A MODEST PROPOSAL FOR TRUE COMPETITION
Bilik, Al
If a clear resolution seems lacking for such vexing problems as unemployment and high prices, recrimination is not. Labor blames business, business blames labor, and both blame the federal...
...A simple yet long overdue device for assuring public accountability may be the federal chartering of interstate and international corporations...
...Of course...
...Consider the prospect of Delaware disciplining DuPont...
...120 COMMENTS AND OPINIONS...
...If inflation and recession are largely attributable to pricing and other restrictive practices of monopolistic and near-monopolistic corporations, the remedy may be found in a uniquely American experience—the Tennessee Valley Authority...
...GM and Ford could choose to continue to produce the bigger cars or smaller cars, and of course anything else that appeals to the profit motive...
...At year's end the New York Times was asking if indeed the time had come for the nation to take a more direct hand in the economy rather than leave prices and other practices to the vagaries of the marketplace or, worse, to the venality of corporate back rooms...
...It's been done before...
...Pricing, production, and marketing policies should be reviewed and if necessary investigated by a specially constituted public agency, which also must bear careful scrutiny itself by appropriate legislative bodies...
...Department of Labor blasted the city of New York recently for letting almost $3 million in 1973 Public Service Jobs funds go unused, he caused much eyebrow-raising and disbelief...
...This restriction and others have caused the limited application of previous Public Service Jobs statutes and threaten to scuttle the more massive program recently enacted by Congress...
...As a nation, we at last seem committed to the proposition that government has a major responsibility to directly cause the creation of jobs...
...The city of New York, he said, was awaiting word from Washington as to the conditions under which the 118 COMMENTS AND OPINIONS money might be used...
...Housing and other urgent construction needs go unmet as unemployment approaches 15 percent in the building trades and bankruptcy threatens many contractors...
...The U.S...
...As a condition for receiving and retaining its charter or license to do business across state and national boundaries, the corporation could be required to file information regarding its employment, pricing, marketing, and other pertinent policies...
...There should be no repetition of the embarrassment to the American government when at the worst of last year's oil crisis the reliability of data, provided begrudgingly at times by the oil companies, could not be ascertained...
...To be sure that competitive public enterprise is proposed intelligently in a particular industry, the federal government should regularly supply authoritative information regarding every facet of the operation of the basic industries...
...But assembly-line workers would have to accept relatively less skilled jobs...
...TVA, a public corporation serving as a yardstick against which to measure the performance of its private counterparts, had kept prices down over the years...
...This would be a clear public service...
...Private power companies coexisted with TVA and still do...
...It is time that the power to charter giant corporations were taken from the states and granted to the national government...
...Just as the idea of publicly created jobs ought to be creatively considered, the problem of prices, inflation, and competition also suggests interesting, even ironic speculation...
...But, unfortunately, New York City was not permitted to recall its own laid-off employees and was required instead to fill the jobs with people laid off by other employers...
...Besides creating or at least saving many jobs, the "Americanization" of American Motors could enable it as a public service enterprise to set valuable standards for the auto industry in such areas as prices, quality, and social utility of commodities produced...
...On the other hand, outright COMMENTS AND OPINIONS 119 nationalization in a nation that is philosophically indisposed to it will produce a monstrous state bureaucracy more destructive than the evil it seeks to correct...
...in effect it could demonstrate the method of assuring real competition in the industry...
...The insistence that cities by-pass their own laidoff employees, that new people hired under the Jobs program be classed separately from regular employees doing the same work, and that civil service protections be diluted has made city officials wary of the program...
...It makes good sense to invest in existing employment situations, quickly translating dollars into constructive jobs...
...This year's new, expanded version will make several billion dollars available...
...And following World War II, the Veterans' Administration was authorized to directly lend money at low interest rates to veterans who had difficulty in financing home purchases...
...One assumes that, as "employer of first resort" of those laid off, New York would use its federal government grant to either retain or recall the same people who were already trained workers...
...The 403 participating cities made use of only one-third of the billion dollars allocated by the federal government last year for creating public service jobs...
...If we narrow our thinking to city employment only, those with clerical skills would no doubt be able to transfer readily...
...Labor blames business, business blames labor, and both blame the federal government...
...Instead of doing relatively unskilled public work for a city, auto workers laid off by any of the auto makers could apply their acquired skills in producing a competitive, small, efficient, energy-saving, antipollution car...
...it need simply compete with it...
...By this time a year had elapsed since the passage of the 1973 law...
...But it is no coincidence that the private utilities, extolling their virtues in newspaper ads a few years ago, did correctly claim that their electric rates were no higher at that time than they had been in 1935...
...Now, almost 30 years after the passage of the Employment Act of 1946, it is time to determine that we will take the steps to assure the creation of a truly competitive economy in which constructive full employment is guaranteed...
...When a representative of the U.S...
...Public employee unions fear that segregated conditions established for workers hired under the Public Service Jobs program will undermine seniority and other carefully guarded rights...
...For example, New York City, for financial reasons, has laid off several thousand employees who had been performing necessary jobs...
...Artificial salary limitations have not helped...
...There may be a way to alleviate the problem by applying the "employer of first resort" principle and by direct use of already existing facilities, plant, and personnel, but for varied kinds of public service...
...The experience of New York City under that statute is no different from that of hundreds of other cities asked to sponsor public service jobs to combat unemployment...
...Banks for some time have maintained a prohibitively high interest rate, thus discouraging the borrowing needed to stimulate the construction industry...
...For example, thousands of workers have been laid off in the auto industry and thus are eligible for public service jobs...
...How could a city like New York, constantly in financial crisis, ignore federal funds that would have provided jobs for 3,000 people...
...Where collusion has overwhelmed competition, the classic response has been Justice Department action designed to dissolve the offending giant or giants into a host of competing units...
...Now let us consider a broadened concept of public service enterprise...
...I would not...
...A FEW PEOPLE, socialists particularly, may take heart and use the occasion to call for outright socialization of basic industry...
...This is the kind of constructive competition that should be generated in auto, steel, and other basic industries...
...Although the government's Federal Reserve Board policy is slowly being relaxed and proposals are offered to indirectly stimulate lending by savings and loan institutions, no immediate breakthrough is in sight...
...The cities would appear to be eminently qualified, in many instances as employers of "first" resort...
...The TVA was formed in 1935 as a U.S...
...public enterprise for the purpose, among others, of providing low-cost electricity for the people living in the Valley...
...does not have to nationalize the private lending business...
...The federal government established the Reconstruction Finance Corporation during Franklin D. Roosevelt's Administration, which offered low-interest loans directly to business enterprise for purposes of new construction and expansion of plants...
...Not to be outdone, the federal government blames local government—at least for the failure to do something about jobs...
...No time-consuming tool-up would be needed if American Motors, which stays in business only by sufferance of the big three, were converted into a public corporation...
...Traditional antitrust action has failed to restore competition...
...Despite such efforts since the passage of the Sherman Antitrust Act of 1890, the trend to monopoly has continued...
...Mayor Beame's reply was equally puzzling...
...Rather than seek to impose centralized government control or ownership, I propose the establishment of true competition in those essential industries found to be dominated by one or a few firms...
...The ultimate irony in the New York City situation was that thousands of laid-off city employees, ineligible for unemployment compensation and for recall to their own jobs, were replaced under the federal Jobs program by privately laid-off workers who were eligible both for the vacant job and for unemployment compensation...
Vol. 22 • April 1975 • No. 2
