Proceedings: Technology and Governance

in the 1990s. Papers Presented at the OTA

20th Anniversary Forum on Technology

and Governance in the 1990s

April 1993

OTA-A-564

NTIS order #PB93-192904
Recommended Citation

U.S. Congress, Office of Technology Assessment,

Proceedings: Technologyy and Governance in the 1990s, OTA-A-564

(Washington, DC: U.S. Government Printing Office, April 1993).
gressional committees an other policymakers.

T

On January 27. 1993, in celebration of OTA’s twentieth anniversary, the agency’s

Congressional Technology Assessment Board hosted a one-day Forum on "Technology

The

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Forum was designed to address several goals:

To raise congressional and public awareness of the most critical issues faced by

our nation and the world.

To equip policymakers with an improved understanding of how best to deal with

these issues.

To show how technology is woven into socio-economic, domestic, and international policies, and to demonstrate the need to adapt our policies, methods of governance, and institutional mechanisms to this reality.

Five topics were chosen, selected on the basis of national and/or global urgency,

likely continued importance to the legislative agenda, and the centrality of technology

in creating or solving the problem: international security, sustaining the global environment; U.S. economic competitiveness: health care: and public education. Distinguished

speakers were invited to address the topics--outlining the problems, the reasons for

their urgency, and alternatives for resolution.

This book contains the five papers presented that day. The proceedings arc being

published to allow for wider dissemination of the authors' presentations of these timely

issues.

OTA wishes to acknowledge the generous financial support of the Carnegie Corporation of New York and Corning Incorporated, without which the Forum could not

have taken place. In addition, OTA thanks the members of the Congressional Technology Assessment Board (TAB) and the Technology Assessment Advisory Council

(TAAC) for their ongoing cooperation and support.

ROGER HERDMAN

Acting Director

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Foreword
CONTENTS

A New World Order

and Its Implications for Arms

Reductions, 1

Sustaining the Global

Environment, 15

Economic Competitiveness

in the U. S., 23

Medical Care Reform:

Building a Viable System, 31

Rethinking Public Education

in the U. S., 43

Forum Speakers. 54
T

he world’s nations face a great challenge. If they can take advantage of the

end of the Cold War to move toward a system of collective security—a system in which the United Nations Security Council and other multinational

organizations. particularly the regional organizations, play major roles-then

the risk of war between nations. and the risk of unrestrained conflict within

nations, will be substantially reduced.

As a consequence, military expenditures across the globe can

be cut dramatically.

Adapting to a Post-Cold War World

Although there was clear evidence for several years that the

Cold War was ending, nations throughout the world have been

slow to revise their foreign and defense policies, and slow to

strengthen regional and multinational organizations to reflect that

fact. Let me point to the U.S. as an example.

In this country, defense expenditures in 1992 approximated

$300 billion. In constant dollars, that was 10 percent more than a

decade ago. Moreover, President Bush’s 5-year defense program,

presented to Congress in January 1992, projected that these

expenditures would decline only very gradually over the next 5

years. Defense outlays in 1997, in constant dollars, were estimated to be approximately 10 percent higher than 21 years earlier,

under President Nixon, in the midst of the Cold War.

Such a defense program is not consistent with my view of the

post-Cold War world.

By

The Honorable

Robert S.

McNamara

A New World

Order and Its

Implications

for Arms

Reductions

Before nations can respond in an optimum manner to the end of the Cold War, they

need a vision of a world which will not be dominated by East-West rivalry, a rivalry

which for more than 40 years has shaped foreign and defense policies across the globe.

The Inevitability of Conflict

As the military action in Iraq, the Yugoslavian civil war, and the turmoil in Somalia,

Angola, and Cambodia demonstrate, (his post-Cold War world is not going to be a

world without conflict. There will be conflict between disparate groups within nations,

and conflict extending across national borders. Racial and ethnic differences will

remain. Political revolutions will erupt as societies advance. Historical disputes over

political boundaries will continue, and economic differentials among nations arc going

to increase as the technological revolution of the 21st century spreads unevenly across

the globe.

In the past 45 years there have been 125 wars, resulting in 40 million deaths. Third

World military expenditures now total almost $200 billion per year. approximately 5

percent of GDP. They arc only slightly less than the total expenditures in the developing world for health and education.

It is often suggested that the developing countries were turned into an ideological

battleground by the Cold War and the rivalries of the great powers. That rivalry was a

contributing factor, but the underlying causes for Third World conflict existed before

the Cold War began, and they will almost certainly continue even though it has ended.
“The U.S.

will live in a

multipolar

world, and

its foreign

policy and

defense

programs

must be

adjusted to

that reality”2

be roughly equal to that of the British in

1965. China's total gross natiional product would approximate that of of the U.S.,

Western Europe, or Japan, and almost

surely would substantially exceed that of

Russia.

These figures am, of course, highly

speculative. I point to them simply to

emphasize the magnitude of the changes

which lie ahead, and the need to begin

now to adjust our goals, our policies, and

our institutions to take account of them.

In such a multipolar world there clearly is need for developing new relationships, both among the great powers and

between the great powers and other

nations.

A New World Order

I believe that, at a minimum, the new

world order should accomplish five objectives. It should:

1.

2.

. . 3

4.

. . 5

Provide to ail states guarantees against

external aggression. Frontiers should

not be changed by force.

Codify the rights of m minorities and

ethnic groups within states, and provide a process by which such groups

that believe their rights have been violated may seek redress without resort

to violence.

Establish a mechanism for resolution

of regional conflicts, and conflicts

w i t h i n nations, w i t hout unilateral

action by the great powers.

lncrease the flow of technical and

financial ass assistance to developing

countries to help thcm accelerate their

rates of social and economic advance.

which are disgracefully low in parts of

the world, particularly Sub-Saharan

Africa.

Assure preservation of tile global environment as a basis of’ sustainable

development for all.
In sum, I believe we should strive to

move toward a world in which relations

among nations would be based on the

rule of law. a world in which national

security would be supported by a system

of collective security. The conflict prevention, conflict resolution, and peacekeeping functions to accomplish the

objectives outlined above would be performed by multinational institutions-o

rcorganized and strengthed United

Nations and new and expanded regional

organizations.

That is my vision of the post-Cold

War world.

Alternative Vision

In contrast to my vision. many political theorists predict a return to the power

politics of the 19th century. They claim

that with the elimination of ideological

competition between West and East,

there will be a reversion to more traditional power relationships. They say that

major powers will be guided by basic territorial and economic imperatives: that

the U. S., Russia. China, India, Japan, and

Western Europe will seek to assert thcmselves in their own regions while while competing for dominance in other areas of

the world where conditions are more

fluid.

This view has been expressed by the

realist school of political scientists, the

leading advocate of which is Michael

Sandell, a political theorist at Harvard,

who has said:

“The end of the Cold War does not

mean an end of qlobal competition

between the superpowers. Once the

ideological dimension fades, what

you're left with is not peace and

harmony, but old-fashioned global

politics based on dominant powers

competing for influence and pursuing their internal interests. ”

Professor Sandel conception of

relations among nations in the post-Cold

War world is historically’ well-f(mndcd,

but I would argue it is not consistent with

the increasingly interdependent worldinterdependent economically. environmentally, and politically in terms of security-into which we are moving. I n that

interdependent world I do not believe

any nation will be able to stand alone.

The United Nations charter offers a far

more appropriate framework for relations

among nations i n such a world than does

the doctrine of power politics.

In contrast to Professor Sandell, Carl

Kazen, former director of the Institute of

Advanced Studies at Princeton, wrote in

International Security:

“The international system that

relies on the national use of mili -

tary force as the ultimate guaran- . .

tor of security, and the threat of its

use as the basis of order, is- not the

only possible one. To seek a different system. . . is no longer the pur -

suit of an illusion, but a necessary

effort toward a necessary goal. ”

That is exactly what I propose we

undertake.

A System of Collective Security

To repeat, the new world order which

I propose would require:

Renunciation by the great powers of

the usc of force in disputes among

themselves and renunciation of unilateral action in dealing with regional or

national conflicts.

Agreement by the Security Council

that regional conflicts endangering territorial integrity, or national strife carrying the risk of widespread loss of

1ife of the kind we arc seeing in

Bosnia today, will be dealt with

“

. . . In the

increasingly

interdependent

world into

which we are

moving, I do

not believe any

nation will be

able to stand

alone”

3
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“Had the U.S. ~

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and other major :

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powers made :

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clear their ~

support for !

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a system ~

of collective ~

security . . . the ;

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Iraqi invasion of :

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Kuwait might ~

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have been :

deterred” ~●

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through the application of economic

sanctions and, if necessary, through

military action. imposed by collective

decisions and utilizing multinational

forces.

Such a world will need leaders. The

leadership role may shift among nations

depending on the issues at hand. Often it

will be fulfillcd by the U.S. How’ever, in

such a system of collective security,

whenever the U.S. does play a leadership

role, it must accept collective decision

making. We’re not accustomed to that: it

will be very difficult.

Correspondingly, if the system is to

survive, other nations must accept a sharing of the risks and costs: the political

risks, the financial costs, and, most

importantly, the risks of casualties and

bloodshed.

Had the U.S. and the other major

powers made clear their conception of

and support for such a system of collective security, and had they stated they

would not only pursue their own political

interests through diplomacy without the

use of force. but would seek to protect

nations against attack, the Iraq invasion

of Kuwait might well have been deterred.

Arms Reduction

While steps are being taken to cstab1ish a worldwide system of collective

security of the kind I have outlined, the

arms control negotiations-including

those relating to the proliferation of

weapons of mass destruction-which

have been underway in several different

fora should be expanded in scope and

accelerated in time.

Particular attention should be given to

establishing long-term goals for nuclear

forces, beyond those incorporated in the

START II agreement signed by

Presidents Yeltsin and Bush earlier this

month.

Today there arc approximately 40,000

nuclear warheads in the world, with a

destructive power over 1 million times

that of the Hiroshima bomb. Even assuming that the reductions called for by

START II are implemented, the stock of

nuclear warheads of the five existing

nuclear powers is not likely to be reduced

below 9,()()() to 10,000 warheads by the

year 2003.

So the danger of nuclear war—the risk

of destruction of societies across the

globe-will have been lowered, but surely it won’t have been eliminated.

Can wc go further? The answer must

be yes,

If there was ever any reason to doubt

that conclusion, it should have been

swept away by the recent disclosures of

how close the world came to nuclear disaster in 1962 during the Cuban Missile

Crisis. It was a dramatic demonstration

of human fallibility, of the degree to

which political and military leaders are

so often captives of misinformation, misjudgment, and miscalculations.

Retrospective View of the

Cuban Missile Crisis

The actions of the Soviet Union,

Cuba, and the U.S. in October of 1962

brought those three nations to the verge

of military conflict, and they brought the

rest of the world to the brink of nuclear

disaster.

None of these nations intended by its

actions to create such risks. To understand what caused the crisis, and how to

avoid such events in the future, participants in the decisions of the three nations

were brought together by Harvard

University, Brown University, and the

governments of the Soviet Union and

Cuba in a series of five conferences—the

last of which was a meeting chaired by

Fidel Castro in Havana, Cuba, in January

1992.

4 :

●
By the end of the third meeting, which

was held in Moscow in January 1989, it

had become clear that the decisions of

each of the three powers immediatedly

before and during the crisis had been distorted by misinformation, miscalculation,

and misjudgment. I shall cite only four of

many examples:

1.

2.

3.

4.

Before Soviet missiles were introduced into Cuba in the summer of

1962, the Soviet Union and Cuba

believed the United States intended to

invade the island in order to overthrow its president and its government. As I shall I discuss more fully in

a moment, we had no such intention.

The United States believed the Soviets

would not move nuclear- warheads

outside the Soviet Union-they never

had—but in fact they did. In MOSCow

we were told that by Oct. 28, 1962,

the height of the crisis, Soviet strategic nuclear warheads had been delivered to Cuba, and their missiles were

to be targeted on cities in the United

States.

The Soviets believed the missiles

could be introduced into Cuba secretly. without detection, and that when

their presence was disclosed, the U.S.

would not respond. Here, too. they

were in error.

Those who urged President Kennedy

to destroy the missiles by a U.S. air

attack, which in all likelihood would

have been followed by a land and sea

invasion, were almost certainly m istaken in their belief that the Soviets

would not rcspond with military

action. At the time, the CIA had

reported there were 10,000 Soviet

troops in Cuba. At the Moscow conference, participants were told there

were in fact 43,000, a1ong with

270,000 well-armed Cuban troops.

Both forces, in the words of their

commanders, were determined to

fight to the death. ” The Cuban officials estimated they would have suffered 100,000 casualties. The Soviets

expressed utter disbelief we would

have thought that, in the face of such a

catastrophic defeat, they would not

have responded militarily somewhere

in the world. The result almost certainly would have been uncontrollable

escalation.

By the end of the meeting in Moscow,

we had all agreed we could draw two

major lessons from our discussions. First,

in this age of high-technology weaponry,

crisis management is dangerous, difficult. and uncertain. Due to misjudgment,

misinformation, and miscalculation of

the kind I have referred to, it is not possible to predict with confidence the consequences of military action between the

great powers and their allies.

Second, therefore, we must direct our

attention to crisis avoidance. At a minimum, crisis avoidance will require that

potential adversaries take great care to

try to understand how their actions will

be interpreted by the other party. In this

respect, we all performed poorly 30 years

ago during the missile crisis. Let me

illustrate my point by referring to an

exchange at the opening of the Moscow

meeting.

President Gorbachev's aide, Georgi

Shaknazarov, was the chairman. He

asked me, as one of the U.S. participants

present who had been a member of

President Kennedy’s Executive Committee during the crisis. to ask the first question. I said. “My question is a very obvious one, from our point of view. What

was the purpose of the deployment of the

nuclear-tipped missiles into Cuba by the

Soviet Union?

Shaknazarov asked, ‘“Who wants to

answer?”

Andrei Gromykok, who for over 27

years had been the Soviet Foreign

Minister, and had been n the Foreign

Minister in 1962, was present and he

“The Cuban

Missile Crisis

was a dramatic

demonstration

of human

fallibility”

5
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6 :

responded, “I can answer that question

with a few words. Their action was

intended to strengthen the defensive stability of Cuba, to avert the threats against

it. I repeat, to strengthen the defensive

capability of Cuba. That is all.”

I then replied, “Mr. Chairman, that

leads me to make two comments. My

first comment is stimulated by the implication of Mr. Gromyko’s answer—the

implication being that the U.S. intended.

prior to the placement of missiles, to

invade Cuba, I want to make two points

with respect to that implication. The first

is, if I‘d been a Cuban, I think I might

have thought that. And I want to state

quite frankly, with hindsight, if I had

been a Cuban leader, I think I might have

expected a U.S. invasion.

“We had authorized the Bay of Pigs

invasion. We didn't support it. militarily—and I think this should be recognized

and emphasized, as it was specifically the

decision of President Kennedy not to

support the operation with the use of military force—but, in any event, we had

assisted in carrying it out.

“And after the debacle, there were

many voices in the U.S. that said the

error was not in approving the Bay of

Pigs operation but in the failure to support it with military force. The implication was that at some time in the future,

force would be applied.

“Secondly, them were U.S. covert

operations in Cuba which extended over

a long period of time. The Cubans knew

that. My recollection is that the operations began in the late 1950s and extended into the period we’re discussing, the

summer and fall of 1962.

“And thirdly, there were important

voices in the United States—important

leaders of our Senate, important leaders

of our House-who were calling for the

invasion of Cuba.

“So I state quite frankly again that if I

had been a Cuban leader at the time, I

might well have concluded there was a

great risk of U.S. invasion. And I should

say as well, if I had been a Soviet leader

at the time, I might have come to the

same conclusion.

“The second point I want to make—

and I think it shows the degree of misperception that can exist and can influence

both parties to a dispute—is (hat I can

state unequivocally wc had absolutely no

intention of invading Cuba.

“1 don’t want to suggest there were no

contingency plans. Obviously there were.

