Dell Champlin

Social capital and the privatization of public goods

Discusses the privatization of public goods and services in urban areas. Examines the common assumption that shifting responsibility for providing goods and services to private individuals will increase the sense of community or “social capital” that binds residents of an urban area together. Argues that privatization of goods such as public safety, education or community recreation may result in more spatially limited social capital, where individuals are less willing to cooperate for the common good. Shrinking the spatial dimensions of “community” to include only members of the same housing development or neighborhood may impose other costs to local governments that offset the expected savings from privatization.

American Prosperity and the “Race to the Bottom:” Why Won’t the Media Ask the Right Questions?

Abstract: Media coverage of income inequality and the economic plight of the middle class fails to analyze the long-term effects of growing inequality and to consider possible solutions. The article examines the literature on media coverage of income inequality and the middle class, and then examines how three competing models, the neoclassical economic model, the propaganda model, and the institutionalist model, explain the inadequate coverage of the effects and solutions.

Thorstein Veblen and the revival of free market capitalism

With the restoration of laissez faire as the governing principle of contemporary economic ideology and policy making, Thorstein Veblen’s insights are once again timely. This book revisits his legacy, featuring original essays by renowned Veblen scholars.

The Media, the News, and Democracy: Revisiting the Dewey-Lippman Debate

As an institution, the news media enjoy a special status derived from the First Amendment to the U.S. Constitution and from the societal expectation that in a democracy a free press is necessary to protect the public interest. As a capitalist enterprise, however, the news media are subject to the same pressures from pecuniary interests as any other private business (Veblen 1988; Croteau and Hoynes 2001). While meeting their dual responsibilities to the public interest and to their private shareholders has always been a difficult balancing act, the rise of large media conglomerates and the resulting concentration of ownership in the media industry have greatly tipped the scale toward the pecuniary and away from the public interest role (Champlin and Knoedler 2002). In this paper, we will examine this triumph of pecuniary interests through the lens of a famous 1920s debate between journalist Walter Lippman and philosopher John Dewey, in which they deliberated not whether, but how, the media should protect the public interest. We then examine news coverage of three recent issues that demonstrate different aspects of the public interest role of the media: (1) the recent proposed changes in media ownership rules; (2) the 2000 Presidential election; and (3) the question of weapons of mass destruction in Iraq. We will conclude by discussing possible solutions to the threat to democracy posed by the conglomerate commercialization of the news and the decline of the public interest function.

Culture, Natural Law, and the Restoration of Community

A growing literature in both academic journals and the popular press explores the loss of community in American life. The exact meaning of community varies, but there appears to be a consensus on at least two points. First, the level of community is believed to be essential to the smooth functioning of a civil society, the political process, and to the economy. Second, while the decline of community has certain concrete, measurable indicators such as voter participation, membership in organizations, crime rates, frequency of litigation, and various economic indicators, community itself is considered to be intangible. It is an idea, a belief, or a set of values. The concern over community, then, is at heart a concern over the relationship between material well-being and an immaterial idea. This paper examines this relationship in two very different approaches to community: a liberal and an institutionalist approach. An issue involving the relationship between an intangible idea and economic well-being fits easily into the institutionalist tradition. In fact, one might say that this is the institutionalist tradition--an investigation into the relationship between culture and material well-being. This relationship does not, however, fit comfortably into economic liberalism. There is little room for a cultural concept such as community in an economic philosophy based on atomistic, natural law. Nevertheless, the role of community has been increasingly emphasized by conservative economic writers who argue that government has destroyed community by pre-empting the private sector. At the hands of conservative social and economic philosophers, community is transformed from a cultural concept into natural law. Not only does laissez faire produce the most efficient and prosperous economy, it also produces the most civil and coherent community.

