Books, Arts & Manners: Sober Birthday Stuff

The Wealth of the American People: A History of American Affluence By Oscar and Mary F. Handlin McGraw-Hill, 266 pp., $10 The Wall Street Journal, authoritative interpreter of the American economic scene for nearly half the nation’s history, greeted the Bicentennial year with a remarkable admission. We don’t really understand what is happening to the economy in the 1970s, the paper said in a major editorial on the last day of 1975, and we don’t think any of the recognized schools of economists do either. Not the Keynesians, not the Phillips Curve people, not the monetarists—not anybody.

To the extent that anyone’s theories explain the recent ominous persistence of inflation through boom and recession alike, the Journal noted, they do so not with Newtonian precision but tenuously, tying economics in to “psychological variables” such as “public illusions, anticipations, and desires.” Fitting that the 1974 Nobel Prize in economics should have gone to F. A. Hayek, author of so many warnings that “economics went wrong when it excluded the variables that cannot easily be quantified.”

JA

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John K. Andrews Jr.

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The Wealth of the American People: A History of American Affluence By Oscar and Mary F. Handlin McGraw-Hill, 266 pp., $10 The Wall Street Journal, authoritative interpreter of the American economic scene for nearly half the nation’s history, greeted the Bicentennial year with a remarkable admission. We don’t really understand what is happening to the economy in the 1970s, the paper said in a major editorial on the last day of 1975, and we don’t think any of the recognized schools of economists do either. Not the Keynesians, not the Phillips Curve people, not the monetarists—not anybody.

To the extent that anyone’s theories explain the recent ominous persistence of inflation through boom and recession alike, the Journal noted, they do so not with Newtonian precision but tenuously, tying economics in to “psychological variables” such as “public illusions, anticipations, and desires.” Fitting that the 1974 Nobel Prize in economics should have gone to F. A. Hayek, author of so many warnings that “economics went wrong when it excluded the variables that cannot easily be quantified.”