The New Economics: One Decade Older
The Unstable Economy: Booms and Recessions in the US Since 1945
Death of the Dollar
The World in Depression, 1929-1939
The Kondratieff Wave
The Great Wheel: The World Monetary System
The Management of Interdependence: A Preliminary View Foreign Relations
The Retreat of American Power
“The most significant political figure in Nixon’s Washington,” economist Eliot Janeway once observed, is “Hoover’s ghost.” Not, as journalists like Henry Brandon would have us believe, Metternich’s ghost, strutting about in the guise of “the President’s first minister, Dr. Kissinger.” Like Metternich, Brandon candidly reports, Kissinger is “bored” by economics. It is a cardinal flaw in a world in which, unlike Metternich’s, economics and politics are inseparable, and it is only necessary to recall the fate of Kissinger’s much trumpeted Grand Design, produced with such fanfare in April, 1973, to see its consequences. “Pure baloney,” commented Joseph Kraft when the Kissinger plan appeared, and he was not wrong.
Janeway’s observation is salutary because it directs attention away from the short term, where politics appears to dominate, to the long-term factors in the current world situation, from the fleeting events of newspaper headlines—“flowers of a single day, fading so quickly that no one can grasp them twice”—to what Fernand Braudel, in a famous essay, called la longue durée; in other words, to the recurrent rhythms and cycles, particularly the economic cycles, by which the actions even of those whom history acclaims as among the greatest manipulators of events—Bismarck, for example—prove, on close examination, to be almost entirely conditioned. More specifically, in invoking “Hoover’s ghost,” Janeway (sponsor, incidentally, of the lectures on which James Tobin’s new book is based) directed us back to the 1930s, the great watershed in twentieth-century history. If, as Brandon predicts, the 1970s will go down in history as the second great watershed, the experience of the 1930s is certainly not irrelevant.
Janeway was not the first, and certainly will not be the last, to draw parallels between the 1970s and the 1930s. Already in 1959 that “dangerous radical” (the phrase is Tobin’s), Professor Triffin of Yale, issued a prophetic warning, only too dramatically confirmed in 1971, of a repetition of the 1931 debacle. In 1965 came William McChesney Martin’s famous “outburst” (the phrase, again, is Tobin’s) on the “lessons of 1929.” Since then the chorus has swollen without cease—and this on the part of responsible, conservative writers, bankers, economists, leaders of international finance, not the professional purveyors of Toynbeean gloom.
Consider, for example, the Institute of Applied Economics in Melbourne in 1971: the crisis facing Australia, it warned, was potentially as great as the Depression of the Thirties; “here, as in North America and Britain, the future of the economy and the society we have been building over the last quarter of a century is at stake.” Or Alan Day of the London School of Economics: “the worst crisis since 1931.” Or Professor Harry Johnson, an oracle at the University of Chicago as well as in London: “the textbook gives no answer,” or (as Alan Day puts it), “We have to rethink the whole nature of our economic and monetary system, involving a revolution as profound as the Keynesian revolution of the 1930s.” Or, finally, the statement of a senior Treasury official in England, backed…
This article is available to online subscribers only.
Please choose from one of the options below to access this article:
Purchase a print premium subscription (20 issues per year) and also receive online access to all content on nybooks.com.
Purchase an Online Edition subscription and receive full access to all articles published by the Review since 1963.
Purchase a trial Online Edition subscription and receive unlimited access for one week to all the content on nybooks.com.