Tape 78 - The future of the affluent state

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-	Welcome once again, as MIT professor,	0:02
	Paul Samuelson discusses the current economic scene.	0:04
	This bi-weekly series is produced	0:07
	by Instructional Dynamics Incorporated,	0:09
	and was recorded June 14th, 1971.	0:11
-	Today I would like to lift my glance	0:15
	from the immediate business cycle situation,	0:17
	to take a longer look at	0:23
	where our American society is going.	0:25
	I was led to think about this subject	0:29
	by a request from a Swedish journal,	0:31
	asking if I would	0:35
	predict for Sweden what some of the trends and tendencies	0:38
	will be in the welfare state of Scandinavia	0:43
	in the decades to come.	0:46
	It was a strange request for me to receive,	0:49
	because I am not an expert on Scandinavia.	0:52
	Perhaps it was felt that my innocence and ignorance	0:58
	uniquely qualified me for the task.	1:02
	It's interesting, perhaps, for me to put down	1:05
	some of my thoughts about the future of the welfare state,	1:08
	because although the discussion originally was about Sweden,	1:10
	I decided the best way to make guesses about Sweden	1:19
	was to make guesses about what was	1:22
	going to happen in America.	1:24
	We have very similar societies,	1:26
	in some ways the United States is ahead of the Scandinavian	1:29
	society, and American patterns therefore,	1:34
	can be usefully used in order to make predictions	1:38
	about the Scandinavian society.	1:43
	As I mentioned on an early tape,	1:44
	the way that the automobile has penetrated	1:46
	modern Swedish life,	1:50
	could have been predicted, and was predicted,	1:52
	by people who used as their pattern	1:55
	what happened to the Ford, to the Chevrolet,	1:57
	and to American life in the decades of the 1920s	2:00
	and the 1930s.	2:06
	This just gave a lead time on what was going to happen	2:08
	in Sweden in the 1950s.	2:11
	In another way, the Swedes are ahead of us,	2:15
	as a welfare state,	2:19
	they reached that position before we did.	2:21
	Prior to 1929, America was a business civilization.	2:26
	"The business of America is business,"	2:31
	said Calvin Coolidge in those days,	2:34
	and I think that that was a correct representation	2:36
	of the national mood.	2:39
	Then along came the stock market crash,	2:42
	and what is much, much more important	2:45
	than anything that happened in the months	2:47
	of the autumn of 1929,	2:50
	along came the collapse of our banking system,	2:52
	along came the Great Depression.	2:55
	Sinclair Lewis could not have written the novel Babbitt,	3:00
	he could not have written the novel Main Street,	3:03
	whose principal character, after all,	3:07
	is Doctor Kennicott, a MD.	3:09
	If he had been writing after 1929,	3:13
	our self-image was drastically changed,	3:17
	and I think irreversibly changed.	3:22
	I think it's uncomfortable for a nation	3:25
	to remain in a state of identity crisis,	3:27
	in a state of nervous breakdown,	3:31
	and nature has a way of filling any vacuum,	3:33
	so that gradually, there was worked out a new self-image	3:39
	of the American people.	3:45
	This did not develop until after World War Two.	3:47
	It was extremely exhilarating to the American people,	3:51
	one must report,	3:55
	that we were so successful in World War Two,	3:57
	in a way that Doctor Spear,	4:00
	the economics are of the Hitler regime,	4:04
	would not have dared to hope for.	4:11
	We had more women in the labor force	4:13
	than the police state of Germany did.	4:17
	I was just talking to a young German professor of economics,	4:22
	his mother kept her maids all through	4:28
	the worst of World War Two for the defeated nation.	4:31
	Well, America, by and large,	4:38
	lost its domestic servants in the first years	4:41
	of war time prosperity, for the most part,	4:45
	never to get them again.	4:48
	We came out of the war top dog,	4:50
	we had even saved the Russians.	4:53
	Our Marshall Plan, this is the time of the year	4:59
	when we remind ourselves of commencement speeches,	5:02
	in 1947 George Marshall came to Harvard	5:05
	to pick up that degree,	5:09
	which he had been offered during the war itself,	5:11
	and which he, as a conscientious soldier,	5:14
	felt he could not accept while men were being killed abroad.	5:17
