145. "Riding a Whirlwind," Society, Vol. 19, No. 3 (March- April,
1982), pp. 29-35.
Policy research and advocacy is a process, an integral part of the total societal-political
give-and-take, not a set of isolated events. In his daydreams, a policy researcher formulates a
fine new idea, whispers it in the ear of the president, and sees him order his staff to "go" with it.
In reality, viable policy ideas are not born full-grown; their development requires a process of
research, consultation, formulation, and reformulation. Access to key policy makers is in itself a
process, especially when significant matters are at stake, with one or more gatekeepers screening
and many others asking to review, comment, and affect the "input." If ignored or circumvented,
they will tend to oppose the policy ideas, as part of their attempt to preserve their opportunity to
participate, their status, and their power. Once the policy maker is reached, any new idea
competes with scores of others, old and new; moreover, the policy maker faces constraints:
economic, legal, ethical, and political. In his book The RAND Corporation, Bruce L.R. Smith
provides a memorable description of the year-long struggle RAND faced when it was trying to
share a policy idea with the Air Force brass, even though in those days RAND was exclusively an
Air Force handmaiden and the idea was vital for the future of the Air Force--and the country. All
this holds for those policy researchers who have institutionalized access to the policy process,
who are looped in. Outsiders who seek to promote policy ideas uninvited, especially without
backing by an organized societal group, lobby, or pressure group, will usually find the process
even more tortuous. Those who choose to travel this road should understand that as a rule they
are in for a long haul.
Certainly this has been my experience over two decades of policy research and advocacy.
It was a long way for many of us from the first articles against the war in Vietnam and the first
teach-ins to the termination of U.S. involvement in Vietnam. In the early sixties Charles Osgood
and I suggested unilateral initiatives to reduce the psychological tensions of the cold war between
the United States and the Soviet Union, based on the notion that they would trigger unilateral
responses (as distinct from prenegotiated, multilateral ones). Initially, these ideas were rejected
with a mixture of questioning of our loyalties and flat denial of the practicality of the ideas. Two
years later, President Kennedy embraced them (in his Strategy for Peace speech). The series of
psychological initiatives which followed led to the first major U.S.-U.S.S.R. détente and, in turn,
opened the door for multilateral agreements on arms reduction, but it took nine more years before
SALT I was agreed upon in 1972, and SALT II is still not ratified. Many other policy ideas
others and I formulated fared much less well, of course. they got no place at all. All this gave me
precious little preparation for the whirlwind which resulted when a policy idea I formulated
suddenly took off shortly after I put it together. What follows is an account of the perils of
occasional success, much rarer than the pangs of prolonged struggle and failure.
The idea concerned the reindustrialization of America. Briefly put, it suggested that the
United States in the late seventies was an underdeveloping nation, with its economic
development in reverse gear, slipping back a bit each year on many key indicators, including
economic growth, capital per capita, productivity, and savings. While some attributed the
erosion to excessive government intervention and the revolution of entitlements, I suggested that
it reflected two decades or more of overconsumption and underinvestment in both the public and
private sectors; not only did public consumption grow, but high dividends and lavish labor
settlements (e.g., in the steel and auto industries) left insufficient resources for investment and
innovation. The country could continue to drift and underdevelop, or deliberately choose to go
slowly. However, if instead it sought to return to a high and rising standard of living, social
services, and defense, a decade or more of restoring the infrastructure (transportation, energy,
human capital) and capital-goods sectors (equipment and plants) would be required.
Reindustrialization involves not a return to the nineteenth century, but evolving modern-day
equivalents, such as solar heaters and dataphones. And for practical and ethical reasons, it would
have to be more socially responsive than the first industrialization. Still, economic growth would
again be accorded high priority.
