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A Dialogue and Agenda for Action

Foreword by Averell Harri- man. Among the participants in this searching discussion are: Harold Howe, Kenneth B. Clark, James E. Allen, Jer- ome Wiesner, C. Vann Wood- ward, Harry Rowen, Erik H. Erikson, Milton Galamison, Kenneth Boulding, Lisle Car- ter, Eli Ginzberg, Thomas Pet- tigrew and Mitchell Sviridoff.

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selves and finally to act for themselves. The things the state must do in order to insure a stable social and economic fabric in which the technocracy can function mean that the young experi- ence repressive authority in their day- to-day lives--if not at home, then in the schools; if not in school, on the streets; if not on the streets, then on TV. They live in America. "When . . . riot equipped cops come to a high school ROTC assembly because one kid threat- ened to pass out leaflets . . . there's nothing intellectual about it. It's just plain trouble. I didn't have to read Marx to find out something was wrong. I looked at my teachers . . . 137 brands of underarm deodorant . . . and . . . at my own parents, to find my own oppression."

Scale is part of it, there are so many of them experiencing these things to- gether now. Cutting boring classes is no longer, necessarily, an individual es- cape but can become a shared act of public defiance in response to external and irrational authority. Dope is a pri- vatization, but with it you learn to evade cops, trust certain people, not others and ridicule the law.

Beyond illustrating the emergence of an even younger radical constituency in the United States than we're used to, these essays also document two separate though equally dissatisfied populations within the schools. Each of these is mak- ing potentially mutually exclusive de- mands and uses of the same school. The

first group, represented here by several black student writers (no working-class white students are presented), want the school to do a more adequate job in preparing them for full participation, at least, in the wealth that is America. They want the upfront economic promises of credentiated education to be kept. The second group, the longhairs, the middle- class freaks, want the implied promises of self-realization in progressive educa- tion to be met. They use or at least experience the schools as a staging area in which the ugliness of America is re- vealed, and their radical, alternate com- munity is first formed. Some college campuses, their administrators and their movement people, are already experi- encing the crisis of differential use and conflicting goals that is hinted at in these essays by high school radicals. There are no solutions offered in this collection, not even any sure recognition of the problem as something that will have to be faced sooner or later.

What the young writers do recognize, over and over again, some haltingly, some with dismay and some with joy-- '~YOU DON'T FOLLOW A THEORY--YOU LIVE ONE. YOU DON'T FOLLOW MARX --YOU ARE MARX. YOU DON'T FOLLOW THE PEOPLE--YOU ARE THE PEOPLE." And they all wonder, what now?

Lee Weiner is an instructor in sociology at Livingston College, Rutgers Univer- sity.

When Cost Push Comes to Shove THE POLITICAL ECONOMY OF PROSPERITY by ARTHUR M. OKUN

Washington, D.C.: The Brookings Institution, 1970, 152 pages, $4.95

Reviewed by KENNETH E. BOULDING

It is one of the by-products of the two- party system that distinguished public servants are occasionally retired in their prime, because of the fortunes of party politics, and hence they have a chance to reflect on what they have been doing and to write up their reflections. Arthur M. Okun was connected with the Coun- cil of Economic Advisers for nearly six years, finally becoming chairman under the previous Democratic regime. He is now a senior fellow of the Brookings Institution and has used his private status to write an essay which consists of reflections, rather than memoirs, but which nevertheless reflects his long, ac- tive tenure as an adviser to the presi- dent. As his association with the council

corresponds in time to the longest con- tinuous economic upswing in American history, at least part of which may be attributed to the good advice given by the Council of Economic Advisers, the document is of unusual significance and interest. It was in this period indeed that the Keynesian revolution finally became the conventional wisdom.

In this tale of consensus and success, two clouds, both growing considerably bigger than a man's hand, shade the skies of the sunny sixties, as they move toward the more somber seventies. One is Vietnam and the rising alternative cost, and increasing illegitimacy of na- tional defense, which more than any- thing else drove Okun's advisee from

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office. The other was the inability of economic policy to control inflation, es- pecially after 1965. Okun acknowledges these defects with disarming honesty. The economy is revealed as a puppet, the real strings of which are pulled by defense, and this Okun seems merely to accept as a fact of political life. There is an uncomfortable echo here for all of us of the economist as Eichmann, sticking to his last, doing his thing, being very professional, but not worrying too much about the legitimacy of the process to which he is contributing. Thus, Okun compares the critics of the tax surcharge of 1967, of which I confess I was one, to little boys who won't take their medi- cine. Suppose, however, the medicine is required as an antidote to poison de- liberately given earlier? Then what would the adviser do? If we say, as Okun does in effect, "Oh, well, presi- dents will be presidents and they do poison us from time to time, so let's be prepared to take antidotes willingly," or should he make a little more fuss about the poisoning? This seems to me a more tricky problem of professional ethics than most economists would be willing to admit.

