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An alternative to economic retrenchment
Book
Reviews
227
writes, for example, that current circumstances often reveal “the meretricious vapidness of public sector organizations engulfed in the context of a nanosecond nothingness and populated by a cadre of professional administrators increasingly plagued with noogenic neuroses” (p. 122). Similarly, Gawthrop notes that achieving critical freedom and mature consciousness “requires public managers to attain a level of maturity that heretofore has not been evidenced” (p. 153). In light of such comments, one is led to ask how it will come to pass that such ill-tempered (even neurotic) types will adopt the highly demanding and complex responsibilities of the ethics of critical freedom. Considered from a Downsian rational-choice perspective, one might ask why would a self-interested public administrator trade a permissive network x orientation for a much more demanding y viewpoint? Gawthrop himself notes: “Opportunities for change are always present for those who are not intimidated by the fear of a new order of things, but as Machiavelli noted many centuries ago, there is nothing more difficult to attempt nor dangerous to handle than to initiate a new order of things” (p. 118). For all the importance to be attached to the process of introduction and implementation of public sector administrative change, Gawthrop devotes little attention to this topic. Although one should not expect a complete disposition of the ethics of critical freedom in such a slim volume, the omission of any serious discussion of how this system of public service ethics is to be institutionalized makes this book a far less important contribution to the literature than it might otherwise have been. As it stands at this point. Gawthrop’s contribution will be of limited interest to a relatively narrow segment of the public administration academic brotherhood. If it is to have an effect beyond those confines, the all-important details of conceptual dissemination and practical implementation will have to be developed for the scrutiny of practitioners and academics alike.
An Alternative to Economic Retrenchment By William M. Dugger Princeton, NJ: Petrocelli, 1984,309 pp., $24.95. Reviewed by Christopher J. Niggle, University of Red/an& An Alternative to Economic Retrenchment combines a critique of orthodox economics and an analysis of the sociological and economic causes of stagflation with an alternative to the current economic program of the U.S. government. Dugger’s book is a good example of the insightful political-economic and sociological analyses that have emerged from the institutionalist and left-Keynesian traditions in U.S. economics (as exemplified by Veblen, Commons, Galbraith, Heilbroner, Lowe and, arguably, Baran and Sweezy). Dugger explains the deterioration in the performance of the U.S. economy as primarily due to two factors: the hegemony of the corporation in American society (coupled with its devitalizing internal procedures for promotion and decision making) and the growthinhibiting fiscal and monetary policies of the federal government. Fiscal policy is characterized by growing and erratic military expenditures and an increasingly irrational tax system. Monetary policy is characterized as “monetarist” in the sense of a reliance upon an excessively tight constraint on growth in the supply of money and credit to reduce inflation since the early 1970s.
228
THE SOCIAL
SCIENCE
JOURNAL
Vol. 24/No. 20987
Any book that is so ambitious and wide ranging in scope is likely to be uneven and so to frustrate, trouble, or enrage specialists. Dugger’s is no exception. For this reader, several aspects of the book are unsatisfactory. The weakest part of the book may be its underlying theory of history, which is presented as an assertion and can be easily interpreted as being an ahistorical form of simplistic economic or technological determinism that ignores the role of class structure (and much more). Another not-so-well-developed argument is the assertion that much of the failure of the corporation to remain competitive through innovation can be ascribed to its growing bureaucratization and its tendency to exclude any but white middle-age males of certain socioeconomic backgrounds from participation in decision making at higher levels. Dugger argues that inclusion of women and minorities into a reformed corporate structure would revitalize the firm. This may well be true, but the decline of their competitive strength may be more importantly attributable to other factors such as their declining profitability and the development of intensive foreign competition. A third problem is his characterization of the Federal Reserve System’s policy as monetarist in the pre-Volker period, when its primary intermediate target was the interest rate on federal funds and when it allowed the monetary and credit aggregates to grow quite rapidly. This is not an orthodox monetarist policy. Dugger is much more rewarding on the other topics he grapples with: the sociology of corporate capitalism, the reasons for the failure of orthodox economics to comprehend the dynamics of the economy, the social costs of the Reagan administration’s program, and the necessity and feasibility of an alternative approach. Dugger’s alternative is a four-pronged program: an internal reform of the corporation, reform of the education system, a system of wage-price controls and economic planning, and a monetary-fiscal policy mix that would encourage investment in both fixed and human capital. He argues that the corporation could be revitalized by democratizing its structure (through workers’and public representatives on boards, democratic promotion processes, internal ombudsmen and advisory councils, and an employees’ Bill of Rights) and changing its regulatory environment with a Federal Corporation Commission empowered to recharter corporations, requiring these internal changes. This is probably the most utopian aspect of Dugger’s program; he proposes eradicating the federal corporate income tax in exchange for these reforms as part of a social contract with the corporations. Education reform is also necessary. The education system should prepare people for full participation in a democratic society rather than continue its current role of providing vocational training and socializing the young to accept the values of the corporation. The proposals for economic planning and growth enhancing macroeconomic policy are less controversial and possibly less utopian. They are similar to the kinds of programs that have been proposed by democratic socialists and Keynesians such as Galbraith and Leontief. Dugger proposes an American form of indicative planning, permanent wage-price controls on the largest corporations and their labor forces, greater emphasis on public investment (R & D, transportation, education) rather than public consumption (defense expenditures), and abandoning the monetarist approach to managing the financial system. Much of this is very sensible; all of it is obviously problematic and controversial; little of it is new. Dugger’s contribution is in synthesizing both heterodox analysis and solution into a coherent whole. This is exactly the type of work that needs to be done during historical conjunctures such as this, which may be as critical a time as the 1930s.
