In the 1920's the economic aggregates--gross national product, industrial production, and employment--climbed upward, except for mild adjustments in 1923 and 1927, in apparent dynamic harmony. A chorus of Americans sang accompanying refrains: "Permanent Prosperity" and "The New Era." The crescendo of the "Roaring Twenties" drowned out most of the dissonant voices which cited weaknesses and imbalances in the economy. The few unharmonious voices which made themselves heard met with ridicule and rejection. If the dissenter was a professor, the public, particularly its business sector, dismissed his warnings as the wailing of a theorist, an impractical man who had "never met a payroll."
Not many professors gave businessmen occasion to poke fun at theorists who ventured to comment from their ivory towers on the going world beyond the campus. Most educators, Tugwell maintained, were really allies of business, justifying current privileges and orthodoxies. The few who suggested timely adjustments in our society met with the cry, from other educators, of "indoctrination."1Tugwell grouped with the press, business sycophants, the orthodox, and the moralists, those teachers who adhered to the "anti-social ideals of 'interested conservatives,'" 2 serving an impossible, imaginary Utopia of reaction.3 Businessmen, Tugwell observed, did not object to practical-minded professors as such, heaping no scorn upon savants whose public statements agreed with businessmen's views.4 He might have added that in the 1920's many strong, successful financial and industrial organizations recruited their chief economic advisers from the universities.5
Tugwell believed that scholars, especially economists, should get down to the facts--as they, not businessmen, found them--of everyday life and their impact on the whole population. He was dissatisfied with the picture which the facts he gathered about the American economy in the 1920's produced. A brief look at the basic ideas of institutional economists will show that dissatisfaction was then the inevitable attitude of one who belonged to that school of economic thought.
Tugwell, as an institutional economist, believed that man's psychological and mental equipment--"human nature"--had not changed substantially for thousands of generations; at some point in prehistory man set out to go on from where he was by modifying his environment.6 And, in succeeding centuries, modify it he did, his technological advance