THE GREAT U-TURN: Corporate Restructuring and the Polarizing of America

A provocative if not wholly persuasive critique of laissez-faire from the authors of The Deindustrialization of America (1982). Since the early 1970's, assert economists Harrison (MIT) and Bluestone (Univ. of Mass. at Boston), US business has responded to the challenge of improving profit margins squeezed in global competition by reversing traditional practices. Government, they note, has abetted this convulsive restructuring--by deregulation, cutbacks in social programs, and curbing in ration. Dismissing the economic growth achieved during the Reagan era as ""a Ponzi scheme,"" Harrison and Bluestone conclude that the game has not been worth the candle--in large measure, they argue, because the principal objective of corporate cost-cutting efforts is ""zapping labor."" Citing a welter of statistical evidence on income inequality, falling wage rates, and the presumptive decline of the middle class, which they attribute to the service sector's latter-day dominance over manufacturing, the authors contend that the domestic economy is overdue for corrective action. Their proposed reforms, which presuppose global reflation and a solution to Third World debt programs, range from ""a system of truly democratic planning"" through restoration of welfare programs, rehabilitation of the public infrastructure, and managed international trade. While intriguing, the Harrison/Bluestone audit does not tell the whole story. Preoccupied with their progressive agenda (with its explicit mistrust of market solutions), for example, the authors discount the effect that demographics may have on socioeconomic trends. In like vein, they all but ignore the critical workplace role now played by technology. In brief, then, more a fervent plea for a liberal brand of social justice than a dispassionate analysis of economic problems.