Special report
Thomas T. Bradshaw
Closing circle on environmental economics There are two men stumping the country today, preaching the need to build a new world economy. They both say that environmental degradation is a necessary consequence of the world's existing economic institutions. They arrived at this conclusion from vastly different starting points. Their combined views indicate that the widely touted affluence of the U.S. consumer is an illusion masked by government and consumer debt and the debt to nature and that these debts have served to cushion the inevitable collapse of an inherently faulty system. One man would base the new economy on what he calls the ecological imperative. The other would base it on a human imperative. Are they both really saying the same thing? One says that it must be done. The other says it can be done, and that it can be paid for out of pretax profits. One man argues, with some force, that use of synthetic chemicals must decline while use of more "natural or environmentally successful" products must expand. The other man says that such expansion must be based on the human imperative. Both men appreciate the tremendous power and potential good of science and technology. But both say that the vaunted achievements of science and technology have largely been transformed into human disasters. Scientists, technologists, and economists, they say, have operated in the human arena and in nature as if unaware of certain laws that are as fundamental as the laws of thermodynamics. As the technologist who ignores the laws of thermodynamics will in the end be forced into bankruptcy when his accumulated energy debts become due, so will go society when the debt to nature and the debt to humanity are presented. Is there anyone left who still thinks that environmentalism will go the way of all passing fads? Have a look at the newspapers, or at the list of topics discussed at any major scientific or business gathering. Whether for better or for worse, environmentalism has become an issue, a 22 C&EN FEB. 21, 1972
movement, an ism, a religion. It's developing an economic and political ideology—and a credibility gap. According to even the most conservative of its doomsayers, if it can be written off at all, it will be written off recurringly, not extraordinarily, for a while to come, if we're lucky. That we borrow from the parlance of the accountant to express the predictions of the doomsayers is a reflection of the fact that the doomsayers themselves are rapidly becoming accountants, cost accountants the likes of which business has never seen. The changing nature of environmentalism and environmentalists is what this article is about. C&EN over the years has chronicled a number of environmental skirmishes. We've carried the obituaries of a number of chemical plants and products. We've even predicted the demise of a few. We've written up advances in pollution control technology. We've reported pollution control legislation and education. But for all it means to chemists and engineers and their employers, environmentalism is not a parochial chemical issue. Some environmentalists, themselves technical men, have moved out of the technical arena and into the arena of economics and politics. That, of course, makes the issue no less chemical. And chances are that more chemists and engineers are currently interested in matters economic than at any time in the history of chemistry. We present here the views of two men—environmentalist Barry Commoner and lawyer-economist Louis O. Kelso—who believe that environmentalism is fundamentally related to the other problems of Everyman, the trials of our times. Of course, environmental catastrophe should be a concern of every human being. But is man's sometimes wanton destruction of his environment not perhaps a symptom of a general malaise of our society? Is it caused by some defect in our economic and political institutions? These two men believe that it is.
The defect in our economic and political institutions is centered on the profit motive, says Dr. Commoner, whether the drive is for profit or "plan fulfillment" as in socialist economies. The only way out of our current predicaments, including environmental degradation, says Mr. Kelso, would involve more profit for most men. There seems to be a basic conflict between the views of these two men. But it turns out that there are striking similarities in their views. Misuse of technology, particularly in the chemical industry, has been indicted as the major direct cause of environmental degradation by Dr. Commoner though he believes that the ultimate cause of man's misuse of technology lies in defective economic systems. Dr. Commoner says that, faced with the inevitability of irreversible environmental degradation, we must start now to build a second economy fitted to the dictates of the ecological imperative. Mr. Kelso says that the fundamental problem and the driving force behind man's misuse of technology is failure, particularly by our economic and political institutions and by scientists, to recognize a basic law of human nature which he calls the Law of Urgent and Important. He says that we must start now to build a second economy fitted to the dictates of the human imperative as expressed in this law. Dr. Commoner estimates that we have some 20 to 50 years left before we reach the point of no return—irreversible environmental degradation. Mr. Kelso says that we can build a second economy in that time through existing industrial corporations and that it can be paid for out of future pretax profits. Handle. Anyone who has ever tried to come to grips with a complex problem sooner or later finds himself trying to reduce it to some fundamental principle or truism, preferably a handle that he can twist and get some positive results for his twisting. It now seems inevitable that for the environmentalist the handle will be an economic one. The scientific and technological problems of environmental-
ism—defining the effects of pollutants, and working out the technical aspects of controls—have not all been solved, to be sure. But effective application of technical controls will depend upon a gripping and positive twisting of the economic handle. And therein lies the rub. It seems that at least until faced with full-scale environmental catastrophe, h u m a n nature will continue to dictate that the twisting be positive. Many persons seem determined not to be inconvenienced by predictions of disaster. Will that mean the demise of environmentalism? Environmentalists themselves are beginning to worry about their own credibility gap. Yet, if even only the mildest of their predictions should start to come true, they would quickly regain lost ground with an even bigger head of steam. Still they continue to w a r n that it might then be too late. Can environmentalism be reconciled with economics? Dr. Commoner
Economy fitted to the dictates of the ecological imperative doubts that the problem can be resolved without substantial changes in the world's existing economic systems. Those are startling, perhaps even dangerous words. And Dr. Commoner has other startling things to say, especially to the chemical industry. To avert disaster, he says, a forced decline in the synthetic chemicals industry will be necessary. He means synthetic fertilizers, pesticides, rubber, fibers, plastics, virtually all large-volume materials that have replaced natural products or products more "environmentally successful." After all the years chemists have spent speculating on which natural product should b e replaced next by a synthetic, are natural products about to stage a comeback? Dr. Commoner presents a somewhat convincing argument in favor of such a comeback. And he describes a number of other industrial situations in which a large— perhaps the largest—part of environmental degradation appears to be caused by the displacement of an older, less polluting technology by a newer, more polluting technology. The environmentalist mentions a few contrasting examples, too. Television is an example of a "wholly new" technology that hasn't displaced anything else and doesn't pollute, Dr. Commoner says. Apparently, the movie house in his neighborhood has been closed down so long he's completely forgotten that it ever existed. And perhaps he's forgotten about the
widespread concern over radiation from TV sets. (The radiation factor, however, is probably another example in favor of his thesis.)
