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The state of the nation : government and the quest for a better society /
Derek Bok.
Cambridge, Mass. : Harvard University Press, 1996.
x, 483 p.
0674292103 (alk. paper)
More Details
Cambridge, Mass. : Harvard University Press, 1996.
0674292103 (alk. paper)
catalogue key
Includes bibliographical references.
A Look Inside
First Chapter


The Economy

In 1932, John Maynard Keynes wrote an essay prophesying the end of "the economic problem"--a time when scarcity would be banished and everyone would have all the material goods they desired.(1) If this were the only memorable statement Keynes had ever made, his reputation by this time would be wearing rather thin. Far from being vanquished, the appetite for possessions seems every bit as great today as it was when Keynes first published his prediction. And so it is that amid the facts and figures that flood our consciousness every day, the most popular index of the nation's progress continues to be the rise and fall of the Gross Domestic Product (GDP).(*)

To be sure, a growing GDP is not the only mark of a successful economy. Closely linked to growth is rising productivity, for greater productivity is the only sure way to increase per capita wealth over a long period. Minimizing unemployment is important too, not only because putting more people to work adds to total output but because jobs matter a lot to self-esteem and self-fulfillment. Finally, stable prices are widely regarded as a vital goal--especially today, when international bond traders can punish a country that allows inflation to get out of hand.

By most of these measures, American industry achieved a global dominance in the late 1940s and 1950s that no nation has equaled before or since. Much of this preeminence resulted from the effects of World War II, which acted as a giant stimulus to the American economy while ravaging the factories and equipment of most of our chief industrial rivals. As peace returned, Europe and Japan had a chance at last to rebuild. Gradually, the gap between their economies and ours began to narrow. Four decades later, how close have other nations come to matching the wealth and productivity enjoyed in the United States? Does America still retain the entrepreneurial skill, technological virtuosity, and financial strength to keep our economy growing steadily at rates equivalent to those of other highly developed industrial democracies? Or have Americans grown slack, unable to innovate enough, save enough, and work enough to avoid sinking gradually to a secondary position among the major economic powers of the world?

Economic Policy Here and Abroad

Improvements in the economies of democratic, capitalist nations owe much to the work of the private sector, notwithstanding politicians' efforts to take credit for new jobs and rising prosperity. The entrepreneurial and management abilities of business executives, the creativity of scientists and engineers, the dedication and skills of the work force, and the willingness of people to save and companies to invest all have a bearing on the pace of economic growth. Yet government policies also affect the progress of the economy in a variety of ways.

To begin with, the central bank has power to influence interest rates and the supply of money and thus to affect the economy's rate of growth and the level of inflation. In addition, the power to tax alters incentives in ways that have an impact on the amount of work performed and the propensity to save and invest. Decisions by the government to run deficits or surpluses can alter aggregate demand and thus influence inflation and employment. They can likewise encourage or inhibit savings and hence affect capital formation, which in turn can stimulate or retard economic growth.

Governments also influence productivity and growth by deciding how much or how little to shelter sectors of the economy from the pressure of competition. In addition, by regulating companies for a wide variety of purposes, officials add to corporate costs and affect competitiveness in world markets. Conversely, through military spending, tariff policies, and a variety of other measures, lawmakers subsidize particular industries and thus help them either grow and prosper or become complacent and uncompetitive.

Finally, the government decides how much it will spend on activities that are widely regarded as important to long-term growth and productivity. Public funds can expand the school system and thus help build a more educated work force. They can improve vocational training. They can support research and pay for mechanisms to speed the transfer of new technology to businesses throughout the land.

All governments try to use these powers to increase economic growth, keep prices stable, and lower unemployment. But countries go about this task in markedly different ways. Some regimes are notably activist in seeking to develop and implement a plan of economic growth. Typically, they try to promote the expansion of certain industries and sectors while allowing others that are not considered competitive in the long run to decline and even die away. Japan and France are the leading examples of this strategy.

