The Illogic of Leanness and Meanness
BROCKWAY, GEORGE P.
The Dismal Science THE ILLOGIC OF LEANNESS AND MEANNESS BY GEORGE P. BROCK WAY Editorial writers and speech makers are fond of the expression "lean and mean" (or, sometimes, "mean and...
...Yet his touchstone was cooperation, not competition...
...Beyond this, the committee approach has a serious theoretical flaw in that it contradicts the very reasons for its formulation...
...Conclusion: A committee should be empaneled to interfere with the free market...
...Yes, I know: We are told we will have to be lean and mean to compete in the global economy of the21st century...
...I am persuaded, however, that what they propose to do about it is indeed far wrong...
...Further, it would assure the "efficient" use of resources and be a necessary contribution to the wealth and happiness of mankind...
...and 1 suspect that Citizen Perot had something similar in mind...
...These, it should be kept in mind, are (1) the decline of American industry because of foreign competition, and (2) the presumed impossibility or unacceptability of self-protection in any form...
...If the committee wouldn't interfere with the natural marketplace, what would it do...
...It is inconceivable, for instance, that giant American corporations would be excluded from the marvelous new industries thought up by the committee...
...They are motivated by the self-interest of the stockholders (in the conventional theory) or of the managers (in Galbraith's view...
...The lean-and-mean logic is similar...
...they are multinational...
...The second involves empaneling a committee of government officials, bankers, businessmen, economists, engineers, scientists, and the obligatory representatives of the general public (but not including Ralph Nader) to recommend research and development projects to the government, and then to pass judgment on the results of the research and propose ways of implementing the development of approved ideas...
...Minor premise: Self-protection is unacceptable because it interferes with the free market...
...in the United States, money talks...
...They can't possibly give a satisfactory answer to the question John Kenneth Galbraith asks in The Affluent Society: "Why should life be intolerable to make things of little urgency...
...The Dismal Science THE ILLOGIC OF LEANNESS AND MEANNESS BY GEORGE P. BROCK WAY Editorial writers and speech makers are fond of the expression "lean and mean" (or, sometimes, "mean and lean...
...Yet if the charge and the cliche were valid, there would be nothing to be done about the decline of American industry...
...President-elect Clinton inclines to this view...
...Some people would no doubt be hurt by it, but you can't make an omelet without breaking eggs...
...It is, 1 think, a case of Samuel Johnson being right again: "Hell is paved with good intentions...
...currently they are running at about 16 per cent...
...Nor do 1 have to read you a list of American industries that have been decimated by foreign competition...
...Wherever in the world that might be, it would not be in the United States of America, for the inescapable reason that, at least so far, the American standard of living is higher than that of any other first-rank country...
...It would be natural and inexorable...
...Practically every economist is in favor of free trade, and the fraternity has been joined by a broad range of right-thinking, public-service citizens groups, from the Council on Foreign Relations to the League of Women Voters...
...I don't have to tell you that the situation is different now...
...For the moment I merely want to register the point that each of the arguments, the ideological and the technical, depends—as does standard economics generally—on three assumptions: that full employment actually obtains here and now, that chronological time does not matter, and that all public questions are, au fond, economic questions (or, as Marx had it, that the state will wither away and need not be taken seriously...
...Augustine wrote: "Every disorder of the soul is its own punishment," and meanness is certainly a disorder of the soul...
...in either case, their devotion is neither to the nation nor to the nation's workers...
...They can't possibly be allowing themselves to think about what happens to people who work (or used to work) for lean and mean corporations...
...Some commentators say that the global economy and the competition are already here...
...Willkie was a lawyer and CEO of a giant utility holding company before he became the 1940 Republican Presidential candidate (Harold Ickes, Franklin D. Roosevelt's Secretary of Interior, called him the "barefoot boy from Wall Street...
...Conclusion: We should make corporations lean by firing people, make them mean by working the surviving employees harder for less pay, and thereby make ourselves miserable without help from anyone else...
...In Japan, captains of industry respect the authority of even minor bureaucrats...
...The chief practical flaw is that whatever good ideas the committee might come up with would be immediately available worldwide...
...On the MacNeil/ Lehrer Newshour a few months ago, U.S...
