- Email: [email protected]
The American way of public policy
.am
~.
The Editor's Chair
The American Way of Public Policy Joseph R. Hartley 2
In his final issue as Business Horizons" editor, Joseph Hartley gives business people, and political leaders here and abroad, some advice: pay attention to the mood of the American people, for it can have lasting effects on the country's public policy. professionals often find America's method of reaching ecoBusiness nomic-policy decisions cumbersome, frustrating, and at times downright confusing. Don t we all? Americans have such a multiplicity of expectations and attitudes. Nevertheless, the convictions and philosophies with which people approach national policy issues are identifiable. A summary of the American approach to thinking about national policy issues-economic and others---may help the reader predict the economic decisions of the people. More important, it should assist business people in their efforts to explain the American way to foreigners, who find our system (or lack of one) so enigmatic. Ideologies such as Marxism or Soviet communism are neat and superficially logical. Fortunately, we don't embrace any ideology or governing "ism." What, then, are the American people's guideposts for reaching policy decisions? Americans prefer pragmatism to dogmatism. They prefer an experimental, open society to a closed, rigid structure. They prefer diversity to uniformity of institutions and individuals. They reject any single dominant economic, theological, political, or moral philosophy. Therefore, no simple doctrinaire formula can state what America's convictions are, have been, or will be. Americans will not accept any single theory of political organization, be it monarchy or fascism. They certainly reject any simplistic doctrine of economic organization, such as laissez-faire, Marxism, or communism. Ironically, Marx predicted that the state would wither away once the people collectively owned all the means of production. Americans suspect that the Soviet state has not withered. A theocracy such as Iran's is barely comprehensible to them. Americans believe deeply in the following: • Education; • Self-government; • Representative institutions (corporate boards are elected); • Human dignity;
Fairness; • Justice; • Personal freedom, privacy, and initiative; • Free enterprise; • The little guy, David vs. Goliath; • Experimentation and innovation; • Efficiency; • Work; • Diffusion of power concentrations; and • Compromise vs. confrontation. These are hallmarks of the American way of public policy formulation. They serve as benchmarks for anyone trying to predict, formulate, or comprehend public policy in the United States. These ingredients of the public mind often conflict; no single quality has ever gained ascendancy. Tradeoffs occur continuously. The past regulation of bank and savings and loan passbook interest rates exemplifies such compromises. For half a century savings and loans could pay .25 percent more interest on passbook savings than could commercial banks. This probably was not economically efficient. But it developed in the Great Depression. Massive foreclosures on farms and homes by banks violated the people's sense of equity. The public also viewed home ownership as a source and symbol of personal freedom from "oppressive" landlords. The S&Ls were new and small. The commercial banks were larger. So the public decided to swallow its preference for free enterprise; Congress regulated financial institutions, deliberately giving a competitive edge to the S&Ls. But the public belief in a pragmatic, open, and experimental society has now gained the upper hand. In the early 1980s we scrapped most of the old financial regulatory laws in favor of increased competition and economic efficiency. America's multifaceted, galactic system does work. But the business world cannot imitate Pollyanna. History tells us that once the public creates some new regulation to solve a problem, generations may pass before that regulation disappears. The root of the problem (real or perceived) may have long since passed away. Enlightened self-restraint, coupled with keen sensitivity for the public mood, surely is the best course for American firms. This means dulling the goal of maximizing shareholder wealth with goals that are fuzzy and social in nature. No one said the CEO and the directors have it easy. Potential federal regulation of the stock exchanges looms on the horizon right now. Numerous investors and financial managers blame programmed trading for the vicious drop in the stock market on last October 19. They may well be wrong, but they believe they are right. The New York Stock Exchange has taken some notably mild action to restrain programmed trading. They may have misread the risk/return tradeoff; the risk seems very high. Another downsweep is not inconceivable. The public outcry and urgent congressional investigations would be inevitable. We probably would then be saddled with government regulation of our equity markets beyond our wildest fears. Any student of the history of the American way can see that. What return is there from the current self-government palliative of the NYSE? Preservation of some economic benefits from programmed trading. Is it worth the potential price? I do not know. This merely illustrates how the relationship between American business and the public seems to swing. Americans prefer a pluralistic democracy to ideology. The keystones of their pluralism are division and diffusion of power--geographically, institutioflally, and organizationally. And the pluralism seems to have been reinforced by a public preference for innovation and experimentation. The people are remarkably open to change. They reject being bound by any rigid doctrine. They take a healthy, practical view of the great issues of the day. Because America has been populated by the entire world, she embraces groups who espouse every conceivable political, economic, religious, and social philosophy. Throughout history, America has tolerated some groups
The American Way of Public Policy I
•
"Enlightened selfrestraint, coupled with keen sensitivity for the public moods, surely is the best course for American firms."