Evolution of an Idea
I developed the concept of reindustrialization as a guest scholar at the Brookings
Institution in 1978-79. Although Brookings has three strong programs, it is dominated by
economists and is best known for their work. Daily interaction with them made me more aware
how different sociological perspectives are from their analyses of the economy, and above all,
how divergent the public policies which follow. What they argued for and what made sense to
me were considerably at odds. Thus, my reindustrialization memo was aimed as much at the
economists as at the policy makers, especially those in the White House. (In the Carter
administration, many of these were Brookings people.) I am not saying that I was fight and they
were wrong, but that we looked at the same world through divergent lenses.
I delivered my first findings at a Franklin Foundation Lecture Series at Georgia State
University; the main outline was later published as "Choose We Must" in Bramlett and Mescon's
The Individual and the Future of Organizations. Enter the mass media, offering the shortest
route from outsider-policy-research to the inner circles of policy making. A local press report
about my Georgia talk triggered a query from the Wall Street Journal's representative in
Washington, and on June 25, 1979, it published a front-page report on my reindustrialization
thesis. "The hard truth is that the once mighty U.S. economy, following years of neglect and
overuse, is aging and tired. . . What's required, in the view of an increasing number of experts, is
a long-term commitment to rebuilding America's industrial base ... Some of the most provocative
thinking comes from a sociologist rather than an economist--Amitai Etzioni." Being told that one
out-thinks the economists is a psychic reward, the kind that keeps policy researchers going in the
long haul, toward the rare occasions of acceptance and acclaim. While this one story did not
firmly put reindustrialization on the map, the next one did.
The Eastern Shuttle between Washington and New York is a meeting parlor; I often
found myself conducting business meetings on Eastern's wings. This time it was with the
columnist Joseph Kraft. We talked about this and that and reindustrialization. Next thing,
Kraft's syndicated column spelled out and promoted the notion--without any reference to its
source. (When I discussed this with Kraft later, he explained that since our exchange, I had
joined the Carter White House staff, and he did not want to embarrass me by citing my prior
views.) Kraft is not to be faulted, in my judgment. The mass media, policy researchers ought to
note, work on different assumptions than does academia. While not to footnote, that is, not to
accord proper credit to sources, is a cardinal sin in academia, in the mass media there are no
footnotes at all, and everybody is "borrowing" from everybody else. Weekly magazines employ
cadres who clip and file daily press items which are soon incorporated into the weekly
"rewrites." The New York Times alone is the source of scores of stories in other newspapers,
often without any attribution.
When Business Week was preparing a special issue on reindustrialization (June 30, 1980),
Lee Walczak, Washington representative, collected reams of materials from me and interviewed
me at length. He even reported in Business Week (June 2, 1980), "Within the Carter camp, the
reindustrialization issue, still in the study stage, is being examined by an informal interagency
group. Separate papers on reindustrialization policy are being prepared by Amitai Etzioni, who
has been quietly at work for months on the problem in a White House office." He continued with
a concise summary of the thesis. But when the special issue appeared four weeks later, no credit
was given. Indeed, Business Week started its special issue with a statement suggesting that its
editors developed the idea. Following a discreet inquiry, Business Week later acknowledged my
role. In an ad in The New York Times (January 12, 1981), Business Week pointed out that after it
had promoted the idea, Forbes "apparently overcame its initial reservations and published an
article by Dr. Amitai Etzioni, who first suggested the concept."
In March 1981, in its special "American Renewal" issue, Fortune recognized my
contribution: "Concern about America's competitive situation is much in evidence, but it remains
freefloating, not attached to any particular program. The talk of reindustrialization' reflects
awareness of a problem rather than focus on a remedy. Sociologist Amitai Etzioni, who put the
word into circulation a few years back, had something sensible in mind. He perceived that the
U.S. had let its industrial base deteriorate relative to those competing nations, and that rebuilding
would require changes in attitudes and policies. But once in circulation the word lost specific
content. . ." But this was atypical. Usually no such credit is to be expected. Recently, when the
new head of the Office of Management and Budget under the Reagan administration called for
declaration of a national emergency to get a new economic program quickly off the ground, no
reference was made to Henry Kaufman, the financial sage who previously had argued for
precisely that. And so it goes.
