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AMITAI ETZIONI

Two other factors seemto have required additional investment. One was the

needto "rewire"

American

industry in responseto the energycrisis. The second

was the rise of competing nations that channeled much more of capital in general and capital goods in particular.

their GNP into

Although cross-cultural comparison canbe misleading, it does suggestthat the United Stateswas lagging behind its major competitors in this sector. From 1971 to 1980, while total U.S. investment was 19.1 percent of GDP, that of West Germany was 22.8 percent and that of Japan 32.9 percent. (Economic Report of the President, 1983, p. 81).

Transportation:ExtensiveDeterioration,Little Replacement

By theendof the 70s,the conditionof Americanrailroadswas,despitesome localexceptions(especiallyin the WestandSouth),particularlypoor. As much as 50 percentof the track was estimatedto bedefective(Glickman, 1980).

Highwayshave not deterioratednearlyto the extentthatrailroadshave,but failureto maintainthemproperlyis beginningto erodethis importantelemenof theAmericantransportatio system.Highwaysaredesigne to lastonlya certain numberof years;federalhighways,for example,werebuilt to last20years,and an increasingnumberare reachingthat age.

Now it is time to returnto whatmightbecalledthe horse-and-buggindustry problem. The fact that this or that part of the transportationelement deteriorated-for instancethemanufactureof horse-drawcarriages-is notthe troubling conditionby itself. The troubleis thatno new, efficient, functionally equivalentitemwasintroducedastheold onesweakened.This is evidentif we reexaminethe transportationmix: it continuesto rely largelyon rail, road, and waterways,and theseall weakened,albeit not evenly. True, somegainswere madeby lessrelianceon particularlyweakene rails andgreaterelianceonless deterioratedroads.But asthesewerebothpointeddownward-and areenergy- inefficient-the total picture was a weakenedsystem.

Communications: A "Model" Sector

Justastransportatio could well standasa symbolof the problemof theU.S. economy,so the communicationssectorcould well symbolizewhat a strong U.S. economywould belike (with somenotableexceptions,especiallythat of theU.S. PostalService).Takenasa whole,duringtheperiod 1950to 1980,the communicationsindustryshowedsteadygrowth. The value of its productin- creasedfrom about$4.5 billion in 1950to $102.8billion in 1984(U.S. Bureau of the Census,1986).

Generallyspeakingthepartsof thecommunication industrythathavegrown mostsince 1950arethosethathavebenefittedmost,in decrease unit costand increasedefficiency, from technologicalinnovation.Three suchdevelopments

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