When The Economy Began Failing

Book Review:

Levinson, Marc, “An Extraordinary Time. The End of the Postwar Boom and the Return of the Ordinary Economy.” Basic Books, New York, 2016. Dallas Public Library 330.9045 L665E

The unusual economic period was the third quarter of the 20^th century, also known as the Post War Boom, or the Golden Era. That’s when many people made good livings and some made fortunes. The “ordinary economy” in the title is what we have now – basic capitalism where some still make great fortunes but everybody else is struggling.

He takes an international approach. He points to a few national economies that did OK while the majority foundered, but mostly he shows the similar problems that the wealthy nations suffered after 1973. His point of departure was the oil crisis, but it might just as well have been the failure of the Bretton Woods international financial agreement 1945-1973.

I particularly enjoyed the way Levinson deflated the claims of various schemes of government intervention. He quotes figures to show that none of the much-vaunted “new” approaches actually did much to help after 1973. Reaganism was just as big a bust as any other “new” theory. Actually, they weren’t even new.

His international approach is far superior to what we usually read in American newspapers and political campaign advertisements. They only talk about what happened in America without regard for world changes. His way is better. For example, suppose an economist said that a certain new technology should have greatly improved manufacturing production in America. Maybe the reason it didn’t is because some other country did it better or cheaper. That’s pretty much what actually happened to American manufacturing, not some mistaken priorities within our own economy.

What limits this economics book is its commitment to capitalism. He dispenses with the Soviet Union’s economic travails in two pages. The rest is about the major capitalist economies. Nowhere in the book could one even ask the essential question of economics, “If we can produce enough for everybody, then why isn’t everybody doing OK?”

The set of statistics most critical for Levinson is those on productivity. He says that the Golden Age was golden because of high productivity in the wealthy nations. The crisis that began in 1973 and continues now was marked by substantially lower productivity. If productivity could be restored to high levels, everything would be just fine, according to Levinson. At the same time, he offers no suggestion as to how that could be done.

You might as well say, and I think Levinson does say, in so many words, “The Golden Age was just a fluke. Misery is the norm.” I recommend this book for its open-minded analysis and despite its conclusions.

–Gene Lantz

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