But I state again, we had absolutely no

intention of invading Cuba, and therefore

the Soviet action to install missiles with

that as its objective was, I think, based on

a misconception--a clearly understandable one, and one that we, in part,

were responsible for. I accept that. ”

Some of us, particularly President

Kennedy and I, believed at the time that

the U.S. faced great danger during the

missile crisis is. However, during the

Havana Conference a year ago I learned

we had greatly underestimated that danger.

While in Havana we were told by the

Russians that the Soviet forces in Cuba in

October of 1962—which, as 1‘VC said,

numbered some 43,000 instead of the

10,000 reported by the CIA—possessed

36 strategic nuclear warheads for the 24

intermediate-range missiles that were

capable of striking in the United States.

At the time the CIA had stated they did

not believe there were any nuclear warheads on the island.

We were also told by the Russians

that their forces included six dual-purpose tactical launchers for which they

had nine tactical missiles with nuclear

warheads to be used against a U.S. invasion force. Most importantly, we learned

that the authority to usc those nuclear

warheads had been delegated to the

Soviet field commanders in Cuba; i.e., no
“More and

more political

and military

leaders are

accepting that

basic changes

in the world’s

approach to

nuclear

weapons are

required”

7
“Returning to

a nonnuclear

world . . .

would greatly

strengthen the

hands of those

who seek to

control or limit

the spread of

other weapons

of mass

destruction”

8

use, he thought, should be “internationalized for security purposes. ” He proposed,

thcrct’ore, to “universalize the capacity of

atomic thermonuclear weapons to deter

aggress ion” by transferring control of

nuclear forces to a veto-less United

Nations Security Council.

Dulles’ concern in 1954 was echoed

very recently by a committee of the U.S.

National Academy of Sciences in a

report that carried a number of signatures, among them that of General David

C. Jones, the former chairman of the

Joint Chiefs of Staff. The report stated,

“Nuclear weapons should serve no purpose beyond the deterrence of nuclear

attack by others. ”

Should we not begin immediately to

debate the merits of alternative long-term

objectives for nuclear forces of the five

declared nuclear powers, choosing from

among three options:

1. A continuation of the present strategy

2

3

of “’extended deterrents’’—as recommended in the above-mentioned report

of Secretary Cheney's advisory committee—but with the U.S. and Russia

each limited to approximately 3,500

warheads, the figure agreed upon by

Presidents Yeltsin and Bush.

A minimum deterrent force-as recommended by the committee of the

U.S. National Academy of Sciences

—with each major nuclear power

retaining 1,000 to 2,000 warheads.

As I strongly advocate, a return, insofar as practicable, to ii nonnuclear

world.

Controlling Proliferation of

Weapons of Mass Destruction

While we‘re debating those issues,

shouldn’t we also debate how best to deal

with the proliferation of weapons of mass

destruction among other nations?

Over the last three decades, efforts

have been made to limit the spread of

nuclear, biological, and chemical weapons. The Treaty on the Non-Proliferation

of Nuclear Weapons was agreed to in

1968, and the Biological Weapons

Convention in 1972. The treaties have

done much to slow the spread of these

weapons.

Yet today, at least three countriesIsrael, India, and Pakistan—in addition to

the five declared nuclear powers, are

believed to possess the capability and the

materials to rapidly assemble, if they

have not already assembled, nuclear

weapons. Others are said to have a biological weapons capability. And still others are carrying out research that could

place them in these categories. Of equally great concern, about 25 countries have

ballistic missiles capable of delivering

weapons of mass destruction.

It is clear that the international community needs to redouble its efforts to

limit the spread and prevent the usc of

these weapons of mass destruction.

Returning to a nonnuclear world, insofar

as that’s achievable, would greatly

strengthen the hands of (hose who seek to

control or limit the spread of other weapons of mass destruction.

One of the main complaints of the

nonnuclear developing countries has

been that the nonproliferation treaty is a

discriminatory agreement which prevents

them from acquiring nuclear weapons

without requiring those already possessing weapons to dismantle their arsenals.

From this point of view, the Biological

Weapons Convention and the Chemical

Weapons Treaty, which do not distinguish between “haves” and “have nets,”

are preferable models.

I think it is time to confront the issue

head on. If wc truly want to stop the proliferation of weapons of mass destruction

and the means of delivering them, I see

no alternative to some form of collective.

coercive action by the Security Council.

To begin with, the Council should agree

●
to prohibit the development, production.

or purchase of any nuclear, chemical, and

biological weapons and ballistic missiles

by nations not now possessing them.

Countries in violation of relevant Security Council resolutions would be subject

initially to strict economic sanctions on

the part of the international community.

If those sanctions failed to alter their

behavior, a United Nations military force

would destroy the weapons.

Countries now in possession of such

weapons of mass destruction would be

subject to iternational inspection and

control and would be asked to approve a

treat! prohibiting “First Use. ”

Potential for Reductions

in Military Expenditures

As we move toward a system providing for collective action against military

aggression wherever it may occur, m i Iitary budgets throughout the world can be

reduced substantially. Those budgets

now total nearly $1 trillion per year, of

which the U.S. accounts for roughly

$300 billion.

I believe that during this decade that

trillion dollars could be cut in half. The

huge savings of $500 billion per year

could be used to address the pressing

human and physical infrastructure needs

across the globe.

In the case of the U.S. it should be

possible, within 6 or 8 years, to cut military expenditures from the 1989 level of

6% of GDP to below 3% .

Military expenditures of (developing

countries, which as I've said come close

to spending $200 billion per year,

approximately 5 percent of GDP, could

be reduced by the end of the century to 2

or 21⁄2 percent.

The costs of wars, the costs of arms

procurement, and the costs of defense in

these developing countries hale caused a

number of them to sacrifice social and

Pakistan to illustrate this point. I turn to it

not because it’s the greatest offender, and

certainly not because it’s the only offender, but it an easy case to consider.

Pakistan's defense expenditures

approximate 7 percent of GDP. It's a

country with significant unmet political

and economic development needs, and I

believe those have been sacrificed to

finance the defense program.

For example, in the late 1980s, only

half of Pakistani school-aged children

were enrolled in primary education facilitics, and only one-fifth were receiving

secondary education. The percentage of

females in primary school and secondary

education was less than the average—

about half as much as the percentage of

males.

Even in the lower-income and

middle-income Asian countries, such as

Sri Lanka or China, the primary school

enrollment and the secondary school

enrollment, as a percent of children in the

age groups, was about twice the level of

the enrollment in Pakistan.

Health statistics offer a similar picture. In countries such as Chile.

Argentina, Mexico, Costa Rica, and

Panama, the population per nurse is

about 500; in Pakistan it’s about 10 times

that high. As a result, infant mortality in

Pakistan is more than twice as high as in

those other countries, and life expectancy

is much less.

While it is extremely difficult to draw

hard and fast conclusions about the relationship between poverty and military

expenditures from statistics such as

these. it is clear that a country such as

Costa Rica, which has only an 8,000-person Civil and Rural Guard force, and

which devotes less than I percent of its

GDP to military-related expenditures, has

more resources at its disposal for social

and economic purposes than countries

that spend nearly an order of magnitude:

more on the military.

: 9

●
“The greater

the political

power of the

security forces,

the less likely

it is that the

requirements

for democratic

governance

will be met "

10

One of the most important effects of

military expenditures. which has serious

implications for political advance and for

economic growth and development in the

developing world. is the degree to which

it strengthens the political influence of

the armed forces at the expense of the

civilian groups within society.

In many parts of the Third World,

economic systems function primarily to

benefit a relatively limited number of

people, and political systems are frequently manipulated to guarantee continued benefits to the elite. If development

that meets the needs of all social groups

is to occur, if democracy is to spread.

there must be, among other things, a relatively equitable distribution of resources.

This, in turn, relies on the existence of a

political system that both allows all

groups to articulate their demands, and is

capable of producing workable compromises between competing interests. The

greater the political power of the security

forces, the less likely it is that the requirements for democratic governance

will be met.

Linking Financial Aid and

Military Expenditures

The role of the military is, of course,

the prerogative of each government.

Nonetheless, the international community needs to identify ways in which it can

reward those countries that reduce security-related expenditures in favor of development.

Therefore I strongly urge the linking

of financial assistance, both from OECD

nations and from multinational financial

institutions. through conditionality. to

movement toward “optimal levels” of

military expenditures. The optimal levels

should take into account the external

threats to a given country.

The conditionality’, this relationship

between external financial aid and developing country military expenditures, can

take many different forms. One form was

proposed in Facing One World, a report

of a committee set up by the Secretary

General of the United Nations and

chaired by former German Chancellor

Helmut Schmidt. The group, which

included ex-presidents or ex-prime m inisters of both developed and developing

countries. urged that, when decisions

concerning allocations of foreign aid are

made, special consideration be given to

countries spending less than 2 percent of

their GDP in the security sector.

I am conscious that application of

conditionality, in whatever form it may

take, will be difficult and contentious.

Nevertheless, it is, I

part of the solution

sented by excessive

poor countries.

Conclusion

believe, an essential

to the waste repremilitary spending in

In sum, with the end of the Cold War,

I do believe we can create a new international order. And yet we have barely

begun to move in that direction.

If together we are bold-if East and

West and North and South dare break out

of the mind-sets that have guided us for

the past four decades-we can reshape

international institutions, and relations

among nations, and we can reduce military expenditures, and we can do so in

ways which will lead to a mm-c peaceful

and far more prosperous world for all of

the peoples of our interdependent globe.

Its the first time in my adult 1ife

we’ve had such an opportunity. Pray God

we seize it.
I don’t think the regional organizations

have attempted to play a role. For example, the OAU (Organization of African

Unity) is moribund. They can't agree

they should play a major part in Somalia.

I don’t believe the people of the United

States are going to put 25,(X)() people into

another Somalia without the OAU being

present.

We’re going to have to allow a little

time for these regional organizations to

be strengthened. In the case of Somalia,

for example, the OAU should be encouraged to address this issue, to lay down

some standards of potential intervention.

I think the U.S. should assume a

major part of the responsibility for the

weakness of regional organizations

today, as well as for the weakness of the

United Nations. The U.N. has been ineffective for 30-odd years. It is still suffering from the determination of the West

and the East that it would not succeed.

It’s going to take time to rebuild it.

Progress has been made. We‘re all

deeply indebted to the U.N. Secretary

General for his initiatives, but we’ve had

tens of thousands killed in Bosnia, we’ve

had tens of thousands if not hundreds of

thousands die of famine in Africa, we’ve

had millions of refugees across the face

of Europe and acress Africa, and wc

stand the risk of many, many more of

these conflicts.

We must turn to the regional organizations. There isn’t even any such organization i n the Pacific. We must bring

together, in some form of structure, Russia. China. Japan, the U. S., and the major

nations of the Pacific Rim, and talk about

how we‘re going to address common

security problems in that region.

It’ll take time to do this, and while

wer're doing it. I think the U.N. is going

to have to assume more responsibility

than I believe ultimately it should.

What do you think of the threat Q to world security as a result of

the reprocessing of spent

nuclear fuels, extracting weapon-grade

plutonium? Specifically, what do you

think of Japan’s current practice of shipping its spent nuclear fuel to France and

Britain, where they are reprocessing it,

keeping the waste, and then sending

weapon-grade plutonium back to Japan?

Can a high-technology nation like that,

with the reservoir of plutonium, become

a super nuclear power overnight?

Japan can become a super nuclear power

any t i me i t wants to, whether it

reprocesses the plutonium or doesn't, and

I think it’s about time wc all recognized

that, including the Chinese.

I attended a meeting a year ago in

Beijing, and they tried to get the group to

sign on to a proposition stating, “All foreign troops should be withdrawn from all

foreign bases.”

I said, “Let me tell you something.

There isn’t a Chinese in this room who

on a secret ballot will, or should, vote for

that proposition. What do you think

would happen in the Pacific if wc withdrew all our troops? Do you want Japan

to be a nuclear power? If you don t,

you’d better develop some long-term) stable security system for the Pacific. It

doesn’t exist today. ”

The U.S. has no legal obligation to

defend Israel, but it does have a legal

obligation to defend Japan. That situation

is unstable unless there is a relationship

in the Pacific that will permit us to carry

out that legal obligation in ways that arc

appropriate to our own security. That

absolutely requires that wc maintain

forces in the area. I don’t think wc have

to maintain forces as large as we have,

and I don’t think we have to maintain the

kind we have, but if wc want Japan to

refrain over the decades from developing

“The U.S.

should assume

a major part

of the

responsibility

for the weakness

of regional

organizations

today, as well as

for the weakness

of the United

Nations”

11
nuclear weapons, we’ve got to address

the basic security requirements of Japan

and the region, and we haven t done so.

What transformations are

Q needed in the Security Council

to realize your objective?

Wouldn't it be necessary to bring in

Japan and Germany, and wouldn't that

create enormous pressures to bring in

Brazil and other countries? If the

Security Council gets very big, it won't

be able to do what you want.

You're absolutely right. If you add

Japan, you’ve got to bring in Germany,

and if you bring in Germany you already

have France and Britain. Arc you going

to have three from Western Europe, and

not Brazil and not India, and not Nigeria?

That’s impossible.

On the other hand, to negotiate a deal

in which you open this whole thing up,

wc might end up with the ECOSOC

(Economic and Social Council), in a

sense. The ECOSOC is a totally ineffective body. And whatever wc think of the

Security Council, it’s a heck of a lot

more effective than ECOSOC, so lets

keep it that way.

Why don’t wc set up a mechanism?

For example, why don’t we agree that

France, Britain, and the U.S.—permanent

members of the Security Council—will

not vote on anything in the Security

Council without consultation with Japan

and Germany? If you want to take it to

the extreme, let’s agree that those three

permanent members won ‘t cast their

votes unless they arc representative of

the votes of all five countries.

Now, I’m not really suggesting you go

that far, but what I’m saying is that we

can do much mm-c than wc arc doing.

The second point of your five Q points describing the new world

order was that minorities within

states should have some means of redress, other than violence, through some

international involvement. At the present

moment, I doubt that would be acceptable to any country, including the United

States. How do you propose to proceed

from where we are today to a situation in .

which that would be accepted?

I think wc should begin to discuss the

problem. I don’t know that it’s unacceptable, and I’d take it step by step.

The first proposition I made in that

point was to codify the rights of minoritics and ethnic groups. Some might take

the position it’s already codified in the

charter of the United Nations, To some

degree that’s true, but the codification is

so general it doesn’t help us very much

in dealing with the situation in Yugoslavia, for example.

I think wc could begin by expanding

the definition of minority rights and ethnic rights. There would be objection to it,

but it could be done, and then we could

set up a process that could be used by

minorities that feel the prescribed rights

in the codification arc being violated.

But what do you do if codified rights

arc being violated, the process is being

followed, and no relief is in prospect?

That’s when you get to the point of disagreement, and there I think you would

find that the Security Council might well,

under certain circumstances, agree to

intervention.

In the case of Bosnia, suppose that the

Security Council would have agreed to

some action before the killing started, or

before it went very far. What action

would we have proposed’? And what

would have triggered it? How much killing would we accept before wc reached

the point where we were moved to act?

Take the list of 125 wars over the past

40 years that have led to the death of 20

million people, and, with hindsight, say

what should we do? We no longer have

the East-West struggle. We didn’t address those in the past largely because of
the East-West struggle. That’s gone,

thats no 1onger an excuse for not

addressing it.

Q

How important do you think

population growth is to international security, and what's your

recommendation for the United States in

this area?

There arc two revisionist schools of

thought that are saying the population

problem is not a problem, or, in any

event, that the way wc are talking about

dealing with it is wrong. One is a school

of economists that maintains if you just

let market forces operate, this population

problem will be taken care of by itself,

that intelligent parents, properly educatcd, will make the right decisions.

There’s much evidence to show that

increasing female education, just through

the primary level, will, over time, lead to

substantial reductions in fertility. Today

fertility in Sub-Saharan Africa is running

on the order of 6.2. That means the average female during her reproductive years

will produce 6.2 children.