Both countries engage in national planning to set a strategic direction and establish goals for various sectors of the economy. In both countries, a strong consensus favoring activist methods helps the government bureaucracy act quietly through the financial system to implement its plans by giving priority in credit and other forms of assistance to companies and industries picked for expansion. For example, during the early postwar years in Japan, the government used its control over foreign currency and foreign technology licensing to implement its priorities.(2) In addition, an easy loan policy tended to force banks to reach their credit limits and to appeal to the Bank of Japan for permission to extend further loans. The latter typically assented, provided the banks involved agreed to follow the government's lending priorities. Since the 1960s, these levers of influence have become less potent, and the government has had to rely more on informal methods of persuasion coupled with strong measures to keep savings and investment at high levels. Whatever the means, the bureaucracy has tried to avoid having its economic policies politicized while encouraging a steady flow of resources away from labor-intensive goods into more sophisticated products that can capture growing shares of world markets and support higher wages and salaries.

Germany has taken a different course.(3) By and large, public officials have not tried to "pick winners" by favoring particular firms or sectors. Nor has the central government been able to use monetary policy as a tool, since the proudly autonomous Bundesbank has often pursued a determined course to keep prices stable even when it appeared to be acting at cross-purposes with the party in power. If any outside force has played an important role in developing German industry, it is the large commercial banks, which are immensely powerful not only as a source of funds but as a major owner of corporate stock with authority to vote by proxy the shares of other stockholders. Controlling a majority of the stock in Germany's largest corporations, banks use their seats on boards of directors to watch over the long-term growth of companies, help arrange useful mergers, and avoid harmful takeovers. Meanwhile, the government works with well-organized, powerful employers' associations and trade unions to train young people for skilled jobs and to implement labor market policies that improve productivity and help declining industries and sectors make way for more productive enterprises.

Sweden has followed a somewhat different path to guide the economy.(4) During four consecutive decades of Social Democratic rule, the Swedish government did not try to nationalize firms or even to interfere much with the business judgment of corporate leaders. But the government did participate in national wage negotiations between the powerful union movement and the confederation of employers. By virtue of the ruling party's close ties with the labor movement and the necessity for such a small country to compete effectively in world markets, these national negotiations produced a series of relatively noninflationary agreements. By favoring more equal wages throughout the economy, officials put pressure on inefficient firms and industries to use labor efficiently or go out of business. In addition, the government instituted the most active labor market policies in Europe, featuring extensive worker training, job placement assistance, and public works employment during recessions. These policies helped ease the phasing out of uncompetitive industries and keep unemployment at a bare minimum without producing excessive inflation.

In the late 1960s, as economic growth began to slow, the Social Democrats initiated an explicit policy of aiding emerging sectors and growth industries. But economic difficulties eventually derailed this plan. Ironically, it was a coalition of nonsocialist parties in the 1970s that turned industrial policy into a program of subsidies for floundering industries. Eventually, several large firms were nationalized in an effort to rescue them from bankruptcy. By the late 1980s, the original plan to stimulate growing industries had largely disappeared, and much of what passed for industrial policy consisted of local efforts to attract business or to shore up companies showing signs of weakness. All efforts to promote development were eventually neutralized by the growth of a welfare state so massive that incentives were skewed, productivity rose more slowly, and economic output actually declined in the early 1990s.(5)

The United States has followed a course quite different from any of those just described. By and large, the federal government has not made a practice of targeting industries and sectors deemed especially promising for growth. Nor have the banks played a role similar to the one pursued by their German counterparts. Instead, the job of allocating capital has been left almost entirely to the financial markets and to companies themselves through the use of retained earnings for internal investment and expansion. Individual firms have been quite free to follow their own business judgment (subject to antitrust laws that preserve competition and various forms of regulation that protect the public interest). Even the trade unions have not seriously challenged management's right to choose technologies, lay off workers, or expand and contract for business reasons.

There has been talk in recent years of a more deliberate industrial strategy for America. Yet government leaders have not been of one mind on this matter. Some have urged the government to follow the lead of Japan and actively encourage "sunrise industries" that have a bright future in an increasingly high-tech economy. Many economists and public officials, however, have questioned whether any government can make better choices than the market. More than a few skeptics have doubted whether Congress could mount an industrial policy that would not quickly degenerate into politically popular efforts to save jobs in declining sectors or to favor businesses in districts represented by powerful legislators. Lacking a consensus, the United States has continued to do less than most of the other leading economic powers to establish a centrally directed economic strategy.

