U.S. Technological, Economic, and SocialDevelopment for the21st Century
clout. Interestgroupsare a major factor in determining,for instance, wherethe United Statesplacesits military bases,builds highways,digs
w a t e r w a y s . T h e c o u n t r y i s u n w i l l i n g t o a c c e p t m o r e p o l i t i c i z a t i o n , l e s s r e l i a n c e o n the marketplace.
At the center of the continuum, between laissez-faire, supply-side economics on the right and industrial policy on the left, is the conception that what ails the country is overconsumption (public and private) and underinvestment, resulting in a weakening productive capacity. Signs of deferred maintenance and lack of adaptation to the new environment of expensive energy can be seenin most ele- ments that make up the infrastructure and capital goods sectors.
The suggestedcure is semi-targeted: Releaseresources to the private sector, but channel them to the infrastructure and capital good sectors, away from both public and private consumption. For example, if we cut governmentrevenuesby $50 billion through across-the-board cuts in personal income tax, the funds re- leasedmight well beused mainly to spurprivate demand for consumergoods and services; little rejuvenation of productive capacity might occur. On the other
hand, if those resources are guided to the productive sectorsof the economy-
Thus, if part by
tax revenues are "lost,"
not just through tax cuts for individuals but in
companies to take accelerated depreciation when they replace
leasedresources will revitalize, benefit: steel or textiles, rubber
without or rails.
determining which specific industry will The polity will setthe context; the mar-
ket will target.
Similarly, providing tax incentives for greaterR&D expenditures spurs on all suchefforts; it does not require any government trade desk or tripartite commit- tee to decide which R&D project is desirable. And if workers are provided with productivity-based incentives, so they can share directly in renewed economic growth, Washington need not be involved in determining which group of work- ers is eligible or to what extent; this is best done by managementand workers
within each corporation.
Critics suggestthat such reindustrialization will return the country to the nine-
teenth century post-industrial
and focus on "basic"
industries rather than on "re-" does point to a re- strong infrastructure and
sectorsdoes not require
a return to
the same mix
tries. The return implied is to sectors, not to anachronistic
higher investment and innovation details.
in the productive