Within the government, acknowledgment of sources is even less common. All but the
most senior people write memos their bosses sign as if they composed them; as a rule it is safe to
assume that what A says is not what A conceived, studied, or formulated. When it is otherwise,
this is treated as a unique event, as when Reagan is reported to have written his own inaugural
address. Sometimes initials on the copies of a memo allow one to trace it to its origins, in case
additional input or verification of details is desired. Often, who really composed the memo is
informally known but nowhere recorded.
My first in-the-White-House reindustrialization memo was drafted as a memo to other
White House staff members from the Special Assistant to the President to whom I was reporting.
It was only after this initial memo received a quite cool reception that I was encouraged to
promote the idea on my own. The trouble was that economic policy was not my turf, and
sensitivity to turf was considerable, to put it mildly. My excuse for dealing with
reindustrialization varied according to those I was trying to interest in the idea, but as a rule, it
was an emphasis on behavioral data and concepts. Thus, in several memos to and in meetings
with Stuart Eizenstat (Assistant to the President for Domestic Affairs and Policy), Alfred Kahn
(Adviser to the President on Inflation), Curtis Hessler (Assistant Secretary for Economic Policy,
Treasury), Hedley Donovan (Senior Adviser to the President), and others, I emphasized the need
for a "gestalt." I pointed out that in recent statements by the administration "many items--each of
merit--are listed next to each other without any unifying theme to provide a meaning or context,
like a shopping list: Maintenance of CETA,' followed by Humphrey-Hawkins legislation,'
followed by Urban Assistance and Community Development,' all with no meaning to most." I
then suggested that "restoring America to economic vigor," reindustrialization, justified in its
own right, provided such a theme.
On one occasion, I tried an end run via the speechwriters. I first talked to a staff person
dealing with them, Bob Myers, and later drafted some choice paragraphs for Carter's favorite,
Rick Hertzberg. I was trying to get the ideas into a proper presidential speech, preferably the
State of the Union message, which would legitimate the theme and provide a policy cue.
Although this had previously been achieved by others, by this time an improved management
system, introduced by Al McDonald, had the staff check suggested items for speeches against
established policy. When no such ground was found for my reindustrialization ideas at the time
(December 1979, January 1980) my paragraphs, themes, and "gestalts" were dropped.
Meanwhile, to my mixed chagrin and delight, other presidential candidates picked up the
idea from Kraft's column. First, Governor Jerry Brown, during a meeting with Washington Post
editors and writers, called for the "reindustrialization of America." He stressed the need for
greater collaboration between government and business, for more planning, for use of credit and
tax incentives for reindustrialization. He added, "we have an environment, we have a
technological base, an then we have a human pool of capital that is not being trained and
mobilized for the kind of work that we have to do." He suggested that we reduce consumption,
shift capital to more investment ("environmental, technological and human"), and "use both the
public and private sector. use changes in credit, changes in the tax law, changes in the regulatory
process" to help improve our competitive position. Next, Senator Edward Kennedy called for an
American Reindustrialization Corporation, to launch a massive public and private Marshall Plan
providing grants, loans, and subsidies to businesses and individuals involved in revitalizing the
economy. Funds were to come from Congress and from borrowing in capital markets, with an
initial budget of about $1 billion. John Anderson, as well as other Republican candidates, did not
use the term "reindustrialization," but described agendas that, in one way or another, come close
to the reindustrialization thesis.
Besides gaining prominence in the political arena, reindustrialization as a theme caught
on in intellectual circles as well. In early summer 1980, the Nashville-based U.S. Industrial
Council Educational Foundation announced that a $1000 prize would he awarded to the winning
one-thousand-word essay on the reindustrialization of America. In June, the President's
Commission for a National Agenda for the Eighties met in Los Angeles for a reindustrialization
"talkathon." In September, the Congressional Institute for the Future, along with the
Congressional Clearinghouse on the Future, sponsored a "Congressional Roundtable on
Emerging Issues" on reindustrialization. The Wall Street Journal cracked, "If you close your
eyes and throw a dart at a map of the U.S.A., it would land at a place where someone is holding,
a seminar on reindustrialization." Life found this line one which "characterized" 1980.