Despite the national differences just described, common forces are at work that cause the practices in all advanced countries to converge. Increasing global competition, especially in financial markets, has narrowed the discretion of governments everywhere. The power of Keynesian economics has waned, causing officials in all industrial nations to rely less on fiscal policy to stimulate their economies. Sensing the need for large structural adjustments brought about by changes in technology and international competition, governments in Europe have begun to depend more on the market and to privatize nationalized industries. Finally, large sectors of the private economy are becoming less susceptible to influence from the State. In Japan, industry has grown more independent of the bureaucracy, while labor movements in countries such as Sweden and Germany are more fragmented than they once were and hence more difficult to coordinate. The forces just described have by no means eliminated all of the variations in the economic policies of leading industrial powers, but they have undoubtedly narrowed the differences.

Comparing National Performance

Regardless of their approach to economic planning, all advanced democratic governments have made great progress in using monetary and fiscal policy to avoid major depressions. Gone are the prolonged declines in national output that plagued America and Europe in the 1930s and at periodic intervals during previous generations. This achievement has prevented much suffering and is too little appreciated.

It is less clear how successful governments have been in crafting an industrial policy that can increase the rate of economic growth. Many observers believe that the task of maintaining industrial expansion, stable prices, and high employment is mysterious enough and subject so often to forces beyond any government's control that even the best-laid plans will not outperform a more laissez-faire approach over the long run. Although commentators often point to Japan as a model of what capable bureaucrats can accomplish, critics have questioned how much planning has truly helped the Japanese and whether its vaunted bureaucracy has actually been all that astute in choosing which industries to favor.(6)

In light of these doubts, it is interesting to examine the performance of the major industrial democracies with their varying approaches to economic policy and compare their record over the past several decades. Table 1.1 reveals how the growth of our GDP from 1960 to 1990 stands up to the record of other leading competitor nations. These figures show that our record is neither the best of the group nor the worst. Analysts debate whether matters are improving. Economic growth in America slowed perceptibly after 1974, but not as much as for our leading competitors. Historically, then, our record has deteriorated over time, yet relatively speaking we performed considerably better after 1974 than we did in the preceding fifteen years. That is why pessimists can look at our recent record and talk gloomily about our declining performance while optimists study the same figures and report that we are doing better.

Comparisons of per capita growth (Table 1.2) tell a different story that is less flattering to the United States. The more discouraging picture revealed by these figures is easily explained. Throughout the entire period, the population of the United States has risen more rapidly than that of our principal competitors. Our increases in total output, therefore, are partly the result of population growth. When that factor is removed by looking at per capita growth, America's relative performance declines. Unfortunately, per capita GDP is probably a better gauge of well-being than total output, since individuals do not necessarily benefit from an expanding economy if the fruits must be divided among larger numbers of people.

America's sluggish per capita rate of growth reflects a failure to increase productivity rapidly. In the 1960s and 1970s, our rate of improvement lagged well behind that of most leading industrial nations. As Table 1.3 reveals, even in the 1980s, our record remained below average. Since 1982, however, only Britain and Japan have raised productivity at a rate significantly greater than ours, and even Japan has not performed particularly well since 1990.

Notwithstanding its sluggish record, the United States continues to have the highest rate of productivity in the world, by most careful measures. Other countries, notably Japan, have overtaken us in a number of important industries such as automobiles, auto parts, metalworking, steel, and consumer electronics.(7) In fact, if one measures productivity by GDP per hour worked, Germany and France may now have surpassed us in the economy as a whole.(8) But French and German employees take longer vacations and thus work fewer hours, so that their annual productivity (GDP per full-time worker) is considerably lower than ours. And Japan, for all its achievements in automobiles, television sets, cameras, and other export industries, still has remarkably low levels of efficiency in large areas of its economy--such as agriculture, food processing, and retailing--that have been sheltered from competition. Thus, if labor productivity (GDP per person employed) in the United States is assumed to be 100, then economy-wide productivity in France in 1990 stood at 95, Germany at 89, Japan at 77, and Britain at 75.(9)

Over the past twenty years, the benefits of growth and rising productivity in America have not been distributed evenly throughout the population. Rather, the pattern conforms more closely to what one would expect in a country that is unusually disposed to reward the successful, resist heavy government intervention, and allow individuals to fend for themselves. As the figures in Table 1.4 make clear, the economic gains in the United States since 1970 have gone disproportionately to the top half of the population, principally people with college and professional degrees. Families below the median derive most of their income from wages, and wages for the bottom half have grown very little, if at all, during the past twenty years. Real wages for workers with only a high school degree actually declined by roughly 15-20 percent from 1973 to 1990, while wages for high school dropouts fell by approximately 30 percent. Thus, the poorest 40 percent of American families were earning no more in 1990 than similarly situated families twenty years before, and the lowest 20 percent were actually earning less.