Problem is failure to recognize a basic law of human nature Factors. Of the three generally recognized factors cited in his recent book, "The Closing Circle," as the cause of pollution—population, affluence (or per capita consumption), and misuse of technology—Dr. Commoner claims that misuse of technology is the biggest. In his mad rush to conquer nature, m a n has ignored certain fundamental laws of nature that dictate the limits of his conquest. Man has failed to take external diseconomies, the cost to nature of man's activities, into account. And m a n hasn't learned yet to apply double-entry bookkeeping to the environment. The most dangerous pollution problems have arisen in the years since World War II, Dr. Commoner says. Pollution has increased tenfold, while population has grown 43% since World War II, he says. Pollution per capita has increased seven-fold. So it is difficult to see how pollution could be caused simply by population growth (admitting of complications caused by population dislocations) since it is difficult to imagine that a seven-fold increase is attributable to personal waste or to stepped-up production to provide the same per capita consumption for more people. What about affluence, or per capita consumption? Increase in gross national product per capita on a constant dollar basis comes out to about 50% since 1946, clearly insufficient to account for observed increases in pollution per capita, he says. Since GNP includes services as well as goods, Dr. Commoner finds it useful to break GNP down into specific items—food, clothing, shelter, automo-
biles, and others. Food consumption per capita in the U.S. has remained essentially unchanged in the period 194668, he says. There has even been some decline in certain aspects of diet quality. Clearly, he adds, there is no sign of increasing affluence with respect to food consumption. The situation regarding clothing is quite similar. He goes on to say that per capita production of most goods produced to meet major h u m a n needs has not increased significantly. The winner of the economic sweepstakes, with the highest postwar growth rate, is the production of nonreturnable soda bottles, which has increased about 53,000% in that time. In second place is synthetic fibers, up 5980%, third is mercury used for chlorine production, up 3930%. Plastics, up 1960%; fertilizer nitrogen, up 1050%. Synthetic organic chemicals, up 950%; aluminum, up 680%; electric power, up 530%; pesticides, up 390%; and many others. Some of the losers are cotton fiber, down 7%; returnable beer bottles, down 36%; wool, down 42%; soap, down 76%, all according to Dr. Commoner's figures. Thus, the kinds of goods produced to meet basic needs have changed drastically. New production technologies have displaced old ones. In general, he says, the growth of the U.S. economy since 1946 has had surprisingly little effect on the degree to which individual needs for basic economic goods have been met. Change. Between 1949 and 1968 total U.S. agricultural output increased
Handle for the environmentalist will be an economic one by about 45%. The population increase during that time was 34%. Crop production per capita rose 6%, Dr. Commoner says. In that period annual use of fertilizer nitrogen climbed 648%, surprisingly larger than
Louis Kelso (left) and Barry Commoner:
need for new world economy
the increase in crop production. Meanwhile, harvesting acreage declined by 16%. Obviously, Dr. Commoner says, pollution caused by fertilizer production and use is due largely to technological change in agriculture not population growth or affluence. External diseconomies include environmental degradation caused by productive processes, directly or indirectly, as well as pollution caused by the end product. For example, use of electricity for producing a synthetic indirectly causes air pollution at the power plant. He includes, also, depletion of nonrenewable natural resources on which production of synthetics is dependent, both for material and energy needs. He indicates that if external diseconomies could be accurately taken into account, a good many synthetics would automatically be displaced by more "natural" or
Major factors are population, affluence, misuse of technology more "environmentally successful" products, which make greater use of renewable resources such as sunlight and nitrogen-fixing soil bacteria. Dr. Commoner is currently drawing up "environmental impact indices" on a number of products. The increase in population, Dr. Commoner concludes, accounts for up to 20% of the various increases in pollutant output since 1946. The affluence factor accounts for 1 to 5% of the pollutant increase, except in the case of passenger travel, where the contribution rises to about 40% of the total. The technology factor—that is, the increased output of pollutants per unit production resulting from the introduction of new productive technologies since 1946—accounts for about 80 to 85% of the total output of pollutants, again with the exception of passenger travel, where it accounts for about 40% of the total. Dr. Commoner bases his conclusions on instances in which quantitative data on pollution output of various productive activities are available. Qualitative evidence on other pollution problems indicates a similar pattern, he says. Cause. The immediate cause for technological failure is clear, Dr. Commoner says. We simply don't know what we're doing: The technologist defines his problem too narrowly, 24
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taking into his field of vision only one segment of what in nature is an endless cycle that will collapse if stressed anywhere. Dr. Commoner remains convinced, however, that technology properly guided by appropriate scientific knowledge can be successful in the ecosystem. At least part of the fault for technology's ecological failure, he says, derives from the fragmented nature of its scientific base. He quotes John Kenneth Galbraith to the effect that the fragmented nature of technology is dictated by the need to make the technological task "coterminous with some established area of scientific or engineering knowledge." The environmentalist says that this defect is largely a result of reductionist tendencies of scientists who find it "distasteful" to deal with real life (meaning sewage) or to do "pedestrian research," such as measuring pollution levels. He laments a curious paradox in the status of environmental science in the U.S. Since World War II there has been unprecedented growth in biological research; yet we remain astonishingly ignorant of the profound changes that, during that same period, have occurred in our own biological surroundings, Dr. Commoner says. That we must now develop a major new research program on "national needs," he points out, is tragic evidence that previous programs have failed to meet them. Nor is the problem limited to biology, he notes. All of science is fragmented. Scientific disciplines are isolated from each other and all of them from the real world. "We have a justified pride in our intellectual independence and know—for we often have to battle to maintain it—how essential this independence is to the search for truth. But scientists may sometimes tend to translate intellectual independence into a kind of mandatory avoidance of all problems that do not arise in their own minds— an approach that may cut them off from the real and urgent needs of society, and often from their students as well. As a result, science has be-
Pollution has increased tenfold while population has grown 43% come too isolated from the real problems of the world and a poor instrument for understanding the threats to its survival. Separation. "The separation between science and the problems that concern people has tended to limit what most people know about the scientific background of environmental issues.
