An economy in trouble
Diamond, Joseph
The direction of Robert Heilbroner's "An Economy in Deep Trouble" (Dissent, Fall 1992) is the need for "transformational growth," to be achieved by a major public-works program and improved...
...They will even work under a poisonous cloud of sulphurous fumes, as they did in Pittsburgh in its industrial heyday...
...Needless to say, this is not an endorsement of such conditions...
...As a consequence, that generation will inevitably face a lowering of living standards...
...We also note that cars are very much a low-to-medium tech product, and here I agree with Heilbroner that we ought not pin our hopes on advanced technology...
...The problem he sees is in "persuading the American public . . . and the elites . . . that a vigorous public sector is a legitimate part of modern capitalism...
...Offered a viable future, American workers will do whatever is necessary, pick up whatever information is necessary, faking it if necessary...
...As such expectations dwindle, the danger of a slide into bitterness and social strife increases...
...The tragedy, of course, is that the deficit was not accumulated to finance productive capital improvement, but as a substitute for the SPRING • 1993 • 245 Communications taxation needed for ordinary government functions...
...Consider another scenario: a major road building program is launched...
...Heilbroner surprisingly minimizes the issue of the deficit, omitting mention of the burden of interest payments...
...Consider this scenario: a class of newly hatched apprentices in various skilled trades emerges from the program, certificates in hand, looking forward to useful employment in industries producing cars, aircraft, air conditioners, computers, and so on...
...Why train more...
...It will not be easy...
...The improvement of parks, roads, airports, and so on is of course desirable, but is secondary...
...These payments reflect the fact that the Republicans, pursuing their aim of dismantling the New Deal, have spent the country's surplus for the next generation in advance, limiting, as intended, the government's ability to finance social programs...
...The problem is to spread the burden fairly, to keep it from degenerating into a squabble over scraps...
...Thanks to an expanded road network completed as another element of the plan, they are prepared to commute fifty or even seventy miles each way to work...
...What is primary is productive, high-paying jobs, turning out the mainline products of everyday life...
...His prescription, it seems to me, does not adequately answer the problem...
...The answer can only be re-industrialization, which requires protectionism...
...Finally, Heilbroner describes a strong correlation between the extent of public capital investment and economic performance in Japan, Germany, Canada and the United States, with the United States showing up badly...
...Our trade with Europe on the other hand is more balanced, essentially a trade in specialties, unlike our imports from Japan, which are essentially mainline products, above all cars...
...The direction of Robert Heilbroner's "An Economy in Deep Trouble" (Dissent, Fall 1992) is the need for "transformational growth," to be achieved by a major public-works program and improved education, including a comprehensive apprenticeship system...
...Most industrial jobs after all are semiskilled, which means that you can learn the job in three days, and most trained people are overqualified...
...the average American still assumes he or she can look forward to two houses, three cars, four television sets, and new clothes every season — a standard of living based, except for the houses, largely on imported products...
...The American Association of Engineering Societies reports that a hundred thousand engineers were laid off in 1991 alone...
...An objection can be made to the comparison: in Japan and Germany heavy investment was needed to rebuild the war-damaged infrastructure, and in the case of Japan to modernize a fairly poor society...
...We cannot compete with Japan, a country where children commit suicide in fear of facing an exam, where adults are worked to death, and where every component of society is rigged as part of the assault on the world economy...
...But, with some exaggeration, what is gained if the earth-moving equipment is made by Komatsu, the workers arrive at the site in Toyotas, wearing work clothes made in Korea...
...If not education and infrastructure but jobs are primary, what is the way out...
...The borrowed money was used, on the governmental plane, for consumption rather than investment, a procedure that Heilbroner rightly tells us is ill advised...
...At this point they run into the sobering fact that those industries have disappeared (gone to Taiwan, China, the Philippines, or Mexico) or have diminished to the level of screwdriver plants, assembling foreign components, in either case having little need for their services...
...Canada, on the other hand, is in the position (like Norway and Sweden) of running a very large country with a small population, an inherently expensive business in terms of infrastructure.q...
...The Japanese have had no trouble in producing quality cars in this country with American workers...
...Given those jobs, people will spend any number of hours commuting by any means necessary, as they do in Japan, whose infrastructure leaves much to be desired...
Vol. 40 • April 1993 • No. 2
