Economic Policy in Crisis

A Service of

Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics

Lemper, Alfons

Article — Digitized Version Economic policy in crisis

Intereconomics

Suggested Citation: Lemper, Alfons (1975) : Economic policy in crisis, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 10, Iss. 11, pp. 331, http://dx.doi.org/10.1007/BF02929312

This Version is available at: http://hdl.handle.net/10419/139283

Standard-Nutzungsbedingungen: Terms of use:

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes.

Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Economic Policy in Crisis

hat the entire Western World is showing the latest turn of the crisis, achieve at best some T marks of a multitude of crisis symptoms is makeshift compromise. Even when the leading something we have become used to. That those statesmen meet to take some urgent decisions whose job it is to get us through the crisis man- affecting the whole of the highly developed, intri- age more or less successfully to avoid the worst cate and interdependent system of economic re- is already hailed as a success of economic pol- lations which binds all countries of the world to- icy. In such an atmosphere in which hectic hand- gether, the decision they ultimately reach after to-mouth measures abound, we are inclined to most strenuous efforts is invariably no more than forget that we are basically faced with a more a stop-gap measure. The politicians stand by deep-rooted phenomenon which should disturb helplessly as the once proud edifice of European all of us deeply - the phenomenon of a general integration sinks into the dust before their eyes. crisis of economic policy. The industrial countries, confronted by the spec- This crisis extends practically over the entire tacle of the gulf between North and South be- economic field. Whatever we choose at random coming ever wider, stand by without any concep- we shall hardly find any sector which does not tion, not knowing what to do as the resolutions bear the depressing marks of this worldwide eco- in the United Nations and the clamour for a "new nomic malaise. economic world order" become more strident. The formerly rejected "link" is now for practical During the period of nearly uninterrupted prosper- purposes accepted, though no one seems to have ity since World War II a whole generation of stu- a clear idea of the consequences of such accep- dents, businessmen and scientists have had the tance. Compromise resolutions concerning inte- doctrine of Keynesian employment policy present- grated raw material programmes and price in- ed to them as a quasi assured part of economic dexations are agreed to without anybody taking knowledge. Economic growth theory operated the trouble to work out what their consequences with models assuming a steady and balanced may be and whether they are at all practicable. growth of the economy. Economic policy adopted Out of sheer political opportunism, simply be- similar ideas. Not so many years ago it would cause they seem to serve some purpose of the still have been reasonable to expect widespread day, promises are made to raise development aid, understanding and approval for an assurance although everybody knows that no such provisions that, as far as industrial countries with a properly can be made in the budgets of the next few years. functioning administration were concerned, trot- ting or even galloping inflation could not happen, Is it fair to put all the blame for the present crisis unless perhaps as a result of wars or catastro- in economic policy on the politicians? The answer phes. Meanwhile it has dawned on us how much must surely be "no"; the causes are much more we were in error. The Keynesian apparatus does deeply rooted - in the area of science or in our not give us a firm basis on which to conduct an mental attitude towards economic problems. economic policy aimed at full employment and Science has not had the strength to change over evenly balanced growth, nor is there a single from piecemeal research into partial problems to government anywhere in the Western democracies a broader view comprising all the problems in- which knows of an effective way of fighting in- herent in the present economic system. It was the flation, let alone beating it. cult of thinking in terms of models which has prevented the economists from posing the prob- What goes for national economies, applies with lems as they are in reality and tackle them real- equal, if not with greater, force - mutatis mutan- istically. If economic policy is to mean system- dis -- to the international scene. An international atic planning for the future, we are showing on monetary policy functioning in accordance with this account a deficit which is larger and infinitely clearly conceived principles ceased to exist years more disturbing than the shortfall in many a state ago. Nowadays IMF conferences, reacting to the budget. Alfons Lemper

INTERECONOMIC$, No. 11, 1975 331