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the advi ce of economi sts has been di srega rded, no ta bl y on ra ising taxes
to meet the in creased demands occasioned by th e Vi etn am War.
It
may
be true, as Keynes asserts to Lekachman 's appl au se, tha t " the ideas of
economists and practi cal phil osophers . . . are mo re powerful than is
commonl y understood. Indeed the wo rld is rul ed by littl e else"; but, as
Keynes adds, " no t indeed immedi a tely, but aft er a certa in interval."
It
certa inl y must be true th at th e general Keynes ian thes is, tha t govern–
ment acti on in the fo rm of an unba lanced budget can offset a tendency
to unemployment, has crept into the popula r and po liti cal beli ef
system; and , analogously with regard to resource a ll oca ti on , the idea
that the costs of a government po li cy ought to bea r some relati on to the
benefits must have had some res tra ining influence on some govern–
ment programs.
(3) The ro le of power in th e economi c sys tem has been a preva ilin g
difficulty. We must di stin gui sh between
po l1t ica l
and
economic
power
in the economy. T he ma instream of economi c th ought , from Adam
Smith on , h as tended to emphas ize the impo rtance of competition
among economi c units in res tra inin g economi c power; the des ire for
power and its expl o ita ti on fo r in creased profits is limited, no t by self–
restraint, but by th e greed of riva ls who seek to ga rner some of the
profits for themselves. Thi s competition , it is traditi ona ll y argued,
keeps profits a t a minimum level necessa ry to induce th e economy to
operate, even tho ugh each individua l entrepreneur seeks onl y more.
The emergence of very large economi c o rga niza ti o ns, bo th corpora–
tions and uni ons, has been a recognized emba rrassment, and Joan
Robinson and Edwa rd Chamberl in in the 1930's ach ieved some success
in extending economi c th eory to cover some el ements of monopo ly
power.
The effect of po liti ca l power on th e economy has long been
recognized ; taxes, tariffs, regul a ti on of indu stry, and mo netary poli cy
have long been studi ed , and , mo re recentl y, government spending. The
stance of the economi st is either tha t of the detached o bserver, predi ct–
ing the effect of actua l po li cy, o r the expert advi ser, predi cting the
consequ ences for each po li cy so tha t they may be eva luated compara–
tively. However, the ca uses of sta te acti on have no t been the concern of
the economi st, nor are they ma tters to whi ch hi s usua l too ls h ave been
much suited. Marxi sts have a lways emphas ized the connections,
though the Marxi an theory of the sta te is remarkabl y underdeveloped.
The Chicago school has begun its theory of publi r intervention.
Indeed, its vi ews on the influence of ves ted interes ts on government
action are remarka bl y cl ose to Marxi st; Gabriel Kolko's Marxist
