Mr Baker's Economic Primer

Forty years ago, I was not yet a Christian, but studying economics at university. I was looking for answers, but had gradually realised that I was pumping a dry well. About that time I came across an reprint of an article written by Russell Baker for the New York Times. This is the best short description of the wisdom of secular economics that I have ever seen. (Remember that the values relate to the early 1970s). Mr Baker seemed to be wiser than my teachers.

Mr Bakers Economic Primer
The economic history of the modern age begins with the crash of 1929 when the stockbrokers jumped out of skyscrapers. The country learned its lesson, tore down the old skyscrapers and put up new ones with windows that couldn’t be opened, so that today stockbrokers have to be content with moving to smaller apartments.

Economic progress was made on many other fronts. To make jobs, the Government spent millions on road-building and Robert Moses, using New York as a model, showed America how to turn every city into a traffic jam by abolishing trolley cars and putting in expressways.

Thus we progressed from the five-cent trolley ride to the $4000 automobile, with the $550 insurance policy, the $5 parking lot and 60-cent gasoline. The automobile industry boomed, along with the concrete, asphalt, insurance, parking-lot and oil business. Thus economic discovered the secret of overcoming hard times— growth.

Unfortunately, however people still did not trust bankers and so, by 1937, the economy was still in bad shape. This was because bankers had a bad image. They wore high silk hats, cutaways and spats, and they kept their money in forbidding concrete banks with iron bars on tiny windows and laughed contemptuously at people offering them a plastic card in exchange for $500.

Then Adolf Hitler started the Second World War. It was growth’s finest hour and ended the depression once and for all.

During the war the old generation of bankers was wiped out by the exertion of making so many low-interest loans to beat the Axis, and by the late 1940s there was a new generation of bankers. These bankers wore ducktail haircuts and pegged trousers and set up shop in display windows and made people come in off the street to borrow money that did not exist, which could be repaid from salaries for work that hand not yet been done.

This was called easy credit. It was giant advance in economics, because it allowed people to buy thing immediately with money they would not earn until years later, if ever.

Soon industry everywhere was roaring away to make things people could buy immediately with all the money that they hoped to earn after the things they bought had worn out. First they made two cars for every family and then an electronic garage-door opener, and then the outdoor barbecue grill.

When industry had finished making everything people wanted, people still had so much ready money left over from future salaries that it started making things people did not want and hired advertising agencies to make people want them anyhow. And so economic progress gave us the hula hoop, the electric toothbrush and the moustache comb.

Even these were not enough to soak up all the money that was expected to be made one of these days, and so to keep growth from stopping, everybody was urged to have babies and we grew a bumper crop of brand new customers.

Then one day people who lived at the seashore notices there was so many people coming to the beach that there was no place to lie down for a sunburn. “This grow idea has gotten out of hand,” said economists, as they sat immobilised in their $4000 cars in traffic jams wondering how they could ever possibly earn the money to meet the instalment payments on their sons’ new moustache combs, which were already wearing out on account of the planned obsolescence, which kept the moustache comb industry growing.

The upshot of this, and several other simultaneous events, was the discovery that growth was destroying the economy.

Soon there were hard times again, but all the new building had windows that couldn’t be jumped out of, so there was nothing to do, but go on paying $2.40 a pound for lamb chops.

Once again economic wisdom was expanded. The President announced that all the people who had indulged in growth were to blame for the hard times. Their selfish indulgence and waste would have to stop, he explained.

That was the way to end hard times and bring back the good old days when everyone would once again be able dine on 15-cents chipped-beef gravied on bread crusts, and put their shoulders to the wheel that would someday bring us grander expressways than we had ever know before.

In brief, economics had revealed its ultimate secret. Good times are brought about by the genius of our bankers, industrialists and leaders, while hard times are caused by our own stupidity in listening to them.