Inside the Carter administration a struggle of sorts evolved between lower-level ambitions
and higher authorities, left-liberal pockets and a conservative majority. The economic policy of
the Carter administration was basically conservative. It sought to curb inflation by voluntary
guidelines which curbed wages more than prices. did not limit dividend payments at all, and
encouraged high interest rates. When this did not work, a recession was deliberately triggered,
although economists were quite clear that the resulting massive unemployment would yield little
inflation relief. Desperate attempts were made to balance the budget, increase defense
expenditures, and curb the growth of some social programs while trimming others. This line had
the support of the main economic policy makers, including the Secretary of the Treasury, and the
chief architect of economic policy for the administration, William Miller; the head of OMB,
James McIntyre, and, to a somewhat lesser degree, Charles Schultze and Alfred Kahn. The only
liberal one of the five "principals" of the Economic Review Group was Stuart Eizenstat.
The president was viscerally and intellectually committed to the conservative perspective.
It was widely known that he felt very strongly that a balanced budget was the way to fight
inflation, and hence all those who wished to explore other ideas were under the gun from the
start. (When, as the 1980 recession deepened, some liberals toyed with the idea of tax cuts which
could stimulate business and create jobs, McIntyre got wind of it, and a presidential directive was
issued not to consider, plan, or talk about tax cuts.)
On a lower level, among the principals' deputies--and their aides--there was a greater
interest in liberal solutions and in reindustrialization. For instance, VanDoorn Ooms, OMB
Assistant Director for Economic Policy, was much less fanatically committed to balancing the
budget than his boss, McIntyre. And Curtis Hessler, Miller's Assistant Secretary for Economic
Policy, and his Deputy, Richard Syron, were much more open-minded about reindustrialization
than Miller himself. Liberal Assistant Secretary of Labor Arnie Packer wrote several memos in
favor of industrial policy, and promoted it through articles in the press and in reports to an
interagency task force. I promoted reindustrialization in countless meetings and lunches, and in a
White House staff briefing.
In the months that followed, as the campaign heated up, the terms "reindustrialization,"
"industry policy," "revitalization," and "supply-side economics" were thrown around at a fast
clip. Under the heading "Reindustrialization's Poor Record," a British executive, R.H. Frierson,
attacked "industrial revitalization" in a Wall Street Journal article, on the basis of the bad
experience of Britain and others in lavishing support on lame-duck industries, a typical failing of
"industrial policy." "Some use [reindustrialization] as a synonym for resuscitating industries.
Others assume it means marshalling capital for new businesses," reported Paul Blustein in a Wall
Street Journal news story. Robert J. Samuelson used the terms interchangeably in the National
Journal. Joel S. Hirschhorn of the Office of Technology Assessment wrote that to
"reindustrialize America" requires a "Marshall Plan," a "national industrial policy." And so it
The irony of the success story of reindustrialization is that as politicians rushed to
embrace it and editorial writers, other intellectuals, and social scientists, to explore it, every one
projected into it his or her preferences. As Fortune put it, the word "became an empty bottle into
which each user pours his own meaning--sometimes mostly fizz." And often I found, both in
White House briefings and in the media, that the concept was rejected for what it was not, or
embraced for the opposite of what it contained. I tried, somewhat frantically, like a person
caught in a whirlwind, to protect the concept. I kept remembering other success stories, in which
policy researchers or policy makers launched an idea only to see it so perverted in the process
that they did not recognize it when it was put into effect. (Hubert H. Humphrey wanted a Peace
Department to counteract the War Department; out of that idea came the meek, nearly irrelevant
Arms Control and Disarmament Agency. Paul Lazarsfeld tried to launch a School for Project
Directors out of which came the excellent but very different Center for Advanced Study in the
Behavioral Sciences.) I launched a blitz of memos and meetings trying to protect the concept. I
also surfaced in the press (after a year of self-imposed embargo) and published articles in The
New York Times, Forbes, The Washington Post, and the National Journal, as well as a series of
press interviews, to explain how reindustrialization differs from supply-side economics and
industrial policy. My mood at the time is captured in the opening sentence of my June 29, 1980,
New York Times article: "As the proud father of the thesis of reindustrialization, let me rise to its
defense. Its potential is currently being clouded by the limitations of industrial policy,' a remote
relative, and misintroduced as the son of the post-industrial society, not its ancestor.