Fortunately, these figures do not mean that 40 percent of American households failed to increase their living standards from 1970 to 1990. Families that found themselves in the lowest income quintile in 1970 were unlikely to still be there in 1990. Most young couples starting out at the bottom of the heap managed to increase their earnings with age and experience over the next two decades. As they moved up in the earnings hierarchy, their places at the low end of the scale were taken by younger workers entering the labor force at lesser rates of pay. What the figures do suggest, however, is that families in the lower half of the scale in 1970 experienced much slower rates of income growth than similar families had enjoyed in the preceding decades, and a substantial number of those with the lowest incomes may even have lost ground in absolute terms.(10)

The pattern just described differs from the experience of Europe and Japan. Earnings in these countries continued to rise in the 1980s even for the lowest-paid workers. In Britain, the only nation besides the United States to experience a marked increase in wage inequality, real wages for the bottom tenth of the labor force still managed to rise modestly from 1979 to 1989. In Japan, they rose by a full 40 percent.(11) These trends, however, may prove to be short-lived. In the 1990s, inequality seems to have started to increase in most European countries as well.

Although falling wages cramped the lifestyle of many Americans, the U.S. economy did succeed remarkably well in creating additional jobs. From 1970 to 1990, total employment rose by 40 percent in the United States, 25 percent in Japan, 10 percent in Germany, 8 percent in France, and only 3 percent in Britain. Although much of America's growth in jobs merely kept pace with the rising population, the effects on jobless rates were also substantial. Prior to 1970, unemployment levels in the United States were quite consistently above those of Western Europe. After 1980, our rates began to compare more favorably. In the 1990s, as recession struck Western economies, unemployment in Europe rose to double digits, while in the United States it gradually diminished to a level below 6 percent (Table 1.5).*

Just why European nations have had such persistent unemployment since 1980 is a matter of dispute. Some observers place most of the blame on generous unemployment benefits, high minimum wages and payroll taxes, low geographic mobility on the part of workers, and strict employment regulations that make companies reluctant to hire more permanent employees.(12) But economists as distinguished as Robert Solow and Olivier Blanchard argue that the factors just mentioned are overemphasized.(13) In their view, the sudden rise in unemployment around 1980 points to another cause--restrictive monetary policies--suggesting that lower interest rates might have kept unemployment to levels much closer to those in America.

Low and declining wages in the United States have had a restraining effect on inflation rates during the past twenty years, just as comparatively high unemployment rates helped curb them in earlier decades. Since 1960, therefore, the United States has had a relatively good record of maintaining stable prices. The figures in Table 1.6 make this clear. The remarkably high inflation rates of the 1970s, of course, were not primarily the result of wage trends or monetary policies in the most advanced economies of the world. Rather, they were the product of sudden, massive increases in the price of oil brought about by mounting global consumption, peaking levels of production in America and the Soviet Union, and the rise of the Organization of Petroleum Exporting Countries (OPEC).

Interpreting the Record

By and large, federal efforts to encourage economic growth have continued to reflect the traditional values of this country. While using the methods of monetary and fiscal policy, the government has not intervened in the economy through planning, ownership of key industries, or credit policies to nearly the extent practiced by many other advanced industrial nations. It continues to rely primarily on the talents and energies of the individual. Thus, rewards for top business executives are greater in the United States than they are in any of our leading competitors, while earnings for the least-skilled workers tend to be lower. How well has this strategy served America over the past thirty to forty years?

By all of the relevant indices save for inflation, virtually every country discussed here did better than the United States until 1980. Whether one looks at overall growth, increases in per capita GDP, unemployment rates, or productivity gains, the record of these nations was superior to America's by a substantial margin.

