Returning to the book Habits of the Heart: Individualism and Commitment in American Life, we’re continuing on to the third pair of the six American visions of the public good, beginning on page 267:
The Administered Society versus Economic Democracy
The Administered Society and Economic Democracy represent the two boldest efforts to imagine a next step beyond the stalemated efforts of Welfare Liberalism and Neocapitalism to solve the problems of our society. The advocates of these new visions strongly reject the notion that the United States can return to anything like the situation that prevailed before 1929. In accepting the interpenetration of private and public power, they represent a crucial break with the assumption that fundamental economic interests can be effectively integrated either through the market alone or through informal alliances among interest groups. Rather, these two visions declare the need to go beyond exclusive reliance on voluntarist strategies for integrating major sectors of society such as business, labor, and government. They propose a more visible, public institutionalization, expanding the linkages between sectors and placing them in a more encompassing national framework.
There is a similarity between the proponents of these still inchoate visions. Both announce that something new to American politics is required because of the failure of older visions. Proponents of these new views join others in a widespread criticism of Neocapitalism and Welfare Liberalism as alike sacrificing the general welfare to “special interests.” Welfare Liberals such as Walter Mondale are thought to give too much attention to labor, ethic and racial minorities, and other special constituencies, and Neocapitalists such as President Reagan are criticized as agents of the corporations and the selfish rich. The proponents of the Administered Society and Economic Democracy present their visions as efforts to incorporate and transcend contending interests. Like earlier reformers, they do so with confidence in expertise as the way to extricate our society from its apparent impasse.
As yet, major politicians have embraced only fragments of these new visions as they seek to update fundamentally older conceptions. For coherent expression of these visions we must turn to theorists rather than politicians. We may consider first a vocal advocate of an administratively more integrated national society, the well-known investment banker Felix Rohatyn. In the 1970s, Rohatyn figured prominently in the rescue of New York City from bankruptcy, a rescue carried out by placing fiscal authority in the hands of an appointed board of the city’s creditors, employees, bondholders, and bankers, operating outside ordinary legislative channels. Rohatyn proposed in the early 1980s that the United States, confronting an increasingly competitive international economy, needed a similar rescue that would produce “stable growth, low unemployment, reasonably balanced budgets, and reasonably valued currency.” Such a policy would need to be “committed to maintaining our social gains by promoting economic growth and full employment,” which Rohatyn argued could not be realized by the kinds of political compromises characteristic of congressional politics. “Only institutions that can take the long view and act accordingly will be able to bring about the kinds of changes that are required,” he contended.
In arguing for the necessity for such new institutional arrangements, Rohatyn spoke in a language strong in technical economic and administrative terms, as Welfare Liberalism and Neocapitalism have done for a long time, but with a weaker evocation of the moral tradition of American politics than even these long-dominant positions usually contain. Rohatyn’s specific proposal was for a “tri-partite economic development board,” made up of representatives of “business, labor and government,” appointed by the president and the Congress, in order to intervene in the economy to promote the economic goals described above. The board, the centerpiece of Rohatyn’s “industrial policy,” was modeled after the New York City rescue board and drew inspiration from the Reconstruction Finance Corporation designed by Herbert Hoover to fight the 1929 depression. To bring so massive a reorganization into being, Rohatyn called for strong national leadership by a “bipartisan administration in which a Republican or Democratic president would include opposition leaders in his cabinet” and which would select members of the economic board in a similar spirit.
The Administered Society is above all a vision of social harmony among different and unequal groups cooperating for the goals of improved individual security and widely shared economic growth. To accomplish these ends, it would link private groups, especially business and labor, with governmental agencies to steer economic development through this period of technological and international change. At the same time, traditional Welfare Liberal programs such as improved opportunity and assistance for those dislocated by major change would be continued. One key to this vision is the idea of “partnership” among various sectors of the economy and society, brought together through governmental boards, commissions, and agencies. Such a policy would depend heavily on the administrative structure of government, rather than on popular representation, and would thus bring technical and managerial experts to increased prominence. Yet the basic understanding of work as a means toward private goals would remain the same as in Neocapitalism and Welfare Liberalism. The “permanent and aggregate interests” of the nation would receive more focused and perhaps more expert attention, but presumably only by those at or near the summits of their respective institutions. The ironic result of the Administered Society is very likely to be an increase of privatized attitudes for the many, now more securely provided for.
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