The Real Reindustrialization
"Supply-side" economics assumes that what ails the economy is mainly an excessive
level of politicization, reflected not merely in the polity's use and allocation of an unduly high
proportion of GNP and in excessive regulation of private decisions, but also in the revolution of
entitlements, in attempts to deal with all social and many personal needs via the polity rather than
the market. Daniel Bell and Irving Kristol have articulated this position, as has Milton Friedman.
The remedy which follows is to reduce the scope and intensity of the polity as much as possible,
by releasing resources to the private sector, deregulating, and letting the market do its wondrous
things. Arthur Laffer and Kemp-Roth are the most radical; they hold that the revenue lost via
monumental tax cuts will be restored by the higher tax yield of a more productive economy.
Other radical conservatives, like Milton Friedman, are satisfied to cut government expenditures
and taxation drastically, without assuming a proportionate gain in tax revenues. This approach is
wholly non-targeted. It sees no need to direct, aim, or guide the economic resources released to
the private sector in any particular way. Indeed, freeing them to go wherever the market will take
them is the kernel of the approach, which would let private demand work its way and the private
economy respond by increasing its capacity to supply what the demand seeks.
At the other end of the spectrum of positions is the notion that, far from being reduced,
the polity's role should be intensified. Here the diagnosis is that, compared to other highly
successful economies, especially West Germany and above all Japan, American institutions
provide insufficient guidance and support for the private economy. The market, it is implied or
openly stated, has shown its inability to invest enough in new plants and equipment, to innovate
and compete. Executives have grown risk-shy and dividend-happy. Steel mills, auto plants, the
textile and rubber industries are crumbling; computers will soon face a government-orchestrated
attack from Japan, to which our industries' response will be divided. According to this liberal
view, correctives are to be found in emulation of "Japan, Inc. " In other words, the solution lies
in government-guided collaborative efforts, with government bureaucrats and technologists
serving as the taskmasters and sources of analysis, tax incentives, capital, and informal if not
outright direction. Recent attempts to turn around the U.S. auto and steel industries, following
the suggestion of tripartite committees, are viewed as American dry-runs. Beyond this, the
advocates of this highly targeted approach see the Department of Commerce transformed into a
Department of Trade and Development, with a desk and a committee for each industry, from ball
bearings to industrial diamonds. The trade desk would analyze the industry assigned to it--say,
shoes--to determine whether it is a "winner" or a "loser, " whether it has a promising future in
terms of productivity, exportability, technology/innovations, labor intensiveness, and other good
things in life. The designated winners would be showered with government-provided subsidies,
loans, loan guarantees, tax incentives, a measure of protection (as in a trigger price or import
quotas), R&D write-offs, and what not. The losers would be buried. (Well, the term used is to
"sunset" them.) The government might provide the workers with retraining and "trade adjustment
assistance" to help move them from parts of the country where the losers congregate (Detroit,
Pittsburgh) to where the winners roam (the Sunbelt, coal states). This policy might be called
"national planning," but as the term tends to raise fears of creeping socialism, most of its
advocates avoid the label. Instead, the term "industrial policy" is in favor.
Critics raise three major questions: (1) Do we have the analytic capacity to determine
correctly who will be a winner, who a loser, or will we misidentify industries and sink vast
amounts of public resources into tomorrow's Edsels? (2) Will our polity, in which the
government tends to be weak compared to business, labor, and local communities, especially
when these work together for their Chrysler, be able to channel resources to those who merit
them by some rational analysis, rather than to those who have political clout? (3) Is the country--both voters and leaders--willing to accept more politicization, less reliance on the marketplace?
