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periods of upswing and a lot of illusions and talk about returning normalcy, after some minor change, we think there will be enduring economic difficulty.
One of the results of that, in our judgment, is that after sub-benefits run out and after people realize that jobs are not going to return quickly, and a different sense of what this means begins to grow, we are probably going to see activism in the streets among white working class people -- whole new political actions in this country -- see militancy again in core cities and ghettos -- over the next 2 to 5 year horizon and on down through the rest of the century. Increasing dislocations and increasing protests and increasing social action leading to political demands and probably violence is a more likely context in which to think about the coming period than the last 25 years.
That means polarization in one form or another. In Watts the police have already been trained to put down food riots efficiently. That kind of dynamic is already arising in parts of Europe. For example, there are quasi-Fascist groups developing in England. In response to rising protests, we are likely to see on central core of thought pushed forward by a group of political and economic and academic and some labor people around the concept of economic planning. The Humphrey-Javits bill is one aspect of this. Groups pushing the notion taht there ought to be economic planning as a way to solve unemployment and inflaction. And what is being offered is very important, a rough variation of French and Japanese modesl of planning, which would attempt to resolve the unemployment and inflation problem primarily by growth.
There are two or three problems whcih become obvious right away. The first is a moral/poltiical problem, which is even if/you could do planning for growth that is in direct contradiction to the obvious needs of a society which is coming up against the limits of basic natural resources, and if you had to say what we need for society, a growthmanship idea is going to gobble up basic resources that are needed. The known reserves of aluminum run out in 31 years -- copper in 21 years -- natural gas in 22 years -- petroleum in 20-25 years -- zinb in 18 years -- at present rates of growth. There is just no doubt that we are coming to the end of our capacity to grow our way upward without encouraging very great damage for ourselves. On that moral level, the plannign for growth is disastrous. Even in the short term, what it means is severe inflation. Long before you get to the end of reserves, you start increasing the price in order to allocate it. Price increases are disastrous to the poor and working class because the board price increases hit there first.
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It is clear that the planning that is being talked about is planning based around certain institutions -- primarily the giant corporations. This planning, although called neutral, is dominated by the priorities of the institutions that/ are behind it -- corporations which want t ogrow and sell for profit, and inherently do that as a matter of their own mechanisms of financing there structure.
If you face those problems at that level, it is evident that one requirement of a decent politics and a decent way forward has to do with confronting the need to change key institutions that are the heart of the process. Minimally you have to talk about institutions that do not inherently push sales grwoth and resource consumption, or at least they have to be neutral on that point. tHat is one of the reasons we come around to the notion of public enterprise. At the very least, the instututions which are needed must not require growth in order to sustain themselves. And pyblic institutions are at least neutral on that point. They are not positive conserving institutions, although some can be.
A second issue is, as you go into this period, even if you don't get into a real growthmanship economy, there are going to be very large dislocations and siruptions. Sever impacts in certain communities and certain industries is projectible in our opinion -- not only for the resource reasons, but some international reasons. The most politically feasible way to talk about public enterprise is in that context because what is happening here has been going on for about 4 to 5 years in different ways in various parts of Europe, particularly Britain, France, and Italy. as there have been dislocations in the South of Italy or Great Britain, one political resposne has been, "Let's find a way to keep the jobs there." First they start pouring very large incentives, that is tax breaks and capital loans and capital grants. Nationalization has not been a serious question for 25 years in Great Britain, but is now again. And the British Labor Party has already announced plans for nationalizing several corporations in order to deal with the massive dislocation problem. In order to keep jobs in communities, there has to be the capacity to keep them there, and that means directly own them and put them there.
If you do nothnig, you are going to have dislocations. If you start talking about what would be a proper way to go forward, I think a decent kind of planning about what would be a proper way to go forward, I think a decent kind of planning would put people to work making things that people needed and would rationalize the production of the society. In that sense, if you are going to reduce the rate of growth because of the need to stop excess consumption of resources, a balanced plannign would have to have the capacity to locate jobs where there are rightful dislocations. When you ship out of autos to mass transit, it
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makes sense to have the kind of planning which will not only see it happening but will have planned to switch over manpower so that people's lives are not disrupted, but also so there is decent, efficient use of manpower. In a positive planning concept, we need to be able to commit jobs in certain locations in a rational way.
A third category really comes up in connection with the broader, and in a way the most open-ended, questions which are being raised now in just a political context. That is the category of rip-offs; banks not providing investment to red-lined areas; rails being milked dry and then being thrown on the public back; enormous wastes -- this sort of random, self-evident abuse. A whole range of criticism and development has been coming in simply out of current problems, which opens the question of public enterprise in a very different way. It is not often focused on, but not only have the polls shown the public is much more open to talking about this now, but 35 Senators have felt able to propose legislation for socialized exploitation of energy on public lands, which is by far the vast majority of oil resources. And they wouldn't do that unless it was at least politically possible. It is now possible to raise these subjects because of abuses and rip-offs of taxpayer's costs.