The problem of inflation is not so much one of professional ethics as of professional incompetence. The incompe- tence, one should hasten to add, is on the part of the whole profession of econ- omists, not merely on the part of its professional advisers. The problem is easy to state, but extremely hard to solve. It is that as unemployment begins to get down towards a tolerable level, the rate of price and money-wage infla- tion begins to rise beyond a tolerable level. Okun holds to what he called the "four-six formula," that is, 4 percent unemployment and 2 percent per annum inflation, as the best that might be hoped for under the present arrangements. This, however, is little more than a pious hope, and for old folks living on fixed pensions a tax on their income that increased at the rate of 2 percent every year would no doubt not even ap- pear to be terribly pious. The awful truth is that there is nothing either in the new economics nor in the old eco- nomics which comes up with any real answer to this, perhaps the most intract- able problem of economic policy in free market societies.

With a few exceptions among the old war horses of the Office of Price Ad- ministration, like John Kenneth Gal- braith, there is remarkably little en- thusiasm in the economics profession, whether new or old, for price and wage control, except under conditions of very

severe emergency. The basic dilemma arises because, whereas income concepts, such as the gross national product, are aggregates that we can increase or de- crease by the relatively simple process of either adding to them or subtracting from them, the price-wage level is a kind of statistical ghost, or average. The realities to which it refers are things like the price of eggs in the local super- market or the price of particular Chev- rolets delivered in San Diego, or the hourly wage of a union carpenter in Dubuque, and several hundred million other such prices. This enormous set of all prices and money-wages has two sig- nificant aspects. There is first of all the set of relative prices which would not be changed if all prices and all wages in money terms were doubled, and then there is the absolute level, which of course would double if all money-prices and wages were doubled. The basic di- lemma is that as with a given price set we begin to approach full employment, people here, there and everywhere find they can get away with raising the money price of the things that they have to sell without losing too much in the way of sales. If everybody does this, in- deed everybody's income will increase and unless the money supply fails to expand sufficiently so that people begin

worrying about the real value of their cash balances, there is no reason why any sales should diminish.

The general price-wage level, there- fore, is a figure with a curious kind of neutral equilibrium without any strong homeostatic mechanisms, so that a rise easily justifies itself. There is also a cer- tain asymmetry in the process in the sense that it seems easier to raise prices or money-wages than it is to lower them, that is, it requires a larger stimulus to lower them than it does to raise them. If relative prices could be adjusted by means of some money-prices or wages rising and some money-prices or wages falling, then the general level might stay constant. What all too often happens, however, is that relative prices are ad- justed by some prices rising and no prices falling, which raises the general level.

The general prejudice of economics against price and wage control, which seems like the most obvious answer to this problem, is understandable when we reflect on the enormous administrative task involved in controlling such an enormous price list in such a way that the relative price structure does not be- come too distorted. The only known method of price and wage control is to freeze existing price and money wages

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as of a given date and then set up ad- ministrative machinery for making ad- justments in them. The adjustments, however, are never able to keep up with changed circumstances, so that relative price structures get more and more out of touch with realities, black markets develop, and eventually the whole sys- tem collapses. The only alternative to price control seems to be what is coming to be known technically as "jawboning," that is, exhortations and exhibitions of presidential anger.

Okun, to his credit, recognizes this problem as essentially unsolved. He does not raise the question as to whether it is unsolved because the economic profes- sion has not done its homework. There is a certain implicit assumption among new economists that this problem is in- soluble and that hence we do not need to bother to try to solve it, and that the thing to do with inflation therefore is to learn to live with it without quite admitting it. There has been only one year since 1939 in which the implicit price deflator for the gross national product has fallen. Inflation, that is, has been a constant feature of the economy for thirty years. We have certainly ad- justed to this in a great many ways-- nominal interest rates have risen, pension funds have gone into equities, Social Se- curity provides a kind of elevator floor and so on. The brutal truth is that neither the real causes of this or its consequences are known to the eco- nomics profession. We know very little about the actual processes of price for- mation, the extent to which, for instance, this is governed by fashion or even what signals are salient in these decisions. There should be a whole science of the sociology of prices, but it simply does not exist. Extremely obscure, also, are the consequences of this long-run infla- tion on lifetime welfare. We really do not know who pays the cost of it, al- though it is clear that there are costs, and that the clever and the lucky benefit at the expense of the unwise and the un- lucky. What this in turn does to the legitimacy of the whole society we do not know.