Business Horizons / May-June 1988 |
"The man on the U.S. street knows that the means outweigh the ends. He insists that the means enhance personal freedom, justice, human dignity, decency, tolerance, and compassion." 4
that prefer their own ideological straitjackets. They know the one Right Way. Some of these groups try to force their Way upon the general public. They cannot comprehend that if their own monolithic dogma became the law of the land, freedom of choice would disappear forever. The people, fortunately, understand this very well indeed. They shun any group claiming to have a corner on Truth. Their salt-of-the-earth wisdom simply will not accept that a mere mortal will ever discover Truth. They remain open to new ideas, fostering search and research for many truths by free people. This openness is a state of mind. It goes far toward explaining w h y the United States remains a fertile bed for economic and business creativity. Americans do not believe that ends justify means. One of Stalin's ends was collectivized farms. He slaughtered 5 million peasants (plus or minus a few million) as the means to his end. Hitler sought a pure Aryan race. He murdered 6 million Jews and 20 million Soviet Slavs. The man on the U.S. street knows that the means outweigh the ends. He insists that the means enhance personal freedom, justice, human dignity, decency, tolerance, and compassion. Our society zigzags toward its ends. The long sweep of American history demonstrates that the people want their society to seek nobler things in nobler ways. To be sure, the cynic can find plenty of embarrassing slips along the way. But Jesse Jackson is running with admirable effectiveness for the Democratic presidential nomination. A political pundit recently observed that he was dumbfounded that Jackson had such strong support in Iowa and Wisconsin. This expert and his kind do not really understand the people. That may explain the reason Jesse is running and they are not. The growing role of the national government in the past century has resuited partially from the pragmatism of the people. If a thing ain't broke, don't fix it. If it is broke, the government may have to fix it. Hence the vast array of economic legislation in the 1930s, the civil rights laws in the 1960s, and environmental legislation in the past 20 years. The people overestimate the government's ability to fix any major broken social or economic part of our society. In this era of high technology, a complex society, and a global economy, the rate of change rises geometrically. Dedicated people in government have bumped against sharp limitations when they have attempted to fix urban decay, drugs, endemic unemployment, school dropouts, crime, skyrocketing health-care costs, and inadequate education. How does our government deal with international terrorism? The Iranian hostage crisis helped bring down Jimmy Carter, and he certainly tried to fix it. Though accused of being impotent, he attempted military intervention. Desert sand clogged the intake screens of the helicopters' jet engines. The Soviets tried to fix Afghanistan; Lyndon Johnson and Richard Nixon tried to fix Vietnam. Discovering the limitations of their federal government has been a new, painfully frustrating experience for the people. But they are pragmatists, their feet firmly on the ground. Abraham Lincoln observed that you can't fool all the people all the time. We are probably in the embryonic stage of learning more about the limits of our government. Americans abhor power concentrations. Fear of excess power seems almost genetically inherited from our ancestors--who were, after all, primarily the landless serfs, sweatshop laborers, slaves, and persecuted minorities. We believe firmly in our pluralistic society, in which the seats of power are widely distributed. Nationally, political power was divided by the founding fathers among the legislative, executive, and judicial branches. Then it was diffused, via the federal system, among the states, towns, and cities. The fourth estate emerged to report abuses. Economic, educational, religious, and judicial power was percolated through a myriad of institutions. In most cases our pluralism evolved quite deliberately. Excessive concen-
