setting a national wage scale. By now it should be apparent
that in the United States wages are determined by a variety of
forces, including government policy, that have replaced labor
markets, as Gruchy explains in chapter 5. In chapter 6 he
explains fully how institutionalists would use incomes policy to
organize all the factors inherent In national wage
determination. Whether the American economy would be
recognizable with a system of national planning and an incomes
policy is debatable, but the stakes of not trying are high.

Our economy currently finds itself in a crisis of rising
federal deficits, international trade imbalances, and a declining
manufacturing sector, with the only national policy being one
of across-the-board budget cuts and a reliance on the market.
Since it has usually been in crisis situations that major struc-
tural change in our economic institutions has taken place, it is
possible that labor and management will develop a greater
interest in democratic planning and an incomes policy.

As Gruchy points out, moreover, no country ever adopts a
complete planning system In a sudden change of policy. As an
institutional economist, Gruchy has more concern with the
process through which planning systems evolve. For planning
to be successful in the United States, an evolutionary process
is absolutely necessary. As Gruchy puts it,

Institutionalists...do not call for a premature plunge
into national planning. It would take time to
develop a workable program for the United States.
Existing data would sometimes be found to be
inadequate, and it would take considerable time to
develop national economic models and other
analytical tools to the point at which they would be
useful in the construction of national plans. In
addition, national planning would raise such difficult
issues as how to preserve the pluralism and diversity
of American society, how various interest groups
would be represented, and how small businesses
would be protected. These problems can be solved
only pragmatically as the planning process is devel-
oped. ²³

With this statement, Gruchy demonstrates the same concerns
and willingness to experiment that he found present in the
planning proposals of the institutional economists of the late
1930s.

Many advocates of social change wish to see the world
remade overnight. But as Gruchy demonstrates in chapter 6,
institutionalists have mainly been reformers. As a reformer,
Gruchy will settle for small changes that will move the world
in a more desirable direction, and that direction must always
be dictated by real events in the world. For this reason, he
finds it an obligation of economists "to educate and prepare
the public for future economic activity." For institutionalists,
that future must include planning; they "are convinced that
economic trends in the western world now point toward a new
crisis that will be handled effectively, in their opinion, only
when the nation accepts their analysis of these trends, and
with it their...rationale for some form of indicative
plannine." ²⁴

In his seminal article on evolutionary economics, Thorstein
Veblen found that prospects were favorable for a trans-

-xv-