Yet such public knowledge is essential to the solution of every environmental problem. "In effect, the citizen faces an important question about modern technology: Sooner or later, every human endeavor—if it is to continue—must pass this simple test: Is it worth what it costs? "Who is to be the Solomon of modern technology and weigh in the balance all the good that comes of it against the ecological, social costs?" Dr. Commoner asks. These are value judgments, he says, not determined by
Kinds of goods produced to meet basic needs have changed sharply scientific principle. These are matters of morality, of social and political judgment. In a democracy they belong not in the hands of "experts," but in the hands of the people and their elected representatives. "There is a myth in some political circles that public policy is determined more by narrow self-interest than by concerns for values as nebulous as the integrity of the environment." The t r u t h is, Dr. Commoner says, that public opinion has, in fact, already established rather well-defined limits to the risks that are acceptable for the benefits to be derived from a wide range of activities. Dr. Commoner sees that there is a relationship between environmentalism and the issues of racial discrimination and poverty. He sees that the affluent suburbanite can escape pollution of the city. And he sees that the appropriate response to some environmentalists' actions may well be that a society that can find the means to save a salt marsh ought to be equally capable of finding the means to employ its citizens. That unions strongly supported the supersonic transport because abandonment of the project would throw thousands of workers out of jobs is understandable, he says. To a person thus employed, the immediate response may well be anger directed against the "eco-freaks" who opposed the SST. However, on further reflection, he adds, such a person might wonder about the rationality of an economic system that forces a person to fight for a job with the knowledge that the product may pollute. In a way, Dr. Commoner says, it is fortunate that the environmental crisis has generated so much discussion. The nation has for many years been tormented by the contrast between its unparalleled wealth and its inability to provide for its people an adequate environment, employment,
schooling, health and social services, and a peaceful life. For a long time, this stark reality has been obscured by evasions, excuses, and a cloud of technical details. It seems to Dr. Commoner that this screen has now, somehow, been penetrated by the environmental crisis. Managing. The major problem of the world is one of managing the use of technology, Dr. Commoner insists. He points out that industrialized nations have tended to level off in terms of population. Population balance has apparently been approached through the material progress of the society. He presents a reasonable argument for the proposition that reduction of death rate and infant mortality in developing countries to minimal levels will lead to a reduction in birth rate. Thus, demographic balance can be approached through efforts to improve living standards. Dr. Commoner links production of synthetic materials with world population problems. The wealth of the advanced nations is largely a result of the application of modern science and technology to the exploitation of natural resources. Before World War II this was heavily based on the use of natural products. The availability of these materials—such as rubber, fats and oils, and cotton—in undeveloped areas of the world led to their exploitation by the more advanced nations during the colonial period. The growth of industrial capitalism in western nations in the period 1800— 1950 may have resulted in the development of a 1 billion excess world population, he says, largely in the tropics, as a result of the exploitation of these areas for raw materials, with the resultant need for labor, during the period of colonialism. Then after World War II modern technology replaced tropical raw materials with synthetic ones so that the technologically de-
Affluence factor accounts for 1 to 5% of the pollutant increase veloped world, "again with no one's intention," rendered functionless in relation to its further s elf-enrichment almost all the population of the tropics. In this way, he says, modern technology becomes the crucial link between the environmental crisis in the advanced nations and the population problems in the developing ones. The postwar trend to replace the natural products with synthetic ones has exacerbated ecological stresses in the advanced countries and has hindered the efforts of developing nations to meet the needs of their own popula-
tions and to support their own motivation for population control. Indictment. Thus, Dr. Commoner has indicted technology. And the fragmented nature of science causes technology to be susceptible to misuse. What drives men to use technology before they are aware of the consequences, however, and hence to misuse it? He concludes that the driving force behind the misuse of technology, the displacement of older technologies by newer ones, leading to environmental degradation, is the rush for profits. He points out a number of examples in which this seems to him to be the case, though he does cite some examples which might lead to some other conclusion. For example, the displacement of coal-burning locomotives by diesel engines improved the environmental impact of railroads
Properly guided technology can be successful in the ecosystem between 1946 and 1950. Unfortunately, he points out, this improvement has been vitiated by the subsequent displacement of railroad freight haulage by truck freight. So the crucial link between pollution and profits appears to be modern technology, which is both the main source of recent increases in productivity—and therefore of profits—and of recent assaults on the environment, Dr. Commoner says. The costs of environmental degradation are chiefly borne not by the producer, but by society as a whole, in the form of "externalities." A business enterprise that pollutes the environment is therefore being subsidized by society; to this extent, the enterprise, though free, is not wholly private. If through government regulations, he says, the producer is prevented from passing the added costs of environmental control along to the consumer, the producer will need to find an alternative means of cutting general production costs in order to maintain profits. The obvious course is to reduce wages, Dr. Commoner says. This would, he says, exacerbate the conflict between entrepreneur and wage earner. On the other hand, Dr. Commoner says that if the added costs are met by raising prices, then the wage earner is confronted with a rising cost of living which will naturally lead him to demand higher wages. Again the conflict is intensified. Moreover, increased prices would inevitably burden the poor most heavily. (If the major difference between synthetic and natural products is that the syn-
thetics have a greater environmental impact, then taking all external diseconomies into account should cause synthetics to be the more expensive. Thus, cotton, for example, would regain that share of the market formerly lost to synthetics if cotton producers could account for their own external diseconomies and still remain competitive. Since it is difficult to name a product that has no "external diseconomies," then the generalization that most prices will rise would seem to be true.) Conflict. Up to now, Dr. Commoner says, free abuse of the environment has mitigated the economic conflict between capital and labor. The benefit appears to accrue to both parties and the conflict between them is reduced. Later, however, when the environmental bill is paid, it is met by labor more than by capital. The buffer is suddenly removed and the conflict between these two economic sectors is revealed in its full force. The practical problems of environmental pollution in industrialized socialist nations, Dr. Commoner says, don't seem to be basically different from those of the U.S. Just as in the U.S., inattention to pollution problems is a consequence of a heavy emphasis on productivity, a lack of sufficient concern on the part of plant managers, and an inefficient system of enforcing regulations, all nourished by the familiar catalyst of economic expediency. Production plan fulfillment is clearly understood to be paramount. If the plan is fulfilled, almost all else can be overlooked. Dr. Commoner concludes, therefore, that both socialist and capitalist economic theories have apparently developed without taking the ecological imperative into account. And both will be severely tested by the urgent
Every human endeavor must pass this test: Is it worth what it costs? need to resolve the environmental crisis. Whatever stands in the way of the necessary accommodation, whether private profit or plan fulfillment, will need to abdicate its immunity from change, he says. Blame. Dr. Commoner places most of the blame on one factor of the environmental problem—at least that factor is the one he would have controlled by social institutions to make it comply with the ecological imperative. The factor he would control is the profit motive, or incentive, or plan fulfillment, or the drive to get ahead, which is exhibited by most human beings. But he would take the carrot FEB. 2 1 , 1972 C&EN
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off the stick only for industry. He would do so because h u m a n selfishness has driven man to misuse technology, and it has done so under all economic systems, he observes. To put it a slightly different way, man has been driven to use faulty technology. And, as Dr. Commoner points out, technology is faulty because of the fragmented nature of its scientific base. That scientific base hasn't become less fragmented, he says, regardless of huge government expenditures on scientific research. Why? Because scientists have shirked "pedestrian research" in favor of more fashionable "reductionist research." Dr. Commoner's term "reductionist research" is practically synonymous with what is more popularly known as basic research or pure science. What he doesn't make clear is that, until very recently, much research has been perhaps too basic in the sense that science, rather than technology, has defined needs and set goals. He doesn't drive home the point, which has been made before but apparently has never been fully appreciated, that the steam engine contributed a lot more to science than science ever contributed to the steam engine.
