Danger Signals in the American Political System

A sound political system must facilitate the resolution of potential political conflicts or crises. Where such resolutions are inhibited the threatened political crisis may be compared to the conditions which may lead to an economic crisis if not corrected. Since 1955 America has been a depression-haunted nation fearful of repetition of 1929. And an old-fashioned market-oriented economic crisis is far from improbable, especially if capital gains taxes are revised to facilitate large scale shifts of capital into bonds and cash holdings. However, our corrective economic technologies are so well developed that the primary economic threat is not our lack of economic knowledge but rather political developments which prevent appropriate corrective economic technologies fretn being employed. If another economic depression does occur in America it will be caused less by irrational economic forces than by irrational political forces. A future economic depression would in effect be “administered,” though perhaps unintentionally. I should like here to consider some problems raised by this notion of an “administered” depression.

The Administrative Depression
The first point is that Wall Street has moved to Washington. I am referring to something more than the big-business aspects of the Eisenhower Administration, for the recent movement of Wall Street personnel into high political positions was inaugurated by F.D.R. as World War II approached. And despite his robber-baron bombast, Harry Truman accelerated this trend. But while the number of investment hankers, corporation attorneys and industrial magnates installed in the highest posts was impressive, more significant was the institutional result of a decade of war and cold war whereby the entire culture became bureaucratized, centralized and militarized to the point of bringing extensive changes in the situation of our social classes and in the way rewards get distributed to them. The most important economic decisions now take place in Washington.

We still try to picture our bureaucratized culture as if it were the simple laissez-faire competitive arena of small bicycle shops and baseinent-tinkering inventors. Even more obsolete is our lingering political picture of Washington pressure groups as if they were innumerable counteracting interest groups that check and balance each other, producing a series of give-and-take compromises that add up to the general public interest. These related pictures are both archaic. Political as well as economic power groups have grown so large and so monopolistic that Washington has become the jousting ground for the monolithic politico-economic members of a great “political ologopoly” benevolently described by Professor John K. Galbraith. Even if it were accurate to follow Galbraith’s neo-classical portrayal of a countervailing equilibrium in Washington’s political market place of pow...