Book Review: International Politics and Economics: The Economics of Competitive Coexistence
| Published date | 01 December 1965 |
| Date | 01 December 1965 |
| Author | Ivo Moravcik |
| DOI | 10.1177/002070206502000407 |
| Subject Matter | Book Review |
Book
Reviews
International
Politics and
Economics
THE
ECONOMICS
OF
COMPETITIVE
COEXISTENCE.
Convergence
Through
Growth.
By
Cyril
A.
Zebot.
1964.
(New
York:
Frederick
A.
Praeger.
Toronto:
Burns
&
MacEachern.
ix,
262pp.
$7.75)
The
scope
of
this
book
is
both
broader
and
narrower
than
its
title
indicates.
It
is
broader
because
underdeveloped countries
outside
the
Sino-Soviet
orbit
are
discussed.
It
is
narrower
because
coexistence
and
convergence
appear
only
as background
aspects
of
the
main
theme-
the
pervasiveness
of
inflation.
There
appear
to
be
three
different
"root
problems"
facing
the
three
great
"subdivisions"
of
the
world today:
A
"cultural
lag
and
entrepreneurial
gap"
(in
the
underdeveloped
countries); a
"contradic-
tion
between
autocratic
management
and pretended
socialist
character"
(in
the
Sino-Soviet
orbit);
and
"sluggish
growth
plus
inflation"
(in
the
industrialized
West).
It
is
the author's
thesis
that
these
problems
are
in
fact
reducible
to
one basic
problem-inflation.
The
greater
part
of
the
book
is
devoted
to
inflation
in
the
West
(or
rather
to
the
recent
"creeping
inflation"
in
the
United
States).
Concerning
the
latter,
Zebot's
position
may
be
summarized
as
follows:
Though
there
are
two
basic
"triggers"
of
inflation-excessive aggregate
demand
and
excessive
cost
increases-the
real
danger
lies
in
excessive
wage
pressures.
The
cost-push
trigger
is
the
villain
because of
its
intractability.
Aggregate
demand-pull
can
be
controlled
within
the
existing
institutional
framework
by
monetary
and
fiscal
policy,
but
wage-push
cannot
be
controlled
in
an
institutional
environment
of
Big
Business and
Big
Unions on
whose
banners
is
inscribed
the
Gom-
persian
slogan:
"More,
more,
and
more."
The
proposed remedy consists
of
a
two-pronged
defence.
As
for
demand-pull,
monetary,
and
especially
fiscal, policy
supplemented
by
cautious use
of
specific
controls
are
seen
as
adequate
weapons
in
the
hands
of
enlightened
governments.
As
for
cost-push,
Zebot
proposes
a
rule
based
on
"Guideposts
for
Non-inflationary
Wage
and
Price
Behavior"
of
the
U.S.
Council
of
Economic
Advisers
contained
in
the
January
1962
Economic
Report
of
President
Kennedy.
(It
is
perhaps
for
this
reason
that
the
book
is
dedicated
to
the
memory
of
the
late
U.S.
president.)
Zebot's
rule
would
allow wage
adjustments
corres-
ponding
to
the
rate
of
change
of
average,
economy-wide,
total-input
productivity.
In
specific
cases
the
rule
would
be
relaxed
to
provide
higher
than
average
adjustments
(in
case
of
labour
shortages)
or
lower
than
average
adjustments
(in
case
of
labour
surpluses).
A
similar rule
is
postulated
for
product price behaviour.
The
obvious
question
is
of
course:
How
would
the
rule
be en-
forced?
The
author's
answer
is
disappointing.
He
proposes
that
major
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