The American Way of Public Policy trations of economic power were splintered. The combined economic and political power of the southern planters before the Civil War evaporated after they insisted on extending slavery to the new western states. The power of the railroads begot the Interstate Commerce Act of 1887. The business trusts, such as Rockefeller's Standard Oil, inexorably led to the Sherman Act. More recently, organized labor has been curtailed. Giantism can automatically make any institution suspect. Executives of our largest firms sense this public skepticism and are understandably perplexed by it. They are just as decent and ethical as executives of smaller firms. And their companies may be very efficient and profitable. AT&T is a classic example. Its telephone service was superb. But the man on the street views great power with great suspicion. He may have a congenial and playful cat in his home. He imagines that same cat becoming the size of a tiger. He would not trust a huge cat, no matter how congenial or how many mice it caught. Nor would his neighbors. Too simplistic? Not in America. We have ample historic experience with abuses of power here and abroad. Watergate was an abuse of power. The locus of that power was destroyed. Everyone marvels that this democracy still survives after 212 years. It is one of the oldest governments in the world. Luck has helped. But above all, the determination of the people to divide and neutralize excessive power has helped our democracy survive. Today Americans are entering a brave new global economic world. It has not been comfortable. They have an appetite for imported products, but they are shocked to see us become a debtor nation overnight. They are confused when they hear of the largest ~ade deficits in our history. They do not understand why they should pay higher interest rates because the value of the dollar falls against the yen. Nor do many understand how the nation benefits when their automobile plants shut down and they lose their jobs after 20, 30, or 40 years of service to their company. Some CEOs say they don't understand it either. None of us knows what lies ahead. However, we can be sure of some things. The people are not changing the basic faiths and preferences that guide their policy decisions. Nor are they changing their fear of power. They are focusing on large exporters, such as Japan, Korea, Formosa, the entire Pacific Rim, and West Germany. Economic experts properly tell them about the advantages of free trade, as has a recent Business Horizons editorial, George Wilson's "Deficits: Another Look." Nonetheless, the people are suspicious that they are confronting some potent new combinations of economic power. Collusion among Japanese companies has a much better chance than among American firms. Long ago a Japanese professor of economics told me that Douglas MacArthur's antitrust laws had broken up the giant Japanese firms. He also noted that Japan was still a relatively unified culture, and that the laws did not prevent the industrial families from eating together. No specter is intended. When Japanese firms seek market dominance, they clearly come from a different milieu than do American firms. The same applies to all Pacific Rim companies. It is no freemarket situation, nor does any informed person pretend that it is. The people know that America is the greatest market in the world. What a great privilege it is for any company from any other nation to be allowed free access to that market. The American business community has a responsibility to ensure that national policymakers be acutely alert to any serious violations of economic power by foreign exporters to this country. After all, it surely must be difficult for many foreign business and economic leaders to comprehend the American way; none of us do ~lly. One thing is certain. The American people might decide that they recognize endemic abuse of economic power in Far-off-istan. If they then decide that this abuse impinges on their lives, they will deal with it as they have dealt with other power concentrations. The result could be protectionism for a long time---or not. It is hard to read the American public.
I
"The man on the street views great power with great suspicion. He may have a congenial and playful cat in his home. He imagines that same cat becoming the s i z e of a tiger. He would not trust a huge cat, no matter h o w congenial or h o w many mice it caught. Nor would his neighbors."
Business Horizons / May-June 1988 |
"The American way is alive and well today. Because of that the candle of personal and economic freedom burns brightly."
