Going for Broke

The Coming Boom: Economic, Political, and Social

by Herman Kahn
Simon and Schuster, 237 pp., $14.95

The Imperious Economy

by David P. Calleo
Harvard University Press, 265 pp., $17.50

Herman Kahn
Herman Kahn; drawing by David Levine

Whatever Herman Kahn may have intended when he and his associates compiled these “seminar notes, papers, recorded briefings and assorted dictations,” the desire to make himself intelligible cannot have been much on his mind. For example, when he wants to say that prices are a function of supply and demand as well as of interest rates and inflationary expectations, he writes, “Thus, the value of money (or the price level) is related to the availability of GNP (goods and services) and the supply of money, the price of money (i.e., the interest rate is related to the supply and demand for credit), and the likelihood of changes in the value of money.”

Such syntactical chaos throughout this book suggests more than its author’s negligence. It also suggests a mind incapable of reflecting on its own effusions, like the mind of an infant or a fanatic, or that of a man for whom it has become second nature to befuddle lecture audiences with fancy inanities. Kahn blames the reluctance of businessmen to invest for the longer term on “the absence of genuine thirty-year bonds,” by which he means bonds that pay 2 or 3 percent interest and will ultimately be redeemed in constant dollars, as if the disappearance of such bonds and the widespread reluctance to invest for the long term were cause and effect and not two ways of saying the same thing.

Kahn’s assumption of a “coming boom” is similarly tautological, for his prediction rests largely on the idea that Ronald Reagan’s economic wisdom is self-evident. “To a much greater degree than most people realize,” Kahn writes, “the strength and depth of the coming boom is [sic] dependent on the man at the top…. And we believe he will do quite well—with a little help from his friends.” Thus Kahn simultaneously patronizes his “commander in chief” and offers him his services as well as those of his colleagues at the Hudson Institute, the think tank he runs and from which his “ideas” emanate. Throughout these pages, Kahn uses the first-person-plural pronoun to indicate the collegial source of his thoughts.

Kahn says that he and his associates “created” this book late in 1981 but most of it seems to have been written much earlier and revised by patchwork. Many of its ideas, Kahn admits, were presented to new members of Congress and their staffs in the last weeks of January 1981 and some chapters, for example those on energy and defense, may have been composed earlier still, before the decline in United States petroleum consumption could be determined for 1981 and when Kahn could still imagine, as he did in his galley proofs, a Soviet nuclear attack on the United States precipitated by “another East German revolt (trying to get some of the freedoms the Poles recently achieved),” a phrase which Kahn amends in the final version of his book to…

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