Managing the use of technology is the biggest problem Dr. Commoner doesn't take a very close look at the question of what drives scientists to be reductionists. He doesn't closely examine the profit motives of science, though he does quote Archibald MacLeish to the effect that science has its own t r u t h which isn't necessarily a human t r u t h and that we should again assume the management of our means. Dr, Commoner doesn't discuss specifically removing the carrot from the stick of science. Nor does he examine the record of government economic planning and its effect on the environment—for example, government subsidization of agriculture and of highway construction. He does discuss the necessity of research programs designed to meet national needs. But though he might be better equipped to contribute in that arena than in the economic or political arenas, the environmentalist doesn't discuss the specifics of how such a publicly funded program might curb the profit motive 26
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of the scientist who, personally favoring more fashionable research, might merely add a postscript to his completed grant proposal to the effect that, "Oh, and by the way, this just might contribute to a cure for cancer or our environmental ills." Assessment. Dr. Commoner has devoted most of his book to an assessment of technology, industry, and economic systems, expressed in quite specific terms. A fundamental law of
Behind the misuse of technology is the rush for profits ecology, he says, is that everything is connected to everything else. The main thesis of Dr. Commoner's book is that there's something radically wrong with our economic systems. His argument that environmental crisis will help point up defects in society carries some weight. And he has demonstrated, perhaps even more rigorously, that our systems governing public funding of science and technology also may be in need of radical change. Mr. Kelso has ideas on economic systems as well as public funding of science and technology. To imagine his ideas operable on a large scale may require some optimism about human nature. Many, especially Dr. Commoner, realize the difficulty involved in trying to reduce nature to a controllable machine that can be finetuned. But they aren't easily convinced, Mr. Kelso has learned, that what is true for nature may be true for h u m a n beings as well. It's surprising, in fact it seems a paradox, that though it's still universally thought that the natural sciences are more nearly perfect than the social sciences, some natural scientists would nevertheless choose an economic system with "all-encompassing plans." Inevitable. Environmental degradation, affluence that is only an illusion for many, war, the capital-labor conflict, a system that forces a man to fight for a job on an environmentally destructive project, unresponsive institutions, and a consumer who can't afford to pay for the pollution control costs that will inevitably be passed on to him. That is a good statement of the problem, which is inevitable under one-factor economic theory, says Mr. Kelso. Consumers must pay for pollution control, except that most consumers can't afford to do so. In fact, the cause of most of our economic problems is too little purchasing power as measured against productive power, Mr. Kelso says. His proposed solution is
disarmingly simple. He has been proposing it for some 15 years—long before environmentalism became a major issue—as an answer, the only possible answer, to man's economic and political woes. Mr. Kelso's solution has been called "radical capitalism," and "universal capitalism." He himself calls it two-factor economic theory, to denote that it takes into account that capital as well as labor is productive; that, in fact, in an industrialized or technological economy, capital is the overwhelmingly important factor in production. All other economic theories he lumps under one-factor theory since they attribute productivity solely to labor. Regardless of the tradition of expressing productivity as output per manhour, everybody knows that the machines do most of the work, he says. Most of the world, including most U.S. citizens, is impoverished, according to Mr. Kelso. The widely acclaimed "affluence" of U.S. citizens, as Dr. Commoner likewise asserts, is largely an illusion. Not much action has been taken against the evils of primitive or "classical" capitalism. The "evil" force in primitive capitalism is the tendency for capital to become concentrated in the hands of a very few people. Although quantitative studies indicate that there are some 30 million stockholders in the U.S., qualitative studies, Mr. Kelso says, show virtually all the stock in the hands of only 5%. Thus, in a mass-production, hightechnology economy, the power to produce overwhelms the power to consume. With productive power and purchasing power drastically out of balance, wealth must be redistributed to keep the economy going. Government performs this function, primarily through the graduated personal income tax and the corporate income tax. These are necessary devices, Mr. Kelso says, but are not effective in accomplishing what should be their primary goal: preventing monopolistic concentrations of capital.
Costs of environmental degradation are mainly borne by society Wealth reaches most of the population only after having taken a labyrinthine detour through government, or only after the monopolistic owners of capital instruments have been forced by the coercive powers of government and labor to throw wealth to labor. In the process, only a small fraction of the wealth, only a very little real purchasing power, actually reaches the public. The rest is wasted
in nonproductive activity. Thus, efforts to bring production and consumption into equilibrium have been only minutely successful. Impoverished. The result is a perpetually impoverished public when viewed against the potential productive power of the nation. And an impoverished public can buy only cheap
Production plan fulfillment is understood to be paramount goods. Therefore, the tendency of such a system is for price r a t h e r than quality to become the determining factor in the m a r k e t place. Faced with an impoverished public, industry must produce ever cheaper goods. This explains why many of our industrial heroes are the cost cutters, Mr. Kelso says. An all-out effort to cut costs inevitably leads to environmental degradation, taking advantage, perhaps unwittingly, of nature to keep the economy running.
