A Perilous Progress: Economists and Public Purpose in Twentieth Century America.

• Author: Galbraith, James K.
• Position: Econ Artists

A PERILOUS PROGRESS: Economists and Public Purpose in Twentieth Century America by Michael A. Bernstein Princeton University Press, $39.50

AT THIS EXTRAORDINARY MOMENT in history, as we enter what many expect to be a long, deep, and intractable recession, and face a war of unknown scope, duration, and cost, one might expect American economists to be hard at work, absorbed in the practical measures required to sustain full employment, to prevent inflation, and to face the failures of worldwide development on which terrorism has been nourished. There is no sign of it.

Consider the so-called stimulus package: Plainly not a line of any draft reflects the thinking of any competent professional in economics. The Republicans have simply resurfaced their tax-cut agenda, cobbled together months back to serve their never-satisfied clientele. Meanwhile the Democrats offer useful relief on too small a scale, alongside pieties about ensuring that all measures be "temporary" and "responsible." Lobbyists in one trench, bookkeepers in the other. Though everyone is fighting, in some loose sense, under the banner of John Maynard Keynes, no one reads him anymore. The fault, dear economists, lies not in our politicians, but in ourselves. This Michael Bernstein makes clear in A Perilous Progress, a history of economics and public policy in the century past. For American economists were raised, above all, to be useful: in war, depression, and in war again, and then, through the 1960s in the management of peacetime prosperity.

Bernstein, a trained economist and professor in history at the University of California at San Diego, details a largely unknown and even unsuspected history of how our professional associations and journals strove from the beginning to engage the important questions, and of how they in the end lost the ability to do so. Bernstein is especially good on wartime planning, and on the high Keynesianism of the 1960s. (Oddly, he passes over the important story of price control, and also, later on, of peacetime incomes policy.) The planners, he demonstrates, knew their business. It was no process of supply and demand that brought 50,000 aircraft a year into production, but the fast and incisive calculations of Simon Kuznets and Robert Nathan and their ability to find resources by, for instance, extending work hours, adding shifts and limiting overtime pay. Bernstein writes: "Born of an intellectual legacy tied to the investigations of scholars...