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The Executive's CompassBusiness and the Good Society$

James O'Toole

Print publication date: 1995

Print ISBN-13: 9780195096446

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780195096446.001.0001

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(p.141) Appendix B Four Proposals An Exercise in Applying the Ideas in This Book to a Contemporary Debate (p.142)

(p.141) Appendix B Four Proposals An Exercise in Applying the Ideas in This Book to a Contemporary Debate (p.142)

Source:
The Executive's Compass
Publisher:
Oxford University Press

(p.143) Telecommunications/information Technology Policy: the Tension among Fundamental Values

Instructions

Our purpose is to consider how complex and far reaching technological issues are resolved by public policy debate and decisions calculated to achieve the most productive and beneficial impacts on all sectors of society.

The scenarios that follow represent the expressed views of four politicians who are articulate advocates of differing positions regarding a possible telecommunications/information technology policy.

After reading, give each statement a short descriptive title. (One could be called the “Liberal Proposal” and another the “Conservative Proposal,” but since we have now used those (p.144) two labels as examples, you must come up with other—even more descriptive—one or two word titles!).

Based on your own judgment, please offer a personal assessment of the desirability of each proposal on a scale of ZERO (a totally unacceptable policy from your point of view) to ONE HUNDRED (the ideal policy in your eyes). The combined score of all four proposals need not add up to one hundred.

Do not agonize over the details of the proposals. Just spend a couple of minutes with each and go with your instincts.

Proposal A

The—Position

It is clear from the testimony we have heard that no policy is the best plan. In the telecommunications/computers arena, governmental power represents too great a threat to freedom to warrant tinkering with the naturally efficient workings of the market. By itself, competition provides all the regulation and incentives for innovation that are required. Consequently, we should move as quickly as possible to deregulate the telecommunications industries. What business is it of gc ernment who owns what television or radio station? As for programming and forms of delivery, the rule should be: the consumer is king. It is up to the public to decide what they watch in the privacy of their own homes: whether it is brought by cable, broadcast, satellite or on phone lines, the public must be free to choose both the method of delivery and the content of the programs. For example, the U.S. government should have left AT&T to its own devices—allowing the introduction of new technology to attack its monopoly (if, indeed, that is what the market mechanism had dictated).

In the computer-related fields, the genius of entrepreneurs and inventors will meet the challenge of competition if they are (p.145) freed from excessive regulation and taxation. While the full list of government infringements on the workings of the market would fill a book, we must begin to remove these by abolishing all tariffs, quotas and controls on the sale and transfer of technology and capital to enterprises and to governments. Domestically, we should unleash the powers of entrepreneurs by eliminating capital gains taxes, and by reducing taxes on income to the level prescribed by logic of supply side economics.

History shows that the only impediments to innovation, growth and the creation of wealth are the well-meaning and do-good interference of government into the wealth-creating activities of capitalists. Equally important, the emerging telecommunication/ computer devices are technologies of political freedom: they promise to free peoples everywhere from network journalists. In the future, these technologies will allow for direct national plebiscites, thus freeing the public from the stranglehold of political parties and professional politicians. Thus, the proper role of government is to deregulate, encourage competition and limit the sphere of governmental authority to enforcing contracts between consenting adults.

Proposal B

The—Position

It is clear from the testimony we have heard that fairness requires us to establish an industrial policy for telecommunications along (he lines of the “indicative planning” model found in the social democracies of Western Europe. While the market plays a role m such systems, the government does those things that the market fails to do. Left to its own devices, the market creates unjust disparities between the winners and losers in society and creates imbalances between classes, races and geographical (p.146) regions. The market also fails to account for the long term.

It was for these reasons that our predecessors established regulatory agencies to deal with the telecom industry. For example, in the United States, AT&T was allowed its monopoly in a fair exchange with society for high levels of service, access to the poor and to rural regions, low prices and research in the national interest. This was a good bargain, and should not have been altered. Accordingly, we must regulate the access to and ownership of television and radio stations. In order to increase the amount of public service programming and to ensure fairness, we must extend regulatory jurisdiction to cable and to other narrowcast technologies. In sum, we must resist the growing pressures to deregulate. The telecommunication and computer industries are already the least-regulated in the world; in fact, we should be going the other way, creating common technical standards, providing access to high-tech goods and services for the culturally and economically disadvantaged and, in general, assuring that these resources will serve the common good rather than the interests of the rich and powerful.

