fared so well, had they been exposed to the full rigors of "hard competition"
with the nation's industrial heavyweights.
The Neoclassical Reaction
But the commitment to the ideal of the atomized market could not, in the
nature of things, prevail indefinitely. The analytical premise of the neopopulist
economists--that large-scale operations rarely guaranteed real economies in an
increasing-cost industry--ran counter not only to traditional teaching, but also
to common sense. The neopopulists' "efficiency be damned" attitude offended
an even broader range of economic sensibilities. Inevitably, the judges' willingness to advance efficiency through policies that were based on ill-informed
premises (the facts, on closer study, suggested that scale economies sometimes
do count),79 or else to sacrifice efficiency on the altar of Jeffersonian culturalpolitical values, called forth an intellectual reaction.
Neoclassical economics, a kind of science of social efficiency, supplied the
vocabulary with which the challengers articulated the case against neopopulism. The core ideas of neoclassicism--often simply abbreviated in the texts as
"price theory"--are the subjects of the next chapter.
Robert Lekachman, The Age of Keynes ( New York: Random House, 1966), 149ff.
Fred L. Block, The Origins of International Economic Disorder ( Berkeley: University of California Press, 1977), 38-42. See also William Appleman Williams, "The
Large Corporation and American Foreign Policy", in
David Horwitz, ed., Corporations
and the Cold War ( New York: Modern Reader, 1970), 94-96.
See generally Joan Spero Edelman, The Politics of International Economic Relations ( New York: Columbia University Press, 1981), 33-37, 78-81. The GATT was
negotiated at Geneva, following an essentially unsuccessful--because overly ambitious--effort at regime building in the 1944-1945 Havana Conference.
See Robert Triffin, "The International Role and Fate of the Dollar", Foreign
Affairs (Winter 1978-79): 269-86.
See Block, International Economic Disorder
, Table 2
Between 1950 and 1970 inclusive, U.S. exports approximately tripled in constant
dollars, while government purchases multiplied by a factor of about 2.5 and G.N.P.
by a factor of about 2. Gross private domestic investment increased approximately 40
percent in the period. See Bureau of the Census, U.S. Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970, 2 vols. ( Washington:
G.P.O., 1975), 1:229-30.
Cited in Felix G. Rohatyn, The Twenty-Year Century ( New York: Random House, 1980), 3.
Charles S. Meier, "The Politics of Productivity", International Organization 31
(Autumn 1977): 607.
John H. Barton and
Bart S. Fisher, International Trade and Investment: Regulating International Business ( Boston: Little, Brown, 1986), 91-92. See generally, JohnH. Jackson