Share this story
Close X
Switch to Desktop Site

Economists with opposing views see growing regulation of industry

Looking into America's future, two distinguished economists see the same thing: dramatic increases in direct government control over the business sector -- and thus over the consumer.

For both men, signs of what is to come lie in the spreading net of government regulations cast by such agencies as the Occupational Safety and Health Administration and the Environmental Protection Agency.

About these ads

But the two economists came to their conclusions from two very different directions when they crossed paths and words at the University of Illinois to address some 1,800 of their colleagues for the July 27-30 meeting of the American Agricultural Economics Association.

The first to speak, retired Kraft foods executive austin C. Hoffman, argued that the federal regulatory net must be greatly enlarged and strengthened in order to break the grip of "monopolistic economic power" in the United States.

Dr. Hoffman called for an immediate wage-price freeze, followed by setting up a long-term system of wage-price guidelines.

Saying he expects little support from fellow economists, Dr. Hoffman added that "it may be necessary to give what amounts to public-utility status to certain key industries when virtually no competition remains." He concluded with a direct call for some nationalization and "more socialism in the economy."

Murray L. Weidenhaum, who like Dr. Hoffman has served in government and business as well as in the university world, took a different view. He argued that the stifling regulatory climate represents a threat not only to vital economic freedom, but to the political freedom that he feels depends on economic freedom.

Dr. Weidenbaum, director of the Center for the Study of American Business at Washington University in St. Louis, said government has become a business decisionamker.

This "second managerial revolution," he warned, leads toward "extending the antitrust statutes to effect a breakup of larger corporations, establishing a centralized national planning system, restricting factory closings or moves, controlling wages and prices on a long-term basis, further socializing the capital markets, and finally, using the government's chartering power to alter the basic organization of the modern corporation.'

About these ads

This list echoed almost point for point what Dr. Hoffman's earlier address advocated.

A vast amount of new government regulation "is in the pipeline," according to Dr. Weidenbaum. As proof, he reported that "the budgeted expenditures of the 57 agencies with major regulatory functions are increasing from $1.2 billion in 1971 to an estimated $6.9 billion for 1981, a 500 percent rise over the decade."

But Dr. Weidenbaum also warned that "an uncritical attack on all government regulation" by business "is quickly found to be both unwarranted and sefl-defeating."

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.