	He came to the Harvard yard,	5:22
	and there unleashed the Marshall Plan	5:23
	for the reconstruction of Europe.	5:29
	This succeeded beyond,	5:34
	I think it's fair to say,	5:38
	the wildest expectations of anyone.	5:39
	If somebody says to you,	5:42
	can you find a single instance of successful governmental	5:44
	planning subsidy intervention?	5:49
	You have only to mention the Marshall Plan,	5:52
	you have only to mention the MacArthur Occupation of Japan.	5:55
	One visits Japan and realizes that even after this	6:02
	long interval of time,	6:09
	the MacArthur Occupation days are remembered.	6:11
	Most of the reforms which were grafted	6:15
	onto the Japanese system are long since gone,	6:18
	but some of the fundamental reforms of	6:21
	land, tenancy, of taxation, the principle,	6:27
	not the degree of progression of the	6:35
	MacArthur Occupation authorities,	6:37
	those still are parts of Japanese life.	6:39
	And so, despite the stagnation of our own growth rate	6:43
	in the 1950s,	6:48
	Americans felt pretty good about their new mixed economy.	6:51
	Moreover, we were envied abroad.	6:59
	We have been an example to the Japanese.	7:02
	One has to say that the Japanese have been too much enamored	7:08
	by the American pattern.	7:10
	Something of the same thing can be said	7:14
	with respect to the German economy.	7:17
	The German people, having tired of state controls,	7:21
	went into a veritable orgy of tending their own gardens,	7:28
	sometimes, by the way, the Germans overshot,	7:33
	and in their own ideology went back to the pre-mixed economy	7:36
	of the 1920s.	7:41
	This new synthesis, then,	7:46
	perhaps reached its peak in Camelot.	7:50
	In the early 1960s,	7:54
	we even succeeded under President Kennedy	7:58
	in facing up to the Khrushchev threat of missiles in Cuba.	8:01
	And up to the time of the tragic assassination	8:07
	of John F. Kennedy in Dallas in 1963,	8:13
	and for at least part of the first term	8:18
	and part of the second term of President Johnson,	8:23
	until America became enmeshed in the Vietnam	8:27
	and Indochina War,	8:35
	we had what was called a new consensus,	8:38
	the Great Society, we were riding high.	8:42
	I come to my point now,	8:49
	this new consciousness has been undergoing	8:52
	a very searching reexamination,	8:56
	most notably, by our young people,	9:01
	by the people in the universities.	9:06
	The civil rights movement must be given some of the credit,	9:09
	or if you look with disapproval upon everything	9:17
	that's been happening, must be given something of the blame	9:21
	for this development.	9:24
	Already back in the 1950s,	9:28
	before Supreme Court decisions	9:31
	and after Supreme Court decisions,	9:33
	we became alerted to the fact that we were a divided house.	9:35
	We were a divided house between black and white	9:40
	in a way that,	9:43
	once the point was elevated to our consciousness,	9:45
	our consciences could not tolerate and agree with.	9:48
	It was absolutely standard,	9:57
	and how little we noticed it,	10:00
	that a person with black skin	10:02
	had to move to the back of a bus	10:03
	in large parts of this country.	10:06
	It was absolutely standard in the armed services	10:09
	that a black person would be assigned to the Navy Mess.	10:12
	If you take the White House Mess in Washington itself,	10:18
	and if you look at the personnel	10:21
	in the armed services assigned to that duty,	10:23
	you saw, unmistakably, the signs of a cast society.	10:28
	So, underneath the veneer of our system,	10:35
	there were cracks, cracks which were not important	10:42
	from the standpoint of the dynamics and development	10:46
	of the system, so long as they remained underneath	10:48
	and were not recognized.	10:51
	But once they came to the surface,	10:53
	they became important for the dynamic development	10:56
	of our society.	11:01
	In order to change the civil rights picture,	11:04
	methods had to be used,	11:09
	which turned out to be imitate-able	11:11
	in connection with quite different matters.	11:16
	The events in Berkeley	11:18
	in the early days of the Berkeley Movement,	11:23
	had nothing to do, in my judgment,	11:27
	with the problems of the underprivileged,	11:31
	blacks, in the South.	11:36
	But once white students were no longer welcome	11:41
