Yet the mythology of arms-length federalism will be a major obstacle, as will the opposition of those who use federalism to cloak their distaste for activist government however financed...

...Reviewed by Michael D. Reagan T F ONE cares about the basic directions of social change, it is good to read almost anything by Robert L. Heilbroner...

...Although this point is exemplified throughout his essays, Heller's viewpoint is solidly optimistic...

...While he wisely refrains from attempting a detailed blueprint, Heilbroner does see the transcendence of capitalism (or the business system, which is his concretization of capitalism) as inevitable...

...The liberals learned that investment tax incentives to business can contribute importantly to the growth they want for humane purposes...

...When war costs decline it should become a politically live issue...

...Yet near the end of that year occurred what Heller calls one of his "most unsettling days"—when Kennedy temporarily backed away from a previous pledge for a tax cut in 1963...

...The successful experience of applying modern concepts to the management of the nation's economy in the 1961-66 period has produced, he believes, "a new flexibility in the economic thinking of both liberals and conservatives...

...The CEA struggled hard before persuading Kennedy not to abort the beginnings of recovery in mid-1961 with a tax increase of $3 billion to pay for the Berlin defense buildup...