The Economics of Chaos

THE ECONOMICS OF CHAOS is best described as an essay in contemporary “political economy"--the original term for the study of economics, which succinctly expresses the real-world interdependence between politics and the economy. Janeway’s point of departure is the urgency of America’s staggering debt burden: When debts continue to rise while incomes fall, as they did beginning in 1986, there exists the threat of a depression. The author recommends economic policies designed to finance: expanded traffic with trading partners; debt-free economic growth; revitalized social programs (especially Social Security); and workable military policy aims. Since only the federal government can activate them all, these proposals are politically as well as economically oriented. To arrive at his solutions, Janeway takes a fresh look at the American economy.

The United States has distinctive geographic and sociological resources which combine to make her the only diversified superpower. These are assets which no amount of ill-conceived policy can entirely squander; one major liability, however, has been the misapplication of European economic theories (which enjoyed only limited success in their place of origin) to the radically different American context. Janeway proposes looking instead to effective past policies, and working from American strengths rather than weaknesses. The solutions proposed in the book’s final section are startling in their simplicity and practicality. Two of Janeway’s suggestions are the bartering of food for oil and the reinstitution of reciprocal trade agreements--both would have an impact upon the domestic and international economies, the balance of trade, and the budget deficit.

A book so full of original thought should be a joy to read, but Janeway can be opinionated and pedantic and seems to have never decided whether he was writing an analytical treatise or a call to action. Substantial space is devoted to such topics as a defense of renegade economist Thorstein Veblen and behind-the-scenes maneuvering in Washington during the New Deal--historical subjects of interest primarily to professional economists, Janeway’s most frequent targets. The descriptive material generally rambles on past the point necessary to support the final proposals. Less emphasis on educating the reader would have given a more focused presentation and a stronger argument.