Reviews
227
writes, for example, that current circumstances often reveal “the meretricious vapidness of public sector organizations engulfed in the context of a nanosecond nothingness and populated by a cadre of professional administrators increasingly plagued with noogenic neuroses” (p. 122). Similarly, Gawthrop notes that achieving critical freedom and mature consciousness “requires public managers to attain a level of maturity that heretofore has not been evidenced” (p. 153). In light of such comments, one is led to ask how it will come to pass that such ill-tempered (even neurotic) types will adopt the highly demanding and complex responsibilities of the ethics of critical freedom. Considered from a Downsian rational-choice perspective, one might ask why would a self-interested public administrator trade a permissive network x orientation for a much more demanding y viewpoint? Gawthrop himself notes: “Opportunities for change are always present for those who are not intimidated by the fear of a new order of things, but as Machiavelli noted many centuries ago, there is nothing more difficult to attempt nor dangerous to handle than to initiate a new order of things” (p. 118). For all the importance to be attached to the process of introduction and implementation of public sector administrative change, Gawthrop devotes little attention to this topic. Although one should not expect a complete disposition of the ethics of critical freedom in such a slim volume, the omission of any serious discussion of how this system of public service ethics is to be institutionalized makes this book a far less important contribution to the literature than it might otherwise have been. As it stands at this point. Gawthrop’s contribution will be of limited interest to a relatively narrow segment of the public administration academic brotherhood. If it is to have an effect beyond those confines, the all-important details of conceptual dissemination and practical implementation will have to be developed for the scrutiny of practitioners and academics alike.
An Alternative to Economic Retrenchment By William M. Dugger Princeton, NJ: Petrocelli, 1984,309 pp., $24.95. Reviewed by Christopher J. Niggle, University of Red/an& An Alternative to Economic Retrenchment combines a critique of orthodox economics and an analysis of the sociological and economic causes of stagflation with an alternative to the current economic program of the U.S. government. Dugger’s book is a good example of the insightful political-economic and sociological analyses that have emerged from the institutionalist and left-Keynesian traditions in U.S. economics (as exemplified by Veblen, Commons, Galbraith, Heilbroner, Lowe and, arguably, Baran and Sweezy). Dugger explains the deterioration in the performance of the U.S. economy as primarily due to two factors: the hegemony of the corporation in American society (coupled with its devitalizing internal procedures for promotion and decision making) and the growthinhibiting fiscal and monetary policies of the federal government. Fiscal policy is characterized by growing and erratic military expenditures and an increasingly irrational tax system. Monetary policy is characterized as “monetarist” in the sense of a reliance upon an excessively tight constraint on growth in the supply of money and credit to reduce inflation since the early 1970s.
228
THE SOCIAL
SCIENCE
JOURNAL
Vol. 24/No. 20987
Any book that is so ambitious and wide ranging in scope is likely to be uneven and so to frustrate, trouble, or enrage specialists. Dugger’s is no exception. For this reader, several aspects of the book are unsatisfactory. The weakest part of the book may be its underlying theory of history, which is presented as an assertion and can be easily interpreted as being an ahistorical form of simplistic economic or technological determinism that ignores the role of class structure (and much more). Another not-so-well-developed argument is the assertion that much of the failure of the corporation to remain competitive through innovation can be ascribed to its growing bureaucratization and its tendency to exclude any but white middle-age males of certain socioeconomic backgrounds from participation in decision making at higher levels. Dugger argues that inclusion of women and minorities into a reformed corporate structure would revitalize the firm. This may well be true, but the decline of their competitive strength may be more importantly attributable to other factors such as their declining profitability and the development of intensive foreign competition. A third problem is his characterization of the Federal Reserve System’s policy as monetarist in the pre-Volker period, when its primary intermediate target was the interest rate on federal funds and when it allowed the monetary and credit aggregates to grow quite rapidly. This is not an orthodox monetarist policy. Dugger is much more rewarding on the other topics he grapples with: the sociology of corporate capitalism, the reasons for the failure of orthodox economics to comprehend the dynamics of the economy, the social costs of the Reagan administration’s program, and the necessity and feasibility of an alternative approach. Dugger’s alternative is a four-pronged program: an internal reform of the corporation, reform of the education system, a system of wage-price controls and economic planning, and a monetary-fiscal policy mix that would encourage investment in both fixed and human capital. He argues that the corporation could be revitalized by democratizing its structure (through workers’and public representatives on boards, democratic promotion processes, internal ombudsmen and advisory councils, and an employees’ Bill of Rights) and changing its regulatory environment with a Federal Corporation Commission empowered to recharter corporations, requiring these internal changes. This is probably the most utopian aspect of Dugger’s program; he proposes eradicating the federal corporate income tax in exchange for these reforms as part of a social contract with the corporations. Education reform is also necessary. The education system should prepare people for full participation in a democratic society rather than continue its current role of providing vocational training and socializing the young to accept the values of the corporation. The proposals for economic planning and growth enhancing macroeconomic policy are less controversial and possibly less utopian. They are similar to the kinds of programs that have been proposed by democratic socialists and Keynesians such as Galbraith and Leontief. Dugger proposes an American form of indicative planning, permanent wage-price controls on the largest corporations and their labor forces, greater emphasis on public investment (R & D, transportation, education) rather than public consumption (defense expenditures), and abandoning the monetarist approach to managing the financial system. Much of this is very sensible; all of it is obviously problematic and controversial; little of it is new. Dugger’s contribution is in synthesizing both heterodox analysis and solution into a coherent whole. This is exactly the type of work that needs to be done during historical conjunctures such as this, which may be as critical a time as the 1930s.