This school of economists would say,

let’s be sure every girl child in

Sub-Saharan Africa goes to school, and

this problem will take care of itself. If

you look at a long enough period of time,

that’s correct.

But by the time that period occurs, the

500 million people in Sub-Saharan

Africa today arc very likely to be five

times that, or about 2.5 billion. So I don’t

agree at all with that school.

The other school of thought is populatcd by many of my feminist friends,

who tell me I‘m trying to impose on

females some form of restriction. I’m

not; I’m simply trying to make available

to females the opportunity for them to

guide their 1ives, and to guide the lives of

their children.

Why am I so concerned about it’?

Well, there arc many, many reasons.

There’s considerable evidence to show

that where these fertility rates arc as high

as they arc in, say. Sub-Saharan Africa—

6.2 or 6.3—the infant mortality rates arc

very high. Maternal mortality rates arc

very high; illiteracy rates are very high;

caloric intake is very low. Caloric intake

for the average of the 500 million people

of Sub-Saharan Africa today would have

to be increased 25 percent to even reach

that of China.

The Sub-Saharan Africa population

I’ve pointed to, at roughly 500 million

today, is projected in recent figures from

the World Bank to stabilize at about 2.9

billion. If you take into account the effect

of AIDS, World Bank projections show

population won’t stabilize below about

2.7 billion.

Is that consistent with optima] economic and social advance for females

and children and others in Africa?

Definitely not. What can wc do about it’?

The first thing to do is to make contraception available to all who want it, and

that is not now being done. Studies have

indicated that there is a substantial

demand for contraception beyond what is

presently being met, but I think one has

to go beyond that, and this is where we

begin to get into controversy.

We cannot wait until wc put all the

females through primary school, and

have a natural demographic transition

take place. If wc do, the present population of the globe, whatever it is—5.2 or

5.5 billion—may not stabilize below 12

or 14 billion, and I think that raises very

serious social problems, and it may raise

some sustainability problems.

The U.S. can take a lead. We are

already doing quite a bit. There is about

$800 million a year in foreign exchange

assistance made available to the developing countries for fertility reduction and

“Sub-Saharan

Africa, the

contraception

prevalence rate

about 10

percent; that

needs to be

quadrupled”

13
contraception prevalence increases. Of

that $800 million, the U.S. provides on

the order of $300 million. Japan provides

about $50 mill ion.

In addition, wc need to increase the

world foreign exchange flows to the

developing countries. so that during this

decade contraception prevalence can be

increased significantly. In Sub-Saharan

Africa, the present contraception prevalence rate is about 10 percent; that needs

to be quadrupled.

If it’s quadrupled, and continues on

after that, the 500” mill ion, instead of stabilizing at 2.7 billion, can be brought

down to a stabilization level of 1.5 billion, which is three times what they have

now.

There’s a tremendous problem here,

and the U.S. can do far more (h an it has

in dealing with it.

Could you give us your thoughts Q on the relation of the economic

recovery in the former Marxist

counties to our national security, and

how far we should be going to aid them?

I would be in favor of the West providing

whatever economic assistance can be

effectively utilizcd by those nations, to

advance their rates of economic and

social advance. That applies particularly

to such countries as the Czech Repubic,

Hungary and Poland. I’m not at all certain how much external financial assistance can be utilized in Russia itself.

Russia needs much, much more than it

is presently receiving in the form of technical assistance, to help it restructure

institutions—its political institutions,

legal structure, its financial systems,

governance.

its

its

its

As an illustration, I don’t think they’re

going to be able to privatize quickly their

very large Russian institutions, nor do I

think they need to do so in order to greatly increase the effectiveness of those.

They can commercialize them, they can

begin to insist they follow accepted principles of accounting. They can begin to

insist that they usc what are called “shadow prices” for their labor and their

goods, and they can begin to insist they

use some incentives.

To put it very simply, I would provide

from the West whatever economic and

technical assistance can be effectively

used.
ver the past century, industrial production has multiplied 50-fold. We may :

project a future world economy multiplying first 5-fold and then 10-fold. :

We may project a world population doubling or tripling some time in the :

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next century. But we will never reach such a stage, because the carrying

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capacity of the earth will have been exceeded. This is why wc arc com- :

By

The Honorable

Gro Harlem

Brundtland

pelled to manage a transition more important than the agricultural and industrial revolu- :

tions. ●

History is full of examples of how human ingenuity can be

wonderfully creative, but also incredibly destructive. We have no

other option than to change, to change profoundly. and to make Sustaining change our friend, not our enemy. The policy platform of the new

administration includes American leadership on global environmental issues. This means dealing with big issues, controversial the Global

issues, complex issues—issues we cannot afford to ignore.

The START II agreement, the chemical weapons agreement,

and all the other major breakthroughs in disarmament which have Environment

made this world a safer place for ourselves and our children must

be followed by equally bold steps that will safeguard the future of

our planet.

Today, despite the problems in places such as the former Yugoslavia, Iraq, Somalia,

or Cambodia, the gravest threats to our future come not so much from military aggression as from our own way of living, from tacit acceptance that poverty and destitution

arc facts of life in the South, and from extravagant usc of natural resources in the North.

This means wc must deal with environment and development not merely as a pollution

problem, but as a challenge to the present inadequate way in which our countries and

the world arc organized and governed.

Exponential growth in our usc of finite natural resoureces will inevitably come to a

full stop. By means of example, with a double-digit. coal-fired economic growth in

China. dwindling food production in Africa, and competition for water in the Middle

East, our earth will become uninhabitable. We must chart a new course for global

development, and soon, before it is too late.

Our Common Future

The rich world has had a frim grip on the Third World for hundreds of years. We arc

now in a situation where that picture may change because wc in the North have become

increasingly dependent on developments in the Third World.

If the Third World sees no option but to follow unsustainable development policies,

we too will become the victims of a shrinking ozone layer, of global warming, loss of

biodiversity and contamination of food chains-all global problems that cannot be

stopped by border controls.

At the Rio Conference on Environment and Development in June 1992, the developing countries presented their demands for equity and justice. They were right to point

out that it is the industrialized world which is placing the greatest burden on the global

environment.

The) were reluctant to accept new requirements for self-restraint, and pointed to

how the rich world has been developing for decades without concern for the environment or finite natural resources. They rightly stated that poor and underdeveloped coun-
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tries could not be asked to forego development because the rich countries

already had used up environmental space.

The World Commission on Environment and Development, which 1 had the

honor to chair, worked to find common

ground between the North and the South.

Our report, Our Common Future, which

was issued in 1987, focused on underde -

velopment and poverty as a main cause

and effect of environmental problems in

the South. It focused on a different kind

of underdevelopment-the overuse of

natural resources—as a main cause of

environmental problems in the North.

Poor people and poor countries have

few options but to overexploit their environment in order to survive. Poverty and

uncertainty about the future serve as

incentives for- people to have more children, since in many countries children

become an economic asset to the family

even before they are 10 years old. When

the population grows faster than the

economy, if the latter grows at all, poverty becomes endemic. Rising numbers of

poor, uneducated people who lack health

services, safe water, and energy will

inevitably undermine their own environment and deplete the resources on which

future generations depend.

The world population is now about 5.5

billion, and it is growing exponentially.

The World Bank stipulates that it might

stabilize at some 12.5 billion by the middle of the next century. But where precisely it stabilizes in the range between 8

billion and 14 billion will depend on policy decisions.

This is why it is so important that

President Clinton has argued for the

resumption of U.S. funding for the

United Nations population activities.

Sound population policies must include

far more than family planning alone.

Raising the status of women, rising

incomes for families, improved health

and education are equally important.

The situation in Haiti serves as a

warning of what may happen if the

downward spiral of poverty, population

growth, and environmental degradation is

allowed to continue unchecked. That

country’s environment is being destroyed

more rapidly than anywhere else in the

world.

The boat people making their way to

Florida may only be the tiny prelude to

the global upheavals wc will face. To

avoid a proliferation of Haitis and

Somalias, we must assist developing

countries in making a new start, gradually taking on the rights and the obligations

of equal partners.

If we should fail, our predicament can

be variously described. Steady deterioration of the quality of life—traumatic forthe rich, catastrophic for the poor--is

perhaps the least dramatic way of

describing humanity’s future.

Foreign Aid Critical

There is, regretably, “aid fatigue” in

the world today, not least as the result of

domestic problems in many industrialized countries. Still, wc must operate on

two fronts. We cannot afford to postpone

international problems during our own

healing period. 1 am often asked, for this

very reason, by friends in the Third

World to emphasize Norwegian aid performance which for many years has

remained in excess of 1 percent of GDP,

the highest in the world, and three times

higher than the average of OECD countries.

Norwegian aid is poverty-oriented,

and has focused on health, basic needs,

women, children, education, family planning, and, increasingly, on the environment.

16 :

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— . —

Yet aid alone is not sufficient to solve

the poverty problem. Aid must be designed to help in building sound national

economics, and in implementing policies

of social reform.

We must launch a full-scale, committed offensive against poverty and undcrdevelopment in the Third World. It will

not be successful unless the U.S. is willing to take a leading role. If we provide

comfort and restore hope, the n we can

avoid much more costly operations.

Now that communism is no longer a

threat to our free societies, containment

should no longer be a major motive for

foreign aid. We must realize that it is in

our own interest to assist the poor countries to achieve sustainable growth. and

to integrate them thoroughly into the

global economy.

This will require that we relieve their

suffocating debt burden, i reprove the

quality and quantity of our foreign aid,

while we require that sound domestic,

social, and economic policies are implemented. Even more importantly, we must

remove our barriers to trade with the

Third World, as we must among ourselves. The conclusion of the Uruguay

Round is now long overdue.

Energy is the Key

Energy is a crucial issue. Energy consumption has grown by a factor of 20

over the past 150 years. Energy usc is the

key to any development strategy.

The triple E’s—Energy, Environment.

and Economy-are inextricably linked.

Unless we find more prudent ways of

using energy, this exponential increase in

our energy usc will continue. The problem will be further aggravated by the

increasing needs for energy in the South,

where more than 90 percent of the population growth will occur.

Many of today’s environmental problems are caused by energy production

and consumption. It leads to acid rain,

deforestation, flooded valleys, polluted

rivers, erosion of our architectural heritage, and specific disasters such as Chernobyl and the Exxon Valdez.

The World Commission on Environment and Development called attention

to the need to improve energy effciency

and to shift toward a more sustainable

energy mix. The Commission also pointcd to the need to avoid extreme fluctuation in oil prices. We emphasized the difficulty of developing alternative energy

sources as long as oil prices remain low.

and we recommended that new mechanisms for dialogue between producers

and consumers be explored.

It would be highly irresponsible to

continue to rely on what I call the “Doris

Day doctrine” in global energy relations.

While exciting in some human relations,

“que sera, sera“ is not a principle that can

guide our energy future.

We should treasure energy resources

more, price them properly rather than

subsidize them, and keep more of them

available for future generations.

Implementing Climate Policies

At Rio we adopted what amounted to

a watered-down climate convention. It

fails to set firm targets, but it is a new

beginning and it requires that wc start to

implement climate policies immediately.

Moreover, it is the first of a new generation of international environmental agreements, as it laid down the fundamental

principle that solutions must be costeffective.

The essence of this central principle is

that we should aim at achieving maximum environmental benefit for the minimum cost. It is obvious that it will take

longer-and we all will lose-if we

squander our resources on the most costly problems,

We should not request all countries to

reduce their emissions by an equal percentage. Clearly, the marginal costs of

“We should

treasure energy

resources more,

price them

properly rather

than subsidize

them, and keep

more of them

available

for future

generations )

17
“American

gasoline is

one of the

best buys there

is in any

industrialized

country, and

such prices

offer little

incentive

for energy

conservation”

18

reducing emissions by, for example, 1 ton

will vary greatly from country to country,

as well as between different sources

within each country.

In a globalizcd economy, private companics often find themselves caught in a

squeeze between the need to respond to

national environmental demands on the

one side, and short-term profit objectives

on the other. They may also be facing

foreign competitors who may be subject

to less stringent requirements.

Let me usc the example of acid rain to

illustrate this problem. Acid raid is a serious problem for Norway. Some 90 percent of (his pollution comes with the

wind from other countries. The problem

must therefore be dealt with at the

regional level. Further reductions in our

low S02 emissions would cost 10 times

as much as similar reductions would in

Poland, We could improve the environment far more quickly and cost-effectively by promoting investment in cleanup

operations in Poland rather than in

Norway.

Norway contributes only about ().2

percent of global C02 emissions, and can

therefore only make a marginal contribu-

(ion to solving the problem, Nevertheless, we have introduced high carbon

taxes. Furthermore, the tax is I inked to

the transfer of financial resources to

developing countries as a means of helping them to curb their own emissions.

The U.S. contributes 25 percent of

global C02 emissions. More important,

however, are the per capita figures U.S.

emissions amount to 5.8 tons of C02 per

person per year, whereas the figure for

Norway is only one-third of that. One of

the reasons for our low figures is our

abundance of hydropower. France has a

similar situation, since their nuclear energy influences their statistics.

Although many people have commented on the dubious nature of statistics, it seems irrefutable that the U.S.

could provide a major share of the

answer to this global problem. To a

non-American, it seems that this could be

done by means or measures that would

be sensible for a number of reasons, such

as, for example, reducing the country

dependence on the resources of the Gulf,

and promoting development of renewable

resources of energy.

Europeans have a hard time understanding how controversial the issue of

taxing oil and gasoline is in the U.S. To

us very low gasoline prices seem an obvious source of revenue which could provide at least a part of a solution to a

deficit problem. Even when adjusted for

inflation, the prices in the U.S. after

Iraq’s invasion of Kuwait were far below

those that sent the nation into fury in

1979 and 1980. Still, the price here is

only one-fourth of the price in Norway or

Italy.

About one-fourth of the price you pay

here is tax, while the picture is the opposite in Europe, where up to three-fourths

of the price is tax.

Thus, American gasoline is in fact one

of the best buys there is in any industrialized country, and such prices seem to

offer little incentive for energy conservation.

Pricing the Environment

Speaking of incentives, the idea of

“green” taxes has increasingly become a

subject of debate. Given the high level of

unemployment in OECD countries, it is

no wonder that new taxes arc unpopular

if they increase the burdens on private

enterprise. Green taxes could therefore be

compensated by lowering other taxes.

In Norway, an official Green Tax

Commission” has studied ways of pricing

the environment more properly. In my

opinion, sustainable development requires both a high level of employment

and an improved environment. This cannot be achieved without changes in our
economic policies. We must consider

whether to lowcr taxes on the “good’’

things. such as work and investment, and

raise taxes on the “bad” things, such us

pollution and depletion of natural

resources.

A report issued by World Resources

Institute indicates that tax increases generally spell trouble by discouraging work

and savings, and that they may trigger the

flight of labor and capital outside tax

jurisdictions. However, a rc~enuc-neutral

shift in taxation should be quite possible.

If applied properly, such a shift could

harness market forces in support of environmental improvements by inspiring

companies and households to act innovatively and efficiently. Such a shift would

lead to additional net savings, since damage to the environment and to public

health would be reduced, as would the

cost of incremental environmental protection measures.

Such a change would be more likely

to succeed if it involved dialogue and

cooperation between the private and public sectors. Environmental protection

need riot be antigrowth. On the contrary,

it must fuel I growth. Some companies

may of course face short-term adjustment

problems. We should not be euphoric and

pretend there will be no problems, but wc

should have faith in our own innovative

capacity. Look at what wc accomplished

with ozone-depleting substances. They

are on the verge of being phased out

completely because knowledge and skill

were put into action to find alternatives

once there were prospects of regulation.

There is tremendous talent available in

the United States. There is no reason at

all why both the economic and environmental performance of the U.S. should

not be the best in the world. I am convinced that millions of non-Americans

felt President Clinton was right when he

said in his inaugural speech, “There is

nothing wrong with America which can -

not be cured by what is right with

America.”