The American way is alive and well today. Because of that the candle of personal and economic freedom burns brightly. The ideologues have an irresistible urge to snuff it out, because the American way is not tidy and neat. They will fail--because of the American way. []
y tenure as editor of Business Horizons is coming to a close. Business Horizons has changed markedly the past four years because it had to. The fundamental objectives have not been altered one iota. The foremost is excellence. The second is to cover all disciplines of business plus its enigmatic economic environment. The third is crisp, succinct, clea~ and readable articles. The fourth is to provide a bridge between the world of business and the humanities. The fifth is timeliness. The sixth focuses on crucial public-policy issues such as the recent rediscovery of protectionism by Congress or the invention of budgetary noncontrol by Congress. Presumably these goals are self-evident. However, the role of the humanities in Business Horizons has been questioned by a few readers. The humanities deal with the study of human beings---their literature, art, philosophy, history, cultures, and values. Since Adam Smith, the ideal of free-enterprise capitalism (not its reality) is for the people, of the people, and by the people. Does that sound maudlin? Tom Peters and Nancy Austin in A Passion for Excellence document that business excellence reduces to "taking care of your people." Take care of your customers, your employees, and your shareholders. A business firm stumbles into a public firefight when it ignores the people. Who would try to do business in China without understanding Chinese culture and philosophy? Business Horizons will continue to have a humanistic thread. With trepidation, we experimented with some humor four years ago. After positive feedback, humor became a staple. In retrospect, it is laughable that we had so many sober discussions over the issue, "Dare we let our readers laugh just a little in such a serious business?" At that time the premier academic business journals were uniformally stuffy and sterile. But, I could not recall ever meeting a successful CEO or vice president without a sense of humor. Laughter is one tonic for their stress. Professors laugh too. Yet the decision was a risky one. Publishing in our field is a conservative business. Thanks to friends in the Indiana School of Journalism, I had studied how the New York Times had literally revolutionized itself since the 1960s while rarely revealing the incremental changes to its readers. We emulated that method of change. However, we don't pretend that BH has become the Times. My greatest debt is to the authors who are Business Horizons' lifeblood. The quality of articles has improved rather steadily thanks to them. Ironically, this been the cause of my only regret. So many outstanding manuscripts have been received that could not be published for lack of space. Despite this dilemma, I have solicited more manuscripts from top business and government executives so BH would be a forum for practitioners as well as academics. The content mix has become more balanced, with more finance, accounting, and public-policy pieces. There have not been enough of the latter. A surprising portion of the economic academic community thinks it should separate its discipline from public policy. A century ago there was no such separation; economics was then known as political economics. We have sought timeliness by seeking some manuscripts that address crucial issues of the moment while guarding against faddism--such as how to manage just like the Japanese in a completely different culture. In short, keeping BH at the cutting edge is like shooting at a moving target. It has been my privilege to work with three superb managing editors. Barbara Coffman broke me in. Judy Schroeder lent a creative flair to all facets. Brian Burton brings the perspective of business publishing and of a business professional to that position. Don David has provided able support. Of course, BH
M
I
The American Way of Public Policy I
would not exist without the dedicated support of Dean Jack Wentworth and Associate Dean George Hettenhouse. I am delighted to pass the editor's chair back to Harvey Bunke after his tenure as chief operating officer of the IU Foundation. The sine qua non of the business profession, Harv Bunke is an economic philosopher. He understands the American ethos. He can also interpret it as few can. Harv is an intellectual in the fundamental sense of Jacques Barzun's magnificent book, The House of Intellect. President James Garfield said that the ideal university was a log with a student on one end and Mark Hopkins on the other. Congratulations! You, as readers of Business Horizons, will once again have the good fortune to have Harvey Bunke at the other end of your log. [] Joseph R. Hartley
"A surprising portion of the economic academic community thinks it should separate its discipline from public policy. A century ago there was no such separation; economics was then known as political economics."
