Books like this one frighten the intelligent reader, while raising the hopes of the naive. By taxing demand deposits at 3 percent per year, Mr. Dahlberg promises to erase all the evils that have tortured this economy for decades. No more inflation, budget deficits, poverty, or unemployment Unfortunately, he is not the first to offer simple solutions to the highly complicated problems of political economy. He mentions Marx and Keynes as men who would have been almost right—had they only understood what he understands. 

For Marx, the solution of all problems was the ending of private ownership of the means of production. Today, half the world, with socialized means of production, lives in servitude. For Keynes, it was government-initiated economic activity (i.e., deficit spending and transfer-payment programs) that would mean the end of all recessions. Today, as all governments spend more than ever before, each recession seems far more severe than its predecessor. And now comes another revolutionary theory. Educated in engineering, Dahlberg adopts a mechanistic approach to economics. “Fortunately, it is ridiculously easy to remove major evils,” he asserts and supports his contention with numerous graphic pictures. That the major evils of economics might be rooted in the vices and virtues of human nature never crosses his mind. 

The “spirochete,” as he chooses to explain it in medical jargon, has been isolated-it is the money-hoarding privilege that some people freely enjoy. He sees himself as the discoverer of a new germ theory of contagious diseases of the economy. Taxing those who hoard the money would provide “a penicillin that will destroy the problem that has been discovered.” (Pasteur, Fleming-Dahlberg is both.) 

Even if we accept Dahlberg’s medical analogy, there are ambiguities. Many people still get sick. New diseases (AIDS!) seem even more dangerous than the old ones. Spirochetes have swiftly become immune to old treatments, and new antibiotics must be invented, But Mr. Dahlberg never con siders what Side effect his prescription for “cheap” money might induce. What would happen when all foreign investors decide to invest their money elsewhere because of the new low interest rates? 

The perfected man, suffering from no diseases and experiencing no economic woes, is still nowhere to be seen. But on every hand are found revolutionary theories that promise a paradise on earth—or at least a stabilized economy. 


[How to Reduce Interest Rates and Poverty, by Arthur O. Dahlberg; Greenwich, CT: Devin Adair Publishers]