Commentary Magazine


Bazelon, Pro and Con

To the Editor:

Congratulations on your publication of the series of articles [“The Paper Economy,” September 1962; “The Scarcity Makers,” October 1962; “The Politics of the Paper Economy,” November 1962] by David T. Bazelon. His ideas are so varied and original that one can hardly agree with all of them in detail. But his stress upon the distinction between the real wealth of nations and the symbols of economic and financial accounting is brilliantly developed. More important still, everyone needs to hear what he has to say, for the phenomenal neglect of this distinction is directly at the heart of our failure during the past decade or longer to use our resources fully and to devote them more effectively to the ultimate purposes of a free and aspiring society.

Leon H. Keyserling
Washington, D.C.

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To the Editor:

The American economy is shuddering and rattling, and David T. Bazelon’s series on the “Paper Economy” provides an acute diagnosis of the malaise. He is pioneering in economic geriatrics, and I am satisfied that he is close to the source of assorted ailments that could, in a short enough time, bring down the nation.

However, this is a long way from the general view among economists, and I hope that COMMENTARY has arranged for a reply. I am anxious to see, not another defense of conventional economic theory, but a point-by-point discussion of Bazelon’s main theses. The debate is a crucial one, for if our economic theories are the sentimentalized and useless relics Bazelon makes them out to be, we clearly are proceeding, energetically and mindlessly, toward no goals at all.

W. H. Ferry
Santa Barbara, California

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To the Editor:

When David T. Bazelon says “. . . . we are trying quite unsuccessfully to deal with a runaway technology within the framework of an archaic business-profit system,” he comes very close to saying what needs to be said about the so-called “American Way.” . . .

What needs to be said is that . . . our system is proving to be a helluva way to run a railroad, or a space program, or a foreign policy, or any of the other things that need doing in and around the nation today.

One of the reasons we are so unsuccessful at any but the superficialities of success, I’m afraid, is our unwillingnes to be honest with ourselves and each other. A result, as Mr. Bazelon implies, is our utterly phony obsession with perpetuating a thing that nobody really wants and which probably really won’t work anymore—industrial competition. Though business talks a great competitive game, it risks jail sentences by rigging markets for everything from giant turbines to garden hose. Labor, through insistence on industry-wide and nation-wide bargaining, has availed itself of monopolistic practices that would have done a Carnegie proud. And in government, most of the career administrators and many of the legislators have no stomach for the unplanned and uncontrolled inherences of true competition. . . .

. . . What really frightens me is that we lose out to Communism because of our stubborn refusal to adjust our system to match the Soviet Union’s increasing competence. For, until the day when we can watch a Soviet space platform break over the horizon . . . like a harvest moon, and be secure in the knowledge that its crew is interested in geodetics, weather analysis, and a head count of whooping cranes, we had better start looking for a new approach, or radical improvements in the old. It’s a matter of survival.

H. T. Rowe
New York City

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To the Editor:

. . . David T. Bazelon certainly makes me think about the problems he deals with more vigorously and painfully than anyone else I have read on this subject recently . . .

Adam Yarmolinsky
Office of the Secretary of Defense Washington, D.C.

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To the Editor:

I thought David T. Bazelon did an outstanding job, not only in analyzing the problem, but in the basic research as well as the lucidity with which the articles were presented.

Paul Ziffren
Los Angeles, California

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To the Editor:

Mr. Bazelon has his breath taken away by a commonplace statistic that he finds characteristic of his deliberately wasteful (paper) society. He states that we scrapped, because of deficiencies in autos, 4,340,000 cars in one year. [But] . . . according to the Statistical Abstract of the U.S., in 1955 we had 62 million cars registered; in 1960 73.7 million; in 1961 75.8 million. We scrapped in 1958 4.1 million plus 538,000 trucks and busses; in 1959 4.5 million plus 691,000 trucks and busses. In 1961, 28 per cent of registered cars were more than eight years old, about 21 million, and this is the significant statistic.

One cannot take the ratio of cars scrapped to those registered in any given year as an index of deficiencies, for the oldest of a series when registration was lower than now were presumably the first to be scrapped. But 21 million cars were more than eight years old—not a bad record of durability. . . .

