“There’ll never be another Camelot,” said Mrs. John F. Kennedy forty-nine years ago this week, in the wake of her husband’s assassination in late autumn, 1963. “Camelot,” of Knights of the Round Table fame, was a Broadway hit at the time, and Jackie saw in all the genius advisors surrounding Kennedy another mythical fraternity the likes of which the world would never see again. These people were that good.
Today, ask any member of the economics establishment what was the greatest era of the President’s Council of Economic Advisors, and the rote answer will come: the JFK years. This is when titans of the field bestrode the CEA: Paul Samuelson, James Tobin, Robert Solow—all future Nobel Prizewinners.
Did these economists ever devise gorgeous policy. They told JFK to amp up the Keynesianism, with a few twists, and watch while the growth came in big, along with the amelioration of poverty.
In this space, and in all sorts of other forums over the years, I have laid out the very clear evidentiary case that the great 1960s boom that ran from 1961-69 (growth at 5.1% per year), the thing that gave us the very notion of “postwar prosperity” after World War II, occurred precisely because JFK did the opposite of what his CEA advisers told him to do. Specifically, JFK arranged for and got permanent marginal tax cuts and tighter money, in defiance of the CEA/Camelot consensus on both counts.
Nonetheless, economists on the JFK team long traded on being “architects” of the great 1960s run, though Tobin did prove sincere enough to disown such compliments. Certainly Samuelson never deflected credit for the boom, and it’s not clear that Solow ever has.
Suddenly all this is pertinent once again, on account of an unjustifiably dismissive review, by Solow in last week’s New Republic, of a new book that takes seriously the minds of conservative economists of the 1950s and 1960s: Angus Burgin’s fascinating Great Persuasion.
Solow’s first whopper in this review is to call the historically influential German economist Wilhelm Roepke “a figure of lesser account.” On these shores, Roepke is the furthest thing from a household name. But here is what Roepke did: he set forth the economics pursued in policy by postwar West German chancellors Konrad Adenauer and Ludwig Erhard.
The single greatest feat in European economic history since the industrial revolution was the West German Wirtschaftswunder—“economic miracle”—of the two decades after 1948, when on Erhard’s application of Roepke’s ideas about sound currencies, no price fixing, and a limited state with clear purposes, a boom of some 8% per year made West Germany the dominant economy in Europe and the third largest in the world.
You don’t have to like Roepke’s ideas, and you can sneer that he didn’t publish in Harvard’s house organ, The Quarterly Journal of Economics, which Solow held so dear. But you cannot deny that Roepke’s ideas drove the policy that accompanied the best thing since the industrial revolution.
There is no saying that Roepke was a nonentity—none. Solow’s “figure of lesser account” remark gives off a whiff of the scene in the Woody Allen movie where a couple of intellectuals are going over the roster of their “Academy of the Overrated,” listing such members as Vincent van Gogh and Isak Dinesen. Woody chimes in: How about Mozart?
From here Solow goes on to suggest that Milton Friedman’s Nobel Prize of 1976 was undeserved. He even says that Friedman and Anna Schwartz’s Monetary History of the United States (1963)—easily the consensus best book written by economists since Keynes—is no great shakes.
Solow is oblivious to the reality that A Monetary History of the United States even today is one of a small handful of successful economics narratives in the monographic form to appear in several generations. Economists generally don’t write books, surely because they can’t. Sustaining a demonstration for hundreds of pages is a different task from writing an article, and you need literary gifts. Friedman broke through the genre restrictions that otherwise captured his field—and Solow is dubious about the respect he garnered.
Then Solow is content to overlook things like the horrid stagflation of the 1970s and write off Margaret Thatcher’s electoral victory in Great Britain as a lark, and Ronald Reagan’s in the United States as an effect of racial questions. Since Solow is talking this way, it’s helpful to remember that alums of the Democratic CEAs of the 1960s (Arthur Okun being the prime example) were prone circa 1980 to deny the existence of stagflation outright. It was that vexing to the Keynesian worldview.
What Solow has given us on the occasion of a new milestone in the historiography of conservatism in economics—Burgin’s Great Persuasion—is commentary straight out of the establishment snootiness towards conservatism that reached its peak in the 1950s. As liberalism’s panjandrum, Lionel Trilling, put it back then, conservatives don’t have ideas, just “irritable mental gestures.”
Solow must have absorbed that attitude pretty fully when he was coming of age in the 1950s, because another two-thirds of a century’s experience has not shaken it even a bit, judging from this review. It seems that the New Republic and its “serious readers”—Solow’s term, buttering up his audience—is still nostalgic for that old uninformed disdain.