Public Service Liberalism

Public Service Liberalism: Telecommunications and Transitions in Public Policy

Alan Stone
Copyright Date: 1991
Pages: 310
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  • Book Info
    Public Service Liberalism
    Book Description:

    Identifying a form of government intervention in social and economic affairs called public service liberalism, Alan Stone looks to that ideology to confront the problems of the 1990s and beyond. He shows in this fascinating case study that the policy has been effective in the past: the American telephone industry from its inception until 1934 is an illustration of how public service liberalism served both economic efficiency and a complex structure of public values. Stone depicts the stages by which public service liberalism was replaced by less adequate policies and suggests ways that it could be successfully restored. Furthermore, Stone demonstrates that government-business relationships like the one that prevailed in the telephone industry were common in the nineteenth and the early twentieth century. He argues that this period was not an era of laissez-faire, as is often alleged, but that its economic energy and extraordinary technological progress were accompanied by complete acceptance of certain kinds of government intervention. Challenging the presuppositions not only of the new ideologists of deregulation, privatization, and competition but also of the practitioners of what he calls the "sanctimonious muddle" of present-day liberalism, Stone demonstrates that public service liberalism could help resolve current problems, such as those in the savings and loan institutions and the cable television industry.

    Originally published in 1991.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-6200-9
    Subjects: Technology

Table of Contents

  1. Front Matter
    (pp. i-viii)
  2. Table of Contents
    (pp. ix-x)
  3. List of Tables
    (pp. xi-xii)
  4. Preface
    (pp. xiii-2)
  5. 1 Liberalism Revised
    (pp. 3-22)

    Since the mid-1970s a new trend has come to dominate thinking about the political economy in much of the Western world. The Keynesian and mixed economy notions that dominated most post-World War II political-economic thinking have been supplanted by fervent advocacy of deregulation of state-controlled sectors, privatization of state-owned enterprises, and most important, a belief in competition as the only reasonable economic arrangement. In some countries, such as the United States, where state-owned enterprises are few compared to Western Europe, only a part of this framework is emphasized. But throughout the capitalist world and even to some extent in the...

  6. 2 The Telephone and the Public Service Idea
    (pp. 23-50)

    As we saw, under public service liberalism a rebuttable presumption exists against government restraint. Some activities are, however, regulated in order to attain certain goals, and even more drastically, some industries are comprehensively regulated. One important set of industries comprehensively regulated pursuant to public service liberalism are those called public utilities or public services. These sectors are critical in any economy and include water, transportation, and communications. To understand public service liberalism in these sectors is to understand public service liberalism as a theory of public policy. We will focus specifically on the communications area and thereby evaluate the ability...

  7. 3 Protection of the Newborn
    (pp. 51-83)

    The lifeblood of capitalism is “creative destruction”—the process by which new products, methods of production, transportation, markets, and industrial organization displace the old. Schumpeter observed that the revolutionary force of creative destruction, and not the marginal forms of price, service, and promotional competition, is the essential aspect of capitalist economic progress. “In capitalist reality as distinguished from its textbook” what counts “the competition from the new commodity, the new technology, the new source of supply, the new type of organization . . . competition which commands a decisive cost or quality advantage and which strikes not at the margins...

  8. 4 Structural Liberalism: The Issues of Economic Structure
    (pp. 84-121)

    Today enterprises from the smallest mom-and-pop store to the largest industrial firms and service companies style themselves corporations. The corporate form dominates in virtually every economic activity except certain professional ones, such as the practice of medicine or law. Yet only a century ago corporations were far less common, and considerable antipathy existed toward them. Both the hostility toward corporations and their gradual acceptance as the dominant business form in nearly all branches of enterprise are best understood within the dynamic of public service liberalism. The gradual transition from hostility to acceptance in both England and the United States was,...

  9. 5 The Progressive Impulse and the Telephone
    (pp. 122-164)

    Few topics in American history have led to more heated debate—and extremely high levels of scholarship—than the Progressive Era. As we saw in chapter 1, progressivism was associated with the rise of the professional classes and their impulse toward planning, often through government intervention as the initial response to a problem. As advocates for change usually do, they provided a justification for their ideology in the form of progressivism and characterized their proposals as progress. In Richard Hofstadter’s words, progressivism was “that broader impulse toward criticism and change that was everywhere so conspicuous after 1900 when the already...

  10. 6 Public Service Liberalism and the New Political Economy
    (pp. 165-204)

    The decline of competition in the telephone industry did not necessarily mean that AT&T would emerge triumphant as the dominant—indeed, overwhelming—factor in that industry. The decline of competition could have led policymakers in many directions, including efforts through the antitrust laws and legislation to revitalize competition. In fact, as we will see, this alternative was attempted, and it failed. Again, important voices were heard favoring such other alternatives as nationalization or municipal ownership. Telephone and telegraph nationalization had occurred in other major countries and, in the context of the time, was not necessarily considered socialistic. Municipal ownership of...

  11. 7 The Administrative State and Public Service Liberalism
    (pp. 205-237)

    In the aftermath of World War I public service liberalism was not dismantled. Rather, it was elaborated and refined in a few sectors such as electricity and telephones. As this chapter will show, it remained a dynamic theory of public policy in these few areas. But public service liberalism was clearly contained. Thus, as we will see in the next chapter, radio, the new communications technology of the 1920s, was not regulated according to public service liberalism’s principles. After the development of public utility commissions, they were the principal institutions that carried forward public service liberalism far into the post...

  12. 8 The Contraction of the World
    (pp. 238-270)

    Late in 1921 Congress enacted the Federal Highway Act, creating a Bureau of Public Roads. Careful highway maps were prepared and a ten-year road-building program was adopted. The unparalleled road-building program both stimulated and was a reaction to the great new industry of automobile manufacturing. In less noticed developments, new methods of mixing concrete for the road-building program, new road-building machinery, powerful new explosives for blasting rock, new ways of spreading asphalt, and a host of other dramatic new activities responded to the needs of automobile and truck transportation. Aviation made even more remarkable strides.¹

    Parallel to the developments in...

  13. 9 The End of the Old Deal
    (pp. 271-286)

    The new interventionist philosophy, ascendant during World War I, retreated from the end of that war until the Great Depression. But as the case of radio regulation illustrated, the new philosophy, although no longer at center stage, continued to play a significant role in American public policymaking. It would have to await the crisis of the Great Depression before it became the dominant theory of public policymaking. Nevertheless, even during the three Republican presidencies in the 1920s, radio regulation was hardly an aberration. In numerous areas government intervened in ways inconsistent with public service liberalism, even as the older system...

  14. Index
    (pp. 287-296)