Project USA: American competitiveness and what must be done to restore it

The United States today faces a loss of influence as a world power, a reduction in American independence as a policymaker, and a decline in the standard of living on which Americans have come to depend. History teaches that nations weaker and less productive than the United States can rise to become economic powerhouses and rapidly increase their standards of living. History also teaches that nations failing to recognize their fundamental problems will inevitably decline. American politicians must face what is abundantly clear: the United States is losing ground and must act quickly to reverse its course. This White Paper outlines what must be done. Information about the nation's current status must be analyzed and communicated. Incentives to improve the level of competence in government must be provided and maintained. The emphasis of government policy must be changed to reflect broad economic and technological interests as opposed to special interests. Savings must be encouraged and increased. Infrastructure must be improved Tax laws must be modified to help bring these changes about. Economic and technological issues must be elevated to the importance they require. American thinking must reflect the new realities: that the age of leadership through military power is over, that the requirements for success in the world of the 1990s and beyond require a sound and growing economy that is internationally competitive. The US can accomplish these goals only through foundation-shaking, comprehensive, fundamental changealong the lines we propose herein.This paper is the executive summary (with minor editing modifications) of a white paper that is available from Cornell University's Johnson Graduate School of Management.     

Tollison costs and technological innovation: The case of environmental regulation

This paper departs from the Tullock cost paradigm that views competition for monopoly privilege as a welfare-inimical process that wastefully dissipates preexisting producers' surplus and, occasionally, leads to inefficient increases in costs and counterproductive uses of scarce resources. The potential availability of rent-seeking may bring about the elimination of inefficient regulatory regimes that retard or prevent the introduction of cost-reducing innovations. Air quality management is but one area in which innovation rent-seeking holds promise for concrete welfare gains. Researchers may wish to focus on institutional mechanisms designed to overcome the transactions costs and free rider disincentives to the formation of a coalition to seek innovation rents. An example of such a mechanism might be a joint venture that requires all venture members to engage in lobbying and to contribute to collective research efforts. These unaddressed questions await future research.The authors are grateful for the insightful comments of Gordon Tullock, Robert D. Tollison, Michael T. Marlow and J.R. Clark. The usual caveats apply. The views expressed herein are solely those of the authors and should not be taken to represent the views of their employers.     

Reviews

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Boris Kagarlitsky, Restoration in Russia: Why Capitalism Failed. London: Verso, 1995, 172 pp., £39.95/£11.95.

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Money madness. Are private psychiatric hospitals resorting to kidnapping in their quest for paying patients?

In their zeal for lucrative insurance reimbursement, some private psychiatric hospitals seem to have gone over the edge themselves. A number of these institutions, critics charge, use outright coercion to commit and retain patients. Now some formerly abducted "recruits" are fighting back with lawsuits.