~.
The Editor's Chair
The American Way of Public Policy Joseph R. Hartley 2
In his final issue as Business Horizons" editor, Joseph Hartley gives business people, and political leaders here and abroad, some advice: pay attention to the mood of the American people, for it can have lasting effects on the country's public policy. professionals often find America's method of reaching ecoBusiness nomic-policy decisions cumbersome, frustrating, and at times downright confusing. Don t we all? Americans have such a multiplicity of expectations and attitudes. Nevertheless, the convictions and philosophies with which people approach national policy issues are identifiable. A summary of the American approach to thinking about national policy issues-economic and others---may help the reader predict the economic decisions of the people. More important, it should assist business people in their efforts to explain the American way to foreigners, who find our system (or lack of one) so enigmatic. Ideologies such as Marxism or Soviet communism are neat and superficially logical. Fortunately, we don't embrace any ideology or governing "ism." What, then, are the American people's guideposts for reaching policy decisions? Americans prefer pragmatism to dogmatism. They prefer an experimental, open society to a closed, rigid structure. They prefer diversity to uniformity of institutions and individuals. They reject any single dominant economic, theological, political, or moral philosophy. Therefore, no simple doctrinaire formula can state what America's convictions are, have been, or will be. Americans will not accept any single theory of political organization, be it monarchy or fascism. They certainly reject any simplistic doctrine of economic organization, such as laissez-faire, Marxism, or communism. Ironically, Marx predicted that the state would wither away once the people collectively owned all the means of production. Americans suspect that the Soviet state has not withered. A theocracy such as Iran's is barely comprehensible to them. Americans believe deeply in the following: • Education; • Self-government; • Representative institutions (corporate boards are elected); • Human dignity;
Fairness; • Justice; • Personal freedom, privacy, and initiative; • Free enterprise; • The little guy, David vs. Goliath; • Experimentation and innovation; • Efficiency; • Work; • Diffusion of power concentrations; and • Compromise vs. confrontation. These are hallmarks of the American way of public policy formulation. They serve as benchmarks for anyone trying to predict, formulate, or comprehend public policy in the United States. These ingredients of the public mind often conflict; no single quality has ever gained ascendancy. Tradeoffs occur continuously. The past regulation of bank and savings and loan passbook interest rates exemplifies such compromises. For half a century savings and loans could pay .25 percent more interest on passbook savings than could commercial banks. This probably was not economically efficient. But it developed in the Great Depression. Massive foreclosures on farms and homes by banks violated the people's sense of equity. The public also viewed home ownership as a source and symbol of personal freedom from "oppressive" landlords. The S&Ls were new and small. The commercial banks were larger. So the public decided to swallow its preference for free enterprise; Congress regulated financial institutions, deliberately giving a competitive edge to the S&Ls. But the public belief in a pragmatic, open, and experimental society has now gained the upper hand. In the early 1980s we scrapped most of the old financial regulatory laws in favor of increased competition and economic efficiency. America's multifaceted, galactic system does work. But the business world cannot imitate Pollyanna. History tells us that once the public creates some new regulation to solve a problem, generations may pass before that regulation disappears. The root of the problem (real or perceived) may have long since passed away. Enlightened self-restraint, coupled with keen sensitivity for the public mood, surely is the best course for American firms. This means dulling the goal of maximizing shareholder wealth with goals that are fuzzy and social in nature. No one said the CEO and the directors have it easy. Potential federal regulation of the stock exchanges looms on the horizon right now. Numerous investors and financial managers blame programmed trading for the vicious drop in the stock market on last October 19. They may well be wrong, but they believe they are right. The New York Stock Exchange has taken some notably mild action to restrain programmed trading. They may have misread the risk/return tradeoff; the risk seems very high. Another downsweep is not inconceivable. The public outcry and urgent congressional investigations would be inevitable. We probably would then be saddled with government regulation of our equity markets beyond our wildest fears. Any student of the history of the American way can see that. What return is there from the current self-government palliative of the NYSE? Preservation of some economic benefits from programmed trading. Is it worth the potential price? I do not know. This merely illustrates how the relationship between American business and the public seems to swing. Americans prefer a pluralistic democracy to ideology. The keystones of their pluralism are division and diffusion of power--geographically, institutioflally, and organizationally. And the pluralism seems to have been reinforced by a public preference for innovation and experimentation. The people are remarkably open to change. They reject being bound by any rigid doctrine. They take a healthy, practical view of the great issues of the day. Because America has been populated by the entire world, she embraces groups who espouse every conceivable political, economic, religious, and social philosophy. Throughout history, America has tolerated some groups
The American Way of Public Policy I
•
"Enlightened selfrestraint, coupled with keen sensitivity for the public moods, surely is the best course for American firms."
