Books, Arts & Manners: The Right Books

There are, God knows, plenty of reasons to hold suspect the movement (of which much has been heard recently, especially during and since the presidential campaign of 1984) for a “national industrial policy” (NIP), the most important being that it represents an attempt to reintroduce by the back door visions of the New Deal and the Great Society that have been discredited by time and rejected by the American voting public. “We are all capitalists now,” the argument (post-Reagan) runs. “So let’s put capitalism on a national, rationalized, efficient, and truly caring basis.” . . . That, more or less, is the gravamen of the speeches and policy outlines issuing from such politicians as Gary Hart, Walter Mondale, Senator Ernest Hollings, Representative William Ford (of Michigan), and Felix Rohatyn, as well as from academicians like Robert Reich (author of The Next American Frontier, 1983) and Barry Bluestone and Bennett Harrison (co-authors of The Deindustrialization of America, 1982) —the latter pair being, however, a good deal less careful than most to conceal their ultimate intentions. In his book Competing Visions: The Political Conflict over America’s Economic Future (Cato Institute, 224 Second Street, S.E., Washington, D.C. 20003; $20; $8.95 paper), Richard B. McKenzie—a senior fellow of the Heritage Foundation and an adjunct scholar with Cato —confronts the proponents of NIP, to devastating effect.

McKenzie starts off briskly by attacking what he calls “the deindustrialization hoax” upon which the call for a national industrial policy rests. According to the advocates of NIP, the United States has been subject, since the 1960s, to an ever deepening “economic malaise,” an “unraveling” of its economy produced by the shutting down of the American manufacturing sector, itself a result of the mobility of capital, an increasingly competitive world economy, and rapid technological progress with which American industry is unable to keep pace. In McKenzie’s opinion, all or most of the argument is patently self-serving: “A gross misconstruction of the economic circumstances of and policy options for this country is not only intended by many … of the proponents of a national industrial policy, but it is absolutely necessary for pulling off the dramatic changes in policy that they seek.” In fact, a great many of the facts deployed by the NIP crowd are indisputable: It is with their interpretation, as well as with the selective principle behind their rhetorical deployment, that McKenzie takes issue. During the 1970s particularly, the U.S. economy was subjected to many stresses arising from internal transition, as well as external pressures, and yet, since 1979—the year at which many of the more pessimistic critics cease their researches—the signs of its fundamental recovery have been so numerous as, one might think, to be beyond oversight. Furthermore, the successes enjoyed by countries whose governments engage in a substantial measure of economic planning are far from being as great, or as unqualified, as the NIPers would have them.

CW

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Chilton Williamson Jr.

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There are, God knows, plenty of reasons to hold suspect the movement (of which much has been heard recently, especially during and since the presidential campaign of 1984) for a “national industrial policy” (NIP), the most important being that it represents an attempt to reintroduce by the back door visions of the New Deal and the Great Society that have been discredited by time and rejected by the American voting public. “We are all capitalists now,” the argument (post-Reagan) runs. “So let’s put capitalism on a national, rationalized, efficient, and truly caring basis.” . . . That, more or less, is the gravamen of the speeches and policy outlines issuing from such politicians as Gary Hart, Walter Mondale, Senator Ernest Hollings, Representative William Ford (of Michigan), and Felix Rohatyn, as well as from academicians like Robert Reich (author of The Next American Frontier, 1983) and Barry Bluestone and Bennett Harrison (co-authors of The Deindustrialization of America, 1982) —the latter pair being, however, a good deal less careful than most to conceal their ultimate intentions. In his book Competing Visions: The Political Conflict over America’s Economic Future (Cato Institute, 224 Second Street, S.E., Washington, D.C. 20003; $20; $8.95 paper), Richard B. McKenzie—a senior fellow of the Heritage Foundation and an adjunct scholar with Cato —confronts the proponents of NIP, to devastating effect.

McKenzie starts off briskly by attacking what he calls “the deindustrialization hoax” upon which the call for a national industrial policy rests. According to the advocates of NIP, the United States has been subject, since the 1960s, to an ever deepening “economic malaise,” an “unraveling” of its economy produced by the shutting down of the American manufacturing sector, itself a result of the mobility of capital, an increasingly competitive world economy, and rapid technological progress with which American industry is unable to keep pace. In McKenzie’s opinion, all or most of the argument is patently self-serving: “A gross misconstruction of the economic circumstances of and policy options for this country is not only intended by many … of the proponents of a national industrial policy, but it is absolutely necessary for pulling off the dramatic changes in policy that they seek.” In fact, a great many of the facts deployed by the NIP crowd are indisputable: It is with their interpretation, as well as with the selective principle behind their rhetorical deployment, that McKenzie takes issue. During the 1970s particularly, the U.S. economy was subjected to many stresses arising from internal transition, as well as external pressures, and yet, since 1979—the year at which many of the more pessimistic critics cease their researches—the signs of its fundamental recovery have been so numerous as, one might think, to be beyond oversight. Furthermore, the successes enjoyed by countries whose governments engage in a substantial measure of economic planning are far from being as great, or as unqualified, as the NIPers would have them.