In order to allow corporations to compete successfully—and, thus, create jobs—we must maintain tariff and other barriers against unfair competition. Moreover, we must follow the example of Japan and Europe and invest in promising new technologies to give all corporations a jump-start in global competition. Governments must thus invest in the industrial infrastructure of telecommunications, much as the French have done with Minitel. And. like the German Max Planck Institutes, we should create government-funded, independent nondefense related high-tech research centers. Moreover, we must support science and math education in schools and colleges. In particular, we should offer scholarships to encourage the culturally and economically disadvantaged to enter these fields. Not only must the government assure that all have equal (p.147) opportunity to learn the new high tech skills, it must insure that all have equal access to the new technologies which, because of their importance, are a public and not simply a private concern. Thus, we must balance the economic power of large corporations with the political power of government.

Proposal C

The—Position

It is clear from the testimony that we have heard that we should establish something like the Japanese Ministry of International Trade and Industry. The proper role of government is to serve the needs of business in the tough world of international competition in which it is Japan, Inc. and EEC, Inc. against the rest of us. The goal should be to make industry as efficient as possible vis-à-vis our competitors. To achieve that end, we must play the game by their rules. First we must end the fiction that anti-trust laws encourage efficient competition. In fact, large corporations must be allowed to combine in order to achieve the economies of scale necessary to meet foreign, government-supported, giant corporations. As a first step, corporations should be allowed to pool R&D, technology and markets.

To increase productivity and our standard of living, we must get government on the side of business. That means that all well-meaning environmental, consumerist, labor and other regulations that hamper competitiveness should be reviewed by joint business-government panels. Indeed, all adversarial governmental agencies should be changed to operate in consultation with industry. Because economic growth is in the interest of all, investment tax credits must either be greatly increased or corporate income taxes removed entirely. It is also clear that something like a moon shot high-tech program is (p.148) needed. While Minitel is one model, such a program should be accomplished through a consortium of private telecommunications and computer firms to avoid the inefficiencies of French-style state bureaucracies. The basic research for the program could be underwritten by government funds. Government should also pay for programs to retrain workers for high-tech and telecommunication industries. The program would be administered by the corporate sector. Most important, the costs of products must be reduced through improved engineering and management methods. Government should work with business and education to ensure a supply of high-tech engineers and others trained in such new productivity techniques as just-in-time, total quality management, and numerical controls.

A major problem all high-tech firms face is the unpredictability of the regulatory environment. By insuring that all federal agencies are staffed by people with business experience, some of the current unpredictability of government actions can be reduced. The real issues aren't whether the position of the big broadcast networks should be maintained, or whether other large organizations should be broken up, as was AT&T in the United States; rather, we must create policy which provides that all such decisions will be made rationally and carefully by business-oriented panels as opposed to being made by anti-business judges and bureaucrats.

Proposal D

The—Position

It is clear from the testimony that our policy needs to reflect the new global paradigm. The world is now one, and it is no longer “Us vs. Them.” Thus, we must learn to think globally while we act locally. Thinking globally requires considering not only the (p.149) environmental impact of our actions, but the effects of the new technologies on Third World employment, development and dependency. For example, in the emerging knowledge economy, the unskilled of the Third World may be left behind as a permanent underclass. International efforts must be mounted to address such problems, including issues like the call from the information-poor for a global information order.

Acting locally, we must establish decentralized, participatory offices of technology assessment around the country. While most environmental and social consequences of telecom/computer technologies appear benign, they could present a threat to such values as privacy, community and local control. What is worrying is that public policy in this area will be made solely on economic and technological considerations, while human issues will be ignored. Farsight is needed with all technology. The intent is not to stifle the introduction of technology but to insure that it serves human ends. Thus, we should err towards policies based on the beliefs that small is better than big, decentralized better than centralized, local better than national, participation better than diktat, demassified better than standardized, and community-centered uses better than self-interested ones. For example, since it is unknown if working with computers is bad for one's health, if the byproducts in the manufacture of semiconducters are dangerous, or if watching television predisposes youth toward violence, it is prudent to be safe in the short-term rather than sorry in the long-run. Is it not better to let the local community decide whether it wants to provide access to certain kinds of commercial or public-service television programming?

Since human development should take precedence over economic development, technology policy should seek to empower the culturally and economically disadvantaged within all regulatory bodies, broadcast licensees, and private companies under contract to the government (and to favor worker-owned licensees and contractors). In particular, policy must weigh (p.150) against the dehumanizing aspects of the new “technologies of control.” In workplaces, “smart machines” can be either enslaving or empowering; we must encourage the latter. Huxley showed how the new technologies can create a sense of powerlessness, wantonness and rootlessness—values we are exporting to the Third World via television programs. And Orwell showed the threats to privacy and democracy that can result from technology as apparently “innocent” as Minitel. In sum, one needn't be a Luddite to be on the guard against technological dehumanization.