...What kind of logic is that...
...Tariffs, subsidies and the like increase the costs of consumption goods, and therefore are bad...
...The logic of the scheme is absurd...
...The world seems to be different now, and not as nice...
...Schumpeter counted the mature corporation's addiction to committee decisions a prime reason for decline, and we all know the absurdity that would result if a committee tried to design an animal...
...The argument for free trade is simple and strong: All of us are consumers, and therefore benefit from cheap consumption goods...
...A minor practical flaw in the committee scheme is inherent in the very idea of creating such a group...
...Essentially, they make two proposals...
...Minor premise: Self-protection is unacceptable because it interferes with the free market...
...Just as the American television set industry quickly slipped into the Pacific sunset, so would the new wonder industries...
...President Bush inclines to this view...
...Perhaps more important, we know from experience that a committee is quickly co-opted by those with the liveliest immediate interest in the outcome of its deliberations...
...This notion was a favorite of former Federal Reserve Board Chairman Paul A. Volcker...
...What has happened recently is not inconsequential...
...The government's role would be crucial, because of the antitrust laws and because the research is thought likely to cost more than any corporation, regardless of its size, could afford...
...There are also technical arguments in support of free trade—for example, the theory that cheap imports are both anti-inflationary in themselves and anti-inflationary in their competitive pressure on domestic prices...
...Consequently, upon learning of the miraculous new product along with everybody else, if it is truly miraculous, the responsibility of these corporations to their stockholders or to themselves would require them to start producing it in the least expensive way...
...Nor can they possibly be wondering whether lean and mean corporations make this a better world to live in, even for their customers and their stockholders...
...She must have been thinking of some Mexico other than the one I've visited...
...Publicists reinforce the charge with the cliche that a man knows better what to do with his money than does some bureaucrat in Washington...
...Those who say that the global economy is upon us are not far wrong...
...Our giant corporations, however, are not really American...
...Free trade as an ideal has had a long run on the American political stage, starting at least as early as the Boston Tea Party...
...Even as late as 1950, imports were less than 5 per cent of our GNP (ex services...
...The economic situation we find ourselves in is mean enough to have at least some of the attributes of hell, and it is paved in part with free trade, a theory whose intentions were the best in the world...
...At any rate, he had a lean and hungry look...
...Trade Representative Carla Hills seemed to believe the Mexican poverty rate was only about 11 per cent (ours was 13.5 per cent two years ago and has undoubtedly risen since...
...A less materialistic reason for open international trade is that it is said to make for peace, although perhaps not in the Middle East...
...he was no starry-eyed innocent...
...1 suspect it is the rhyme that appeals to them...
...Fifty years ago another self-made man, Wendell L. Willkie, had a vision of One World in which we would all help each other...
...Major premise: American industry is being ravaged by foreign competition...
...The conventional charge against selfprotection is that it interferes with and distorts the natural course of trade, thus making for inefficient if not altogether wasteful use of resources...
...Major premise: The American standard of living will be ravaged by foreign competition...
...And where would they do that...
...I say "were" because I'm not so sure they're all so good today...
...The most famous technical argument is David Ricardo's so-called law of comparative advantage...
...In the proposed body the industry and banking representatives may not be the smartest or the best informed, but they surely will have their minds concentrated on the fate of their sector of the economy, and they will certainly wield the direct and indirect power that comes with enormous wealth...
...On the premises, there is no more place for a reindustrializing committee than there is for self-protection...
...Wherever in the world they found the most stimulating subsidies, the most alluring tax rates and the cheapest labor...
...Its whole purpose is to interfere in a large and comprehensive way...
...The cheapest labor will not be found here unless we destroy ourselves...
...I find it odd that standard economics, based as it is on self-interest, should find self-protection invariably reprehensible...
...The foregoing arguments, including Willkie's, may be classified as general or ideological...
...Until 1977, American exports generally exceeded imports...
...The scheme has both practical and theoretical flaws...
...The first is the lean and mean thing, to which I will return...
...Unhappily, there isn't sufficient space here to discuss this "law," except to say that it consists mostly of exceptions...
...What happened...
...In addition, it is observed that the largest corporations tend to devote less and less money to research...
Vol. 75 • November 1992 • No. 14
