----------------- HES POSTING ----------------- 
Published by EH.NET (April 2002) 
 
Michael A. Bernstein, _A Perilous Progress: Economists and Public Purpose 
in Twentieth-Century America_. Princeton, NJ: Princeton University Press, 
2001. xi + 358 pp. $39.50 (hardback), ISBN: 0-691-04292-6. 
 
Reviewed for EH.NET by William J. Barber, Department of Economics, Wesleyan 
University. <[log in to unmask]> 
 
 
This volume is part chronicle and part sermon. Both parts are rewardingly 
excellent. 
 
The chronicle traces the course of the American economics profession from 
its beginning in the late nineteenth century to the close of the twentieth 
century. The author (Professor of History and Associated Faculty Member in 
Economics at the University of California, San Diego) takes note of the 
fledgling profession's early struggles to establish standing and 
credibility with regard to the expertise its members could bring to the 
shaping of economic policy. The door to the corridors of power was opened a 
crack -- but only a crack -- in the Washington of World War I. Greater 
opportunities beckoned in the 1920s when Secretary of Commerce Herbert 
Hoover -- who rejected the notion of inevitability in the business cycle -- 
recruited economists to mount studies sponsored by the President's 
Conference on Unemployment. Hoover nonetheless turned a deaf ear when more 
than a third of the membership of the American Economic Association 
petitioned him to veto the Smoot-Hawley Tariff in 1930. For the profession, 
the decade of the 1930s was difficult altogether. Though its members were 
represented on an unprecedented scale in the ranks of the New Deal's 
bureaucracy, the absence of policy remedies for Depression around which a 
consensus could be formed was damaging to their public image. 
 
In Bernstein's account, a recognition that the economics profession could 
usefully sere the public purpose dated from economic mobilization for World 
War II. This trend was sustained and extended in the "national security 
state" of the Cold War era. The creation of the Council of Economic 
Advisers in 1946 was a signal achievement that institutionalized a role for 
economists in government, conveying an authority far beyond that accorded 
to other social scientists. Bernstein makes valuable use of the archives in 
the various Presidential Libraries -- as well as the records of the 
American Economic Association -- in crafting his narrative. 
 
The author inspects the CEA's performance in the Kennedy-Johnson 
administration in some detail and for good reason. The demand-side tax cut 
of 1964 -- engineered by a CEA composed of Walter Heller, James Tobin, and 
Kermit Gordon -- was the high water mark of Keynesian-style economics. For 
a time, confidence in the ability of economists to "fine tune" 
macroeconomic policies to achieve full employment and to accelerate 
economic growth seemed to be well-placed. That faith was shaken in the 
later 1960s as military spending in Vietnam fueled inflationary pressures 
that the Johnson administration failed to contain. But worse was to come. 
The sense of Keynesian triumphalism that prevailed in the early 1960s was 
effectively shattered in the "stagflation" of the 1970s. The backlash 
brought monetarist and supply-side doctrines into prominence. The author 
adds a richness of detail to this oft-told story. 
 
The sermon dimension of the volume appears in the concluding chapters in 
which the author surveys the "state of the art" at the close of the 
twentieth century. At this moment in time, economists appear to have lost a 
capacity to say anything useful to serve the public purpose. The 
profession's preoccupation with models remote from reality and with a 
virtually unchallenged faith in the allocative superiority of free markets 
have meant, in effect, that its practitioners have turned to serving the 
acquisitie purposes of private interest and have lost touch with the public 
interest. Bernstein argues this point with some vigor in a useful 
discussion of unfortunate consequences that have flowed from exercises in 
de-regulation and in the privatizing of functions formerly performed in the 
public sector. 
 
Altogether, this book is an impressive achievement. 
 
 
William J. Barber is Andrews Professor of Economics, Emeritus, at Wesleyan 
University. His recent works include _Designs within Disorder: Franklin D. 
Roosevelt, the Economists, and the Shaping of American Economic Policy, 
1933-1945_ (Cambridge University Press, 1996). 
 
Copyright (c) 2002 by EH.Net. All rights reserved. This work may be copied 
for non-profit educational uses if proper credit is given to the author and 
the list. For other permission, please contact the EH.Net Administrator 
([log in to unmask]; Telephone: 513-529-2850; Fax: 513-529-3308). 
Published by EH.Net (April 2002). All EH.Net reviews are archived at 
http://www.eh.net/BookReview 
 
 
------------ FOOTER TO HES POSTING ------------ 
For information, send the message "info HES" to [log in to unmask]