Between supply-side economics on the right and industrial policy on the left stands
reindustrialization. the concept that what ails the country is overconsumption, both public and
private, and underinvestment, resulting in a weakened productive capacity. Signs of deferred
maintenance and lack of adaptation to the new environment of expensive energy can be seen in
most of the elements which make up the infrastructure (such as transportation, communication,
power, R&D) and the capital-goods sectors.
The suggested cure is semi-targeted: release resources to the private sector, but channel
them to the infrastructure and capital-goods sectors, away from either public or private
consumption. For example, the funds released through across-the-board tax cuts might well be
used mainly to spur private demand for consumer goods and services (gasoline, for instance),
with little rejuvenation of productive capacity. On the other hand, if the resources released are
guided to the productive sectors of the economy--not to specific industries--by allowing
accelerated depreciation, for example, for those who replace obsolete equipment, or who change
to equipment which is more energy-efficient, the released resources will revitalize, without
determining which will benefit: steel or textiles, rubber or rails. The polity will set the context,
the market will target.
Similarly, providing tax incentives for greater R&D expenditures spurs on all such
efforts; no government trade desk or tripartite committee needs to decide which R&D project is
desirable. And if productivity-based incentives enable workers to share directly in renewed
economic growth, Washington need not be involved in determining which workers are eligible;
this is best done by management and workers within each corporation.
Critics suggest that reindustrialization will return the country to the nineteenth century
and focus on "basic" rather than post-industrial high-technology industries. The prefix "re" does
point to a return, but it should not be taken too literally. A return to a strong infrastructure and
capital-goods sectors does not require a return to the same mix of specific industries. Thus,
communication satellites and dataphones could do the job of the Pony Express and the Morse
telegraph, and slurry pipelines instead of barges might carry coal. The return implied is to Iii,,her
investment and innovation in the productive sectors, not to anachronistic details.
Reindustrialization does favor mitigating the criteria of "comparative advantage," though,
with considerations of developmental economics, social responsiveness, and national security.
Studies of developmental economics show that a measure of government-provided incentives
and support, even short-term import limitations, is often essential for developing a new industrial
base; the same might hold for renewing one. Social considerations urge us not to export all blue-collar work to Third-World countries we have plenty of unskilled labor of our own. National
security requires us not to grow so dependent on imported coal, steel, and ship-building that we
are unable to withstand interruptions or boycotts. Reindustrialization thus stands between
supply-side economics and industrial policy; it is semi-targeted, and the context it seeks to
advance is a stronger productive capacity.
Carter Joins In
The whirlwind did not subside, of course, while I stated and restated the argument for my
conception of reindustrialization. If anything, it spun even faster as the presidential campaign
moved toward its climax. By May 1980, all the candidates had signed up for one or another
concept of reindustrialization--except my candidate, Jimmy Carter.
Carter was not doing too well at that time. As inflation and unemployment continued to
rise, his approval rate had dropped to an unprecedented low of 20 percent, despite promises to
balance the budget, and Senator Kennedy was challenging him in the primaries. The Carter
administration now became more actively concerned about labor's support. The White House
and the AFL-CIO had previously negotiated a "national accord" which called for close
consultation with these unions on matters of short- and long-run economic policy. This now led
to two specific ideas. One was the creation of a national reindustrialization board, to be co-chaired by Lane Kirkland and Irving Shapiro, which would formulate general policies; that never
got off the ground. Second, two industry-specific tripartite committees were activated to help the
auto and steel industries, especially hurt, to turn around.
Once the Kennedy threat was overcome, these ideas were incorporated into a new
economic policy package, to face Reagan. It put heavy emphasis on a tax cut for business, in
contrast to the traditional focus on individuals. Although, historically, two-thirds of revenues
lost in tax cuts had gone to individuals, and the GOP was calling for dedication of 85 percent to
individuals, the Carter plan was going to award 55 percent to business, 45 percent to individuals.