	as part of the movement for civil rights in the South,	11:45
	you had active people looking, so to speak,	11:51
	for a new cause, and also,	11:55
	newly cognizant of methods	11:59
	for expression of opinion or agitation.	12:02
	And so, the movement against the Vietnam War,	12:06
	which became such an important part of American life	12:12
	in the final years of the Johnson administration,	12:17
	the methods used, the sit-ins, the picketing,	12:21
	the non-violent and violent expressions of opinion,	12:27
	these were borrowed from the civil rights movement.	12:32
	And the borrowings, of course,	12:41
	were done in a creative way	12:42
	with lots of improvements	12:43
	and further perfections of methods.	12:46
	This is not something, however, which will go away,	12:53
	in my judgment, as soon as the Vietnam War is over,	12:56
	as soon as the spoiled college population no longer	13:01
	has the specter of the draft to haunt them.	13:05
	It would not meet the fundamental problem, I believe,	13:11
	merely to have a voluntary army	13:17
	and continue the Vietnam War.	13:20
	Or, merely to have a volunteer army and discontinue	13:21
	the Vietnam War.	13:26
	Or, merely to have a volunteer army	13:29
	and scale down greatly the share of the	13:31
	gross national product,	13:36
	which goes into Cold War security expenditures,	13:37
	defense expenditures, offense expenditures.	13:42
	Because coinciding with the civil rights movement,	13:47
	coinciding with the West Coast Berkeley	13:52
	anti-Vietnam movement, has come youth culture.	13:56
	Everything which any of my listeners will associate	14:02
	with the word marijuana, with hippiness,	14:06
	with the counter-culture.	14:12
	These are what I have in mind,	14:15
	but instead of these things being the property	14:17
	of a small, spoiled group of the children of affluence,	14:23
	in Greenwich Village in New York,	14:30
	possibly in the Berkeley underground,	14:34
	possibly in Madison, Wisconsin underground,	14:37
	possibly not far from where I'm speaking,	14:40
	Harvard Square, Cambridge fun city,	14:43
	this is a movement which is now very pervasive	14:47
	throughout American life.	14:51
	And it is characterized by a new rejection	14:53
	of that new second synthesis, which I mentioned,	15:01
	namely the post-Franklin Delano Roosevelt	15:08
	mixed economy synthesis.	15:13
	We see it most acutely at our elite universities.	15:18
	Yale, I offer to you as an outstanding example.	15:22
	How many of the graduates of Yale	15:27
	of the class of 1971 will go into business?	15:30
	How many of the graduates of the class of 1951 from Yale	15:37
	went into business?	15:42
	How many of the graduates at our elite universities,	15:45
	who are not going into law school,	15:48
	and who are not going into medical school,	15:50
	will go to any graduate school at all?	15:52
	How many of them, rather than donning a gray flannel suit,	15:56
	a neck tie, prefer, and will prefer to live in Levis,	16:02
	to drive taxi cabs, to become plumbers,	16:09
	revert to a life of work with their hands?	16:16
	In the largest number, of course,	16:24
	this cannot be expected to happen in our society.	16:27
	But what's very significant,	16:34
	is to see what the changes in numbers are.	16:35
	Three years ago, if you had gone into a working-class	16:39
	district, a lower-income district of a suburb of Boston,	16:43
	you would have seen a length of hairstyle	16:49
	very different from that	16:52
	in the affluent districts around Boston.	16:54
	That is not true today.	16:57
	The children of the working classes have long hair.	16:59
	If you go into the Gary steel mills,	17:06
	if you go into the River Rouge Ford mills,	17:10
	you will find the returning veterans	17:15
	have brought their pot,	17:21
	in many cases harder drugs than that, into the factory.	17:22
	It is said now in Detroit,	17:29
	try to avoid a Monday car or a Friday car,	17:31
	because the degree of absenteeism	17:35
	and the degree of discipline on the job on those days	17:38
	is of a different order of magnitude	17:42
	from that on the other days of the week.	17:44
	Of course the answer one must give is,	17:48
	well, how does one avoid that?	17:51
	We just get a car by punch card order.	17:53
	Something very deep is happening in American life,	17:57
	it is not peculiar to American life,	18:00