Marcus A. Heyman
New York City

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To the Editor:

. . . It is high time that some new ideas appeared in the field of economics, and I think economists like Mr. Bazelon and Robert Theobald are among those in the forefront of an exciting and important new approach which will make many of our customary attitudes appear old-fashioned.

Clarkson N. Potter
New York City

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To the Editor:

David T. Bazelon’s series on the “Paper Economy”. . . gave me a “shock of recognition”; here . . . in only slightly different language, was the Technocracy thesis of 1932. . . . This is not to imply a lack of originality or perception on the part of Mr. Bazelon, but rather to speculate whether an “idea whose time has come” may not be about to get another airing.

The Technocrats of 1932 . . . made dramatic headlines with the thesis that technology smashed the price system: the abolition of scarcity by productivity had rendered unworkable a system of allocation based upon property rights, price, and a monetary-debt system predicated upon promises to pay which assumed an indefinitely expanding physical production. The themes of Mr. Bazelon’s and the Technocratic analysis are strikingly similar: technological abolition of the scarcity conditions necessary to the workings of capitalism; the lack of correspondence between paper activities and allocation of physical goods; the analysis of property as social limitation rather than thing-ness; the functions of money and debt. Of interest, too, is the Veblenian point of departure for both viewpoints . . . the contradictions between the rules of the game and the goals of entrepreneurs caught up in the Price System, and the “real” world, with the differing rationality of the production technologist and engineer. . . .

The crucial policy problem posed by the theme, “technological abundance destroys scarcity” (and its paper economy), is how to perform economic allocation under such conditions. Here the Technocrats made their Utopian proposal—in the sense of an unrealistic departure from existing cultural limits. Scrap the entire paper system, they said, and replace it with a “real” system of accounting based on units of energy measurement, continuously fed into a central computer system. Thus, under conditions of abundance, resource allocation at the primary and secondary industry levels could be nearly continuously determined by registration of consumer behavior. Given further decisions about social overhead costs and services, this is a model of a totally planned, publicly-owned, economy. . . .

“The validity of paper in the absence of scarcity is unthinkable without conscious control of its quantity and/or value,” emphasizes Mr. Bazelon. Writing as he does in a period of less acute economic crisis than the 1930’s, and thus without its apocalyptic social visions, it will be of considerable interest to see what proposals he comes up with for achieving this end.

Henry Elsner, Jr.
Philadelphia, Pennsylvania

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To the Editor:

. . . Mr. Bazelon’s series of articles seems to be chiefly noteworthy for their unwarranted conclusions based on unprovable assumptions.

For example, in the first article [“The Paper Economy,” Sept. ’62] Mr. Bazelon refers to Franklin Roosevelt as that friend and benefactor of the bankers. . . . Implicit in the writing is the thought that the banking class of the United States recognized and loved FDR for saving their bacon. . . . In fact, the very mention of Roosevelt to my conservative friends . . . sends the temperature of the room up a number of degrees. . . .

If I understand Mr. Bazelon correctly, he is proposing his own form of Veblenism . . . if U.S. Steel would only produce steel at something close to 100 per cent of capacity instead of just over the 60 per cent level, we would not throw the excess steel into the sea. . . . I agree; we would not. We would store it in leaky warehouses at twice the rent that the warehouses were worth until such time as the steel rusted to the point of no return. . . . What I am trying to say is that increasing production is the very least of our problems. Distributing it is the stumbling block, which Mr. Bazelon makes no attempt to leap over, walk around, or push out of the way. . . .

[Mr. Bazelon] . . . refers to the conspiracy between government, industry, and banking to perpetuate this paper economy of scarcity. I assume he means unconscious conspiracy as opposed to cabal. He cannot be proposing that there is a conscious meeting of minds among the three groups. . . .

Nowhere . . . does Mr. Bazelon refer to the greatest failing of our country . . . universal (or almost universal) suffrage, without universal education. . . . The reality of the situation is that the people of the United States like paper money; they like being able to buy what their neighbor cannot; they like owning small pieces of AT & T; and they like the illusion of security that what Mr. Bazelon calls the Paper Economy brings. If Mr. Bazelon wishes to change all this he must attack it at the source and not try to superimpose a system from above. . . . That source is education. I suppose that is exactly what these articles are trying to do—educate the reader to an idea. If so, they fail, for they succeed only in irritating. . . .