The Role of Technology

I believe that all countries, rich and

poor, are well advised to invest more in

the skills of people. An increasingly

well-educated population must be the

core of a new supply-side agenda for the

1990s and beyond.

The U. S., Japan, and Europe must be

the engines of change, but technological

advances i n the North w i 11 (rely provide

partial solutions unless technology is also

disseminated to the Third World. This

does not mean that we must weaken the

protection that patents provide. In fact,

effective patent systems are necessary to

promote technology dissemination and

transfer, ensuring a proper return on

research and development.

Patent protection has sometimes been

regarded as a major barrier to the usc of

technology. However, studies commissioned in preparation for the Rio conference raised doubts about this. The evidence indicates rather that lack of capital,

lack of skills, lack of markets, and the

weakness of infrastructure arc the major

barriers to the diffusion of environmenttally sound technology.

It is difficult to see how the Third

World can become a reliable new market

for high-tech products if the knowledge

base is too thin. It would therefore be a

good international industrial policy for

governments to support companies to

work with Third World companies in the

fields of technology, research, and development.

The 10 largest companies in the

United States spend more on research

and development than the entire Third

World, including China. Clearly, technology cooperation should become a natural

part of forward-looking foreign policies.

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“Technological

advances in the

North will only

provide partial

solutions unless

technology is also

disseminated to

the Third World”

19
“If we maintain

the illusion that

each nation can

act in isolation,

we risk

postponement

of critical

decisions which

will only be made

effective when

states act in

cooperation”

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The World Resources Institute has

found that research and development

funding has largely been devoted to fields

of little relevance to environmental quality. The heart of the matter seems to be

that in many countries the need for new

technology to solve environmental problems has been inadequately recognized,

and that the role of governments in

encouraging such technologies is poorly

defined.

One problem is that technology is seldom widely spread when it is based on

“technology push.” “’Need pull” is what

is needed instead. The difficulty in the

case of environmental technology is that

this need is not a private need but a public need. This is a serious problem as our

economic systems do not sufficiently

take into account harm done to people’s

welfare or the environmcnt. A part of the

solution must therefore be to make economic agents act in harmony with the

needs of society today and in the future.

Environmental and other public needs

argue convincingly in favor of policies to

support environmentally benign technologies. We need industrial policies

with targets and purposes that only

democratic governments can set.

The 1990s will be a decade of destiny,

in which wc must summon all our human

resources, our knowledge, and our moral

conviction to seriously face the real challenges of the future. The forces of technology, of finance, and of electronic

communications must not be al lowed to

take over powcr which was vested i n

democracy to shape our future.

The Challenge of the 1990s

Therefore, the challenge of the 1990s

is to deepen and widen the forces of

democracy, and to lift democratic decision-making also to the international

level. Even the most powerful nation

state is too small for addressing global

challenges.

If we maintain the illusion that each

nation can act in isolation, we risk postponement of critical decisions which will

only be made effective when states act in

cooperation. We also risk an increase in

the current skepticism and lack of confidence in democracy, politics. and politicians.

People do not believe in politicians

when they promise to do what is in reality beyond the reach of their present powers. People are used to holding politicians

accountable and to measure the results

and how they arc able to improve the

quality of life. If the results do not meet

people’s expectations, they arc quick to

turn against politicians and the political

system itself.

If this alienation is allowed to continue, we risk a gradual disintegration of

our traditional political institutions. The

antipolitical establishment mood in many

countries is one such sign. The increasing

racism and xenophobia in many European countries today is a frightening

reminder of dark chapters of European

history.

All our efforts to solve the new global

threats must be underpinned by true

internationalism. There will be competition, clearly, but such competition

between companies and countries must

be governed by fair, open, agreed upon,

and enforceable rules.

In the final analysis, the problems of

envirnment and development depend on

the global dissemination of the ideas of

democracy. The unveiling of the environmental ecocide in Eastern Europe, committed under totalitarian rule, clearly

shows that only people who arc allowed

to participate in pubic 1ife, without fear,

will be able to build community purpose,

instill social responsibility, and assert the

larger vision of a just and sustainable

future.
The resource of human minds and our

ability to organize our communities, and

community of countries. arc what wc

must rely on in a major transition period

toward a sustainable relationship between

people and the earth. If I had not believed

that people would have the capacity to

govern and to reconcile the two, I would

have felt less inspiration working politically to integrate enironmental issues

into policymaking as I have been doing

for nearly two decades now.

We need a global democracy. This

will only be possible if Europe and North

America can lead; those parts of the

world which have been benefited by the

history and tradition of democracy for

more than 200 years certainly have a special responsibility.

I want to conclude by reminding you

of the words of Winston Churchill, who

spoke here, in this same area, 50 years

ago. He said, “Europe and the United

States must lead, for their own safety,

and for the good of all walk together in

majesty, in justice, and in peace.”

This is exactly the same challenge to

us all at this very moment 50 years later.

Will technology alone provide Q for a sustainable global development, or will will need to look

for reductions in the standard of living

from the northern countries?

I believe if we do the right things, if we

change our systems, and especially if wc

start using energy in a better manner than

up to now, then wc can make a major

contribution to the necessary changes

that may increase the standard of living

which is necessary in the Third World.

The focus is not to reduce our standard of

living, but to change it, absolutely.

Q

I’m curious about the politics of

development assistance in Norway. How do you sustain a level

of development assistance in escess of 1

percent of GNP? Is this a popular program? What arguements are effective in . .

persuading the Norwegian people to sustain this level of development assistance?

I can remember many election campaign

since the ‘70s, when I first started as a

politician at the national level, where

people came up to me in the streets and

criticized events they had read about in

the papers-c. g., boats carrying food to

India. There arc always very strong arguments for using the money at home. and

there arc always needs at home that could

be taken even better care of.

My party, and also the conservative

party, stood up and said, look. wc have to

do our share to alleviate poverty and destitution in humanity globally. It is necessary for politicians to make these kinds

of arguments. Otherwise the sentiments

can spread, and they arc dangerous because without a global aspect to our domestic problems, they cannot be solved.

Alleviating poverty and opening markets, increasing democracy, and, not the

least of all, taking care of the environment-these issues need to be dealt with

on behalf of each citizen in the United

States, or in Norway, for the future of

their own children, for their own health,

for their own security.

Q

You noted the importance of

enhanced educational status in

the developing nations, and also

in Eastern Europe. There are also major

health status problems. What would your

suggestions be in terms of how Western,

democratic, developed nations might

effectively pursue approaches to enhancing health and education status in these

needy countries ?

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; 21

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“We live in an

age where

complicated

issues are

presented in

30-second

sound bites.

This tends

to confuse

people’s

willingness

to concentrate

on in-depth

thinking about

the future”

22

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I think generally the political will or

ability in the years after 1989-90 to invest

and to support the Eastern European

countries and Russia have not been sufficient. It would have taken a broader

agreement in the West to go in with more

resources, more people, and more willingness to invest and to aid these countries into economic progress and social

purpose in a new situation, in what I

would call a social market economy.

1 think we have to be more forthcoming to the needs of the Eastern European

countries and the previous Soviet Union

because there is instability and it is a security risk to us if we do not help

increase the confidence in democracy.

And how do you do that without giving

people the feeling that their 1ives become

improved when democracy is introduced? That is a challenge, and education, health, and employment are the

basics of that.

There are few topics as conQ tentious in the U.S. as taxes—

green or otherwise. Can you

point out some of the lessons Norway has

learned for dealing with the unintended

or undesired consequences of green taxes?

It has not been easy. After our introduction of green taxes, the problem of competitiveness became acute for certain

Norwegian industries because other

countries reduced or at least did not

increase their level of taxation in these

areas. We had to back away from some of

our initial goals.

But wc have not abandoned our policy. We are going to stand on this policy,

and we are fighting in Europe and other

places to have others follow because we

know it’s the only way to have sustainable development, to have an energy mix

which is wise, and to give the right

incentives for using resources in a nonwasteful way.

Democracy tends to work from Q crisis to crisis. What you're

talking about are things that

need to be done, but are a little bit ahead

of a crisis. How do we create motivation

in the political centers of this world?

I see no other way but for us to reach out

to the general community. This has

become, in a sense, more difficult: wc

live in the age of television, an age where

complicated issues are presented in 30-

second sound bites. This tends to confuse

people’s willingness to concentrate on

more in-depth thinking about their own

society and about the future.

The media and the communications

revolution makes us able to reach every

person, all around the world. There is a

potential for building democracy and

purpose which is absolutely fantastic.

But the way these things arc driven by

commercial interests—for issues that can

“sell” at the moment-create a problem

in long-term thinking, and in taking seriously some basic aspects of our own

societies and our own future.

When people lose sight of the central

issues, we—as politicians and as scientists—have to move out even more into

those places where we meet them, not

through the television screen but directly.

Because it is when wc answer questions,

like you asked me now, in an audience

where peep 1 e see us talking, not i n

one-minute or half-minute sequences, but

in paragraphs, that they can improve their

own knowledge and thinking.

This is a new beginning for a new

administration. There are many opportunities for positive change. As the

President said in his inauguration speech,

it is critical to explain the consequences

of not making some bold decisions, and

hope that four years from now people

will see that those decisions were wise.
hen historians examine the decade we’re in, and the one wc just left, : By

they will find it a remarkable period because of the fundamental

~ Dr. Laura

changes that occurred.

: D’Andrea The Cold War has ended. One of the world’s two military superpow- .

ers has self-destructed. We lived for half a century in a world of two : Tyson

military super[pwers, and now wc have only one: the United States.

●

●

There’s also been a somewhat less remarked upon change

●

in the world economic system. For the last 50 years the U.S.

was the only economic superpower. But in the 1990s the world

has become a tripolar economic world, with three relatively Economic

equal economic superpowers—Europe, Japan, and the United

states.

This tripolar world is a world which is much more interde- Competitiveness

pendent because of trade and foreign investment flows, and A

it’s a world which is increasingly competitive Indeed, Fred

Bergsten of the Institute for International Economics has in the US.

called the new economic order one of “competitive interdependence.”

The economics of Europe, Japan, and the United States arc

linked by trade, and they’re linked by investment. They arc also striving to gain market

share, and they are striving to attract quality foreign direct investment-often at one

another’s expense.

So in this competitive, tripolar economic world, how does the U.S. shape up to the

competition?

The Good News

I want to start with what I think is the good news, and the real news, and that is that

the U.S. remains the most productive and richest economy in the world. The average

standard of living of Americans, as measured by GDP per capita, still exceeds that of

any other industrialized nation by a substantial amount. As a recent careful study by the

McKinsey Group documents. our absolute level of productivity still exceeds that of any

other industrialized nation.

Also, since 1986 we have seen an export boom in the United States, so wc have

emerged once again as the world’s largest exporting nation. Exports have accounted for

a large fraction of the rather slow growth wc have experienced in the past four years.

That’s the good news. Nonetheless, I would like to emphasize that. in terms of relative competitive position, there are signs of weakness, signs of problems, and before wc

turn to these problems I want to give you my personal history in terms of being

involved with the issue of national competitiveness.

Defining National Competitiveness

It was just about a decade ago that John Young, then CEO of Hewlett-Packard,

chaired President Reagan Commission on Industrial Competitiveness. That commission came up with a number of recommendations to build, restore, strengthen, and

improve U.S. competitiveness.

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“GDP per

capita in the

U.S. over the

last 19 years

has grown

more slowly

than GDP

per capita in

the other

advanced

industrialized

”

nations

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At the end of the process John Young

found that he still didn’t have a very

good statement of what the problem was.

He had a lot of solutions in search of a

problem,

So a number of academics from Stanford and Berkeley got together and came

up with a working definition of national

competitiveness. It has become the standard definition, and this is the one I will

use now. I will then discuss some signs

that suggest the U.S. position on national

competitiveness is something about

which we should be concerned.

The definition of competitiveness we

devised in 1982 had two parts:

1.

2.

The ability of a nation to have its

goods and services meet the test of

international competition-i. e., compete in world markets.

The ability of a nation, while it’s competing in world markets, simultaneously to provide real increases in real

living standards for its citizens cm a

sustainable basis.

Keeping that definition in mind, if we

look back on the past decade since that

report came out, we can see signs of

weakness in the U.S. position.

Inability to Balance Trade

The first danger sign is the accumulation of very large trade imbalances. We

accumulated over a trillion dollars’ worth

of trade imbalances during the 1980s.

During our recent export boom, we had a

situation where our exports were growing

rapidly and we were growing slowly at

home, and our imports were growing

slowly. We got our trade imbalance

down significantly—we got it down to

about $70 billion last year—but it looks

like it’s going to be going up again.

If you look at the numbers through the

third quarter of this year, we’re already at

$68 billion, and the fourth quarter is

obviously going to bring in substantial

additions to that number.

The point is, we made some improvemen t because we slowed down our

growth rate, the rest of the world

increased its growth rate, and we exported more and didn’t import as much, but

we weren’t able to come to a position of

trade balance. And now, if wc start growing more rapidly than the rest of the

world, as some indicators suggest we

w i 11, then we may in fact see a rising

trade imbalance problem.

Declining Standard of Living

Another sign of weakness is that the

standard of living—the GDP per capita

in the United States, the broadest definition of our living standard—actually

declined in 1991 and 1990.

Of course, those were recessionary

years, but if you look at historical data,

GDP per capita in the U.S. over the last

19 years has grown more slowly than

GDP per capita in the other advanced

industrial nations.

Moreover, if you look decade by

decade—if you look at GDP per capita

growth rates in the United States going

from the ’50s to the ’60s to the ’70s to

the ‘80s—you see a downward trend.

Our growth rate is clearly decelerating.

These figures become more disturbing

when you look at indicators such as

wages and family incomes. Consider

wages, for example. The most recent

economic report of the President, prepared by my predecessor, Michael

Boskin, stated that in 1972 average real

weekly earnings in the U.S. were $315;

in October of 1992, they were $255.

Thus, there has been a 20-year period in

which we‘ve had a decline in real average weekly earnings of nearly 20 percent.

This means that during the ‘80s, a period
Determinants of Competitiveness

When we worked on competitiveness

a decade ago, we tried to think about

what determined that national ability:

What are the fundamental underlying

determinants of national competitiveness? The way to address this question is

to think a little bit about how companies

compete.

Companies can compete in two major

ways. They can compete on price—i.e.,

by offering products at a relatively low

price. compared with other companiesor they can compete on Technology-i.e.,

by improving the quality of a product or

by introducing an entirely new product.

Let's look at each of these in turn.

Competing on Price

lf you think in terms of a company,

there are two fundamental determinants

of price—the cost of or the prices that you

pay your inputs and their productivity.

How much does it cost you to hire a

worker, and how productive is the worker? How much does it cost for you to

purchase or lease a piece of equipment.

and how productive is the piece of equipmen t

Let's examine the labor cost issue,

because that’s where our standard of living is tied in. If you look at our competi-

.

tive position on thee basis of price for

wages, you might say we have improved,

but we've improved because our wage

growth has been so anemic. Our wage

growth has been negative, in real terms.

for many of our workers.

Although we have become more price

competitive because we've had lower

wages. that doesn't translate to national

competitiveness. If we compete on the

basis of lower wages, we’re not going to

get that other half of the competitiveness

equation, the part about rising living

standards.

Thus, competing on wages is not an

effective national competitiveness strategy. It will work for an individual company, and it can work for a nation in terms

of selling more goods and services, but it

cannot work for a nation in terms of generating rising living standards for its populat ion.

Business Week last year noted that the

U.S. ranked at the bottom of- 12 industrial

countries in terms of the increase in manufacturing wages that had been realized

over the 1980s. and the Business Week

editorial concluded, “The U.S. is more

competitive .” I would argue that the U.S.

was more price competitive as a result of

this. but it wasn't more competitive in

terms of being able to generate rising:

wages for its population.