Business Horizons / May-June 1988 |
"The man on the U.S. street knows that the means outweigh the ends. He insists that the means enhance personal freedom, justice, human dignity, decency, tolerance, and compassion." 4
that prefer their own ideological straitjackets. They know the one Right Way. Some of these groups try to force their Way upon the general public. They cannot comprehend that if their own monolithic dogma became the law of the land, freedom of choice would disappear forever. The people, fortunately, understand this very well indeed. They shun any group claiming to have a corner on Truth. Their salt-of-the-earth wisdom simply will not accept that a mere mortal will ever discover Truth. They remain open to new ideas, fostering search and research for many truths by free people. This openness is a state of mind. It goes far toward explaining w h y the United States remains a fertile bed for economic and business creativity. Americans do not believe that ends justify means. One of Stalin's ends was collectivized farms. He slaughtered 5 million peasants (plus or minus a few million) as the means to his end. Hitler sought a pure Aryan race. He murdered 6 million Jews and 20 million Soviet Slavs. The man on the U.S. street knows that the means outweigh the ends. He insists that the means enhance personal freedom, justice, human dignity, decency, tolerance, and compassion. Our society zigzags toward its ends. The long sweep of American history demonstrates that the people want their society to seek nobler things in nobler ways. To be sure, the cynic can find plenty of embarrassing slips along the way. But Jesse Jackson is running with admirable effectiveness for the Democratic presidential nomination. A political pundit recently observed that he was dumbfounded that Jackson had such strong support in Iowa and Wisconsin. This expert and his kind do not really understand the people. That may explain the reason Jesse is running and they are not. The growing role of the national government in the past century has resuited partially from the pragmatism of the people. If a thing ain't broke, don't fix it. If it is broke, the government may have to fix it. Hence the vast array of economic legislation in the 1930s, the civil rights laws in the 1960s, and environmental legislation in the past 20 years. The people overestimate the government's ability to fix any major broken social or economic part of our society. In this era of high technology, a complex society, and a global economy, the rate of change rises geometrically. Dedicated people in government have bumped against sharp limitations when they have attempted to fix urban decay, drugs, endemic unemployment, school dropouts, crime, skyrocketing health-care costs, and inadequate education. How does our government deal with international terrorism? The Iranian hostage crisis helped bring down Jimmy Carter, and he certainly tried to fix it. Though accused of being impotent, he attempted military intervention. Desert sand clogged the intake screens of the helicopters' jet engines. The Soviets tried to fix Afghanistan; Lyndon Johnson and Richard Nixon tried to fix Vietnam. Discovering the limitations of their federal government has been a new, painfully frustrating experience for the people. But they are pragmatists, their feet firmly on the ground. Abraham Lincoln observed that you can't fool all the people all the time. We are probably in the embryonic stage of learning more about the limits of our government. Americans abhor power concentrations. Fear of excess power seems almost genetically inherited from our ancestors--who were, after all, primarily the landless serfs, sweatshop laborers, slaves, and persecuted minorities. We believe firmly in our pluralistic society, in which the seats of power are widely distributed. Nationally, political power was divided by the founding fathers among the legislative, executive, and judicial branches. Then it was diffused, via the federal system, among the states, towns, and cities. The fourth estate emerged to report abuses. Economic, educational, religious, and judicial power was percolated through a myriad of institutions. In most cases our pluralism evolved quite deliberately. Excessive concen-
