Britain, and still survives in Japan. Indeed,nuntil the latter part of the 60’s,nmany mainstream eeonomists considerednMilton Friedman a right-wing nutnrather than a serious economic theorist.nExcept for his macroeconomic views,nmost of the Keynesian construct hasndisappeared. Today exports, not governmentnexpenditures, are seen as the enginenof growth and expansion of demand.nThe export multiplier of Keynes’nopponent, Fritz Maehlup, has outlastednthe Keynesian public works multiplier.nSimilarly, clarifications of interest ratentheory and more sophisticated analysisnof technological change have replaced,nrespectively, Keynes’ theory of liquiditynpreference and marginal propensity toninvest. More importantly, many of thenclassical theories of the quantity of moneynand international trade have been restorednto their place in the economic curriculum.nThus, what became known asnKeynesianism wilted, as the worid economynbecame more integrated and tradenrecovered from the state trading systemsnof the 1930’s. What many economistsnnow see—indeed, what some of themnsaw from the outset—is that Keynes’n”general” theory was really a “partial”ntheory of certain conditions in internationalntrade: the conditions of economicnnationalism of the post-World War I andnDepression eras.nThis eclipse of many of Keynes’ ideasndoes not mean that continuing study ofnhis thought is futile, especially for thenUnited States. For just as Britain in then20’s and 30’s found itself burdened withnwar debts and a currency that had ceasednto be the staple of international trade, so,ntoo, the United States no longer dominatesnthe wodd economy. Since PresidentnNixon declared in 1972 that “Wenare all Keynesians now,” the dollar hasnlost more than 50 percent of its valuencompared to other currencies, and thennational debt and regular deficits arennow enormous burdens on our nationalnbudget.nIL_j^nl^^’^^^^^vlj .,n11 ^fJL^^^^^nm ‘ ‘^^^^V^n% ^r|n36/CHRONICLESnMoreover, economic nationalism isnnot dead. We know that Japan deliberatelynprotects its markets, both directlynand indirectly, and that a dollar devaluationnof 60 percent against the Japanesenyen is but another name for a 60 percentntariff, because it raises the prices in dollarnterms of Japanese goods and lowers thenprices in yen terms of American goods.nThe truth is that the wodd is on thenverge of a change similar to the one thatnoccurred before World War I, when thenBritish pound sterling began to waver asnthe unit of international trade andnBritish dominance no longer was guaranteed.nThen Germany challenged Britainnand knocked sterling from its place,nwhich it never recovered. Today, the dollarnwobbles with no clear challenger established.nBut, as a Worid Bank executive •nrecently told me after Secretary of StatenChristopher’s disastrous trip to Beijingnand after President Clinton failed in thenGATT talks with France and in forcingnJapan to open its markets to Americanngoods, “There is no question that thenUnited States today talks big, but nonlonger carries a big stick.” Were Keynesnalive, he would understand our predicament,nas Britain after Worid War I facednsimilar conditions.nThere are many today who are ardentnfree-traders. 1 am among them. Flowever,nnot a few of us are aware riiat hope ofnexpanding world trade requires hegemony,nand a single guarantor of both peacenand debt collection. At least, these havenbeen necessary in the past. Many of usnhave read the jeremiads against free tradenby that old imperialist Leo Amery in hisnunappetizingly titled book The WashingtonnLoan Agreements of J 946. In short,nthe specter of nationalism—that fornKeynes was reality—still haunts thenworid, and the United States as a nationnwould do well to contemplate Britain’snplight in the 1930’s, if for no other reasonnthan that “it could happen here.”nOne hopes that those libertarian andn”one worider” advocates of a free tradenmanaged by international institutions arennot entrusted widi assuring the welfarenof the United States in the years to come.nOne also hopes that there is a Keynesnaround who understands the differencenbetween what is good for the New WoridnOrder and what is good for America.nWhat is good for both is often congruent,nbut just as often at loggerineads. Itntakes a steady gaze to walk the thin linenbetween them. Widiout that steadiness,nfears about our position in the worid willnnnbe realized and American interests andninstitutions could come under siege evennmore than they are today. Keynes withnhis superb intellect comprehended thenrelationship between policy and theory,neconomics and national sovereignty.nBritain today may not be the richestncountry in the world, but its institutionsnendure, thank God. And Keynes deservesnsome credit for this result.n]ames /. Novak is the author ofnBangladesh: Reflections on the Watern(Indiana University Press).nOf Time andnthe Rivernby Collie OwensnA History of the Rivernby James ApplewhitenBaton Rouge: LouisiananState University Press;n49 pp., $15.95nThe Horse Show at Midnight and AnnAfternoon of Pocket Billiardsnby Henry TaylornBaton Rouge: LouisiananState University Press;n137 pp., $19.95nThe Last Centurynby Laurance WeidernSydney, Australia: Picador Press;n140 pp., $12.95nIt is fitting that two of these outstandingnvolumes of poetry (Taylor’s andnWeider’s) gather work from over 20 yearsnof the poets’ respective careers; fittingnbecause all three collections exhibit anconcern for the passage of time, both itsndestructive power and its capacity to inspirenwisdom and love. In contrast to poetsnwho pour forth prose masqueradingnas verse—work so solipsistic as to be virtuallynmeaningless—and poems hobblednto a political (predominately leftist)nagenda, these three poets whose concernnis to capture the human condition innwords and forms of lasting beauty havenproduced some of the best that contemporarynpoetry has to offer.nJames Applewhite’s new collection re-n
January 1975July 26, 2022By The Archive
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