New books chart economic trends. Current affairs
Communications Deregulation: The Unleashing of America's Communications Industry, by Jeremy Tunstall. New York: Basil Blackwell. 320 pp. $24.95. The global impact of American communication developments is charted in this important and ambitious overview by a British sociologist who directs the Communications Policy Centre in London.
Deregulation started before the Reagan years, although it culminated in 1982 with the breakup of AT&T and the release of IBM from a long-running antitrust case. In the 1975-1985 period, the regulations put into effect in the period from 1965 to 1975 were repealed. This revolution of running regulation on ``fast backward'' is now combined with the revolution of running technology on ``fast forward.''
Whether or not this has been successful depends on definitions, but Jeremy Tunstall nevertheless attempts to sketch a scorecard. He finds that deregulation of satellites and video has strengthened America's international leadership.
Keeping IBM intact increased its strength abroad but weakened the United States computer industry. The divestiture of AT&T was a mixed blessing. Possibilities for many new services at the local level have been opened up, even while actual offerings tend to be ever more national. Free-flow policies for data services have largely been a success but have contributed to excessive international financial volatility. The Money Mandarins: The Making of a New Supranational Economic Order, by Howard M. Wachtel. New York: Pantheon Books. 254 pp. $18.95.
The present economic uneasiness is traced back to changes in the world economy in the 1971-1973 period, when the Bretton Woods arrangement for the postwar international economy was ended. This deregulation of international money, rather than shocks from the Organization of Petroleum Exporting Countries cartel, is seen as the root cause of today's world economic chaos.
Aided by the revolution in communications technology, a new breed of ``money mandarins'' has thrived in the 1980s atmosphere of deregulated high-stakes global finance. Corporations have become dominated by financial wizards who know little about production. Economic affairs are increasingly supranational, while government remains confined to old boundaries.
Howard Wachtel, an economist at American University in Washington, D.C., argues that international public policy is needed to address these new conditions. He proposes a new target zone exchange-rate system to provide predictability in international economic relations and encourage more long-term productive investment. Stabilizing an Unstable Economy, by Hyman P. Minsky. A Twentieth Century Fund Report. New Haven, Conn.: Yale University Press. 353 pp. $29.95.
Hyman Minsky, an economist at Washington University in St. Louis, takes a ``post-Keynesian'' view that the standard body of economic theory is seriously flawed and offers no useful guide to economic policy.
The so-called neoclassical synthesis does not deal with time, money, uncertainty, investment, ownership of assets, or how a financial crisis can emerge. The major flaw of our type of economy is its inherent instability. But the worst consequences of this turbulence can be contained or moderated by appropriate government interventions. Only an economic theory that is critical of capitalism can be a guide to a successful capitalism.
Minsky proposes an agenda for an integrated program of reform involving the proper role of ``big government,'' an employment strategy that advances well-being, a system of financial institutions that dampens instability, and an industrial policy that puts idle labor to work. He does not, however, address the reality that ``our'' economy is rapidly becoming globalized.
Michael Marien edits Future Survey, published by the World Future Society, Bethesda, Md.