Challenge to Affluence, by Gunnar Myrdal
Challenge to Affluence.
by Gunnar Myrdal.
Pantheon. 172 pages. $3.95.
Before I start to talk about this wonderful little book—wonderful because it speaks bluntly of fundamental issues—I want to get some things off my chest. I am disturbed by the cavalier manner in which several recent works of similar intent have been treated in the press, and even in these pages, by some of our sophisticated economists. Here we have an economy that by all accounts is far from being a roaring success—a growth rate which barely manages to stay even with the population explosion, several million unemployed, an insulated defense sector that takes the best talents in our society, and an underground of invisible men and women whose pittance of earnings barely allows them to subsist. But when a few writers try to tell us why or to offer reasonable Utopias (are Utopias always so unreasonable?), the sophisticated response appears to be little more than a gravelly grunt disguised as semi-scholarly criticism.
Thus Edward Hollander, chairman of ADA’s executive committee, is so dazzled by the dynamism and resilience of the American system that he finds David Bazelon’s trenchant analysis of the paper economy1 merely an undignified case of intellectual nose-thumbing; Paul Samuelson, the nation’s leading economist and a top Kennedy adviser, admits that he is utterly bored whenever he hears of the West Virginia miners; and Robert Heilbroner, who really ought to know better, is impelled to characterize Robert Theobald’s proposal for a guaranteed social minimum income as an Indian rope trick, mainly because the latter failed to plot in fine detail how that scheme might be achieved. What these economic sophisticates seem to be saying is, “Yes, the poverty and high-level stagnation and the futility of the new technology have been exposed. But enough of that. Let us go on to the standard Keynesian remedies and not stoop to argue off-beat ideas to correct the flow of an economic cornucopia, which though a bit erratic and admittedly pointed in the wrong direction, nevertheless yields some small quantity for those shoved aside.”
If this is indeed to be the new debate on economic issues which now baffle the best of minds, I shudder to think of the treatment that may be accorded Gunnar Myrdal’s latest book on America, Challenge to Affluence. In fact, Heilbroner already has told this eminent Swedish economist that we do not need any advice, and one can almost hear other Keynesian epigones exclaiming: “Who is this stranger in our house who criticizes its structure?”
However, like a number of other observant visitors from de Tocqueville to Bryce to Keynes himself, Myrdal knows more about our house than most of us do. His most famous work is, of course, An American Dilemma, the classic study of our race relations in which he revealed the tragic clash of belief and action in its full frightening intensity. Few American scholars have been capable of handling this lacerating subject or were even willing to do so. In addition to this remarkable study, Myrdal’s contribution to contemporary economics has already assured him a permanent place in the pantheon of great economists. In his theoretical work he has exposed the impossibility of building a pure social science that imitates physics or astronomy in being devoid of value judgments. Much to the consternation of his academic colleagues, he has shown that political attitudes cannot be excluded from so-called first principles and that positive propositions in social science—those which seek to elucidate a set of consequences from a priori statements—invariably disguise a normative bias.
Myrdal’s vast experience during the past four decades—as professor, member of the Swedish parliament, cabinet minister, economic planner, bank director, international civil servant, and author of a forthcoming massive study of Southeast Asia—has made him into a cheerful pessimist who can visualize with full clarity the contours of the good society and at the same time explain in technical detail why the policies of the powerful nations of the West are invitations to doom. About a year ago, I attended an off-the-record meeting in Washington to which Myrdal had been invited to speak. A large man, with deep alert eyes, he entered the room, sat down, and without waiting for the chairman’s introduction, he pounded the table and exclaimed: “What is the matter with you American economists? Your country is in trouble, real trouble, and you spin delicate theories in the air!”
The ideas which he then proceeded to throw at us have been brought together in Challenge to Affluence. The central one is that the American economy is undergoing serious structural change. Curiously enough, this upsets some liberal economists who are so devoted to orthodox Keynesianism that they see tax cuts and interest-rate manipulation as the only cure for economic ills. Further, because conservative writers have argued that unemployment stems mainly from the laziness of our youth and the unwillingness of unemployed miners to move to the West Coast, liberals have been reluctant to consider the structural case at all, and in fact have often denied that it exists. This strange game in political economy—avoiding problems because your opponent is talking about them—is practiced not only in official Washington and among its academic advisers, but in the unions as well. This is surely self-defeating, for the evidence on structural change is quite persuasive and by no means supports the conservative position.
Rapid expansion is, of course, essential for a viable economy. But it will not by itself reduce unemployment to manageable proportions, since increases in productivity and automation tend to destroy the more common kinds of work, and to create more esoteric, and fewer, jobs in their place. As Myrdal demonstrates, these new jobs call for higher education: contemporary unemployment afflicts mainly the uneducated. As time wears on, the latter will increase in number, and lacking any genuinely massive corrective measures, they will become an army of unused and unusable persons—an “underclass” as Myrdal calls them. This is a structural problem created by the changing character of industry itself. Plants move to new locations; some industries grow, others decline; even in a single industry, the company mix may be shifting. The unemployment that this creates exhibits less and less of a temporary “frictional” character. It contributes to the “underclass” which is already forming in our society, an increasing body of unemployed who have been out of work for so long that they are too discouraged even to look for jobs. Though uncounted and virtually invisible, this group recently has been estimated to number over a million and a half persons. Should the economy begin one of its periodic momentary spurts, then some of these long-term unemployed may be absorbed, but the climb will have to be extraordinarily vigorous and of enormous magnitude to draw back all those who are still capable of working.
What then are we to do? The program Myrdal suggests is familiar enough and much has already been written about it—education, retraining, slum clearance, housing, urban transport, area redevelopment, expanded public services. All this is essential. So is a good fiscal environment. However, in Myrdal’s view, and I believe he is right, the latter alone would be insufficient. Even the postwar explosion in effective demand was rooted in a structural change imposed by the war economy. Hence, tax cuts and other fiscal measures need to be supported by a much greater educational effort and by a vastly expanded program of public improvements. Will it be done? Here Myrdal has some doubts, for the President, he states “. . . will not ask enough, and in any case, not get Congress to accept more than a very minor part” of the measures required.
Yet characteristically, Myrdal refuses to be discouraged. Since the poor of America are inarticulate and in politics can speak only in a whisper, if at all, he urges those with stronger and clearer voices to speak for them. If they do so consistently, then even the “under-classes” will discover one day, as did the Negro, that attention must be paid to their complaints. That is what many of us in Washington are doing—speaking as loudly and clearly as we can. And that is why I resent the defeatism of the politically despondent and the closed minds of the economically sophisticated, both of whom will dismiss Myrdal’s profound strictures as so much gab from a Dutch uncle and assert that change of this magnitude is too difficult to accomplish. Those of us who must work and watch in Washington think differently, otherwise we should do our writing elsewhere. We don’t mind having Myrdal tell us where we fail, for he knows where we succeed. He also knows that the high-level stagnation we have suffered in the last dozen years will progressively destroy these successes if it continues unchecked. In short, we respond to the legitimate concern he expresses in this book, one that is worth a much closer reading than it is likely to receive in some quarters.
1 See COMMENTARY September, October, and November, 1962.