The experts have been so wrong so often in the past decade that it's sorely tempting to guess that they're wrong again and that the future isn't going to be quite as they expect. Or, to be more precise and provocative: Because the experts now seem to think our inflation and energy problems are intractable and low productivity growth is something of a permanent condition, it's tempting to speculate that inflation rates will slide downward in the 1980s, that the problems associated with the "energy crisis" will diminish and that -- lo and behold -- productivity growth will begin to revive.
We always have been blinded by the present and the recent past. In 1945, people worried that the country would drop back into depression. It didn't. Now that inflation has continued so long and exceeded everyone's expectations so often, there's a natural inclination to see it as mysterious and unmanageable. The same for energy and productivity.
Maybe. But something curious and possibly important has happened in Washington over the past year: There has beed a subtle but fundamental reorientation of government economic policy away from short-term results. Rather than focusing obsessively on the business cycle, Congress and the administration increasingly are proposing and approving measures that don't promise instant success and, in many cases, involve painful adjustment for affected groups and industries.
This reverses the emphasis of the past 20 years, when there was a premium on responding to the most conspicuous problem or the noisiest constituency. Not that these pressures suddenly have vanished: witness the rescue of Chrysler Corp. But the climate has changed, and both Congress and the White House quietly have adopted -- possibly without even realizing it -- a longer view of economic policy making.
The evidence of this is everywhere. The White House has been willing to allow energy prices to rise as a way of promoting greater energy efficiency -- not tomorrow, but over the next decade. Tight money policies, which have sent interest rates to historic levels, enjoy a political acceptability almost unimaginable 18 months ago because they are believed to be necessary for a gradual reduction in inflation. Again, not tomorrow.
Congress reflects the same tendency. Now it is attempting to end the energy-environmental stalemate by creating an Energy Mobilization Board that -- without eliminating conflicts -- at least might creat a quicker, neater procedure for settling them. No quick results there, either.
Likewise, Congress just has enacted sweeping legislation that will mean more competition among financial institutions -- banks, savings associations and credit unions -- and is considering legislation that would promote added competition in the trucking and railroad industries. The Federal Communications Commission recently issued new rules opening up data and business communications to added competition.
To some extent, each of these is the product of distinctive pressures and, in some cases -- inflation and energy are the best examples -- events virtually have foreced the White House and Congress to accept things they once found distasteful. But, while respecting history's complexity, it's difficult to deny a broader shift in attitude.
The focus in the '60s on the "business cycle," which originated in the Depression, created a convenient intellectual framework for politics. So long as the government could prevent or minimize the uncertainties of downturns, the economy's other long-term problems would tend to take care of themselves. The public perception grew -- and the government's, too -- that the government's job was to protect people against all kinds of adverse economic changes, not just recessions.
All this implied a quiet judgment about human nature: that people couldn't -- and, in many cases, shouldn't have to -- adjust to threatening economic changes. If energy prices were about to rise, stop them; people couldn't take it. If a slowdown loomed, do something; people couldn't take it.
But what we now seemed to have learned is that economic change is a long-term process. Government's short-term attempts to prevent adverse economic changes don't work necessarily and may make matters worse; guaranteed government responses to every economic downturn may create inflationary expectations. And we also have learned that people and institutions can take change. They complain -- about higher energy prices, for example -- but they adjust, too. The system isn't so fragile after all.
Without being outlandish, it's possible to envision greater economic stability in the mid-1980s. The rise in energy prices already has resulted in a substantial decrease in oil consumption (5 percent to 10 percent for gasoline), but the more lasting effects may come when people buy new cars and businesses make new investments. Reducing money supply growth ultimately should affect prices because, having less funds, firms will bargain more resolutely with suppliers and workers. Changes don't occur instantly because contracts and expectations don't change instantly.
And productivity? It's arguable that the slowdown has resulted from rising inflation (which made new investment less attractive) and the vast increase in "baby boom" workers (which made labor more abundant relative to capital). The influx of new workers will abate in the 1980s. If inflation does, too, will investment and productivity rise? Will recent "deregulation" -- partial though it is -- of the transportation communications, finance and energy industries provide another spur?
To suggest these possibilities is not to prophesy their inevitability. Fifteen years of rising inflation and increasing exposure to world markets have changed both our economy and our politics in ways we don't yet understand. Pressures for short-term results and short-term protection remain strong, and if the economy enters a severe downturn, they will get stronger. The history of the '80s may be the tension between the legacy of the '60s, which is to protect people against unpleasant changes, and the lesson of the 70s, which is to take a longer view.