William Mayleas
New York City

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To the Editor:

. . . Mr. Bazelon has. . . distorted the central fact of American political life—the unprecedented and growing power of the Federal government, especially the executive branch. . . .

One does not have to accept Mills’s conception of the “power elite” to realize that the vast power of government is not controlled by the electorate. The separation of policy-making from politics is almost complete. Only infrequently is the electorate aroused to play its theoretical role. . . .

. . . These elite rulers are not just figureheads, [but] in fact rule. Most elite leadership finds its home in the Executive Department and its correlative agencies. The demise of Congress is no secret, except perhaps to Congressmen. . . . The Executive Department exerts tremendous and growing power because it has had both the desire and the ability to act decisively. As a result, executive power reaches every part of our economy. . . .

The President is the undisputed head of this power-wielding force. . . . By setting national goals, by declaring national emergencies, by relying on and substantially molding the dinosaur of public opinion, he can uncheck the checks and unbalance the balances of a system which already gives him incredible power. . . .

Chris Vasillopulos
Hobart College Geneva, New York

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Mr. Bazelon writes:

To my friends and other flatterers, thank you very much—and I hope you’re right.

To Mr. Rowe, I might agree with you about our lack of candor. Certainly in an early tomorrow, the issue will in all candor be one of survival. But not survival of “true competition,” whether by government, labor, or industry—but rather survival of government, labor, and industry with or without true competition, because . . . there hasn’t been any lately. It seems silly to say it, but we will just have to make do without.

Mr. Heyman would like to engage in a statistical argument. But if I did, I would have to go to the Statistical Abstract—and he has already been there. Besides, he is happy about 21 million cars more than eight years old—much happier I am sure, than the people who have to drive them . . . and what about the 4,340,000 cars scrapped in that particular year?

I am not a Technocrat, Dr. Eisner. But I do stand on the belief that Veblen was all by himself, a giant. I rather think that Technocracy was the first reductio ad absurdum response to the initial sunburst of Veblen’s insights. . . . (Are you mixing up Veblen and Technocracy? They are not the same.) I would not scrap the whole paper system—I wouldn’t even think about doing it: that sort of thing is certain to drive you crazy. Besides, the point is not whether I scrap it, but what everybody else does. . . . Under conditions of abundance, the ancient issue of justice tends to lose its point. If we’re a little wiser about it, we can get along a while longer under the paper system without killing ourselves about its validity. That is a spiritual, not a bread-and-butter problem. (I pointedly offered no proposals, Dr. Eisner—just impressions and analysis: the excess of irrelevant ideas is a greater problem than the lack of concrete technical proposals.)

Mr. Mayleas, sir: I am in the habit of making wisecracks, not explaining them—you will have to struggle with the FDR-banker thing as best you can. As for my Veblenism, yes, it is mine. But it doesn’t seem to have much connection with yours. The problem is, if you like the phrasing, of distribution. Now what?

Finally, I give ground to no one in my devotion to education. . . . But what, really, is your point? I know that the American people like the Paper Economy—in fact, I said so in clear print a few times. Indeed, I was so convinced of the fact that I did not (and do not now) have the courage to tell them what they should be interested in instead. Do you? (And I am sorry I irritated you: all I meant to do, was to disturb you terribly.)

Mr. Vasillopulos, you are wrong. You don’t see where the power is in this society. Do you think that “elite” is a dirty word in sociology? No, it is a transcendant fact where you and I live. And it is not limited to the Federal government—indeed, it is an afterthought there: the Federal elite is, literally, the result exclusively of the confused abandonment of elite power elsewhere in society. (Which will not continue much longer, incidentally.) You say: “Most elite leadership finds its home in the Executive Department and its correlative agencies.” You must be joking. In a recent contest between this all-powerful elite and an organization representing less than a quarter-million doctors, the Federal government was unable to give medical care to millions of aged citizens who desperately wanted and needed it. What tyranny! But day-by-day and in millions of ways, and to the tune of billions of dollars of social effect (though you can’t measure this sort of thing in dollars), the unnoticed elites of finance and industry literally decide, for their own absurd purposes, just exactly what we shall think and feel and want from tomorrow. . . . Power is not something evil people do to cause us trouble—it is something society creates to keep in business. . . .

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