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“Eighteen

percent of

fulltime

U.S. workers

cannot earn

enough

income to

support a

family of four

above the

poverty

level”

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26 :

If you don t want to compete on

wages, on living standards, and you want

to compete on price, then you’re going to

have to go to the other part of the cost

equation, which is productivity, and

that’s why economists generally agree

that the most fundamental determinant of

long-run competitiveness is productivity

growth.

If you want your competitiveness to

grow over time, it depends very much on

how fast your productivity grows. There

is widespread agreement that, although

we’re not sure precisely why, the U.S.

has had an overall slowdown in productivity growth since the 1970s, and it has

had the lowest productivity growth of the

G-7 nations for a substantial period of

this time. Overall, our productivity

growth has been below 1 percent for the

last 20 years.

That brings us to the next question. If

we could accept the notion that productivity growth is the most important determinant of national competitiveness as I

have defined it, and if you look at the

evidence that our productivity lead is

diminishing because our productivity

growth is falling behind that of our competitors, then the policy challenge

becomes, What do we do about productivity growth?

This question generates lots of controversy, but one of the things economists

agree on is that capital per worker is the

most fundamental, easily measured determinant of productivity growth. For

example, between 1959 and 1973, capital

per worker in American private business

increased 2 percent annually, and productivity increased 2.8 percent annually.

Between 1974 and 1991, capital per

worker only grew at 0.6 percent annually, and productivity grew at slightly less

than 1 percent annually.

Right away you can see the correlation. lf wc don’t supply our workers with

modern capital and equipment, with

advanced technology. then they will be

less productive, and over a long period of

time we will not be able to support high

growth in real wages.

This of course brings us to the issue of

investment, because the way we get capital growing relative to labor, the way we

supply our workers with the most modern technology, is to invest in plant and

equipment, and that is an area where we

have really fallen short for quite a long

time.

According to the Private Sector Council on Competitiveness (which was started by John Young as the private sector

continuation of his public sector effort in

1982), for more than 20 years the U.S.

has been investing a smaller percentage

of its gross domestic product in plant and

equipment than the average of the other

advanced industrial nations: and during

the last three years it has invested less

than every single one of the other

advanced industrial nations; and in 1991,

American investment in plant and equipment hit a 14-year low.

In addition, if wc examine net national

investment—i. e., above and beyond what

needs to be invested simply to take

account of depreciation-then the percentage of net national investment in

GNP in the U.S. was lower in the 1980s

than it was in the ‘70s, and that was

lower than it was in the ‘60s.

As this is a declining trend of net

national investment out of GDP, wc

should not be surprised to find that the

growth of net, nonresidential capital

stock-i.e., what wc really arc adding to

the productive capacity of the economy—has been slowing down since the

mid-’60s,

Let me comment on public investment, because one of the things that will

be an important part of the Clinton

administration is the importance of public investment as well as private investment.

●
In real terms, we spend only half now

of what wc spent on public investment

relative to GNP in the 1950s and the

‘60s. What is invested in infrastructure,

in education, in civilian research and

development programs, etc., is in real

terms a lower percentage of our GNP

than was invested decades ago.

Again, international comparisons are

important. The level of public investment

relative to GNP is one and a half times

greater in Germany, and three times

greater in Japan, than it is in the United

States.

Our commitment of resources to public investment, as a percentage of GNP,

has been trending clown over time. The

rates of Japan, Germany. and some of the

other European nations have been trending up.

There is a lot of controversy about the

exact number to usc to measure the rate

of return to public investment. The overall conclusions of several recent studies

suggest that public investment can be

complementary to private investment,

and actually can help realize the returns

to private investment, and that public

investment has a positive contribution to

make to the economy.

In considering competitiveness from

the point of view of productivity and investment. and then the role of private and

public investment, where do wc come out

in terms of various policy areas?

The problems l’m talking about-the

investment problem, the productivity

problem, even the underinvestment in

public investment areas—those problems

were all identified in the last economic

report of the President, which came out

in mid-January.

I agree with the points made in that

report. The first was that we have to

work to improve the incentives for private investment in the U.S. We have

unwittingly put into our tax system disincentives to invest, and we have to try to

take out some of them.

Currently under discussion in the new

administration is some form of investment tax credit, as well as some form of

targeted capital gains relief to encourage

the formation of new entrepreneurial

business activities. We have to do something to encourage investment in the private sector.

We also need to change the composition of government spending. President

Clinton is very committed to moving

public spending to investment programs-to infrastructure programs, to

civilian technology programs, to education programs, and to health programs

that are so essential to the well-being of

our workforce.

Then, finally, wc have to tackle deficit

reduction. Theres a lot of discussion

going on about deficit reduction. and I

think it’s important to emphasize that

deficit reduction is not an end in itself,

its a means to an end. The reason we

need to reduce the deficit is because the

government deficit absorbs resources that

could otherwise be used for private

investment.

In 1991, for example, the federal

deficit exceeded personal savings. We

were generating a certain amount of personal savings in the U. S., but the federal

deficit was taking more out of the national savings pool than we as individuals

were putting in. The government deficit

in that year-199 1—absorbed about 22

percent of total private savings (i.e., personal and business savings combined).

If we can get the deficit down, we will

be able to free up resources for private

investors, and that’s a very important part

of productivity development, and thus

national competitiveness development.

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“We have

unwittingly

put into our

tax system

disincentives

to invest, and

we have to

try to take

out some of

them”

27
“The U.S. !

position in :

●

many critical ~

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technologies is :

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slipping—in some {

cases it’s been ~

lost altogether– :

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and future ~

trends are not ~

encouraging

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28 :

Competing on Technology

If you’ll recall, I mentioned above that

the two main ways to compete are on

price-—which is either competing on

wages or on productivity-or on technology.

Technology itself, of course, helps

you compete on productivity. Capital per

worker and productivity are correlated

not just because you're giving workers

more machinery to work with, but

because you're giving them better

machinery to work with.

We also can think about technology as

having a direct effect on the ability to

compete, and here wc need to examine

how we’re doing in terms of supporting

the input into technological development

and diffusion. The input 1‘ II discuss here

is research and development spending.

As a percentage of GNP, the U.S.

invests less in civilian R&D as a percentage Of GDP than most of its major competitors. Indeed, wc invest only half as

much in civilian R&D, compared to

GDP, as is the case in Japan and Germany.

Over the past 19 years, again according to the Private Sector Council on

Competitiveness, the U.S. has had one of

the slowest growths in civilian R&D

spending of all of the advanced industrial

countries. In the recession years—1 990

and 1991—real R&D spending in the

U.S. actually decreased.

Thus, wc arc underinvesting in civilian R&D. That’s the first point. The second point, which is also well documented

by a number of studies, is that the U.S.

seems to lag in the commercialization of

technologies.

We have not lost our lead in innovations, although our lead is diminished,

but we do not seem to be able to commercialize as well. Firms in the rest of

the world seem to do better.

This has led the Council on Competitiveness to a conclusion that was very

important in the formulation of a technology program during the Clinton campaign. The conclusion of the Council on

Competitiveness is that the U.S. position

in many critical technologies is slipping,

in some cases it’s been lost altogether,

and future trends arc not encouraging.

This conclusion was reached about a

year ago in a very influential report, and

there were a number of suggested public

policy proposals made in that report.

Many of them arc being picked up in a

variety of places.

Some of them, for example, have

shown up in the Competitiveness Policy

Council, a group headed by Fred

Bergsten that was established by the

1988 trade bill. It’s a bipartisan group

with private interest group representatives, and they have laid out a technology

strategy. Some of the proposals in the

Nunn-Domenici plan for a competitive

America are similar to the ones I’m about

to suggest, as are some proposals from

the Senate Economic Leadership Group

and the House Science Committee.

I’m going to mention a few proposals

that were outlined in what was for many

people the most compelling document of

the Clinton campaign: the technology

policy document that came out at the end

of September.

First of all, wc must improve incentives for private investment in research

and development. Here the most important issue is the need to make the R&D

tax credit permanent.

We have a tax credit, one which has

proven to have a beneficial effect on

research and development spending by

private companies. R&D spending by

private companies has been shown to

have a positive spillover effect on the

nation. But R&D is a long-term activity.

and wc need a long-term tax credit situation so companies can make R&D decisions appropriately.

●
The second issue on which there is a

great deal of consensus is the need to

increase the share of federal R&D funding for civilian technologies. Already we

have had some decline in the share of

federal R&D spending going to the military, from a peak of about two-thirds

down to about 60 percent. But we really

have to move more. Of the federal R&D

dollars, a larger share should go to civilian

programs, a smaller share should go to

military programs.

Thats not to deny that there have

been important benefits from military

R&D. If you will look at the history of

the computer industry, or the history of

the semiconductor industry, or the history of the commercial aircraft industry in

the United States, you certainly see that

i n their infancy, in the days of their

development into world leaders,

military-funded R&D played a very critical role.

But as Eric Bloch has argued very

effectively, the spillover effects of military R&D have become less important,

and they arc likely to become even less

important in the future.

One reason for that is because for a

number of technologies, the frontier is in

the civilian market. The second reason is

that we‘d better not rely on military R&D

budgets in a world of declining military

budgets. And the third reason is the

nature of the competition. It was okay for

us to rely on military programs when wc

didn’t have very serious competition. But

if wc rely on military R&D programs and

our competitors rely on civilian R&D

programs. we may find ourselves getting

to the market a little more slowly than

they.

We must figure out ways to increase

the share of federal R&D funding that

goes to civilian purposes. We need more

federal R&D money for prccompetitive

research and development, stages where

the gains arc hard to capture by individual firms and where private R&D is likely to be inadequate. A recent report by

the National Academy of Sciences drew

a similar conclusion, noting that existing

programs for channeling federal monies

to generic, nonmilitary technologies arc

underfunded and uncoordinated. NAS

added that the programs need to bec insulated more from political ntlucrwc.

Thus, we need a new approach. one

with more coordination, more funding,

and a better delivery mechanism. I

assume I will be working on this quite

actively in the administration with my

counterparts in Commerce, in the Office

of Science and Technology, and with

members of Congress. I assume wc 11

also be trying to build on some of our

successful programs.

We have had some success with the

advanced technology program at NIST

(National Institute for Standards &

Technology). It’s a small program, but

it’s widely viewed to be a fairly successful program. We’ve obviously had some

successes with dual-use technology programs in DARPA (Defense Advanced

Research Projects Agency), We’ve had

some successes, although there is more

controversy about this, with some of the

CR ADA (Cooperative Research and

Development Agreement) programs at

the national labs. And some of the

FCCST (Federal Coordinating Council

for Science and Technology) initiatives

have been viewed to be quite successful.

Finally, let me comment on diffusion,

because you can talk about our problem

as one of not investing enough in civilian

technology, and you can also talk about

our problem as one of diffusion.

The Clinton administration has

emphasized this point a lot, in the context

of trying to work on expanding a national

manufacturing extension service—building on the federal and state programs that

arc in place. Reviews of these programs

conclude they have been relatively suc -

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“The spillover

effects of

military R&D

have become

less important,

and they are

likely to become

even less

important in

the future”

29
“Some of the

policies and

institutions that

served us well

in the old world

need to be

looked at

again”

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cessful in diffusing technologies, in diffusing quality management practices, and

in providing small firms with access to

sophisticated testing facilities and training programs.

We also encourage diffusion by

encouraging investment in general,

because diffusion occurs when firms

increase their rates of investment. When

companies buy new technology, it gets

diffused quickly.

The new administration is committed

to complementing the civilian technology

program with a very active training and

education program. After all, wc want to

make our workers more productive by

giving them modern equipment, but we

also have to worry about the skills of our

workforce. And we have to do something

about the fact that we spend only 20 percent as much as other advanced industrial

countries in training our workers.

Conclusion

Let me end with a couple of observations from my recent book about trade

policy in high-technology industries.

What I concluded was, although the trade

problems are very thorny, the fate of our

high-technology industrial base depends

much less on the trade battles that wc

fight abroad than on the choices we make

at home. We need to fight our trade battles in a serious and informed way, but

We cannot hoodwink ourself into believing that if we have a problem it’s because

of an unfair trading practice. If we have a

problem wc must first look to the

home-grown causes of that problem.

The second general observation I

made in this book is that in this tripolar

competitive world in which wc are no

longer the economic superpower, and we

are the only military superpower, some

of the policies and institutions that served

us well in the old world need to be

looked at again. We need to change our

own policies and change our own institutions because the nature of the challenges

we face is different.

I conclude that book with the observation that it’s fortunate for us, that the collapse of the Soviet Union provides an

opportunity for us to reconsider our priorities, and to shift our resources from

the military challenges of the past, which

we ably met, to the economic challenges

of the future, which I hope this new administration will help us meet.
o

ur system for providing health care in this country is in deep trouble. It is z By

not really a system at all; it is a “nonsystem,” a disorganized hodgepodge

~ Dr. Arnold S.

of ad hoc arrangements for the delivery and payment of medical care, ●

: Relman which. in response to innumerable conflicting private and public interests,

●

have simply accumulated over the past half century without any overall :

plan or direction.

It is, in short, a typically American institution, as American

as apple pie. But it isn’t serving our needs very well anymore.

In fact, it has become a major social and economic burden on

the country, which is now demanding correction.

The problem does not lie with our unexcelled medical science and technology, nor with the technical competence of our

medical personnel. The problem is the way we provide and

pay for medical care.

American biomedical scientists have won more Nobel

Prizes than all their colleagues in the rest of the world combined, but the American health care nonsystem would win no

awards. Judged by its ability to meet social needs, our system

suffers seriously by comparison with those of many other

advanced Western countries.

We are failing to provide decent care for a large and growing fraction of our citizens because we simply cannot afford

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Medical Care

Reform:

Building a

Viable System

the increased cost. Medical care has become monstrously expensive, and its cost continues to rise at an absolutely insupportable rate.

Waste, inappropriate and inefficient usc of services and resources, inequity, and

excessive administrative overhead are seen at every turn. These problems have been

obvious for many years. and suggestions for major reform have been made many times

before. But now, with the election of a new president who is committed to health care

reform, with mounting public clamor for change, and with the congressional leadership

on both sides of the aisle declaring themselves ready for enactment of new health care

legislation, We seem to have come at last to a true crossroads in our national journey

toward health care reform.

We cannot stay where wc are. We must move, but in which direction? What do we

do?

A spate of proposals has recently been introduced in the Congress, and many more

have been debated in the public arena, but until now there’s been no sign of coalescence around any one of them. However, there seems to be agreement on the general

goals. We want medical care for all our citizens, at a cost wc can afford, in an accountable system that promotes quality and efficiency, encourages innovation, and allows for

some freedom of choice.

That’s a tall order. Many believe it is unrealistic, not attainable in the foreseeable

future, it’ ever. 1 disagree. I believe that if the richest country in the world can afford to

devote 14 or 15 percent of its economy to health care, it can certainly have a system

second to none, with all the desired charactcristics—provided we recognize what needs

to be done, and are willing to do it.

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“I cannot

imagine a

patient walking

into a surgeon’s

office and

saying, ‘Doctor,

just give me

the standard,

low-cost

operation. I

don’t want the

top of the

line ”

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Delivery System:

the Heart of the Problem

First wc must identify the basic causes

of our problem. We cannot set the system

right until wc understand what IS wrong,

and how it got that way. Most discussions of health care reform have focused

on the payment side of the system, particularly on funding and on medical

insurance.

That’s understandable, because the

insurance system is seriously flawed and

in urgent need of reform. But reform of

insurance cannot do the job by itself; it

does not go to the heart of the problem,

which is to be found in the medical care

delivery system.

Current legislative proposals, in my

opinion, pay insufficient attention to the

delivery system, yet that is where the

ultimate success of efforts at health care

reform will be decided. The main thrust

of my comments will be concerned with

the delivery of medical care.

Physicians’ Role in

Medical Cost Crisis

The medical care system is in essence

a reflection of how physicians practice

their profession. That may sound like a

physician’s parochial conceit it, but a

moment’s reflection may convince you

otherwise.

