I have the heart of a social democrat and I want to fudge my acceptance of his message, but he shores it up with hundreds of pages of facts and reasoned argument. Futhermore, I am writing these lines as a visiting scholar at the University of Helsinki, the capital of a nation that emerged from World War II bombed out, with tens of thousands of casualties, with the burden of enormous reparations to pay the victorious Russians, and with nothing to sell but timber, milk, ingenuity, and a reputation for craftsmanship and dependability. If exponential increase in GNP is what you want, Landes points the way. I have, however, two questions. One, I am sure that a wise appreciation of market forces is essential to increasing productivity, but that is only half of economic success.
Somebody has to buy the product.
The prime cause of the Great Depression, according to John Kenneth Galbraith, another Cantabridgian, was not lagging productivity but lagging consumption. Landes might be justified in saying that his book is on production, not consumption, and that he can only write one book at a time. If so, I look forward to his next book. Nonetheless, we must match consumption with production, and I'm not sure we are as good at that as we assume. We may find out shortly as the Asian Tigers, crippled as consumers by the collapse of their currencies, swamp us with floods of TVs, VCRs, and computers, now dirt cheap because of the same collapse.