During much of this period, however, the success of our competitors reflected a process of catching up after World War II. It was much easier for countries such as Japan and Germany to copy innovations from America than it was for us to make new technological breakthroughs. As capital flowed more plentifully, Europe and Japan could build modern factories with state-of-the-art equipment to replace what they had lost during the war. Meanwhile, to a greater extent than Europe, America was shifting its economy from manufacturing to services, where productivity gains have been traditionally harder to achieve.

By 1980, the period of catch-up was pretty well over. Productivity growth abroad slowed to levels much closer to those of the United States. Because the record of the earlier postwar period was so greatly influenced by atypical conditions, the years since 1980 offer a much better test of relative economic performance.

Since 1980, just as in preceding decades, the record of Japan stands out. By every relevant test, the economy of Japan performed substantially better than that of the United States or any other leading nation. In the past few years, however, even the Japanese have encountered severe difficulties that have caused their economy to grow less rapidly than our own. Whether this slowdown is only temporary or the beginning of longer-lasting problems is still unclear at this point.

The experience in Europe has been altogether different. Since 1980, overall growth rates in America have exceeded those of most European countries. Our inflation rates have generally been lower. As for unemployment, England, France, Germany, and Sweden have all had deteriorating records, with the result that jobless rates in each of these countries have risen since 1990 to levels well above ours.

America's relatively low levels of unemployment, however, have been accompanied by declining wages for unskilled workers, leading to shrunken paychecks for many people. By the early 1990s, more than two million heads of families in America were working full time throughout the year and still falling below the official poverty line. Wage earners in the lowest-paid 10 percent of the work force were earning less than half of what their counterparts were paid in Germany, even though our total per capita wealth was greater. For most American families, incomes rose more slowly than they had in earlier decades, even though many people were working longer hours.

Also troubling is the large deficit in our international trade which has persisted to this day, notwithstanding much corporate restructuring and major declines in the value of the dollar. Thus far, other countries have been willing to tolerate the deficit and to accumulate large quantities of dollars. Eventually, however, their patience may wear thin and they may start selling dollars, driving the value of U.S. currency down to a point at which our exports and imports come into balance again, but only at the cost of substantial reductions in our standard of living and major shocks to the world economy.

At the root of these difficulties is a sluggish rate of growth in productivity. Despite the corporate restructuring and the sustained prosperity of the 1980s, output per worker throughout our economy continued to advance at a slow pace (approximately 1 percent per year).(*) Although other countries are also experiencing much lower rates of productivity growth, experts worry that our progress continues to lag behind the average rates historically achieved by the economy.

Does it matter if productivity rises by only 1 percent per year, instead of the higher rates traditionally achieved in the United States? More than one might think. In a six-trillion-dollar economy, even the addition of only 1 percent in economic growth for a single year produces an extra $60 billion in GDP. After a period of years, the cumulative effect of persistently sluggish growth becomes enormous. Over twenty years, the gain in GDP from a 1 percent higher growth rate will rise to well above one trillion dollars. In other words, a 1 percent addition to our growth rate over this period could wipe out the budget deficit, restore the viability of our Social Security program, increase the incomes of all families, and still leave enough money in additional tax revenues to extend health insurance to every American and fully pay for a host of other social programs that are now only partially funded or about to be cut back.

Despite this discouraging look at what might have been, not all economists are worried about America's record.(14) Some observers emphasize that there will always be a tendency for productivity to rise relatively slowly in the most efficient national economy, because it is invariably easier for other countries to copy the practices of the leader than it is for the leader to innovate and improve beyond what is currently known. Eventually, when other countries come closer to the productivity levels of the leader, their rate of progress will slow as the opportunities to copy diminish and the challenge of continued innovation grows more difficult. To analysts of this school, there is nothing surprising in the fact that other advanced economies increased their productivity more rapidly than we did for several decades after World War II. The decisive point for them is that since the mid-1980s other countries have not reduced the significant advantage that America still enjoys.

What accounts for America's continuing advantage in productivity so many years after the end of World War II? This was the subject of a massive recent study by the McKinsey Institute. Drawing upon the experience of many years of corporate consulting around the world, McKinsey investigators looked in detail at a large number of service and manufacturing industries in the United States, Japan, Germany, France, and, in a separate study, Sweden.(15) As expected, many factors contributed to differences in productivity within the industries investigated. In some cases, variations in the organization of work made a decisive difference; in others, product design allowed some companies to manufacture more cheaply; in still others, variations in the amount of capital invested and the types of equipment and technology used were important.