Physicians are paid only 19 or 20

cents of the health care dollar in

America, but their decisions and advice

largely determine how most of the rest is

spent. Physicians order the tests and the

procedures, they command the use of

hospitals and nursing homes and outpatient facilities, they prescribe the drugs

and recommend the use of medical goods

of all kinds.

Of course, all of this is usually done

with the consent of patients, and sometimes even at their request; but the fact

remains that most medical care. unlike

most other services, is not independently

selected at the discretion of the recipient.

Furthermore, considerations of service

price, which are so important in most

other kinds of choices made by consumers in our economy, arc much less

constraining in medical care, because

three-quarters of the cost is paid by third

parties.

Quality is not much of a consideration

either, because patients are rarely able to

determine in advance the quality of the

medical services they will receive. And

even if they could, few would want anything less than the best available.

I cannot imagine a patient walking

into a surgeons office and saying,

“Doctor, just give me the standard,

low-cost operation. I don’t want the top

of the line.”

In sum, patients are not consumers in

the usual sense, and the market for medical care, if you want to call it a market,

is not like the markets for most economic

goods and services. People can shop for

medical insurance, but not for their personal medical services.

I’m not suggesting that patients cannot or should not participate in decisions

about their care. They often can, and. if

they wish, they should be given all possible information to help them do that.

But most people who arc ill, or fear

they are ill, want and need to depend on

their physician—and it’s primarily the

physician who decides what will be done,

based on his or her assessment of the particular situation.

However, with relatively few exceptions, there is much room for differing

medical judgments on what ought to be

done in any given situation. Despite the

recent enthusiasm for “practice guidelines,” most of the day-to-day practice of

medicine cannot now, and probably

never w i 11, be reduced to rigid algorithms.

●
In short, while consumer choice of

medical services is limited, physician

choice is not. The options open to the

physician for the use of medical

resources are often very wide, and they

may have widely varying price tags.

There is hardly any place in the practice

of medicine where properly informed and

motivated physicians could not effect

tremendous savings and reduce the rate

of medical cost inflation by making certain choices and not others-without

risking the patient's welfare, and in the

process often improving the quality of

care.

I conclude that the most important

proximate cause of our medical cost crisis is the behavior of our physicians. In

doing so, I do not suggest that doctors are

more greedy or venal than other mortals;

they are not. In fact, I believe they arc

probably less inclined to put their own

economic interests above their clients’

welfare than are many other professional

providers of specialized services in our

economy.

But doctors are human, and like other

humans they respond to externalities.

Their behavior is influenced by how they

are paid, how their practices are organized, how they are trained, and how

they are buffeted by the economic and

social forces now donminating the delivery of mceical care.

Most physicians arc paid on a piecework basis. The more tests, procedures

and sevice they prescribe and provide,

the more money they’re likely to make.

Most physicians practice alone, or with

one or two associates, in private offices

where there is little or no professional

accountability or peer review.

Most physicians are specialists and

are trained to provide an expensive, technology-intensive kind of medical care.

They are also trained to do everything

that might possibly’ help the patient. with

little or no regard for the flattening of the

cost-benefit curve.

This behavior is reinforced by the

expectations of patients, who want no

expense spared if there is any chance of

benefit. particularly if they’re insured or

if they know somebody else will pay.

Physicians also face an increasingly

competitivc professional environment.

The number of practicing physicians.

most of them specialists, continues to

orow far more rapidly than the popula- e

tion, and the number of available insured

patients continues to diminish.

Commercialization of Health Care

Physician behavior is also greatly

influenced by the vast commercialization

of the medical care system that has

occurred in the past few decadcs. I estimatc that approximately a third or more

of all medical serviccs in this country arc

now provided by investor--owned facilities

Competition, overbuilding, the duplication of facilities, and the still largely

open-ended funding of the health care

syste drive these providers to expand

their revenucs. But entrepreneurialism is

also rampant in the private, voluntary

sector, where there arc the same economic imperatives to generate mm-c business

in an increasingly threatening and competitive environment.

Advertising and marketing are widely

employed by all kinds of facilities. investor-owned or not, and also by doctors

in private practice. The advertising by the

hospitals and the health care facilities has

as its primary target the practicing physicians, who arc encouraged to refer their

insured patients and usc the facilities

maximally.

Physicians are also invited to become

investors in goods, services and facilities,

with very attractive opportunities for

income, with the obvious purpose of generating still more referrals and more rev- : 33

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party payers :

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attempt to :

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blunt instruments :

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34 :

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enue for the providers. Probably 10 or 15

percent of al1 physicians are now

involved in such so-called b

’self-referral”

arrangements; in places likc Florida and

California, the hothouses of medical

entrepreneurialism, the number may be

as high as 40 percent.

All of these considerations, added to

the lack of the usual constraints on the

consumers of medical care, inevitably

drive today’s practitioners to do more for

their patients even when less might be

enough, to usc resources lavishly when a

more prudent usc of resources might be

appropriate.

Revolt of the Payers

Years of double-digit medical inflation have finally produced what might be

called "thc revolt of the payers,” an effort

by the third-party payers to contain costs

rather than simply pay the bill.

Government adopted prospective

payment-DRGs (Diagnosis Related

Groups)—for hospitals, and a fee scale

for paying doctors. DRGs have at least

temporarily slowed the cost increase in

Part A of Medicare, but have also caused

hospitals to shift more of the burden to

the private insurers, because the DRGs

pay hospitals less than their costs.

The long-term effects of physician

payment reform remain to be seen, but

control of the volume of physician services is still an unsolved problem. I read

in the Washington Post today that total

expenses for Medicare are expected to go

up by another $21 billion this year, so it’s

clear that whatever methods for cost control have been used so far by the government in the Medicare sector have not

been entirely successful.

Private insurers, for their part, have

relied largely on what has come to be

known as “managed care” to control their

costs, mainly through various kinds of

utilization review. Judging from the continued escalation of private insurance

premiums, the net effect on costs so far

has not been very impressive. Furthermore, third-party payers arc not well

equipped to micromanage the practice of

medicine. When they attempt to manage

care, they have only blunt instruments at

their disposal, and they concentrate on

costs rather than the complexities and

subtleties of personal medical care. The

result is unwelcome and intrusive interference with the professional responsibilities of physicians, and an increasing

degree of administrative hassle and overhead that has angered and frustrated most

physicians.

In my almost 45 years of being a

physician, I cannot remember a time

when practicing physicians were so

angry at, and demoralized by, what they

consider to be unreasonable bureaucratic

intrusion into the practice of medicine.

And yet, there is no doubt that the

medical car-c delivery system needs management; without it, costs will continue

to spiral out of control. The question is

not whether we need management of the

medical care delivery system. The question is, who should do the managing, and

how? Neither insurance companies nor

the increasing army of profit-making, utilization review companies that are now

being hired by the insurance companies

arc qualified to do the kind of management that’s needed.

I submit that those closest to the

patients, those responsible for the medical decisions, should do the managing.

Only physicians in close touch with their

patients are in a position to know how to

use medical resources cost-effectively,

with appropriate concern for the welfare

of each patient.

I believe the best way to reform the

delivery system is to put the direct

responsibility for cost control on physicians, by requiring them to livc within a

fixed, per-capita budget. That easily

translates to a national budget, if you
want to think of it as a way of national

cost control. To make it possible for

physicians to take appropriate responsibility for cost control, we must change

the circumstances that have determined

their behavior until now.

Competitive HMOS

Doctors of the future will be practicing responsible, accountable, cost-effectivc carc in group model HMOs (Health

Maintenance Organizations)--private,

not-for-profit, cooperative or membership-owned HMOs, with open enrol1-

ment.

HMOs should be paid on a capitation

basis, and they should compete, not, as

some would have it, on the basis of price,

but on the basis of quality. The price

should be fixed nationally, with appropriate regiona1 and 1ocal variations—

according to economic conditions and the

severity mix of patients, etc.—and with

appropriate re-insurancc protection

against the occasional outlier, which

could be a disaster for a small group.

As I've said, these HMOs should

compete for patients, and for doctors to

work in them, on the basis of quality, riot

price. Physicians who work in these

HMOs should be paid salaries-no

bonuses, no incentives for doing more or

doing less. They should be paid fair,

competitive salarie, based on the

assumption that physicians in such organizations, as a group, should receive

approximately the samc fraction of the

health care dollar that they do now, after

practicc expenses.

The distribution of that money should

be a matter of self-administr;ition by the

doctors. Let each group of doctors--

given a fixed, lump-sum of money,

which represents an agreed-upon percentage of the total premiums paid into

the group or paid into the system aS a

whole—manage themselves, set their

own salaries, decide how much more

they think their neurosurgeon is worth

than their primary care practitioners, and

so on.

Impossible, you say? A pipe dream?

Not at all. I’Ve seen it happening, very

successfully. in several places around the

country.

An arrangement like that enables

physicians to act as the fiduciaries they

ought to be—as the purchasing agents forpatients, staying apart from an increasingly entrepreneurial, m:irkct-oriented

system, which up until now has drawn

the physicians in.

A system like this enables physicians

to do what they were trained to do when

they were students and residents, to do

the right thing in the best interests of

their patients, and to act as discriminating

purchasing agents for their patients, dealing with the medical-industriiil complex

and all the new products and the expensive new drugs and tests.

They will be expected to live within a

fixed budget, and their professional

income will be 1imited to their salary. I

think it should be made illegal for physicians to makc money by self-referral

arrangements.

I applaud Rep. Stark for his original

bill, which dealt with self-referral to

diagnostic laboratories. It only covered

Medicare, but I believc that this principle

should be applied across the board to all

physicians and all self-referral and

self-dealing arrangements. It may surprise you to know that, in my opinion,

the majority of American physicians

agree on that score . Currently the

American Medical Association and other

m major groups, such as the American

College of Physicians and the American

College of Surgeons, support that idea.

The arrangements I am advocating

promote professional standards, accountability, and also the appropriate use of

m edical manpower. Wel1-organized

HMOs use medical manpower efficient-

●
“We should

establish

mechanisms

for technology

assessment.

Without that,

we are the

helpless

captives of

an explosion

of expensive,

glittering

technology"

36

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ly. They usc no more than the necessary

number of physicians per number of

patients covered. which is substantially

less than the number of physicians we

have in the country today, and they usc at

least 50 percent—sometimes more--of

their physician fulltimc equivalents in

primary care. In contrast, the health care

system at the present time is gradually

changing to a mix of 80 percent specialty, 20 percent primary care.

When I started out in medicine, it was

just about the reverse: in the last 40 years

we've see n this enormous increase in

spec i al ists.

Now, I am not a Luddite. My academic career was based on specialized medicine, research, and developing and applying all kinds of new, expensive tech -

niqucs. I believe specialization is necessary for continued innovation and

improvement in the medical care system,

but it’s out of control. We don’t need all

the specialized care and all the specialists

we have now.

Reforming Medical Care Funding

In order to put all this into effect, we

will need major reform of the payment

and the insurance sidc. We can't get

changes in the health delivery system

without major changes in the funding of

medical care, and the way insurance

works.

I believe we ultimately will need a

universal insurance system, providing

standard benefits in approved, accountable, not- for-profit HMOs, with some

kind of semipublic oversight. We will

need a discrete, earmarked medical care

fund, supported by a universal health tax,

to pay for personal care, research and

education, and preventive care.

The American health care system

depends on a flourishing. vital, innovative research and educational establishment. That establishment has to be identified, it should be supported through the

general medical care fund, and it has to

be accountable for what it does with its

money. I believe there would be plenty

of money in such a universal fund to do

that, as well as to pay for the increased

amount of preventive care we need.

Everyone should be in the system but

free to pay for additional benefits outside. Everyone should be financially

responsible, according to their means, for

paying into the system. Ultimately, we’ll

have to break the link between employment and health insurance. We can’t do it

abruptly, but the amount of money that

employers arc now putting into the health

care benefits of their workers ought to be

paid as increases in taxable salary, which

then the employees would use to pay

taxes into the medical fund.

Steps We Can Take Now

Now, I admit, the Clinton administration is not going to put forward this proposal in the next 100 days, and even if it

did it would be dead on arrival in the

Congress. Nonetheless, wc ought to start

thinking in these terms.

What can we do in the meanwhile to

control costs and move toward universal

coverage? There arc many things being

considered that might be politically possible. For example:

We should increase “’pay or play,’

making it more attractive for small

employers by reforming the small

insurance market. If wc want to raise

some tax revenue, maybe wc can cap

the tax deductibility of employers’

premiums.

To get universal coverage as quickly

as possible, we should expand eligi -

bility for Medicaid. It is unconsc scionable that in many states in this

country a person income has to be

lesS than half the poverty level before

he or she is eligible for health insurance.

●
■ As quickly as possible we ought to

move Medicaid and Medicare and

employment-based insurance toward

HMOs. Furthermore, we need policies that wi11 encourage and support

the formation of HMOs.

■ We should start right away to reform

the medical manpower situation. We

are producing physicians, most of

them specialists, at a rate our system

cannot absorb. The morc physicians

we produce per population, the more

money We’re going to spend.

Government and academic institutions and teaching hospitals should

face the fact that we need a fair and

reasonable method of controlling the

output of total doctors, and shifting

the balancc from too many specialists

to morc primary care physicians.

■ We should establish mechanisms for

increased technology assessment, and

reporting of outcomes. Without that.

wc are the he helpless captives of an

cxplosion of expensive, g1ittering

technology that’s been inadequately

evaluated. We need to reduce the vast

area of grey uncertainty which the

marketers and the advertisers exploit,

and focus in on those new technologies that are truly cost-effective and

worth the money.

A simple example: Right now the

Food and Drug Administration is

required by law to require pharmaceutical companies requesting

approval of a new drug to submit evidence of effectiveness and safety. But

there is no requirement that the company also submit comparative evi -

dencc on the relative cost-effectiveness of their new product with

respect to existing products that may

be much cheapcr. That kind of informat ion, if it comes out at all, is avail -

ablc much later, after the marketing

blitz, and after an enormous amount

of money has been spent.

Establishing multispeciality groups

is an ideal way to improve the reporting of outcomes.” Uniform reporting,

+group responsibility, peer review, and

internal education would make the

practice of medicinc far more interesting and rewarding to those in these

practices, and would quickly generate

a vast amount of information, which

we are not currently getting out of

our fragmented, solo practice, private

office based system.

■ And, finally, if we want to effect

major social change for the pubilic

good, we must educate the public to

understand why it is in their interest,

economically and medically. We are,

all of us, paying that huge bill—this

year it will be $940 or $950 billion--

and we're paying for it in a crazy,

disorganized, indirect, inequitable,

and uncontrollable way. And furthermore, we're probably paying at least

$200 billion--maybe $250 billion--

more than we would need to pay if

we had an efficient, rational, responsible system.

We need to tell people you can’t

get anything for free. If you want

decent medical care, there is a way to

give you the best available care at the

lowest possible price, and put you in

charge. You will have to decide ultimately how much you want to pay

for’ insurance that will do this, but

you can be assured you wil1 see

where the money goes.

The money will be earmarked. It

will not be lost in the general government funds, it will not be subject to a

year to year manipulation by the

Congress. It has to be an earmarked,

separate fund which people pay into

and which is u used for the purposes

described.

I believe that, with appropriate

education and with some courageous

political leadership, the people will

“We’re probably

paying at least

$200 billion–

maybe $250

billion–more than

we would need

to pay if we had

an efficient,

rational,

responsible

system"

37
“If you’re going

to change a

system that

depends on

how doctors

behave, you’d

better consult

with them"

38

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agree, because it’s in their best interests, and I believe the medical profession wil1 agree, because ultimately

it’s in their best interest.

Certainly it’s in the best interest of

young physicians who arc starting

out. Most young physicians are aware

that the times arc changing. They’re

anguished about their own futures as

independent and respected professionals, and they want to practice

good medicine. Yes, they want to

make a decent living, but they want

to feel they're doing good, that

they’re going to be respected by their

colleagues, and that their patients will

appreciate what they do.

