Success, '81 style
The overriding domestic problem for the new Reagan team is restoring the productive and competitive ability of the massive US economy. Bringing inflation, unemployment, and the balance of trade under control, after all, is directly related to this more fundamental challenge. Yet it is precisely because of the success of such US industries as integrated circuits, textiles, and agriculture that Americans need not despair the future.
As the series appearing in this week's Monitor -- "American Industry: 3 Success Stories" -- indicates, the United States can long remain at the forefront of world industry and commerce. What it takes is a rededication to the type of Yankee ingenuity that led to integrated circuit technology. Given a creative work force, a commitment to research and development, and a favorable governmental tax and regulatory climate, American firms can keep pace with their counterparts abroad -- if not often quickly establish a competitive edge.
What qualities -- not unique to Americans but perhaps often associated with them -- do these three success tales identify? Perhaps the most obvious is a gritty kind of resourcefulness, no matter how hostile or limiting surrounding conditions may seem. Essex Junction, Vt., although a picturesque setting on the Winooski River, is not a world center of sophistication in the sense of New York , London, or Paris. Yet, in the same way that a more rustic New England of two centuries ago staggered the imagination of the world by dispatching its sleek trading ships to the most distant shores, so today the local IBM plant is spinning out many of the most dazzling technological innovations in 20th-century industrial production.
Add in ample doses of determination (as seen in the unwillingness of textile manufacturers to "write off" what only a few years ago some economists thought was a "doomed industry") along with an untamed sense of exploration that is always looking for the new, the untried, as in the case of agriculture, and the American spirit of enterprise comes into even sharper focus.
Past agricultural advances must be excelled, we are told by Department of Agriculture research administrator Terry Kinney, because "if we continue with conventional agriculture, we are going to lose our soils, our water supply, our resource base." But US agriculture is not standing comfortably pat with the status quo, as Mr. Kinney notes, pointing to such innovations as a new air blower that reduces grain lost in combine harvesting, computer-controlled irrigation systems, and new breakthroughs expected in genetic engineering that will be applied to food and fiber production.
For the new administration, we think, the warning words from another top agriculture official, Thomas Saylor, ring loud and clear. "The United States," he says, "has developed the most efficient food and fiber system in the world." That efficiency, he notes, stems from "one reason -- because investments in agriculture and its marketing systems has been economically attractive."
President-elect Reagan, as indicated throughout the campaign, has made the restoration of favorable capital investment policies in the US a central element of his entire economic strategy. We fully expect, and welcome, efforts by the new administration to adopt more generous depreciation schedules for industry, reduce marginal tax rates for individuals, and slash unnecessary regulations that add to the cost of doing business. All of these measures will make investment once again attractive -- and presumably invigorate firms with needed resources for new plant and equipment and "R & D" (research and development).
We do not pretend to suggest that the task --cans in the months and years ahead, as they seek to restore that sense of quality and excellence that have characterized their most productive enterprises. Americans must make much greater efforts to subdue inflationary wage demands, for example, while US firms must be more adventuresome about competing abroad, particularly in third-world countries. But what is apparent from the series concluding today is that the very underlying qualities that so long gave Americans their "industrial edge" are still there, waiting to be reclaimed by new generations of "Yankees."