>CB: Thanks for this report Lou. The above passage, and your whole
discussion demonstrates how regulation/deregulation is a form of
state-monopoly as Lenin predicted the direction of that process in
_Imperialism_, especially in the historical period you focus on , '20's and
'30's.
>
> I think this process must be conceived of as a formation, dissolution,
and reformation of new monopolies. It is difficult to tell whether the
California situation is a dissolution or a phase of a cunning reformation.
Because capitalism is the exclusive "game in town" , eventually even the
dissolutions become a field for some monopolist like Samuel Insull to
pickup the pieces in a new monopoly , a reformation phase.
>
>Perhaps this method of thinking of monopoly as a process will suggest new
approaches to the national income accounts and the like.
Charles is anticipating the direction I am going with this. After I am done
looking at specific cases of deregulation and the economic impact, I will
attempt to put all this in the context of Marxist theory. I approach the
question--at least right now--from a slightly different angle than Charles.
I see the deregulation phenomenon as the American expression of the
capitalist restructuring taking place around the world under the general
rubric of "privatization". Since nationalization was never really an
important part of the American economy, as it was for example in Great
Britain, the accelerated capital accumulation process that began in the
early 70s took the form in this country of attacking regulation. In any
case, the thing to look for is what drove this process forward, which is
undoubtedly heightened capitalist competition internationally. One of the
benefits of doing this research is that it gives me the opportunity to
re-read the great New Yorker magazine articles of the 1970s available in
book form under the title "The Sporty Game".
The New York Times, July 28, 1982, Wednesday, Late City Final Edition
BOOKS OF THE TIMES
By Christopher Lehmann-Haupt
THE SPORTY GAME. By John Newhouse. 242 pages. Knopf. $14.95.
AT first a reader is amused by the incongruity between the subject of John
Newhouse's latest book and its title, ''The Sporty Game.'' What could be
more frivolous than playing a game in which you bet everything you have in
order to remain a participant, and what could be more sobering than the
business of making and selling commercial airliners?
But one doesn't get far into Mr. Newhouse's report, which appeared first in
slightly different form in The New Yorker magazine, before one realizes
that the title isn't meant to be kidding. They really do refer to risks
being ''sporty'' in the airline industry. And those risks do involve
betting everything you have - in some cases as much as an entire company
worth several billion dollars. For example: according to Dean Thornton,
general manager of Boeing's program to build the 767, the company's first
wholly new airplane since the 747: ''more than two'' billion ''and less
than ten,'' but ''most of Boeing's net worth is riding on this chip.''
Moreover, it's a game that matters considerably to all American citizens.
As Mr. Newhouse points out, the commercial airline business produces this
country's leading export, and hence one of its leading means of offsetting
a negative balance of payments. Also, ''the airplane, like the
semiconductor chip, is closely linked to economic growth because of the
technologies it embodies.''
Finally, and most obviously, because of our growing dependence on air
travel, the health of the industry affects our comfort, convenience and
safety. Where the airline industry bets billions of dollars on its product,
we air travelers bet our very lives.
This last could have been an excuse for great solemnity on Mr. Newhouse's
part. Yet he takes a middle course throughout. True, the book's title is
just about its only light touch -at least it is if you take as seriously as
the industry does the expression ''unkunks,'' short for
''unknown-unknowns,'' which can cost a given program millions of dollars;
or the so-called ''chicken test,'' which involves firing an unplucked
four-pound chicken at a fast-running jet engine to be sure that the engine
can stand the impact of a seagull or a duck, and ''gulp'' it through, in a
manner of speaking.
On the other hand Mr. Newhouse shuns heavy-heartedness as well. In a
chapter called ''Comfort, Convenience and Safety'' he gently suggests that
the first two items may be compromised somewhat by the pressures currently
being put on the industry as a result of recent deregulation.
But on the subjects of past safety and the possible future lack of it, he
is extremely cautious. For instance, in his brief history of the
unfortunate DC-10, he goes to considerable lengths to reassure us that for
all its bad publicity the airliner was not inherently unsafe. Yet the clear
message he conveys concerning the future of air travel is that, as a Pan Am
engineer once put it, aviation itself ''is not inherently unsafe, but, like
the sea, is terribly unforgiving of any carelessness or neglect.''
With similar clarity and care Mr. Newhouse recounts such landmarks in the
recent history of commercial aviation as Pan Am's and Boeing's huge gamble
on the 747, and how it was almost lost before it was won; how the
''healthy'' free-market competition between Lockheed's L-1011 and
McDonnell-Douglas's DC-10 nearly destroyed both companies; how Europe's
Airbus Industrie has come from far back at great odds to become a major
rival to Boeing on the international market; in short, how losing at the
game can amount to winning and vice versa.
What this all adds up to is an effortless telling of a complex drama, in
which the seemingly bright dawn of the 1960's has led to the cloudy high
noon of the 1980's. Moreover, this drama's denouement may be symptomatic of
America's current economic malaise.
According to Mr. Newhouse -whose previous books include ''De Gaulle and the
Anglo-Saxons'' and ''Cold Dawn: The Story of SALT,'' among others - what
now threatens America's ability to compete with Western Europe and Japan in
building and selling airlines is a whole complex of diminishing business
capacities, ranging from worker productivity to a willingness to be bold.
Unfortunately, Mr. Newhouse concludes, the Reagan Administration's
''reprivatizing'' of the economy is probably just the wrong new set of
rules for this vital industry, because free-market economics is exactly the
game that our rivals will not be willing to play. In his view, precisely
because this game is so sporty, private industry can no longer afford the
gamble.
If this seems a paradox, it is only one of many that Mr. Newhouse has
elucidated in this quiet but forceful report.
Louis Proyect
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