American Notebook Ferment in the Economy

The economy, like any organism, can absorb only so many minor injuries before the cumulative impact begins to undermine the economic health of the nation. Builtin stabilizers of unemployment compensation, social security, and the like may pull the economy out of its doldrums, as they have in part during the past year, but like many medicines they may only cure the symptoms of more complex maladies which linger on.

Economists have been busy issuing conflicting diagnoses on the present state of the economy. The optimists point to rising industrial production, to rising profits and building plans, and to the stock market; the pessimists to a continuing hard-core of unemployment. Since both arguments are relevant, perhaps what is required is a trial assessment of some of the larger forces causing the present ferment in the economy.

Probably the most important single trend in the economy since 1948 has been the failure of the manufacturing sector to expand output sufficie...