So there we have it, Mr. Kelso says. Capital, or ownership of capital instruments, tends to become concentrated. According to Mr. Kelso, if the concentration process were allowed to go unchecked, the economy would grind to a halt. The result is depression. To keep the economy going requires a redistribution of wealth. E n t e r government and labor unions. Enter waste. E n t e r increased productivity to eliminate labor. E n t e r production of nonconsumable goods in an effort to create jobs. E n t e r stockpiling of war materials. Inflation. Since few persons really want to live on the dole, enter government make-work projects and subsidization of already monopolistic industries in the n a m e of creating m o r e jobs —and m o r e waste. The workers in make-work jobs do receive pay, of course, b u t that pay generally does not contribute to real purchasing power and is, in fact, inflationary. The explanation is t h a t many of these work-
ers are not involved in producing consumer-useful goods or services. Therefore, they do not produce real wealth. They are involved in nonproductive, possibly even counterproductive work or in production of w a r goods, which are not consumable in any positive sense. And government deficit spending keeps it all going. I n Mr. Kelso's view, the economy would be better off if such workers
Scientists have shirked pedestrian for reductionist research were unemployed and still received the same incomes. At least they wouldn't then be counterproductive and counterecological. It would be even better still if they were involved in producing something useful. Meanwhile, industry is straining at the bit with its excess of potential productive power. Enter consumer credit, which is only an a t t e m p t to increase purchasing power and in the
Of Environmentalism, Economics, Profits, Growth, Capital, Labor, Universal Suffrage, and Social Duties , Environmentalism, when it becomes survivalism, becomes a universal issue. Economics has always been a universal issue. Both have been largely left up to experts. Both Dr. Commoner and Mr. Kelso seem to lean in favor of universal suffrage—Dr. Commoner for environmental and political suffrage, though it's not clear whether he's for universal economic suffrage. Both seem to have a strong sense of social duty. In "The Closing Circle," Dr. Commoner states that, "If the environmentalist plunges headlong into economic matters, he may quickly lose his way in a maze of unfamiliar theory and poorly understood controversies, finally to be swamped in a flood of professional disdain." Nevertheless, seeing it as his social duty, Dr. Commoner has chosen to bite the bullet. And he has come, at least temporarily, to the conclusipn that because pollution is linked to profits through productivity, a scheme must be devised in which industry can operate without profit, or, as he puts it, "in which industry is guided by longterm social gain rather than by private profit." There is an apparent conflict here between Dr. Commoner's ecological imperative and Mr. Kelso's human imperative, since Mr. Kelso seems to be saying that each of us should be allowed to profit more, through ownership of capital instruments (though possibly less through our own labor). Definitions. A look at some definitions common to the field may help to
dispel some of the semantic confusion surrounding economics. Management consultant Lawrence T. Harbeck of Ann Arbor, Mich., has endeavored to arrive at a fundamental definition of profit. Many textbooks point out, he notes, that profit is money left after cost is subtracted from selling price. This definition is narrowly accurate, he cautions, but broadly misleading. It sounds as if the seller is getting something for nothing. And it leads to the question: If the costs are met, why should there be a remainder? It implies by omission that profit is associated only with money and sales-oriented economic systems. Economic experts agree to disagree, Mr. Harbeck says. They describe profits variously as: high earnings from entrepreneurship; discrepancies arising from uncertainty; results of a monopoly position; return from a contrived scarcity; unnecessary surplus; implicit interest, rent, and wages; an accounting residual needed to balance earnings against the value of goods and services; a mixture of these. None of this is helpful, Mr. Harbeck warns. Precision is needed. Model. In a recent Wall Street Journal article, Mr. Harbeck constructs a Robinson Crusoe economic model. Consider Crusoe, the castaway on a desert island. "He has drinking water but no food. At rest, his body uses material and energy equivalent to one fish per day. If he does not eat one fish per day, while resting, he will starve. "But he must work to catch fish. He
pays a price for each day's effort. The price is extra material and energy used by his body while fishing. His efforts, successful or not, require a second fish each day. If he catches two fish each day he will live; if his catch averages less than two, he will die. "If he catches a third fish one day, it is profit. He can afford to rest the next day and not fish at all. Or he can keep working and save his extra fish for the day when he gets less than two. Or he can start to build a supply to allow him to stop fishing, temporarily, and make a fish net to improve his productivity. The extra fish, the profit, gives him the option of doing something other than fishing." To elaborate a bit on Mr. Harbeck's model: Let's say that with a net Crusoe is able to double his average catch per unit time spent fishing. Now, when he fishes by hand, he profits. The same is true once he becomes part capitalist. The difference is that part of his profit is then due to the net, part to his labor, according to Mr. Kelso's two-factor theory. Either way, with a net or without it, he profits at the expense of nature and continues to do so only within the limits of his natural resources. In addition to the fish, the free time that Crusoe gains, time during which he doesn't have to fish, is also attributable to his capital instrument, a fish net. So each day that the net enables Crusoe to quickly fulfill his urgent needs, he has time left over which he can spend, if he so chooses, on fulfillment of not-so-ur-
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final analysis serves only to further diminish the consumer's real purchasing power. The debt to n a t u r e is not the only developing crisis, Mr. Kelso says. Witness the increasing rate of individual bankruptcy.
Fundamental law is that everything is connected to everything else Solution. Mr. Kelso's solution is something like a universal profit-sharing plan. The basic idea is that everyone must participate as directly as possible in the productive process and produce real wealth (something use-
gent, but nonetheless important, needs. For example, he might choose to study astronomy. On the other hand, the situation could get much more complicated. Crusoe might spend his free time in devising an even more efficient method of catching fish. He might learn to cultivate coconuts using dead fish as fertilizer. All the while, free time allows him to go about not-so-urgent, but nevertheless important matters. For example, he might engage in studying the habits of small marine organisms. Perhaps he does so simply because he's interested. Suppose he discovers that a disease is spreading among small marine organisms and he recognizes this as a threat to his fish supply farther up the food chain? It is obvious that Crusoe's free time has been well spent, but only by chance. Conclusions. From the hypothetical Robinson Crusoe situation it is possible to arrive at the major conclusion that profit, no matter what you choose to call it, is necessary for life. Living things in nature profit at the expense of other living things in nature. And it would seem that if all men are to profit, the expense must be borne by nature. Possibly the best goal to keep in mind is that the sun should bear the heaviest burden. But obviously, in a market-place economy, profit doesn't easily lend itself to such a simplistic definition. Things quickly become confused. According to Mr. Harbeck: "Time is a factor in measuring profit. . . . We can define [profit] as occurring only during
28
C&EN FEB. 21, 1972
ful) and m u s t receive real purchasing power directly through ownership of capital instruments. Then, after internalization of external diseconomies has been enforced by the Government, the consumer can better afford to pay the extra costs. Probably the most difficult hurdle any revolutionary economic theory m u s t overcome is the semantic confusion (see box) surrounding capital, labor, profits, productivity, and growth as well as popular notions of the process by which capital is acquired and accumulated and the force behind its concentration. One of the first popular notions that must be dispelled' is that capital has to be acquired by "sacrificial saving," Mr. Kelso says. Capital can pay for itself very rapidly, he says, by creating new capital, and is therefore inherently capable of being financed. An artificial device which generates ever-increasing confusion, Mr. Kelso says, is the custom of attributing pro-