For the most part, however, these differences were the result of choices made by the companies involved. The root question, then, was why some companies made better choices than others, leading to greater levels of efficiency. For the McKinsey investigators, one explanation overshadowed all others. The most efficient industries tended to be those most exposed to competition, domestic or foreign. Conversely, the least efficient industries were those least subject to commercial rivalry, either because they were nationalized or because they were sheltered from competitors by trade barriers, cartel-like arrangements, or laws regulating prices, output, or hours of operation. In the end, therefore, the relative productivity of advanced industrial economies turns out to depend primarily on the extent to which governments are willing to expose their industries to rigorous competition at home and abroad.

As growth rates have slowed among the leading industrial nations, officials in all these countries have begun to lower existing barriers to competition. Nationalized enterprises have been sold to private owners, import restrictions modified, anticompetitive regulations relaxed. If this process continues, differences in productivity among the leading economies should tend to narrow as companies everywhere are pressed by competition to adopt more efficient practices.

Yet even the economists who subscribe most strongly to this "convergence theory" admit that productivity growth among leading national economies does not resemble the race between Achilles and the tortoise. It is not at all certain that the United States will maintain its current leadership position indefinitely.(16) Japan already has achieved much higher rates of productivity than the United States in several major industries (while lagging far behind us in others). Nor does convergence mean that differences in productivity will eventually become too small to matter. Over a sufficiently long period of time, even modest differences among nations in their rate of productivity growth can produce major differences in overall efficiency, which will in turn have substantial effects on living standards, influence in world affairs, and other matters of concern to the American people.

Apart from competition, what determines how well nations perform over the long run in raising productivity? One important factor is the level of investment, since it is through investment that a country maintains and expands its infrastructure and modernizes its plant and equipment. On this score, America's record does not compare well with that of its leading competitors. In 1990, total investment in the United States was significantly below the level in any of the countries on our list (as it has been fairly consistently for several decades) and was barely half the level achieved by Japan.(*) Not only did America rank last among the other nations in our sample in gross capital formation; it also ran behind all of the other twenty-three members of the Organization for Economic Cooperation and Development (OECD).(17)

The gap between the United States and other nations is not so large with respect to investment in plant and equipment, which is the form of investment most critical to productivity. Even so, America has tended to lag behind its leading competitors, at least until recently. Table 1.7 records the trends since 1972 in the United States and other advanced industrial countries. In explaining this record, most economists stress the anemic levels of private savings in the United States, together with the large government deficits since the mid-1980's that have pushed up the national debt and siphoned off savings from the private sector.(18)

As yet, higher rates of savings and investment in countries such as Germany and Japan have not hurt the United States, because American firms, under the pressure of competition, have learned to use their capital more efficiently than their counterparts in other leading industrial nations. Some firms abroad allow their facilities to lie unused or only partially used during periods of the day or year; others indulge in "gold plating"--that is, using machines and equipment more sophisticated than the work to be done truly requires. For reasons such as these, although Germany and Japan both have invested much more capital per capita than the United States, their productivity continues to lag behind ours.(19) Eventually, of course, global competition may force their executives to utilize capital as effectively as American managers do. When that time comes, the United States will find it difficult to match the productivity gains in Germany and Japan or equal their growth in per capita income.

Vital as they are, savings and investment in plant and equipment are not the only determinants of rising productivity and growth. Other important elements are technological innovation and added know-how and skill on the part of the work force. In turn, innovation and labor skills are much influenced by trends in research and development and by programs of education and training. The chapters that follow take up these subjects, in order to throw more light on America's past economic record and its prospects for the future.

Copyright © 1996 Derek Bok. All rights reserved.

