Fred Block

Recent Articles

Markets, States, and the Green Transition

To get renewable energy technologies into broad use, government needs to promote both supply and demand. Markets are too risk-averse.

(AP Photo/U.S. Army)
(AP Photo/U.S. Army) This solar array at White Sands, New Mexico, is the largest of the U.S. Army's solar photovoltaic systems. The $16.8 million project includes nearly 15,500 sun-tracking solar panels spread across 42 acres. This article appears as part of a special report, "What the Free Market Can't Do," in the Winter 2015 issue of The American Prospect magazine. Subscribe here . I f you believe in the perfect efficiency of free markets, then any government intervention, by definition, has to make things worse. Evidence is of no consequence. I once participated in a debate on innovation with two panelists from two of Washington’s most market-oriented think tanks. When I pointed out that a government program—the Department of Defense’s Advanced Research Projects Agency (DARPA)—had created the Internet, my opponent was hardly fazed. He responded, in effect, by saying we don’t know whether the private sector might have done it faster and better had the government not been interfering...

The Public Sources of Prosperity

Alexander Field argues infrastructure spending during the Great Depression did wonders for American productivity.

Conservatives and deficit hawks who see government spending as a drain on the economy imagine that economic growth in the United States has stemmed only from private investment and innovation. But from the earliest days of the Republic, government at all levels has played a critical role in expanding the economy. The development of transportation -- from lighthouses, harbors, inland waterways, canals, and railroads to highways and airports -- has been the most obvious contribution. The government's role in technological innovation, often for military purposes, has also been central. In the 19th century, federal armories pioneered mass production based on interchangeable parts. During World War I, public investment laid the basis for the radio and aerospace industries. World War II and the Cold War led to advances in biotechnology, energy, and computers and electronics. Alexander Field's ironically titled book, A Great Leap Forward: 1930s Depression and U.S. Economic Growth, adds new...

Saving Disgrace? More on Savings

F red Block and Robert Heilbroner, in "The Myth of a Savings Shortage" ( TAP , Spring 1992), want to persuade us that, contrary to the conventional wisdom, there is no scarcity of savings in the U.S. economy today. They say that the present national savings rate is as high as ever; that it plays no depressing role in our prolonged recession and sluggish growth, not to mention our lagging productivity and our weakness in international competition; and therefore increased saving would be no remedy for these problems.If their argument were valid, it would entail a revolution in public policy. But alas it is a muddle of misconstrued flows, confusion of categories, and reckless double counting. Trying to prove that the national savings rate has not really fallen below the 1970s level, Block and Heilbroner begin with corporate saving, which they say is five times as large as household saving. Their claim that "corporate saving shows no downward trend" as percent of GNP during the 1980s...

The Myth of a Savings Shortage

The United States is being held hostage by a dubious statistic and a serious misapprehension. The statistic shows that household saving in the U.S. economy dropped precipitously during the 1980s. The serious misapprehension is that this drop has impaired economic growth and that the economy cannot revive until the savings rate increases. In the standard view, without savings there can be no investment, and without investment, no growth -- whence comes the deceptively simple but misleading idea that the path to recovery lies in a revival of household savings. The drop in household saving over the past decade reported by the Commerce Department is certainly dramatic. From 7.5 percent of disposable personal income in 1981, saving fell to only 2.9 percent in 1987, the lowest ever recorded. Since then the rate has moved up to just over 4 percent. Household saving by no means comprises total national saving. It is dwarfed by corporate saving (profits plus depreciation), which is some five...