production, and conclude that the castaway makes a profit of one fish every eight-hour working day that he catches two. It gives him the option of not fishing at night. The significant point is this: During a productive period, however defined, he produced more than he consumed. Profit is thus the difference between production and consumption of the producing unit—while it is producing." He adds that, "All living things and all organizations of living things must be profitable to exist. Bears, squirrels, and trees must make a profit in the summer to survive the winter and start producing again next spring. Life survives unprofitable periods only if production exceeded consumption during an earlier period. Profit achieved during eight hours enables the worker to not work the remaining 16 hours of the day. The worker's profits permit his children to not work at all. Profit should not be confused with savings. Living things must save, if only in the form of fat, to survive profitless periods. But before they can save they must profit." The hypothetical situation also suggests several other conclusions. • Labor is essentially energy. Man expends a portion of his energy which he gets from his food, and ultimately from the sun, in his efforts to acquire a continuing supply of food and other necessities. Man profits through his labor. If he didn't, he might never have time to devise a capital instrument. • Capital instruments are inanimate technological devices which enable man
ductivity exclusively to labor. Capital instruments, tools and machines, are responsible for the larger p a r t of productivity. They are inanimate productive devices, to be sure, but nevertheless must be recognized as productive devices, not concealed labor. In other
Reduce nature to a controllable machine that can be fine-tuned words, technology m u s t be recognized as an entity, not j u s t as an extension of man. As Mr. Kelso puts it, "The highest wages are not currently being paid for production but rather for being present at the scene of production as a member of a well-organized power bloc." In many cases of featherbedding, for a laborer to be present at the scene of production is not necessary at all, he says. In such a case, if the laborer were to receive his income through ownership of a share in the capital instruments which actually carry out the
to expend a smaller portion of his time and energy acquiring his necessary food, or other things he considers necessary, thereby enabling him to have time left over to spend thinking about not-so-urgent but nevertheless important matters, thereby enabling him to develop more capital instruments if he so de^ sires. The fact that a capital instrument (technology) is inherently profitable makes all this possible. But capital instruments, being inanimate objects, do not of themselves require growth. • Man,' being a thinking animal, will expand and use his knowledge. He will profit from technology. • Crusoe's island, having a population of one man, a capital instrument, and natural resources, thus has universal capitalism as its economic system and universal democracy as its political system. • The economy of the island is a twofactor economy in that he profits from his ownership of a capital instrument as well as from his labor. Profits are thus the wages of capital. • Production and consumption are in balance since Crusoe the producer is the same as Crusoe the consumer. • Crusoe had no free time to spend on "important" matters until he had seen to his urgent needs. Perhaps the most complicating single event that could occur on his island would be the arrival of another man. Mr. Kelso's two-factor theory has it that political democracy, which must be founded on economic democracy, would not be possible unless the new arrival
productive process, then he would receive real wealth, real purchasing power directly through his ownership of capital instruments. He would not need to stand alongside a machine to give the appearance of being employed, and could afford to use his innate intelligence to develop craftmanship in some other area not so susceptible to mass production techniques and much more satisfying to him. Quality. If the same situation applied to many persons, then there would be other real purchasing power available for buying his highly crafted products. And the increases and the productivity of the capital instruments of which he owned a share could be applied to increases in quality and to eliminating coercive labor. (Dr. Commoner calls for a return to craftsmanship and quality. Mr. Kelso claims that his plans would provide for such a return.) Mr. Kelso's human system is remarkably similar to Dr. Commoner's nat-
ural system. Dr. Commoner says that the most stable natural system is the most diverse one. In other words, when man injudiciously places artificial constraints on the natural system, he almost invariably causes a disruption, usually by killing some form of life that is beneficial to something somewhere. Mr. Kelso says that the most stable economic system, and therefore the most stable political sys-
had the right to ownership of capital instruments, the right to participate in production other than through labor alone, and exercised these rights. Efficient. Suppose the man turns out to be a scientist, a man more intelligent and knowledgeable but less muscular than Crusoe. The economy would obviously be more efficient if the new man spent his time thinking and Crusoe spent his time catching fish. In Mr. Kelso's theory, such an arrangement, mutually agreed upon, might be workable. But Mr. Kelso says that the optimum situation would obtain only if the new man were allowed and maintained his economic ballot, ownership in capital instruments used in production of the material necessities of life, and only if he conscientiously endeavored to apply his thinking work to urgent matters until both he and Crusoe became secure in their belief that their urgent needs would continue to be met. There may be many objections to such a simplistic model. Things do get complicated when the population of the island grows and more technology enters the picture. But thinking in terms of such a model can perhaps shed some light on the conflict between practical businessmen who see profit as "making the wheels go 'round," and their opponents who would like to eliminate human selfishness. Can the conflict between such different men be resolved? Dr. Commoner recognizes that scientists have been guilty of detaching themselves from the urgent needs of life. He seems to regard their attitudes as self-
centered. Technology is faulty, partly because of its fragmented scientific base. Pollution is linked to profit through technology, he says. Thus, the ultimate cause of environmental degradation is the profit motive, not population. Population. The U.S., he says, probably has sufficient resources to support its existing population, which seems to be leveling off. Efforts to reduce population, he says, are equivalent to attempting to save a leaking ship by lightening the load and forcing passengers overboard. One is constrained, he notes, to ask if there isn't something radically wrong with the ship. He seems to be asking, could the profit motive be the leak? Lawrence Harbeck says, "Free enterprise acknowledges human selfishness and directs it to constructive ends. Partisans of free enterprise claim this as a virtue; they believe selfishness is a fact of life. Opponents express horror at this pragmatic view; they believe government can eliminate human imperfection." Mr. Harbeck goes on to say that "Idealists who confuse profits and selfishness often follow this pattern: They avoid profit-making jobs, seek profitusing careers, and clamor simultaneously for government action to prevent others from generating profits. The analogy would be to destroy part of the food and water in a lifeboat because the rowers are getting larger shares than those who cannot or will not help row the boat to safety."
Too little purchasing power as measured against productive power tern and the system least apt to cause environmental degradation, is one that fosters the widest possible diffusion of ownership of capital instruments. Would Mr. Kelso distribute ownership equally to all men? No. Would Dr. Commoner distribute populations of natural species equally over the surface of the planet? Of course not.
