Who doesn’t want to save free enterprise? In 1974 alone there were two books with the title, How to Save Free Enterprise. One of them had the subtitle, “from BUREAUCRATS, AUTOCRATS, AND TECHNOCRATS.” The other one, by Arthur O. Dahlberg, had no subtitle. Implicitly, then, “from ITSELF.”
1974 was the high water mark for How to Save Free Enterprise books. There were none published in any other year, although the idea of saving free enterprise had its heyday in the 1940s. The antagonist then was frequently the New Deal, although Henry Wallace targeted monoply in his Saturday Evening Post essay, “We Must Save Free Enterprise.”
Dahlberg’s prescription for saving free enterprise had two main parts. The first part was a scheme to discourage people from hoarding cash or demand deposits. The second was a throwback to his 1930’s proposals for substantial reduction of working time to shift production to goods and services for which demand is spontaneous. I get the impression from how he talks about the latter, that it is his primary concern and that the monetary scheme was just a way to eliminate the fear of unemployment that in his view prevented people from choosing leisure over increased consumption of ‘not spontaneously demanded’ goods.
In his Introduction to How to Save Free Enterprise, John Chamberlain described Dahlberg as “a student of John Maynard Keynes who can both appreciate and see beyond the master.” Chamberlain, incidentally, had also written the Foreword to the first U.S. edition of Friedrich Hayek’s The Road to Serfdom and the Introduction to William F. Buckley’s God and Man at Yale. Subsequently, he was a lifelong contributing editor to Buckley’s National Review.
Dahlberg was not literally a student of Keynes. But he does tell of a discussion that he had with Keynes in Washington in which Keynes agreed with his contention about the theoretical soundness of a monetary instrument to discourage hoarding of money. Keynes doubted, however, that such an instrument could be devised.
I have affectionately referred to Dahlberg as a crank regarding his elaborate chart art. In his radio talk, “Is the Economic System Self-Adjusting?” Keynes referred to the heretics from economic orthodoxy as surviving only in “isolated groups of cranks.” He went on to affirm that he ranged himself with the heretics.
Both Keynes and Dahlberg were concerned with the tendency of incomes to outpace consumption and investment and thus lead to slumps. Each conceived of a different technique for ‘tweaking’ the system to compensate for the imbalance; both saw the reduction of working time as the ultimate solution to it.
Neither realized that Karl Marx had propounded similar positions about working time and about the failure of the economic system to self-adjust. He called it crisis tendencies. They also seem to have not been mindful of Michal Kalecki’s analysis that big industry and big finance don’t want to “save free enterprise.”