Consult the Physicians

I want to make one final point, which

has to do with the newly appointed

Presidential Task Force on Health Care

Reform. It is made up of very distinguished people, and headed by Hillary

Rodham Clinton—but not one of them

has had any experience in the delivery of

health care, not one has lived in the

health care system, not one is a physician. Now, obviously, health care reform

is a public responsibility and a political

responsibility, but if you're going to

change a system that depends on how

doctors behave, you’d better consult with

them.

Trying to reform the health care system without bringing the doctors to the

table is like trying to win a football game

with coaches alone, without any players.

You can have very smart economists and

planners and politicians, but if the players, the people who deliver the health

care, arc not going to be involved, i t

won’t work. When I'm sick, I don’t want

to be taken care of by a doctor who’s

angry and dispirited and demoralized and

can't wait to get out of his practice.

I think we have to recognize that the

new system-whatever it ends up

being—won’t work unless the delivery

system works well, unless doctor-s are

brought into the system and rewarded for

doing the right thing.

You made the point that doctors Q are only paid 19 or 20 cents on

the health care dollar, but they

probably determine about 98 percent of

the medical decisions. If in fact that’s the

case, why do you turn over to the government, to somebody other than doctors,

the determination as to what services

ought to be provided to whom, and at

what prices?

Because the present system in which

doctors practice forces them to make

socially bad decisions. The economic

incentives are wrong.

Q

I understand the notion of having a budget and of cavitating,

and I also agree with you that

the current system rewards doing more,

and in fact a significant amount of

unnecessary kinds of things. What 1 don‘t

understand is why you’re not prepared to

allow the capita ted physician or physi -

cians to innovatet introduce prevention,

figure out ways to negotiate with the hospitals, figure out ways to negotiate with

the subspecialists, to reduce those costs,

and in fact to be able to profit in that.

That is, why there can’t be an economic incentive for delivering a better

product, as opposed to being salaried?

The answer to your question is, you can’t

quantify quality very effectively. Furthermore, I don’t believe it’s necessary. My

●
reading of the mood of young American

physicians is that they don’t want to be

businessmen, they don't want to figure

out how to make more money. They

want to make a decent 1iving, they want

to get good fringe benefits, they want to

be proud of the care that they give, they

want to be well thought of ybj their colleagues. I don’t believe that doctors have

to be given an economic incentive to be

efficient and creative.

We did very well-there was plenty

of creativity and plenty of commitment--

before health care was turned into an

industry.

Yeu've spoken very eloquently

Q

of what’s wrong with the system

that delvers medical care to

sick people. Could you give us some view

of what you think is the appropriate role

for physicians and medical educators

and researchcrs in preventin,g disease? 

And do you think that some of the current

I think you huve to make a distinction

between medical care and health care.

Medical care is what I've been talking

about. Health care is concerned with protecting and promoting the public health.

It requires many other kinds of interventions, and goes far beyond what doctors

and hospitals and nurses and technicians

can do.

A large amount of the pathology that

brings people to hospitals and doctors’

offices is social pathology--gunshot

wunds, drug abuse, alcoholism, violence. That’s why it’s so easy to point out

the tremendous disparity between the

enormous amount of money we invest in

medical care and many of the common

measurcments of public health, which

show us to be not advanced at all.

We spend more money on medical

care than anybody else, but our infant

mortality and our longevity and immunizations and so on are not very much to

write home about, and that's because

these things require social and political

action.

If wc spent more money on education,

reconstructing our inner cities and our

poor rural neighborhoods, and so on and

so forth, would that give some relief to

the medical care system? Wou1d it

reducc some of the expensc’? Thats a

complicatcd question, and although much

has been written about it, I’m not sure we

know the answer.

Obviously we have to commit ourselves to prevention, because at the very

least, whether we save money or not, we

are certainly improving quality of 1ife.

Whether it really would add significantly

to the solution of our health care cost

problem, I don’t know.

You hinted that the public might

Q accept access to hea1th care

through prepaid systems, HMOs

in particiular. Do you envision the medical profession--young physicians, men

and women—accepting employment

through HMOs? Without them, you don’t

have a system.

Yes, I can easily imagine young physicians doing that, because the alternative

isn't very attractive. Remember, the

alternatives are closing down, and the

fact of the matter is that more and more

young physicians are joining groups and

are taking salaried positions.

Of course, it’s a generational thingthe older physicians arc not, but it’s happening with younger physicians.

I also want to make a point I didn’t

have a chance to discuss. The system that

I’m describing should be the system that

is subsidized by the medical care fund. It

should not be required for everybody, as

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40 :

long as they contribute their share of the

tax.

It should be like public education.

You have to pay for it, but if you don’t

want to use it, and you want to spend

your own money to send your kids to a

private school, that’s your option.

I think the publicly subsidized system

ought to allow point of service options,

so, for example, you can supplement

your payments into the system if you

want to go see some famous consultant

when you have a tough problem. Or if

you don’t want to be taken care of by that

system at all and you want to buy your

own indemnification insurance-–and you

can afford the $20,000 or $30,000 a year

that a family policy might cost—fine. I

think people ought to be allowed to do

that.

I’m not at all afraid of a two-tiered

system developing, because only about 5

percent of the country will be able to

afford private insurance. Most of us will

be in the system that is publicly subsidized, and most doctors will be in the

system, and most of us will have a major

stake in seeing that it works properly.

In your remarks you mentioned Q you have seen systems that are

working, By that did you mean

there are individual HMOs, perhaps nonprofit HMOs, that are managed well? Or

are there systems outside this country

similar to what you’re recommending?

I’ve done a lot of traveling during this

last year and I’ve looked at many HMOs,

of all kinds-ones that are successful and

ones that are not. In my judgment, from

the point of view of the quality of the

care, patient satisfaction, doctor satisfaction, and cost, there are indeed successful

HMOs which meet all the criteria.

What about other countries? Look at

Canada. Canada does many things right

that we can’t do. It takes care of everybody, it covers all necessary costs, and so

far Canada isn’t going broke from health

care, although we should note that in the

last couple of years their costs are escalating almost as rapidly as ours.

Canada’s system has features I think

we can learn from. One is that they have

a single payer, and a very efficient insurance system. Their overhead costs are

minuscule compared to the terrible overhead costs that we pay for private insurance.

Doctors in Canada aren’t hassled with

insurance forms. They fill out a form

after they’ve seen a patient and at the end

of the month they get paid automatically.

The trouble is that the Canadian system

doesn’t control the volume of services, it

controls only the price. Because i t

doesn’t control the volume, it ratchets

down the price to keep doctor payments

within 1imits; so the doctors run faster

and faster and faster to maintain their

revenues.

Furthermore, the Canadians haven’t

seen fit, or aren’t able, to invest as much

in health care as we can, so they don’t

have as many facilities. Thus, there are

queues for some things—greatly exaggerated, in my opinion, but nevertheless

real.

Q

The cost of dying is rising faster

than the cost of living. I understand some substantial fraction

of medical care cost is in the last year of

life. Would you comment on whether this

is an area where, from a cost-containment point of view, we need to do something ?

Most people die slowly, and they get sick

before they die, and they need a great

deal of attention, so it’s not surprising

that we should spend a lot of money as

chronic diseases progress.

The question is, is it being spent needlessly, clearly with no expectation of any

●
benefit’? 1‘m i~urc some is. Maybe a lot is.

If you make rounds on the intensive care

units of most of our teaching hospitals, or

you make rounds in neonatal intensive

care units, you see hopeless, moribund

patients being kept alive for various reasons.

There is money being wasted. How

much, and how it impacts on the overal]

cost of health care, I don't know. But I

do know that if you had a rational system

that was not driving to keep the intensive

care units full and increase hospital revenues, and if doctors weren‘t being paid

on a piecework basis, you’d have doctors

with fami1ies and patients asking the

relevant questions: What makes medical

sense, what makes ethical and personal

sense’?

Given the high cost of medical Q education, which studen ts

choosing specialties must take

into account, and the strong emphasis

you mentioned on new high-technology

medicine practiced by specialists, what

sort of institutional and financial programs do you envision to change the balance of primary care physicians to specialists?

Students, in debt, come out of medical

school, finish their residency, and look at

what’s going on out there. They see that

if they become a radiologist or a procedure-oriented neurologist or a neurosurgeon or opthalmologist, they can work a

40-hour week and makc three or four

times as much money as their colleague

who chooses to be a family practitioner

or a genera1 internist, who is working

long hours, is on call all the time, and is

fighting to make a deccnt living. Why

would they want to go into primary care?

So we have to make some major

changes. First, we h have to change that

disparity. I think if you made primary

care more rewarding, and the disparities

much less, more people would choose

primary care, particularly if they practice

in groups. One of the really dispiriting

and dismaying things about a lot of primary care is that you're alone. You're

alone with uncertainty and multiple problems. you wish you could talk to colleagues, and you wish you had easy

access to consultants-that’s what you

get in a group.

We have to recruit people in medical

schools who arc interested in primary

care, and wc have to reduce the burden of

the cost of medical education, with loans

and scholarships and grants, to attract

them into primary care.

How will this new approach Q affect the amount of money

spent on medica1 research?

Also, do you foresec a shift of emphasis

in research--e.g., perhaps less emphasis

on extremely sophisticated diagnostic

methods, and more of an emphasis on

more effective and lower cost health care

delivery?

I am not suggesting any lower priority

for medical research. On the contrary, I

believe wc ought to invest more in medical research, because it pays off. There’s

plenty of money in the system. We‘re

going to spend $950 billion for health

care this year; wc definitely can afford to

give medical research and teaching hospitals and education the $20 billion or so

they will require.

We as a nation are so rich. If we were

as rational as wc arc rich, wc could have

just the kind of health care system we

want.

As for a shift in emphasis in research,

the main issue is to determine what’s

effectivc and what isn‘t. If very expensive, very sophisticatcd technology can

do a significantly better job, then we

should usc it. I believe we can afford all

“We as a

nation are so

rich. If we were

as rational as

we are rich, we

could have just

the kind of

health care

system we

want"

41
the diagnostic technology we need if we

use it rationally.

Let’s take MRI (magnetic resonance

imaging), for example. We’re probably

spending more than $10 billion a year on

MRI. I know there are places in this

country where a patient comes in to see a

general practitioner and says, “Doctor,

I‘ve got a bad headache.” The doctor

replies, “Well, who knows, you might

have a brain tumor. Let’s order an MRI.”

Any good physician knows that’s irrational.

However, we can afford the rational

use of MRI and any other sophisticated

technology that significantly improves

the diagnosis or treatment of disease.

Would you discuss the present Q medical delivery system, rural

versus urban, and what impact

your proposal will have on that?"

There was a study published recently in

The New England Journal of Medicine,

which pointed out that the demography

of the country is such that you could not

have three competing HMOs in one third

of the country, because the population

isn’t dense enough. So “managed competition,” in the sense of having competing

HMOs, wouldn’t be applicable in many

rural areas. But you certainly could have

one HMO, and I have seen a couple of

very impressive examples of well-organized. not-for-profit HMOs which have

outreach programs in the rural areas.

They have a clinic in small towns and

in rural areas, staffed by members of the

HMO—usually there’s one internist, one

pediatrician and one family practitioner,

and a nurse or two, and a simple diagnostic laboratory, backed up by circuit rider

specialists who come out to deal with

elective problems. Rapid transportation

into the central facility is available when

hospital care or tertiary speciality services are needed.

It works beautifully, it keeps costs

down, it provides much better care than

most of these communities had before,

and it keeps the doctors happy, too. They

don’t feel isolated, they don’t feel alone,

they can enjoy the skiing

and still stay in contact

leagues.

and the fishing,

with their col-
more than the allotted time talking about these institutions, their exotic

~ Derek Bok

problems. their political correctness, their vaulting tuition. their scien- .

But that said, I think it fair to remark that universities

are not where our critical educational problems lie. America Public

stil1 has the best system of highcr education in the world.

Our scientists continue to win most of the Nobel Prizes, students come from all over the world to study with us, we Education

have the largest and most accessible system of higher education for the most diverse group of students in the world.

Very few people would make such a favorable assessment of our primary and secondary schools. Therefore, I want to concentrate today on

public education as the more urgent and important task bet’orc us, particularly at the

dawn of a new administration.

Public Schooling in the Spotlight

Public schools in this country have been very high on the national agenda for a full

10 years, ever since 1983, when the Gardner Commission issued its report. To the best

of my knowledge, that is a record length of time for public schooling to get that kind of

high-level attention in this country.

Why have we continued to give greater than normal attention to public education

over such an extended period of time?The answer is contained in four propositions

which a great many people in this country be1ieve:

1.

2.

. . 3

4.

Education is vital to improving the productivity and competitiveness of our economy at a time when that economy is being challenged by foreign competition more

than ever before.

The academic proficiency of our young people has gradually declined in recent

decades.

Whether you look at science, math, reading, writing. or analytic skills, our students

rank below their count counterparts in almost all other industrialized countries.

The root of these problems lies in our schools, either because--depending on your
44 :

Although I believe there is an urgent

need for the reform of public education. I

think it’s important to start by being clear

about the underlying premises.

In my view at least, we should not

exaggerate the role of public education in

raising productivity and making us competitive in world competition. Education

is not the most immediate cause of our

productivity problems, and improving

education will not necessarily improve

productivity.

It certainly won’t do it in the shortrun, and it will only help improve productivity in the long-run if we decide to

save more, and invest more, and if American companies decide to reconfigure

their operations to fully utilize highly

educated workers. None of those improvements is foreordained, and none

can be taken for granted.

As for the declining educational standards, that seems to me something of a

myth inspired by reporters and publicists,

who find it very difficult to keep the public's attention without talking about

decay and imminent collapse. If you look

at most tests of achievement over- the last

20 or 25 years, they indicate our students

are performing about as well as they ever

have. Some of them even show that students arc performing at higher levels than

they had before.

That is true for the reading levels of

17-year-olds, it’s true of math and science for 9- and 13-year-olds. It’s true for

blacks and Hispanics in math and reading

at ages 9, 13, or 17. All of these groups

are performing better than in the last

20-odd years. The idea that everything is

declining is simply not supported by the

evidence.

As for student achievement compared

with other countries, there are dismaying

results. It is disturbing to find, in one poll

I recall, that we were performing worse

in math that students in Thailand and

other far-off countries. Yes, these are disturbing findings, but you have to look at

those tests very, very carefully, and read

the fine print. When you see that students

in some underdeveloped countries arc

doing better than ours in math, it’s a pretty good bet that their tests are being

taken by the very small percentage of the

population that makes it to high school.

That isn’t comparable to the 75 percent

of young people that complete high

school in this country.

Whatever international comparisons

show, and however dismaying they may

be, it would also be a mistake to believe

that the differences are explained primarily by differences in the quality of our

schools, or our school practices, or the

length of the school year, or the amount

of time on tasks that teachers spend in

our classrooms. The most careful work I

have seen on international differences

suggests that by far the most important

reason for our poor showing in those

competitions is that a much higher percentage of American children grow up in

poverty or in broken homes, not that they

have attended inferior schools.

When you get through revising these

popular beliefs, does it mean that we no

longer need to worry about the quality of

our schools? Certainly not. It does mean,

1 think, that there are a lot of other factors besides schools that have a lot to do

with how much our students learn—

nutrition, parental attention, the amount

of TV that is watched, the quality of

neighborhoods.

It does mean that if any occupant of

the White House is really serious about

wanting to be remembered as an education president, he should also try to be

remembered as a housing president, an

antipoverty president. a health president,

and a great many other kinds of presidents, as well, because a serious assault

on education must include serious attention to this whole range of problems.

●
Societal Gains From Reform

That said, however, I still believe that

schools can have an impact. You have

only to look at the many examples that

have now been accumulating of innercity schools, in blighted neighborhoods,

that are still managing to do much better

than other schools with similar ethnic

and income groups in their student popu1ations. When you see the higher

achievement scores, the higher graduation rates, the larger numbers of students

going to college—– you get a sense of

what can be accomplished by successful

school reform.