Full Text Reviews
Appeared in Library Journal on 1997-02:
Bok, president of Harvard University from 1971 to 1991, is a professor at Harvard's Kennedy School of Government. Here he looks at five long-time concerns of Americans‘prosperity, quality of life, opportunity, personal security, and values‘to determine whether the pessimism rampant in the United States in the 1990s is justified. Changes since the 1950s are described and comparisons are made to other advanced industrial democracies. In areas where the United States seems to be performing poorly, Bok explores why and the role the government plays. Bok does a truly superior job of marshaling ideas and factual information from many fields of knowledge. His methodical presentation of this information is revealing, and the approach is a refreshing change from the unsubstantiated opinion that frequently characterizes debate on these topics. Essential reading for public policy scholars, this book will find a wide audience among educated readers generally. Highly recommended for all libraries.‘Mary Jane Brustman, SUNY at Albany Libs. (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
Appeared in Choice on 1997-04-01:
Former Harvard president Bok provides a sweeping, fair-minded assessment of the state of America's economic prosperity, quality of life, and values in the mid-1990s. Using a wealth of historical and international data, Bok evaluates the quality of 17 aspects of contemporary American society: the economy, scientific research and technology, education, labor market policy, housing, the environment, the arts, child nurturing, race relations, occupational mobility, violent crime, health care, workplace protection, old age security, civil liberty, personal responsibility (including social capital), and poverty. He inventories his assessments in a series of useful tables. The US has made major advances in most areas since the early 1950s, he concludes, but American successes "have been fewer and farther between" since the 1960s; in many areas, the US lags behind comparable nations. Public perceptions that something is seriously wrong with the country "in the main ... seem well founded." Government must play a vital role in reversing this trend (Bok will address this theme more fully in a future volume). Many books survey the state of the nation in a few of these areas, but no comparable recent book takes so broad an approach. Appropriate for undergraduate and graduate students alike and for every college library. D. B. Robertson University of Missouri--St. Louis
Appeared in Publishers Weekly on 1996-12-16:
Bok, president emeritus of Harvard and a professor at the Kennedy School of Government, knows that tables and statistics are the most subjective of objective facts. But in his attempt to pin down exactly what the state of the nation is and why Americans are so gloomy about it, Bok has accumulated hundreds of them. He measures the reality and the perception of five basic goals that Americans tend to agree on: economic growth; quality of life (e.g., healthy environment and cultural life); chance for advancement; security; and maintenance of certain basic values. Bok proves that, overall, America is closer to these five goals than it was 20 years ago, but the speed of its advancement is poor compared to other industrialized countries. Nowhere is that more obvious than with education, largely because the country spends "twice as much educating college students as it does training those who merely graduate from high school, and more than five times as much as it does on high school dropouts." Bok sees this as the first of two volumes, with the second aimed at probing "more deeply the question why our policies and programs so often fail to meet our expectations." Perhaps because it is more descriptive than prescriptive and because it is precisely not polemical, The State of the Nation is often dry. There are plenty of interesting facts and points that readers will want to store away for future reference, but the argument they add up to is rather diffuse. (Jan.) (c) Copyright PWxyz, LLC. All rights reserved
Review Quotes
[Bok] looks at five long-time concerns of Americans--prosperity, quality of life, opportunity, personal security, and values--to determine whether the pessimism rampant in the United States in the 1990s is justified...Bok does a truly superior job of marshaling ideas and factual information from many fields of knowledge. His methodical presentation of this information is revealing, and the approach is a refreshing change from the unsubstantiated opinion that frequently characterizes debate on these topics. Essential reading for public policy scholars, this book will find a wide audience among educated readers generally. Highly recommended.
Every so often, a book comes along that not only makes an important contribution to academic literature, but is also an absolute joy to read. The State of the Nation is such a book. In a well-written, incisive and wide-ranging discussion, Derek Bok offers an interesting and important contribution to the ongoing debate on American 'declinism'...Bok offers a detailed analysis of the question of American decline in relation to a series of domestic factors: economic prosperity, quality of life, opportunity, personal security, and values...This book provide[s] a balanced, wide-ranging discussion of contemporary American political issues. Overall, this is an enjoyable and highly accessible book which should be highly recommended for students in courses on American government and politics...[It] is a very worthwhile contribution to the academic literature on American politics.
Focusing on five areas--economic prosperity, quality of life, opportunity for all, personal security, and fundamental societal values--Professor Bok sets out to determine whether things really are getting worse for Americans by taking an historical and comparative approach. The result is a book packed with a great deal of statistical data of interest to anyone concerned with contemporary American society and government...Many Americans blame government for failing to tackle...issues, but Bok's conclusion is that if government is the problem, it is also still the solution.
