Is Democracy Viable These Days?

Several decades ago, when I spent a few years studying and teaching economics, I recall telling students that they need not worry about the return of another Great Depression because by that time, (the late 60’s) we had learned enough about how market economies work that we would always be able to avoid troubles of such magnitude. I now have much less faith in that statement. How tragic it is that Economics is such an impoverished area of study. Apparently the most fundamental problems are just too difficult for a consensus to develop among professional economists. Take the current situation. We seem to have two big problems. We know we have a high degree of unemployed resources, especially workers. And we fear that we have too large a national debt. These are very elementary issues. An equivalent medical question might be what to do if someone is bleeding to death from an open wound. An equivalent question from the realm of physics might be about the relative rate of fall for two objects of different weight. You remember, Galileo worked on that one. Yet there is apparently no consensus among economists on these most fundamental and important questions.

Of course, if there were consensus there is no reason to expect that the voting public of this country would be persuaded about what should be done. Evolution seems pretty well settled in the scientific community, but millions of our countrymen have no trouble disbelieving. Ditto global warming. So even if there were agreement among economists that what is needed in times of high unemployment is for the federal government to run deficit budgets, like the way the budgets of the second world war period got us out of the depression of the 30’s, and that budget balancing and national debt reduction should be undertaken during periods of vigorous economic growth, there is no reason to expect that the public would get it or that the Congress would act on it. It is enough to rattle fifty years of optimism.