Here, indeed, I am not so much criti- cizing Okun, whose admirable exposition of the current conventional wisdom leaves little to be desired; the question I am raising is whether we do not need a newer economics which will take per- haps another 30 years to be em- bodied in the conventional wisdom, and whether the very success of the new economics in becoming the conventional wisdom has not prevented economists from making the major intellectual effort

SEPTEMBER 1970 67

that is clearly necessary if the new eco- nomics is not to lead to an increasing degree of inflation and alienation. It is one of my cardinal principles that noth- ing fails like success (because we don't learn anything from it) , and the very success of the new economics may well be a long-run disaster from this point of view. It is unkind, however, to scold Okun for the defect of his profession and his generation. It will perhaps take a new breed of economist to answer the questions he leaves unanswered. One

wishes indeed that the radical econo- mists would take them up. At the mo- ment, however, they seem to have gotten themselves bogged down in a slough of nineteenth century emotions out of which it is hard to see any new ideas emerging. We need a newer left as well as a new- er economics, but neither seems to be forthcoming.

Kenneth E. Boulding is professor of eco- nomics at the Institute of Behavioral Sci- ence, University of Colorado.

Young Man on Olympus THE WHOLE WORLD IS WATCHING: A YOUNG MAN LOOKS AT YOUTH'S

DISSENT by MARK GERZON. New York: Viking Press, 1969, 274 pages, $6.95

Reviewed by c. MICHAEL CURTIS

Mark Gerzon is a bright, inquisitive, glumly humanistic Harvard senior who has transformed an ambitious under- graduate thesis into an earnest, ram- bling, effortlessly generalized view of what it means to be young and thought- ful, in America today.

His thesis, roughly put, is that today's youth are untouched by experiences that shaped the political, social and moral

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views of the rest of us, indifferent to the economic exigencies of times past, liberated from the cultural isolation that preceded sophisticated mass communica- tions, and peculiarly absorbed in a psy- chological/relativist view of their human potential. These phenomena express themselves in emotional recoil from the vulgarities of materialism or the rigidity of national pride, in an acute vulner- ability to loss of self-esteem, and resolve not to fight, as Gerzon puts it, "in bat- tles that have already been won." If there is a productive alternative, argues Gerzon, it lies in humanist commitment to the development of the self and to an intense "feeling of relatedness" to others.

As a format for improvement of the species, there is nothing intrinsically alarming in that proposal. What is a good deal more interesting is Gerzon's attempt to isolate the uniqueness of his generation's qualms about the modern world, and his determined polarization of attitudes between the spiritually sac- rosanct (youthful) and the tiresomely corrupt (adult) .

Many in his generation, Gerzon ad- mits, "have been charged with ingrati- tude, lack of patriotism, immorality, self-indulgence, disrespect for l a w . . . and so on." But these objections, he in- sists, are based on standards acceded to by a generation two decades older and are therefore historically obsolete.

The point is less mindless than su- percilious. Gerzon is not so much de- claring himself four-square with impiety, immorality or self-indulgence, as he is resisting the temptation to imagine that adults can know what they are talking about when they levy such judgments.

As a moral perspective, Gerzon's

olympian stance is a triumph of be- havioral open-mindedness. The question of political loyalties, for example, is majestically simplified. "The young," says Gerzon, "think expressly in terms of the individual, not of the one or power politics." Now, it is one thing to resist cold-war rhetoric and the simplic- ities of free trade. It is quite another to insist that the '*value of the individual" is sustained by an implacable rejection of personal identification with the best that a political system can mean for its citizens.

It is true that Gerzon--and the youth- ful generation he defends--has an his- torical advantage over the adults he judges so harshly. Young people did not create or nurture the international ten- sions that appall them (and all too fre- quently cost them their lives), and it may not be unreasonable of them to refuse any share of the guilt or na- tionalist vanities these tensions engen- der. But what is one to make of the argument that "the loss of the lives of Vietnamese . . . is unusually close to the hearts of young people because they find it easy to see, in the simple peasant way of life, elements of individuality, independence and auton- omy that are the very characteristics they consider missing in modern Ameri- ca"? This is sheer romanticism, and is about as convincing as Rotarian rhetoric about the virtues of free enterprise en- trepreneurship.

Gerzon admiringly cites Irving Louis Horowitz' dictum that justice defined as "economic we l fa re . . , best suits the needs of the [underdeveloped] world." This is a practical judgment, and it has sympa- thetic adherents on both sides of the Iron Curtain, but what is the sort of individ- ualism that expresses itself in capitula- tion to economic planning rather than to such "outmoded" democratic concepts as political liberty?

The moral superiority of Gerzon's youthful generation is boundless. "The young today," says Gerzon, "are not en- tranced by what technology does for man and so can better observe what it does to man." Gerzon cites three sources for his insights into the effects of tech- nology-Marshal l McLuhan, Kenneth Keniston, and Erik Erikson (a curious way to establish the omniscience of the youthful eye) - -and permits himself the indulgence of the judgment that "this generation feels a need for something more than the fragmentary or visualized goals in life with which its parents' gen- eration was satisfied."

The point is not that this social-psy- chiatric view of American life is either

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