Former Harvard president Bok provides a sweeping, fair-minded assessment of the state of America's economic prosperity, quality of life, and values in the mid-1990s.
In State of the Nation, Bok has taken on a formidable task. He has surveyed the major social changes in the United States since World War II and examined not only the causes of each trend, but also the pattern of the combined changes. His survey ranges from the economy to quality of life to opportunities to values. He examines in detail crime, race, education, children, the environment, the arts, health, poverty, and old age...What slowly emerges from the tapestry of data and research that Bok weaves is a wealthy nation that is underachieving.
The approach here is both historical and comparative, as Bok seeks to measure America against herself as well as against other industrialised nations. And he does so not simply at the level of opinion but on the sturdier ground of hard facts...One of the most interesting points he makes is that things may or may not be bad and getting worse, depending upon one's perspective, but this much is without doubt: the way Americans see themselves and their problems has changed dramatically.
Those who need more articulate approaches to a world characterized by impasse...will not be disappointed by Bok's offering.
Undertaking an assessment of national well-being is daunting. At each turn, one is subject to criticism for the (non)selection of any particular variable and for the interpretation of the relevant data. Bok has done an admirable job on both accounts. State of the Nation is unique in its breadth of analysis and use of six other democracies for comparison. The 80-plus tables of data are informative, providing reference information for the inquisitive. His 'summary' chapter is most beneficial, tying together his argument that America has, since 1960, made progress in many areas, regressed in others, and has not matched some of the accomplishments of other leading democracies.
Undertaking an assessment of national well-being is daunting. At each turn, one is subject to criticism for the (non)selection of anyparticular variable and for the interpretation of the relevant data. Bok has done an admirable job on both accounts. State of the Nation is unique in its breadth of analysis and use of six other democracies for comparison. The 80-plus tables of data are informative, providing reference information for the inquisitive. His 'summary' chapter is most beneficial, tying together his argument that America has, since 1960, made progress in many areas, regressed in others, and has not matched some of the accomplishments of other leading democracies.
This book is a civic gift...[Bok's] concern about the state of the nation is manifest on every page of this sweeping work of scholarship and unusually cogent thought.
This item was reviewed in:
Kirkus Reviews, December 1996
Publishers Weekly, December 1996
Library Journal, February 1997
Choice, April 1997
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Main Description
Never before have Americans been so anxious about the future of their society. But rarely has anyone offered a clear statement about why, in a nation so prosperous, free, and stable, we tend to assume that the country is in dire straits and that the government can do little to help. This book is just such a statement, an eloquent assessment of where America stands, how our society has changed in the past half-century, and who or what is responsible for our current frustrations. Derek Bok examines the nation's progress in five areas that Americans generally consider to be of paramount importance: economic prosperity, quality of life, opportunity, personal security, and societal values. He shows that although we are better off today in most areas than we were in 1960, we have performed poorly overall compared with other leading industrial nations. And when it comes to providing adequate health care at a reasonable cost, educating our young people for high-skilled jobs, alleviating poverty and urban blight, and reducing crime, our record has been dismal. Comparing the United States with other leading industrial nations on more than sixty key indicators, Bok shows that we rank below average in more than two-thirds of the cases and at the bottom in more than half. What has caused this decline, and what can be done about it? In virtually all important areas of American life, Bok concludes, government policies have played a significant, often decisive role in accounting for our successes as well as our failures. But whereas others call for downsizing the federal government, Bok argues that government is essential to achieving America's goals. In short, Ronald Reagan was only half right. Government is the problem. But it is also the most important part of the solution. By assessing the state of the nation and identifying the reasons for its current condition, this book helps set the agenda for improving America's performance in the future.
Unpaid Annotation
This book is an eloquent assessment of where America stands, how its society has changed in the past half-century, and who or what is responsible for our current frustrations. Derek Bok examines America's progress in five areas: economic prosperity, quality of life, opportunity, personal security, and societal values.
Table of Contents
Introduction Prosperity
The Economy
Scientific Research and Technology
Labor Market Policies Quality of Life
Living Conditions
The Environment
Encouraging the Arts Opportunity
Child Policies
Career Opportunities Personal Security
Violent Crime
Health Care
Regulating the Workplace
The Burdens of Old Age Values
Individual Freedom under Law
Personal Responsibility
Helping the Poor What It All Means
Summing Up
Questioning the Verdict
The Role of Government
Table of Contents provided by Publisher. All Rights Reserved.

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