Structural Change in U.S. Labor Markets

Two debates over labor market structure have occurred in the U.S. since World War II: the structuralist/aggregate demand school debate in the early 1960s and the deindustrialization debate of the 1980s. In both controversies one side offers a structural explanation in which difficulties in the labor market derive from an overall transformation of the economy. The opposing view is that labor market trends cannot be explained by a structural transformation, since no such transformation has taken place. Despite heated policy debates and impressive data collection the essential point of disagreement in both debates remains unresolved: the existence of structural change in the labor market. This paper argues that two fundamental problems have hindered a satisfactory outcome to these recurring debates over structural change in the labor market. First, each side in the debate has a different concept of structure. If a consensus cannot be reached on what structural change in U.S. labor markets means, any debate over the existence and implications of this change is bound to be fruitless. With an imprecise or inconsistent definition of structure the question cannot be settled empirically. The second and more serious difficulty is that both sides use concepts of structure that have more to do with product markets than labor markets. The focus on product markets results from the fundamental assumption that labor demand is a derived demand. This assumption is axiomatic in neoclassical theory and exerts a powerful influence even on structuralist labor economists who reject much of the orthodox approach to labor. The first part of this paper looks at the consequences of this approach to structure. Despite the fact that the debates were sparked by high unemployment and other disturbing trends in the labor market, the debates address labor market structure only indirectly. The theoretical arguments underlying the assorted views reflect a paradigmatic dispute over the nature of economic growth. The second part of the paper discusses the concept of labor market structure and suggests an alternative approach. The paper then returns briefly to the debates over structure to demonstrate how this alternative approach would clarify this controversy. The Two Labor Market Debates The initial impetus to both debates was a secular rise in average unemployment rates. The structuralist/aggregate demand school controversy resulted from an increase in the average unemployment rate to 5.8% between 1958 and 1964 (Frumkin, 1987).(1) Killingsworth (1965) argued that the trend toward higher unemployment rates was due to a structural transformation of the labor market. The disproportionate incidence of high rates of unemployment in specific segments of the labor market led to the Killingsworth twist, a forerunner of the declining middle of the 1980s. Killingsworths conclusions were based on the observation of lower unemployment rates among more highly skilled and educated workers. However, despite the use of statistics on labor supply to support his argument, Killingsworth was arguing that it was the structure of labor demand that was undergoing transformation. Killingsworths structuralist arguments were countered by the Council of Economic Advisors (Bowen, 1965). The Councils contention was that although specific sub-groups of the labor force were affected differently over the business cycle, there had been no secular increase in the level of structural unemployment nor had there been significant increases in the unemployment rates of groups considered to be dominated by unskilled workers. The higher unemployment rates after 1957 were attributed to a deficiency of aggregate demand. During the 1980s unemployment reached its highest level since the Depression. Many manufacturing industries were particularly hard hit by the recessions of the early 1980s leading to widespread layoffs and plant closings. Economists such as Robert Reich (1983), Barry Bluestone and Bennett Harrison (1982) argued that high unemployment rates and the loss of manufacturing jobs reflected long-term structural changes in U. …

Toward an ethics of corporate restructuring

Corporate restructuring has had a profound impact on the US economy. While the problems of restructuring have been discussed in great detail, the solutions are elusive. What can or should be done to mitigate the impacts of restructuring on workers, communities, and society at large? The stumbling‐block to finding an answer to this question is the lack of a satisfactory ethical framework for evaluating restructuring decisions. The purpose of this essay is to develop such a framework. The first part of the paper reviews the ethical guidance provided by the standard theory of the firm. The second part explores an alternative framework based on the work of Elizabeth Anderson. Her “expressive theory of rational action” offers a more promising framework for evaluating management decisions with significant costs to society.

Universal Health Care and the Economics of Responsibility

Abstract: In the American health care system the cost of health insurance is underwritten by all three sectors of the economy: 1) households; 2) employers; and 3) government. However, while costs are shared, responsibility is not. The retreat of private firms and government from assuming a substantial share of the burden of health care costs is based on the presumption that health care is an individual’s responsibility, while the contributions of government and the private sector are basically optional - a matter of benevolence rather than responsibility. The outcome of the current debates over health care reform will depend on this issue of responsibility. Who should pay for health care? Is it a collective responsibility or an individual one? In this paper, we explore the economics of responsibility as it applies to health care. In the institutionalist framework, any reallocation of costs must be driven by an underlying philosophy of shared responsibility.

The Decline of U.S. Labor Unions and the Role of Trade; Can Labor Standards Improve under Globalization?

innovation-finding least-cost ways to achieve a given environmental objective. Little innovation arises for improving the quality of the environment itself. Driesen is skeptical of the ability and willingness of the public sector to deliver qualitative improvements, although he does explore a number of procedural reforms that increase government efforts to improve environmental quality. Driesens focus is on the legal changes necessary to stimulate private sector investment in environmental quality. Some ideas, such as allowing greater individual collection of civil penalties, are pragmatic. Other policy options are radically provocative, if not well developed. For instance, Driesen (a former lawyer with Natural Resources Defense Council) proposes an environmental competition statute that would allow firms investing in major pollution prevention technologies to recoup costs from firms who do not. How this would work in practice is unclear. In the end Driesen asks many of the right questions about innovation and technological change that are frequently overshadowed in environmental policy debates. He also stresses the need for research that more closely links outcomes with policy design. While his heart is in the right place, his proposed alternatives and critiques of existing policy alternatives are frequently incomplete or off the mark.