The American Way of Public Policy trations of economic power were splintered. The combined economic and political power of the southern planters before the Civil War evaporated after they insisted on extending slavery to the new western states. The power of the railroads begot the Interstate Commerce Act of 1887. The business trusts, such as Rockefeller's Standard Oil, inexorably led to the Sherman Act. More recently, organized labor has been curtailed. Giantism can automatically make any institution suspect. Executives of our largest firms sense this public skepticism and are understandably perplexed by it. They are just as decent and ethical as executives of smaller firms. And their companies may be very efficient and profitable. AT&T is a classic example. Its telephone service was superb. But the man on the street views great power with great suspicion. He may have a congenial and playful cat in his home. He imagines that same cat becoming the size of a tiger. He would not trust a huge cat, no matter how congenial or how many mice it caught. Nor would his neighbors. Too simplistic? Not in America. We have ample historic experience with abuses of power here and abroad. Watergate was an abuse of power. The locus of that power was destroyed. Everyone marvels that this democracy still survives after 212 years. It is one of the oldest governments in the world. Luck has helped. But above all, the determination of the people to divide and neutralize excessive power has helped our democracy survive. Today Americans are entering a brave new global economic world. It has not been comfortable. They have an appetite for imported products, but they are shocked to see us become a debtor nation overnight. They are confused when they hear of the largest ~ade deficits in our history. They do not understand why they should pay higher interest rates because the value of the dollar falls against the yen. Nor do many understand how the nation benefits when their automobile plants shut down and they lose their jobs after 20, 30, or 40 years of service to their company. Some CEOs say they don't understand it either. None of us knows what lies ahead. However, we can be sure of some things. The people are not changing the basic faiths and preferences that guide their policy decisions. Nor are they changing their fear of power. They are focusing on large exporters, such as Japan, Korea, Formosa, the entire Pacific Rim, and West Germany. Economic experts properly tell them about the advantages of free trade, as has a recent Business Horizons editorial, George Wilson's "Deficits: Another Look." Nonetheless, the people are suspicious that they are confronting some potent new combinations of economic power. Collusion among Japanese companies has a much better chance than among American firms. Long ago a Japanese professor of economics told me that Douglas MacArthur's antitrust laws had broken up the giant Japanese firms. He also noted that Japan was still a relatively unified culture, and that the laws did not prevent the industrial families from eating together. No specter is intended. When Japanese firms seek market dominance, they clearly come from a different milieu than do American firms. The same applies to all Pacific Rim companies. It is no freemarket situation, nor does any informed person pretend that it is. The people know that America is the greatest market in the world. What a great privilege it is for any company from any other nation to be allowed free access to that market. The American business community has a responsibility to ensure that national policymakers be acutely alert to any serious violations of economic power by foreign exporters to this country. After all, it surely must be difficult for many foreign business and economic leaders to comprehend the American way; none of us do ~lly. One thing is certain. The American people might decide that they recognize endemic abuse of economic power in Far-off-istan. If they then decide that this abuse impinges on their lives, they will deal with it as they have dealt with other power concentrations. The result could be protectionism for a long time---or not. It is hard to read the American public.
I
"The man on the street views great power with great suspicion. He may have a congenial and playful cat in his home. He imagines that same cat becoming the s i z e of a tiger. He would not trust a huge cat, no matter h o w congenial or h o w many mice it caught. Nor would his neighbors."
Business Horizons / May-June 1988 |
"The American way is alive and well today. Because of that the candle of personal and economic freedom burns brightly."
