Our Overloaded Economy: Inflation, Unemployment, and the Crisis in American Capitalism

Our Overloaded Economy: Inflation, Unemployment, and the Crisis in American Capitalism

Our Overloaded Economy: Inflation, Unemployment, and the Crisis in American Capitalism

Our Overloaded Economy: Inflation, Unemployment, and the Crisis in American Capitalism

Excerpt

This is a book about why the American economy--that curious melange of private and public activities--is not working as it ought to work. Millions of our citizens are either without jobs, not working at their full potential, or simply bored with what they are doing. Millions more, no doubt, believe they are overtaxed and shortchanged by unfeeling and unresponsive governments. And all the time prices for life's necessities and pleasures--food, housing, medical care, entertainment--never stop rising. In more than a dozen years no government in the Western industrial world, let alone in the less developed world, has solved the problem of inflation. "Stagflation" is the ugly word used to describe our situation.

My focus is on the American economy, although the problems which beset us are endemic to all the liberal- democratic, essentially capitalistic nations of the West (including Japan). There are two crucial facts about ourselves and our society to underscore. The first is that, in spite of our much- vaunted prosperity and affluence, we are not nearly so rich in either material wealth or human happiness as we think. The second is that we have yet to resolve the critical and bitter "paradox of poverty in the midst of plenty," the same problem which John Maynard Keynes wrestled with in the 1930s.

The subtitle, Inflation, Unemployment, and the Crisis in American Capitalism, reflects the seriousness of our situation. Few words are more overworked these days than the word "crisis." Yet it is difficult for even a casual observer to view recent upheavals in our economic life without feeling that something is fundamentally wrong with the way things are going. The 1974-75 slump was the worst since the Great Depression of the 1930s. In 1980 the economy plunged into short, sharp recession, and again the downturn had only a fleeting impact upon inflation. More than any other factor, the failure of the Carter administra-

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