What we have been oding just to set up the context is to argue: 1. that there are valid reasons for some industries to be publicly owned and controlled; 2. that there are political opportunities which are already beginning to emerge; and there amy be ways to link the political opportunities to a rational new political alliance that meets btoh present adn future needs -- radically decentralized, socially based kind of planning.
Jeff Faux
In a sensethere is one reason which is valid if you accept the idea of planning and public enterprise, and that is that if the planning is ever going to be done in the public interest, the public has to have the expertise and the knowledge that only comes from operating an enterprise. As long as the situation exists that the expertise is outside the public sector, the public is still faced with the fact that it doesn't control the expertise, regardless of the kind of planning or regulatory control.
We have done some studying of the situation in Western Europe since public enterprise is more advanced than in the U. S. A study done ten years ago
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revealed that the differences are small. For example, it showed that 15% of the economy (goods and services) in the U. S. was publicly owned. At the same time in Great Britain, only 25% was publicly owned. In some instances a planned economy that has a great deal of public ownership, like France, has sectors like the construction industry where ith as practically no public ownership. According to that study, in the U. S. about 8% of the construction activity is produced directly by the public -- primarily the Corps of Engineers.
One of the most interesting conclusions is that to the degree that planning or adhering to a plan is voluntary ,that kind of planning system increases the concentration of private power. If you have to convince corporations to go along with your national economic plan, you are better off to have only a few than you are to have a lot. In the American experience, that has been brought home every time we get close to planning. It is easier to control industries where there is a lot of concentration of power (for example, steel). If somebody in Washington could call up the president of the largest two or three steel companies, he oculd get an agreement. In medical care, however, where you have thousands and thousands of private doctors dispensing the service, you couldn't control that very easily. The implication of this is kind of hard. It means to the degree we erect a plannign system in this country that is strictly geared to oluntary compliance on the part of big business, then that is going to inevitably increase big business's power because the workaday operations of government are going to support a concentration of power in the private sector. In France the planners have a rule whcih says that the point at which you can really begin to plan through this kind of voluntary system is when 80% of the output of the industry is controlled by 20% of the companies.
Motivations for public enterprise in Europe vary all across the board. For example, the Italian banks are largely owned by the Italian government because they failed in the 1930's at which time Mussolin i bailed them out to such an extent that the government found taht they really controlled the banking systems. In Brtain the coal mines were taken over to a large degree because the industry needed to be rationalized. Again this deals with the overall problem of efficiency and concentration.
In Sweden the amount of planning is quite large but there is not too much public ownership. The reason for that is that Sweden has a fairly close political system with a homogeneous population. They do have a fair degree of ownership of banks.
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In Italy and Great Britain, however, you have a fair degree of public ownership and no planning. in France the planning system is quite smooth, and it is controlled by the same elite that run the country. Very interesting comments have been made about the French banking system. The government owns the top four commercial banks in the country; but they same people run the government banks as run the private banks. They come from the same school, the same small stratum of society. And while on paper there is a great deal of public ownership, when you get through the mask of public ownership, you find the same people making the same decisions.
The cultural systems of West Germany and Japan, which are fairly planned economies, are U.S modesl. Again the system is based on corporate power.
We have taken a look at the responsiveness of public enterprise because that is obviously one of the main questions which will be asked. In terms of responsiveness to the government, they seem ot be fairly responsive. In terms of service, customer services -- for example, the mass transit system in France -- they are very responsive. The telephone system in France which is also publicly owned stinks. Mostly that is becuase of investment. If you invest a lot in ma chinery, quipment, etc., you are going to get a decent system. If you don't you are not.
In a lot of the areas, we find that the workers are much better treated in public enterprises. One of the major results of the British nationalization of coal mines is that safety conditions improved immeasurably over the first decade. It is generally true that a larger proportion of the total revenue of nationalized enterprises goes toward worker benefits, health and safety and things of that sort.
Public enterprises have been more responsible in terms of economic adjustments, lay-offs. When the British government took over the coal mines, in the process of consolidation, that meant that a lot of people were getting laid off. Most of the reductions in force were done by attrition. There was a lot of restraining and a lot of care and concern for what would happen to the coal miners that you just would never find in the private sector.
Another item on responsiveness of public enterprise is that the accounts and the books of public enterprise are open. By and large the information which is available from public enterprise in Western Europe is much, much, much greater than that which is available from private enterprise, with the result that public enterprise is often criticized more because the press has information.
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