But the most stable system, Mr. Kelso says, would be one in which all men received a large portion of their material support through ownership of capital instruments. Existing economic systems have stretched the link between production and consumption almost to the breaking point by refusing to recognize that in an industrial economy the most direct means of participating in production is by ownership of capital instruments. Every living thing in nature, Dr. Commoner says, must produce something that can be consumed by something else. Mr. Kelso seems to be saying that every man, since he is a part of nature, must somehow participate in the production of the consumable necessities of life, even if only vicariously. Dr. Commoner says that there is no such thing as a free lunch, and that to assume that there is, is to invite destruction. Mr. Kelso says that no man can in the long run get away with abdicating his responsibility in producing the lunch, and to deny a man the right to engage in that production is to invite destruction. In fact, in Mr. Kelso's view, only by bringing the consumer into the productive process can production and consumption be brought near equilibrium. Existing systems, he says, are doomed to an orgy of overproduction with environmental degradation as a result, and a perpetual general impoverishment. Probably not since the dawn of man's recorded history, he says, have production and consumption been in perfect balance. Urgency. Existing economic systems, Mr. Kelso says, violate a fundamental law of human nature—the Law of Urgent and Important. Human affairs are governed by two hierarchies of values, he explains, corresponding
Most of the world, including most U.S. citizens, is impoverished to the two sides of man's nature. One is a hierarchy of urgency corresponding to the animal needs and wants of man. The other is a hierarchy of importance, corresponding to the spiritual, civilized, or human needs of man. The priority order of particular activities on these scales of values is inverse, so that an activity that occupies first place on one is in last place on the other. "In the human scale of things, it is the goods of civilization—the arts, the sciences, religion, education, philosophy, statesmanship, and the like—that weigh heaviest. Despite much particular evidence to the contrary, man's civilization as a whole testifies to that FEB. 2 1 , 1972 C&EN
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truth. It is equally clear, however, that for all but the most exceptional human beings, the goods and services that minister to the need and desire for creature comforts weigh heaviest on the scale of urgency. It is only when man's urgent material needs and desires are satisfied and he is secure in his belief that they will continue to be satisfied—when, in a word, he becomes affluent—that the urgency of economic matters disappears, and the truly important things move into the foreground of consciousness. In the presence of poverty, all human affairs are dominated by the urgency of things economic; the importance of the goods of civilization is obscured, and even repudiated." Thus, Mr. Kelso has articulated what psychologists have long since recognized as a truism: When basic needs are met, more sophisticated needs emerge. In addition, as he has pointed out, more sophisticated needs or even sophisticated knowledge that cannot be directly related to basic needs may well be repudiated by those whose basic needs haven't been met. Clash. The following quotation, taken from the closing chapter of Dr. Commoner's book, "The Closing Circle," seems to indicate that he has clashed head on with the Law of Urgent and Important: "There is a sharp contrast between the logic of ecology and the state of the real world in which environmental problems are embedded. Despite the constant reference to palpable, everyday life experi-
Involved in counterproductive, counterecological work ences—foul air, polluted water, and rubbish heaps—there is an air of unreality about the environmental crisis. The complex chemistry of smog and fertilizers and their even more elaborate connections to economic, social, and political problems are concepts that deal with real features of modern life, but they remain concepts. What is real in our lives and, in contrast to the reasonable logic of ecology, chaotic and intractable, is the apparently helpless inertia of the economic and political system; its fantastic agility in sliding away from the basic issues which logic reveals." Comments from earlier chapters in the book indicate that Dr. Commoner
intuitively realizes the great extent to which men have reversed the Law of Urgent and Important. And he realizes that to violate that law on a large scale is a threat to life itself, and that for some men (scientists especially) to subordinate the urgent needs of other men, even though unwittingly, toN fulfilling their own important needs is dangerous and, in the age of high technology, is not likely to continue indefinitely. If it's not stopped by environmental collapse, then it probably will be by war, accidental or intentional. Implementation. Mr. Kelso has detailed financial schemes for implementing his theory. He has put them into effect in a number of situations. Plans for his latest experiment were disclosed late last month by Puerto
Technology is an entity, not just an extension of man Rican governor Luis Ferre in his state of the commonwealth address. In some 20 years, through Operation Bootstrap, which provided large tax incentives to lure development capital to the island, Puerto Rico has become a modern industrial state. But many Puerto Ricans remain impoverished. The wealth produced in Puerto Rico is not consumed there. It can't be, because not enough Puerto Ricans have enough purchasing power. Mr. Kelso's plan would allow Puerto Ricans to become owners of productive capital instruments through credit. He has had some success in the U.S. and Canada, too. His schemes include something for everyone, even existing owners of capital instruments. Realizing that to advocate redistribution of the ownership of capital instruments would alienate powerful persons whose help is needed, he takes the opposite tack of appealing to their enlightened self-interest in an effort to arrange financing for acquisitions of new capital by new capitalists. Widespread implementation of the two-factor theory, he says, would be deflationary and therefore of benefit to everyone. One of his schemes provides cash savings for corporations through a tax shield. He is seeking corporations that are looking for debt financing. "Suppose a company wants to borrow $1 million," he says. "It goes to a bank. But the company says to the bank, 'Don't lend the money directly to the corporation. Lend it to our employees' stock ownership trust.' The employee committee managing the trust then directs the cash to be invested in the corporation. New stock is issued for that cash at the then-current fair market value of the stock.
The corporation commits itself to repay the bank indirectly through the trust. Repayment to the bank through the trust is therefore in pretax dollars, because the trust is legally an employee deferred compensation trust. In effect, the company repays the loan as if it were making contributions to a pension plan. Such payments are tax-deductible." With conventional debt financing, only the interest on the loan is tax-deductible. With Mr. Kelso's scheme, repayment of the principle is, too. The deal is less risky for the bank, since the loan is repaid from pretax dollars by the corporation. The scheme also provides work incentives for employees as well as a second income plan which provides dividends from capital instruments that eventually pay for themselves. The employee therefore becomes less dependent on his wages and the arbitrary will of other men. In addition to increased employee efficiency, a long-term advantage for the company is that the stock remains in the hands of a team "that is here today and tomorrow," Mr. Kelso says, regardless of the market price of the stock. Others. But what about those persons who don't work for profit-making corporations? As stated earlier, Mr. Kelso has something for everybody. He would set up a government-sponsored Capital Diffusion Insurance Corporation to take care of these persons. It's a bit more complicated than the profit-sharing plan for the corporation, but the result presumably would be that each person would get a portfolio of stock on credit. As Washington Post columnist Nicholas von Hoffman put it in a review of "Two Factor Theory: The Economics of Reality," by Mr. Kelso and political scientist Patricia Hetter (Vintage paperback), "The truth is most of us are job serfs. At a time when invested capital returns 20 to 30%, we have no capital. We only have our wages and salaries, and a debt so high that something like 20 cents on every dollar we earn is spent to pay off what we owe . . . . If you have any kind of a job they'll give it [almost any consumer item] to you
Participating in production by ownership of capital instruments for next to no money down. But what happens if you don't want it? "What happens if, instead, you want to buy $4000 worth of IBM shares on the same terms? You know, stock now, no money down, don't pay anything for three months. Blow that idea out of the other ear." FEB. 21, 1972 C&EN
31
Mr. Kelso says, however, that he can arrange it. He has drawn u p a blueprint in the form of an Act of Congress to replace the Full Employment Act. So, says Mr. Kelso, solve the economic problem of society first, and a
