of these regions. To test Olson’s logic,nconsider its reverse. Would a Southernnvictory in the Civil War have weakenednresistance to unions or the welfare state?nWould a London Terror have improvednEngland’s performance in the 1800’s? Innrecent times it has not been conservatismnbut radical change which has producednnegative impacts on the economy—andnon society.nOlson should have considered morenthan just Schumpeter’s theory of competitioanIn his classic Capitalism, Socialismnand Democracy, Schumpeter arguesnthat bourgeois liberalism went too 6r innoverthrowing the remnants of feudalism,na process Olson applauds but whichnSchumpeter feels has left capitalism opennto attack from groups Olson fears. TonSchumpeter;nThe stock exchange is a poor substitutenfor the Holy Grail. We have seennthat the industrialist and merchant asnfer as they are entrepreneuers also fiUna fimction of leadeiship. But economicnleadership of this type does not readilynexpand into the leadership ofnnations….nThe inference is obvious: barringnsuch exceptional conditions, thenbourgeois class is ill equipped to facenthe problems, both domestic and international,nthat have normally to benfaced by a country of any importance.nThe aristocratic “steel frame” of societyn”continued to rule the roost right to thenend of the period of intact and vital capitalism.”nCapitalism is in decline becausenits supporting social order is in decline.nOlson confuses society with theneconomy, letting the part swallow thenwhole in materialistic fashion. It is notnthe duration of institutions that matters,nit is the values they embody (thoughnpernicious doctrines may weaken statesnso that they do not have the opportunitynto become enduring). But values havenno place in Olson’s theory, which is littienmore than a mechanical piling up of institutionsnplotted i^ainst the c^endar.nWithout higher values, special interestsndo dominate.nOlson’s theory does have a way to takenthis into account if he would use it. Hendraws some distinction between interestngroups based on the “size” of their concern.nAn “encompassing” group identifiesnits interest with that of the country. Henthinks of such groups in terms of theirnsize as a percentage of the wealth or populationnof the country, but it could alsonapply to a group which, even if small innnumber, could by tradition or dedicationnthink in terms of the national interestnand act with authority even in thenface of special-interest pleading. In andemocracy, such a regime would be difficultnto establish. It does seem that conservativesnhave a better record of electingnpresidents than members of Congress,nand within Congress, a better record innthe Senate than the House. The largernthe constituency, the more weight isncarried by issues of national concern asnopposed to local or special concern. Anpresident is rated on how well the overallneconomy or foreign policy or “mood”nof the nation is doing, ^ereas congressmennare rated on how well they keepntheir fences mended at home. A systemnwhich shifted more power to the Executivenand less to the Legislature shouldnperform better in the long run. This willnmean a reversal of trends since Watergate,nwhich will not set well with thenpopulist wings of either the right or thenleft.nIn support of this is Olson’s belief thatnstronger parties would weaken specialninterests. Politicians who are stronglynlinked in the public mind to nationalnparties and their policies will have to actnin more responsible ways to ensure overallnprogress. Of course, a heightenednsense of nationalism would need to benan integral part of any such system. However,nsince nationalism is partially a nonmaterialistnvalue based on a shared culturalnheritage, it escapes Olson’s attentioanOlson concentrates on the democraticncapitalist nations of the West and theirnantecedents. The communist states arennot mentioned, which is logical consideringntheir lack of pluralistic interestngroups. If the West is suffering a “deathnnnof a thousand cuts” according to Olson,nthe East is suffering, according to MarshallnGoldman, from a single mortal woundninflicted by state planning.nIhe Soviet economy is in trouble.nThe shortages of grain and meat are wellnknown. Even vsith imports, food rationingnhas been reintroduced in some areas.nYet some ferm lands lie fallow and thencrops grown on other fields are plowednunder due to a lack of incentives to harvest.nConsumer goods are so scarce thatnnot only are long lines and empty shelvesncommonplace, but workers find thatnthey cannot spend all the money theynearn. Goldman contends that what monetarynincentives may exist are renderednimpotent by this. The progress in electronicsnand “high tech” which has sweptnthe West has essentially skipped thenU.S.S.R, except in the area of certain militarynapplications. Even other areas ofnmajor government concern, such as steelnproduction, have slipped in recent years.nMost damaging, however, is a feet whichnGoldman does not mention: that thenSoviet Union, alone among the industrialnnations, has a decreasing average lifenexpectancy.nGoldman’s position is that the “StalinistnModel” of economic development, wWchnhas been entrenched in the U.S.S.R. bynan aging leadership that knows of nothingnbetter, is to blame. This model concentratesnon investment in heavy industrynand assiunes that a trickle-down effectnwill benefit light industry and consumernproducts. This might have some chancenof success in an open economy, but in ancentrally planned economy with totalnstate ownership of the means of production,nnothing happens without ordersnfrom the top. Light industry cannot follownheavy industry, and profits and incomengenerated in industry cannot flow tonstimulate consumer-goods productionnunless the plarmers decree it, and theyndo not. Though targets are set for the expansionnof all parts of the economy, thesentargets always have to be revised downward,nand when this happens heavy industryngets top priority and other sectorsn^•^••15nOctober 1983n