The American way is alive and well today. Because of that the candle of personal and economic freedom burns brightly. The ideologues have an irresistible urge to snuff it out, because the American way is not tidy and neat. They will fail--because of the American way. []
y tenure as editor of Business Horizons is coming to a close. Business Horizons has changed markedly the past four years because it had to. The fundamental objectives have not been altered one iota. The foremost is excellence. The second is to cover all disciplines of business plus its enigmatic economic environment. The third is crisp, succinct, clea~ and readable articles. The fourth is to provide a bridge between the world of business and the humanities. The fifth is timeliness. The sixth focuses on crucial public-policy issues such as the recent rediscovery of protectionism by Congress or the invention of budgetary noncontrol by Congress. Presumably these goals are self-evident. However, the role of the humanities in Business Horizons has been questioned by a few readers. The humanities deal with the study of human beings---their literature, art, philosophy, history, cultures, and values. Since Adam Smith, the ideal of free-enterprise capitalism (not its reality) is for the people, of the people, and by the people. Does that sound maudlin? Tom Peters and Nancy Austin in A Passion for Excellence document that business excellence reduces to "taking care of your people." Take care of your customers, your employees, and your shareholders. A business firm stumbles into a public firefight when it ignores the people. Who would try to do business in China without understanding Chinese culture and philosophy? Business Horizons will continue to have a humanistic thread. With trepidation, we experimented with some humor four years ago. After positive feedback, humor became a staple. In retrospect, it is laughable that we had so many sober discussions over the issue, "Dare we let our readers laugh just a little in such a serious business?" At that time the premier academic business journals were uniformally stuffy and sterile. But, I could not recall ever meeting a successful CEO or vice president without a sense of humor. Laughter is one tonic for their stress. Professors laugh too. Yet the decision was a risky one. Publishing in our field is a conservative business. Thanks to friends in the Indiana School of Journalism, I had studied how the New York Times had literally revolutionized itself since the 1960s while rarely revealing the incremental changes to its readers. We emulated that method of change. However, we don't pretend that BH has become the Times. My greatest debt is to the authors who are Business Horizons' lifeblood. The quality of articles has improved rather steadily thanks to them. Ironically, this been the cause of my only regret. So many outstanding manuscripts have been received that could not be published for lack of space. Despite this dilemma, I have solicited more manuscripts from top business and government executives so BH would be a forum for practitioners as well as academics. The content mix has become more balanced, with more finance, accounting, and public-policy pieces. There have not been enough of the latter. A surprising portion of the economic academic community thinks it should separate its discipline from public policy. A century ago there was no such separation; economics was then known as political economics. We have sought timeliness by seeking some manuscripts that address crucial issues of the moment while guarding against faddism--such as how to manage just like the Japanese in a completely different culture. In short, keeping BH at the cutting edge is like shooting at a moving target. It has been my privilege to work with three superb managing editors. Barbara Coffman broke me in. Judy Schroeder lent a creative flair to all facets. Brian Burton brings the perspective of business publishing and of a business professional to that position. Don David has provided able support. Of course, BH
M
I
The American Way of Public Policy I
would not exist without the dedicated support of Dean Jack Wentworth and Associate Dean George Hettenhouse. I am delighted to pass the editor's chair back to Harvey Bunke after his tenure as chief operating officer of the IU Foundation. The sine qua non of the business profession, Harv Bunke is an economic philosopher. He understands the American ethos. He can also interpret it as few can. Harv is an intellectual in the fundamental sense of Jacques Barzun's magnificent book, The House of Intellect. President James Garfield said that the ideal university was a log with a student on one end and Mark Hopkins on the other. Congratulations! You, as readers of Business Horizons, will once again have the good fortune to have Harvey Bunke at the other end of your log. [] Joseph R. Hartley
"A surprising portion of the economic academic community thinks it should separate its discipline from public policy. A century ago there was no such separation; economics was then known as political economics."