THE ECONOMICS OF CHAOS: On Revitalizing the American Economy

Provocative prescriptions for prosperity and generous doses of near-antic insights from a maverick practitioner of the dismal science. As Janeway takes stock of what's right and wrong with an alarmingly vulnerable domestic economy, he opinionatedly assesses the contributions (constructive or otherwise) of thinkers and doers--including Hamilton, Veblen, Schumpeter, FDR's New Dealers, Volcker, and Reagan's supply-siders. Among other offbeat observations, the author asserts that American policymakers--if they want to fulfill their potential as workers of economic miracles--must declare their intellectual independence from Europe's shop-worn theories. In typically pungent fashion, Janeway concludes that the US has a wealth of unappreciated assets that could be gainfully employed to avert a global slump. Among the nation's plus factors are longer life expectancies, a health-care industry second to none, the economic liberation of women, an immigration boom, an unrivaled agribusiness, a currency that sets the world standard, and enviable technological capabilities. On the liability side, the author lists the politicization of economics, which in turn has ""theologized"" politics--a situation that has produced persistent budget and trade deficits. By contrast, he classifies Pentagon outlays for elaborate and overpriced weapons systems as problems that are essentially manageable. In any event, the author proposes a series of government actions that, he argues, could sustain as well as ensure ongoing abundance--without incurring increases in either federal taxes or expenditures. His suggestions range from swapping food for oil through signing reciprocal trade agreements (rather than further devaluing the dollar), affording taxpayers genuine incentives, and encouraging defense contractors to create simple, multipurpose hardware, e.g., a V/STOL aircraft with civilian as well as military applications. Whether Janeway's program would pay off is an open question, but his breezy, yet thoughtful, analyses offer a challenging critique of what passes for conventional wisdom.