When basic needs are met, more sophisticated needs emerge flood tide of the goods of civilization will follow. But to reverse the Law of Urgent and Important is to invite disaster. We are guilty of that reversal, Mr. Kelso says. That which is important, he says, we are doing, and doing brilliantly. That which is urgent and which, if left to run its own violent course, will destroy the world and civilization, we do not at all, or we do haphazardly and badly. By violating the Law of Urgent and Important, he says, an inherently important scientific undertaking is transformed into a disaster. The conquest of space, for example, is unquestionably important. But by no objective standard, he submits, can the conquest of space be appraised as urgent under present circumstances in the world. The space race, he says, cannot even be considered urgent from a military standpoint. Freedom. Basic to Mr. Kelso's vision is the assumption that to be politically free, man must also be economically free. He must hold his means of subsistence independent of the arbitrary will of other men. The scientist who eschews ownership of material things, particularly ownership of the means of production, puts himself in the position of having to sell the products of his mind in order to live. How can those products of his mind possibly be as pure as he would like them to be? Technology, Mr. Kelso says, is a process that substitutes things for people. More explicitly, he says, it is a process by which man shifts the burden of economic production from the human to the nonhuman factor, namely capital instruments in which are harnessed the forces of nature. That technology which affects the environment so destructively was adopted primarily to obtain a larger output with less labor input, to cut costs, or to keep from incurring costs that would add to the price of the product, or to produce things and services that labor cannot produce at all. There is nothing in the concept of productivity through technology that says that productivity cannot be applied to improvement in quality rather than to cost cutting. A job-oriented or full-employment 32
C&EN FEB. 2 1 , 1972
economy actually pits labor against technology. The result is that a large part of the power of technology is directed toward eliminating labor, causing a general reduction in purchasing power and thus the need to cut costs even further. If conditions worsen (and Mr. Kelso predicts that they will) under our existing system—a system committed to full employment rather than production of consumeruseful goods and services, the conflict between labor and environmentalism will be increasingly aggravated, Mr. Kelso says. The emerging picture is one of a giant named Technology, faulty due to its fragmented scientific base, but driven by the force of man's determination to use and expand knowledge. A basic drive behind Technology is to eliminate senseless toil, and quite possibly to improve the quality of life. To pit labor against Technology serves only to pester and distract the giant, causing it to smash blindly through the labor barrier and then lose its way in a morass of costcutting problems. Optimistic. To accept Mr. Kelso's theory, one must be rather optimistic about human nature. Is it within the realm of the possible for imperfect man to devise economic institutions capable of channeling man's drives rather than eliminating them? The industrial corporation, with some relatively minor refinements, can do so, Mr. Kelso believes, and can itself be made more responsive to h u m a n needs. Mr. Kelso's dream is no Utopia with every citizen equal. But in his vision, everyone's income would be considerably closer to the mean. Mr. Kelso is a practical man, as is demonstrated by the assumptions underlying his theory and implementation plans. He assumes that the poor are not going to voluntarily renounce affluence as long as others have it. He assumes that those who are already affluent will refuse to relinquish their wealth voluntarily in order to share with others. He says that adequately policed but yet free market economy
Owners of productive capital instruments through credit is more efficient than a rigidly controlled one. For the economy to be stable by the year 2000, Mr. Kelso says, very rapid expansion in production of consumeruseful goods and services would be necessary. He assumes that the resources necessary to produce general affluence exist and if these resources are used properly, expansion can take place without excessive environmental
degradation. Indeed, he says, a good deal of economic growth under his plan for a second economy would represent growth in environmental technology. The quality of life would rise, he adds, but GNP could go down. Growth. Under universal capitalism, what would prevent wholesale rape of the environment through mad rush for profits by billions of capitalists? A fair amount of man's greed can be attributed to the fact that very few men have any real economic security, Mr. Kelso maintains. It is not enough for man to have his urgent needs met; he must be secure in the belief that they will continue to be met. Proverbial wisdom has it that the smaller a man's fortune is, the more anxious
The truth is that most of us are job serfs he is to increase it and protect it. Dr. Commoner has said that there are already many ordinary citizens who've been willing to set aside their narrow self-interests to accomplish some significant progress on environmental issues. If they've come this far with only political democracy, what would economic democracy let them do? Economic growth, at least in terms of material goods, should level off, Mr. Kelso says, under a system of universal capitalism. He insists that multinational corporations must foster widespread ownership of their foreign operations in order to build up purchasing power and the economic foundation for stable political systems as they build up productive power in developing nations. Population growth will level off as men acquire material well-being, he says, as it has already in this country regardless of the fact that our affluence is largely an illusion cushioned by nature's, government's, and the consumer's debt. The U.S. system of free enterprise has never been wholly free or wholly private. Government has always been both partner and policeman to industry. The role of government as policeman is probably the more proper one, Mr. Kelso maintains, and government is apt to get much more involved in that respect, especially as concerns the environment. But the role of government in making certain that equality of economic opportunity (not just employment opportunity) exists, policing market competition, and policing the concentration of individual productive power can certainly be improved, he says. There is no logic, Mr. Kelso says, in looking to full employment as the sole mechanism for enabling the masses to participate in production when the
bulk of the wealth is produced by the nonhuman factor of production. In fact, he says, employment statistics indicate that some 37% of the work force is economically unemployed if we define economic employment as being employed in production of useful goods and services.
SUPERNOSE
To reverse the Law of Urgent and Important is to invite disaster The first aim of government should be to foster diffusion of new capital formation as well as diffusion of economic risk, Mr. Kelso says. Primarily the credit system of the economy should be used to accomplish that end. Existing antitrust laws need overhauling, he says, and a new antimonopoly concept needs to be introduced into national economic planning. Its objective would be to avoid undue concentration of the power to produce wealth in any individual. When the imperative of full employment no longer dominates the society, government planning can then more successfully conserve natural resources, he says. Insufficient. Government's role change alone is not enough, Mr. Kelso says. Business also will have to change. Private enterprise has progressed to its present state through a strategy centered wholly on production. The managers of today's enterprises have remained aloof to any direct concern with building the economic power of the consumers to consume, according to Mr. Kelso's observations. Full-employment economy actually pits labor against technology Could it be that someday news of the rate of new capital formation and diffusion will be recorded in the newspapers and announced on the air waves? This prospect sounds a bit more cheerful than the body count of enemy dead—or the tally of pollution levels. What would the world be like? Would everyone then have a TV set on which to see the space shots? Will Mars wait for another generation? Would everyone then have more of an understanding of and prefer to watch that real life adventure? Or would many switch to another channel to enjoy vicariously a dream world of cheap tinsel? And would the astronauts then be able to send back word that the earth appears to be getting cleaner?
Wilks introduces the first portable general-purpose IR measurer of air pollution It's the MIRAN(™) Infrared Gas Analyzer—capable of detecting and measuring concentrations of any infrared absorbing gas (which includes practically all air pollutants) in the few-parts-per-million range. It's rugged, weighs less than 30 pounds, and can be carried anywhere for immediate, on-the-spot measurements. No need to collect samples for subsequent lab analysis. The MIRAN Gas Analyzer is a compact, sensitive infrared spectrometer covering the spectral range from 2.5 to 14.5 microns, coupled to a variable path gas cell adjustable in path length from 3/4 to over 20 meters. It can be set at any selected wavelength to record spectra. Cell path length variation and scale expansion capability permit a broad sensitivity range from several percent down to fractional parts per million. The Wilks MIRAN Gas Analyzer is truly a "Supernose" in identifying and quantizing air pollutants. Write for Bulletin CEN-S-2. "MIRAN" is a trademark of Wilks Scientific Corporation.
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