What is most puzzling about the present uneasy combination of inflation and depression in the United States and elsewhere—a combination that includes high rates of production, employment, and profit with great pools of economic stagnation and widespread shortages of all kinds—is that no one has tried to account for it in a general or systematic way; as the result, in other words, of a certain historical process from which certain political consequences can be expected to follow.
Instead we are told that these problems result from shortages of fuel or soy beans or excessive speculation by Arab money changers, or that the government is spending too much or too little on either armaments or welfare programs, or that corporate monopolies have fixed prices and production levels according to their own interests and not in the interest of the economy generally, or that wages are too high and the dollar too low, or that this or that primary product—principally oil—is growing scarce, or that there are too many people in the world, demanding too much. Meanwhile we have a variety of conflicting prognoses and remedies, derived from various ideologies, yet the crisis seems to worsen each day as things grow scarce and world prices rise. More ominously, there arises the likely danger of strong political reactions as public confusion, anger, and despair inevitably grow. From the politicians and economists we get the usual incantations and assurances; leeches, opiates, and appeals for faith; but as the symptoms proliferate no one names the disease itself.
No doubt the low public standing of pessimistic speculation accounts for much of this reticence; but the trouble with gloomy prophecies is often not the absurdity of their premises but the imprecision of their timing. Is it possible that something has finally gone wrong with the productive system itself; that what links the rising price of bread to the constriction of the world’s oil supplies and what links street crime and air pollution to the declining dollar—what accounts, in other words, for the relative decline of middle-class sovereignty in the advanced industrial countries—is that certain limitations may now have been reached in the techniques by which the middle class has traditionally sustained itself and its culture?
Perhaps the trepidation with which one asks such a gloomy question explains the reluctance of others to do likewise. The boneyards of speculation are filled with the remains of premature Marxists and other impatient prophets, trampled by workers and peasants, unexpectedly arisen from their long misery and rushing complacently to the bank. Yet the signs of decay are unmistakable as unprecedented productive failures occur in one industry after another, in the United States as well as in other advanced economies—in medical services and transport, in agriculture and housing, and in the formation and distribution of capital. Even in Japan the spectacular bullet train from Tokyo to Osaka now occasionally breaks down, while in France and Germany, as well as in Japan, the rate of inflation is steeper than in the United…
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