In particular, business was to benefit from accelerated depreciation of new equipment,
machinery, and plants, to motivate it to throw out obsolescent or energy-inefficient items.
Carter's plan mixed some elements of reindustrialization with some of industrial policy.
Reducing labor costs (by offsetting part of business's contributions to social security) or
encouraging replacement of obsolescent plants and equipment (by faster tax write-offs) was
reindustrialization--and that was where the big bucks were to go. Retraining workers and thus
reducing resistance to technological innovation was also reindustrialization: so was the
reindustrialization board, which was intended to increase the general collaboration among
business, labor, and the government. Touches of industrial policy were to be found in the
suggestion of investment tax credits to ailing firms (especially aimed to help steel). in plans
tailored to help auto manufacturers, and in the industry-specific tripartite committees.
Carter unveiled much of this package late in the election campaign, in his address on
August 28, 1980. He was thus the last to embrace the reindustrialization theme. Until about two
weeks earlier, the higher reaches of the White House had continued to resist the theme, on the
grounds that it might imply new expenditures, larger deficits, and had clung to the hope that
pushing a balanced budget would take the wind out of the Republican sails--and be virtuous, too.
Only as the possibility of balancing the budget became ever less credible, and the upbeat themes
of the opposition made Carter's program appear dull, did Carter and his cabinet publicly embrace
reindustrialization, without much enthusiasm. At the last minute, though, they changed the label.
In the preceding memos and meetings and minutes, "reindustrialization" was commonly used.
But just before the August 28 speech, someone pointed out that the term was identifiable with
one professor. "Renewal" was then suggested, but after Secretary of Commerce Philip Klutznick
pointed out that "renewal" smacked of the liberal, unpopular urban renewal programs,
"revitalization" became the label.
Reaganomics is more ambitious than reindustrialization. It seeks not merely to restore
the productive capacity of the United States but also to reduce inflation, balance the budget,
substantially increase military spending, and change the social profile of the government by
doing less for groups which traditionally were Democratic constituencies (such as the poor,
minorities, and labor) and more for groups closer to the Republicans (big and small business, and
If the 1981 Reagan American Recovery Act is evaluated narrowly, from only a
reindustrialization viewpoint, some of it is highly beneficial, some counter-productive, and much
is left undone. Productive features include new incentives for savings and investment, especially
the change in IRA and Keogh rules, as well as the reduction in capital gains tax, accelerated
depreciation, and support for more private R&D. All-Savers Certificates are a costly bail-out for
the Savings and Loan Associations and channel resources to residential housing, which
economists count as "investment" but which are not productive assets. Changes in leasing rules
are a reward for inefficient or failing corporations. Nothing has been done to secure workers'
sharing in gains in productivity or to fashion an energy policy--at least one aimed at other
infrastructure elements, especially transportation.
Emerging somewhat dizzy from this experience, I conclude, to paraphrase the dictum,
that success has a thousand families, failure is an orphan. You can easily claim failed policy
ideas as your own; you cannot secure those which the polity, the intellectual community, and the
media adopt. They will carry your concept their own way, mixing elements and ideas. You may
enjoy seeing your idea bandied about and elements of your thinking embraced, but do not expect,
even under the most favorable circumstances, to see your idea protected or given a full test of
what you think should be tried. And while this may rile you, on second thought you will realize
that it is in the nature of a pluralistic, democratic society; only in a tyranny of technocrats could it
be otherwise. Strongly as I believe in reindustrialization as I conceived it, not as it has been
confused with industrial policy and blended with supply-side economics, I would rather ride a
whirlwind than be part of a technocracy.
Amitai Etzioni is University Professor at the George Washington University
and director of the Center for Policy Research. A Senior Adviser
at the White House in 1979-1980, he, is the author of numerous books,
including The Next Years: An Immodest Agenda, forthcoming