U.S. Intellectual History Blog

A Hint At The Ideological And Intellectual Roots Of Our Current Economic Crisis?

During the fall of 1974, in the first few days of October, a young economic advisor to President Gerald Ford met with group of disadvantaged Americans to discuss the debilitating effects of inflation.

According to a Philadelphia newspaper, the group was composed of “six Blacks, four Indians, two Orientals and a few poor whites.” Group representatives relayed to the advisor “that many poor persons are forced to eat dog food, many Indian children are literally starving, and millions of Blacks have already lost the small gains they’ve made over the past decade.”

Here was the official’s reply: “Everybody is hurt by inflation, not just you people. If you wanted to examine who is hurt the most percentage-wise in their incomes, it’s Wall Street stockbrokers. I mean their incomes have gone down the most.”

Of course contemporaries denounced the advisor. The head of the Southern Christian Leadership Conference, Rev. Joseph E. Lowery [right, at President Barack Obama’s inauguration], said: “To equate the plight of the Wall Street financier who may have to eat less steak and sip less champagne with the plight of the poor who are forced to eat dog food—and may have to eat the dog—is a statement to the nation and the world that the poor are expendable.”

A Democratic congressman from New York, Charles Rangel, called for the advisor’s resignation. Rangel reflected: “How can the man who is supposed to advise the President on crucial economic matters during this period of unemployment, which is double the national average in the Black community, and spiraling inflation make a statement that stockbrokers are suffering the most. I am aware that the impact of inflation is totally pervasive, but it is absolutely obscene and insane to place stockbrokers at the bottom of the economic ladder.”

Who was Ford’s advisor? The answer, and source of my anecdote, are in the comments. – TL

5 Thoughts on this Post

  1. The advisor was Alan Greenspan, then chair of Ford’s President’s Council of Economic Advisors. Source: Philadelphia Tribune, October 8, 1974, p. 6. Other references to the remark occur in The New York Times and Chicago Tribune.

  2. So the question is what can we expect from Greenspan and his ilk under an Obama presidency? Is the economic myopia on the mend, or will there be a resurgence? Personally, I’m not hopeful.

  3. Excellent post, Tim.

    I actually think the real question is not what we can expect from free-market ideologues like Greenspan, but rather what we might expect from our policy makers. Will they look for economic advice elsewhere, or keep returning to the folks who got us into this mess? Personally I’m not hopeful, either.

  4. I agree. (Polemically) Greenspan is really endorsing the following point of view:

    “On the basis of capitalism, a system in which the worker does not employ the means of production, but the means of production employ the worker, the law by which a constantly increasing quantity of means of production may be set in motion by a progressively diminishing expenditure of human power, thanks to the advance in the productivity of social labor, undergoes a complete inversion, and is expressed thus: the higher the productivity of labor, the greater is the pressure of the workers on the means of employment, the more precarious therefore becomes the condition for their existence, namely the sale of their own labor-power for the increase of alien wealth, or in other words the self-valorization of capital. The fact that the means of production and the productivity of labor increase more rapidly that the productive population expresses itself, therefore, under capitalism, in the inverse form that the working population always increases more rapidly than the valorization required of capital.”

    Which is to say, the “accumulation of misery [is] a necessary condition, corresponding to the accumulation of wealth. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, the torment of labor, slavery, ignorance, brutalization and moral degradation at the opposite pole, i.e. on the side of the class that produces its own product as capital.”

    This is from pages 798 and 799 of the Penguin Capital. Still relevant!

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