	but, in my judgment, it is somewhat related to affluence.	18:04
	I would like to call your attention to a book,	18:13
	it is a best seller,	18:15
	it is called The Greening of America, Charles A. Reich.	18:17
	Notably, it's interesting how often Yale appears	18:22
	in these matters, I say this in some admiration,	18:25
	not in condemnation.	18:31
	Professor Reich, R-E-I-C-H,	18:34
	is a professor at the Yale Law School,	18:37
	his book is a best seller,	18:39
	it has been a best seller in hard cover,	18:41
	it is a best seller now in paperback.	18:43
	Let me say very succinctly, it is a silly book.	18:48
	It is full of assertions	18:54
	for which evidence is not given.	18:59
	It is full of assertions which are self-contradictory.	19:01
	Nevertheless, I believe that in the vulgar popularizations	19:06
	of ideology, you pragmatically encounter the importance	19:13
	of ideology, and you cannot laugh off the fact	19:18
	that it is a best seller.	19:21
	It is a mixture of Galbraith, of Herbert Marcuse,	19:23
	of zen, I could even say that in the mixture	19:32
	there is something of Professor Frank Knight,	19:37
	or Hayek, or Professor Milton Freedman.	19:42
	If you actually go through the credits,	19:46
	you will see that The Road to Serfdom	19:50
	is one of the books there nestled right in with	19:53
	Marcuse, right in with Malcolm X, is The Road to Serfdom.	20:00
	Despite its silliness,	20:07
	and not putting things the author's way,	20:09
	the diagnosis which I have just given,	20:12
	and which I had constructed prior to even reading the book,	20:14
	of the pre-1929 synthesis, the nervous breakdown,	20:18
	the new mixed economy synthesis,	20:23
	the present identity crisis,	20:25
	all of that is mirrored almost precisely,	20:28
	by consciousness one, consciousness two,	20:33
	consciousness three of Reich.	20:37
	You may say, and I will agree,	20:42
	how could the book help but be a best seller?	20:43
	It is flattering to its readers.	20:46
	What it says in effect is,	20:50
	you kid, there in the junior common room,	20:53
	smoking your pot, you are the salt of the earth.	21:00
	You are right to be reading astrology,	21:06
	to be interested in organic food culture,	21:11
	to be interested in zen.	21:14
	You are right to be organic, to be non-rational.	21:16
	Throw away your calculus book,	21:20
	throw away your symbolic logic,	21:23
	throw away your econometrics,	21:27
	and light up, and feel.	21:31
	Now, my time is up,	21:35
	let me simply say that there are some extremely interesting	21:38
	implications of this for Ralph Nader's movement,	21:43
	there are some extremely interesting implications of this	21:49
	for the behavior of the corporation in the decades ahead.	21:51
	One of the most important things	21:58
	that that junior executive who's being groomed to	22:00
	become the Executive Vice President eight years from now,	22:05
	and to become the President 15 years from now,	22:08
	and the Chairman of the Board 20 years from now,	22:11
	that he could do, is to steep himself in,	22:15
	if you wanna put it this way,	22:18
	what the opposition is like,	22:20
	what the opposition is cooking up,	22:22
	because I think that the ideology,	22:24
	the consciousness reflected here	22:28
	runs very deep in the mainstream of modern American life.	22:32
-	If you have any comments or questions	22:37
	for Professor Samuelson,	22:39
	address them to Instructional Dynamics Incorporated,	22:41
	166 East Superior Street, Chicago, Illinois, 60611.	22:44

Item Info

Title:

Tape 78 - The future of the affluent state

Date:

1971

Contributor:

Samuelson, Paul A. (Paul Anthony), 1915-2009

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audiocassettes

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English

Digital Collection:

Paul A. Samuelson papers, 1933-2010 and undated

Source Collection:

Paul A. Samuelson papers, 1933-2010

Series:

Economics Cassette Series: Paul Samuelson

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Limited Re-Use

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samuelsonpaul
duke:325101
pstau001078
ark:/87924/r41c1tx8f
d2b15b67-5457-4bad-a740-a439817fc0fe

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Tape 78 - The future of the affluent state

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