Improving schools will also be important for a lot of reasons other than productivity, whatever the connection with

schooling and productivity may be.

Schools are one of the few places in

our Society where problems of race relations and diversity that are so important

to keeping our society somewhat unified

and cohesive are being confronted.

Schools continue to provide places of

opportunity for students who might otherwise be forgotten. ” They also do a lot to

make better citizens. We know, for

example, that voting rates in this country

arc below those of almost any other

advanced country in the world. What we

don’t always remember is that when you

look at the reasons why people don‘t

vote, by far the most important factor is

how much education they have had.

So in all these ways reform of schools

is important. And in addition, you have

to believe that as our workforce becomes

better educated and better able to deal

with higher level prob1em so1ving,

American business will find a way to usc

those ski1ls productively, with higher

paying jobs.

U.S. Goals Have Changed

To recapitulate, our schools are doing

as well as they ever have. The problem

is, that isn't good enough. The world has

gotten more complicated, and though our

standards haven't declined, our needs

have gone up, and we have not improved

the quality of education to keep pace,

Although the best way to improve that

student achievement would be to reduce

poverty, diminish crime and stop drugs,

improving schools is surely important

enough to be worthy of our best efforts.

We’ve made a lot of false starts in the

past 10 years in trying to improve our

schools, and that’s not altogether surprising, because historians of education tell

us this is practically’ the first time in

which America has asked its schools to

make learning and clear thinking, problem solving, careful reading and writing

their primary goals.

That astonished me the first time I

heard it, and yet, as one looks into it, it’s

true that for generations wc didn’t really

want a terribly intelligent work force.

What we wanted was an obedient and

disciplined workforcc.

As a result, other goals took precedence throughout most of our historygoals such as integrating the races, or

assimilating immigrants, or teaching

them the American way of life, or helping students adjust to life problems, or

teaching basic ideas of citizenship. These

were all very worthy goals, but not the

same thing as making as your primary

objective the need to develop well-educatcd, articulate, problem-solving, 1iterate people,

Thus, we’re at a rather early stage of

truly caring about improving these intellectual skills, and after a decade of vigorous experimentation, we‘re beginning to

arrive at a consensus.

We’Ve learned that the way to improvc schools is not to hand down a lot

of detailed rules that prescribe what students should learn, and how they should

be taught. We did a lot of that in the early

‘80s, and it didn‘t work very well. It
“The exceptional

talent, that thin

stream of

excellence that’s

so important in

providing an

inspired teacher,

a mentor, a future

principal, is being

drained out of

the system"

46

Recipe for Reform

1.

.2.
tions. That is over now. Many talented women and minorities are going

into law, business, and medicine.

Education majors today in this country tall somewhere in the bottom 40

percent, or even 30 percent, of their

college classes.

The chanccs in the late ’60s that

someonc with an IQ of 130 would go

into teaching were just about as great

as the chances that somebody with an

IQ of 100 would go into teaching,

proportionately speaking. Today the

chances that someone with an IQ of

130 will go into teaching are less than

a fourth of those of someone with an

IQ of 100. The exceptional talent,

that thin stream of excellencc thats

so important in providing an inspired

teachcr, a mentor, a future principal,

is being drained out of the system.

To correct that, we need to begin

by paying teachers more. Only a

10-percent increase relative to other

professions, would, according to the

best estimates we have, increase the

number of applicants enough for us

to lift the standards of our teachers up

to the averagc for all college graduates. I‘ve never heard a good reason

why we should settle for less than

average quality of College graduates

to teach our students.

Simply offering higher salaries

isn‘t enough. We a1so have very

casual methods of selecting teachers

in many parts of the country. When

able candidates apply they aren’t necessarily chosen. Teaching is the only

learned or quasi-learned profession I

know in which people with higher

academic records do not receive any

more money during the course of

their careers and are not promoted

any more rapidly than people with

lesser ability and intellectual accomplishments. Once teachers are hired,

they rarely have an opportunity to

col1aborate with their colleagues, to

talk about the desperately difficult

problems they facc in trying to

improve learning in their schools.

Many of them have little opportunity

to participate in school policies.

For all those reasons-their working conditions, methods of selection

and promotion, as well as the salaries

they rcucivc-talented people do not

become teachcrs or do not stay long

once they begin. It’s not just that the

students who major in education are

not up to the normal standard in the

college classes to which they belong.

The best of the students who major in

education and graduate never go into

teaching. Of the ones who do go into

teaching, the more ablc among them

are the first to leavc. Among those

who leave, the ablest are least likely

ever to return. What we are getting at

every stage is a progressive 1oss of

our most talented group, and the

results over time are quite serious and

must be correctcd.

6. Finally, we have to find some way of

strengthening the incentives for students to learn. If you look at surveys

of teachers across the country. you

find that one of the most disturbing

changes is in the number of teachcrs

who regard student apathy as a seri -

ous problem. There’s little wonder in

that. Part of the explanation may have

to do with the quality of teaching, but

a lot of it has to do with the fact that

there are so few incentives for students to be motivated to take their

work seriously.

There arc only two incentives

under the current system that I can

think of. One is to graduate, because

that helps you get a job--that’s very

easy. The other is to do Well enough

to get into college. That affects rela-

: 47 ●
“How can

we break

through that

thick crust of

tradition of

the vested

interests to

bring about

the reforms

we need?"

48

tively few people, because only about

200 of our 3,000 or 3,500 colleges

are very selective, so it’s not that difficult for most high school graduates

to get into a college they want to go

to.

If we are going to motivate students, we’re going to have to add to

those incentives. We’re going to have

to make the quality and the quantity

of their schoolwork matter to their

future lives. Somehow we have to

develop in businesses and universities enough confidence in the curricula, and the ways in which students are

assessed. so the quality of a student’s

record w i 11 matter when it comes

time to hire students or decide

whether to admit them to college.

Those arc the six basic steps. They’re

very daunting, but as I said before, what

really makes it tough is that we have to

do them all if we’re going to get reasonablc improvement. Paying student teachers more is not going to help very much

if the systems arc rather casual about hiring better teachers. Goals and standards

arc not going to help much if the students

aren't motivated to reach them. Good

teachers aren’t going to accomplish much

unless they arc ably led, and given a real

chance to work together to improve and

participate in the curriculum and teaching

policies of their school.

So we’re talking about really massive

changes that arc bound to encounter a lot

of resistancc and inertia.

The ultimate question is, how can we

break through that thick crust of tradition

of the vested interests, and all the other

forces that block substantial change, and

try to bring about the reforms wc need?

We know that issuing orders won’t work.

We’Ve tried that-teachers arc expert at

adapting to orders and rules without

changing fundamentally how they teach.

What other method can we USC’?

‘Parental Choice’ System

The most popular idea in recent years

to create a motive for change is to turn

the schools into a competitive system. By

giving vouchers worth sums of money to

parents, schools would bid for and compete for students, just as commercial

firms compete for business. The pressure

of trying to attract enough students with

their vouchers would force schools to get

better.

That’s a very attractive idea—it might

even be correct. But it is also a very

expensive method. It would require the

government to assume the share of the

total school budget now borne by private

schools. Thats not an inconsiderable

number of billions of dollars—and once

we begin we’re never going to be able to

draw back. So we need to be absolutely

sure that competition is going to work

before we start down that path. Alas,

there are quite a number of reasons why

it might not work.

One is that we may not get many new

schools springing up to create this competition. It takes a lot of work to develop

new schools. It’s not clear that the mere

handing out of vouchers will bring lots of

schools into being, particularly in rural

areas and inner cities where starting new

schools is a pretty tough business.

It’s also not clear, if wc do get these

new schools, that they arc going to be

superior to the schools wc have already.

One of the other things that is widely

believed, I think inaccurately, is that private schools do much more for their students than public schools, and that, if we

only had more schools likc those coming

into existence, competitive pressures

would lift the quality of what we do.

Actually, the performance of students

in private schools is only slightly better

than the performance in public schools,

and a large part of the difference may be
explained by the fact that the parents who

send their children to private schools

tend to be more involved in their education, more supportive, and hence have a

positive impact on their learning.

So it’s not clear how much improvement the new schools will give us.

Furthermore, we’re not even sure students will choose the academically superior schools. Once before we gave a lot

of choice to students, when wc opened

up the required curriculum and established a lot of electives in the ‘60s. What

we found then is not that the students

flocked into the academically demanding

courses. Quite the contrary, they began to

take baskct-weaving and life adjustment

and sports in modern American life, and

all sorts of things that acid-tongued conservatives objected to, and rightly so.

Why should we assume that students will

do better choosing schools than they did

choosing courses’?

Finally, of course, there is the problem

of the schools that arc left behind—the

unsucccssful schools. What’s going to

happen to them?

Public education is not like business;

unsuccessful schools will not go bankrupt. We have some experience with

what happens to them when their students leave--remember “white flight”

when busing was in vogue. Like old soldiers, they don’t die, these schools, they

just 1 imp along, in somewhat worse

shape than they were before. No choice

plan that I have read has made a serious

effort to come to terms with how we can

deal with those lagging institutions to try

to make them better.

In sum, parental choice is certainly an

experiment worth trying. But it’s very

much unproven, and it would be hazardous to bet the family store on that as the

instrument of reform.

Community Coalitions

Show Promise

I f I were to guess how large-sca1e

reform could occur in this country, i t

wou1d not be through competition, i t

WO uld not be through merit pay for

teachers—that’s never worked where it’s

been tried—and it wouldn't be through

issuing more regulations.

The best hope that I can see is if coalitions arc formed in cpmmunities--political leaders, business leaders, universities,

school officials, teachers, and other leaders who feel strongly enough about the

need for changing their schoos that

they‘re prepared to work together until

real real reform takes place. Only such coalit ions are powerful enough, only they

have all the interests in the room that can

worry about how to establish the connect ions between school and work, and

school and college, and create the incentives we need. Only they have power to

strike a grand bargain in which the teachers get higher pay and more autonomy

from nagging regulations--in return for

the kinds of accountability and standards

and goals that we need to improve the

system.

Government’s Role

What can the federal government do

to speed the process of reform’? Its role,

perforce, must be limited; public education remains primarily a local responsibility. Yet I believe the federal government can do a number of useful things to

help us progress.

It certainly can do a lot, and I hope

will do a lot, make sure that children in

this country arrive at SChO Ol in larger

numbers truly ready to learn. According

to a 1991 survey of kindergarten teachers

in this country, some 35 percent of young

children are coming to school unprepared. And what do I mean by “’not ready

“Parental

choice is

certainly an

experiment

worth trying.

But it’s very

much unproven,

and it would be

hazardous to

bet the family

store on that as

the instrument

of reform" 

49
“This is a very

competitive

country. If we set

goals, and

define the

measures to see

who is reaching

the goals, and

publicize the

results, we’re

going to

motivate a lot

of people"

50

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for school’”? Let me just quote one New

Jersey teacher:

Now, what does it take to improve

(hat’? Obviously, one could start with

fully funding Headstart, early child nutrit ion, prenatal counseling, and so on.

We‘re behind almost all countries in

those areas. Nearly half a million of our

children are malnourished, and 12 million report they go to bed hungry at some

point every month. Fetal malnutrition, I

am told, affects some 10 percent of all

the babies born in the United States.

All these things take their toll on IQ,

on motivation, on ability to learn.

They’re relatively easy to correct, and

they‘re a good investment-they return

many more dollars than the cost of

implementing them.

Secondly, the federal govemment can

participate in setting goals, and it can

participate in helping to develop better

ways of assessing schools and teachers

and students to see how they arc progressing toward those goals.

This is a very competitive country. If

wc set goals, and define the measures to

see who is reaching the goals, and publicize the results, we're going to motivate

a lot of people and affect their behavior

positively.

If we’ve got the goals wrong, and if

wc arc measuring progress in the wrong

way, particularly if we are measuring

progress in SChOOlS by some kind of trivial true-and-false, multiple (his-and-that,

that tests the accumulation of little facts,

then that is exactly what we’re going to

get in return; and that is not what the

future of this country requires.

There’s a lot the federal government

can do in improving the quality of teachers and principals. Teacher training programs are, by all accounts, mediocre.

Some kind of competitive grant that

would inspire institutions to vie with one

another to come up with more creative

programs would be very helpful.

We can also use more money for science education, not just to train the 25 to

33 percent of new high school teachers of

science and math who arc not really qualified to teach those subjects, but also at

the elementary school leve1. In the third

grade, girls and boys arc equally interestcd in science, but at that point girls begin

to 1ose interest. If wc have no teachers

with any background in math and science, it clearly isn't going to help in

keeping alive such interest in science as

girls at that point i n their lives seem to

have.

We need fellowships for principals to

obtain proper training. With help from

the federal government wc could create

some incentives for creativity in that area

by providing portable fellowships that

would makc universities work much

harder to try to attract aspiring principals

and prepare them for effective leadership.

And finally, of course, wc need to

finance a process of continuing experimentation. We are just beginning to learn

what works and what doesn't. It terribly important to continue that process.

We need pilot experiments of school

choice plans, wc need mm-c work on how

to use technology to improve learning,

wc need new textbooks in science, experimental schools—a whole 1ist of things

that will teach us how to improve practice and policy in the public schools.

●
“If we make an

investment

to improve

through

experimentation

and research the

ways in which

young people

learn, these

expenditures will

more than pay for

themselves”

51
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52 :

For a number of reasons, it’s a splendid

idea. We implemented it at Harvard, and

more and more colleges arc doing it, with

the help of state licensing boards. It pro-

 vides another source of attracting talent

into teaching. If we’re ever going to get

as many teachers as we’re going to need

in the next decade, when about half of

our current teaching force will retire or

leavee, and if we’re going to do it at the

levels of quality we want, we’re going to

have to get away from thinking about

(caching as something that we train people for in graduate school and then they

spend their life doing it.

We’re going to have to get some of

these undcrgraduates, who may spend a

few years teaching before they do something else. They’re very bright and cager.

We’ve also got to try to get people in

m midcareer into (caching. There arc lots of

scientists and engineers, and even

lawyers, who have gotten to a stage in

their careers where they’d like to teach

kids. We’ve got to find a way of attracting them and training them to do SO.

All of this will give some healthy

competition to established programs of

teacher training.

schools better, almost always works

when it is tested in a .few schools. The

results are wonderful. The problem is, it

educational extension scervices? Is there

a way the federal government could

bring the states together cooperatively to

find a way to do that?

I don’t have a detailed plan for this. 1

take your very good point as apparent

and valid on its face, without need of a

reply.

One thing wc have found in some of

the work wc have done at Harvard is how

extraordinarily isolated teachers arc. and

how extraordinarily isolated prinipals

arc. We put together something called a

“principal center.” where attendees pay

their own way and come together for

weekend and evening programs. They

have a lot to do with picking what the

agenda and the topics wi11 be, and the

Harvard faculty tries to assist them in

putting together a good program, and providing whatever learning wc can to help

them deal with the problems they have.

The amazing thing is the enthusiasm

for this, Several hundred principals very

quickly got involved because, as wc

should have known from research, they

have amazingly little opportunity to sit

down with peers. And if they don’t come

together and talk about matters of com~-

mon interest, obviously they're not going

to learn about the best practices being

developed, either through research or

elsewhere.

So I think wc need extension, wc need

everything wc can get to increase the

amount of cooperation among and col -

laboration within schools and people who

arc grappling with these tremendously

difficult problems of how to help students learn better. I think your idea is a

perfectly splendid one.

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There are universities that have done a

fair amount of this kind of teaching. At

Harvard we have a professor or two in

the science who gives a night course

that's open to teachcrs. We have other

professores who have summer courses for

teachers who want to catch up in their

field. Yale has done very good work in

creating courses for pubic school teachers to come together on a regular basis in

certain fields such as history.

If this were identified by the government as a real need, and every university

was expected-not commanded, but

asked to he1p out in this common effort

to keep science and math teachers up to

date-it could be done. After all, universities have as big a stake as any in

improving K-12 education.

My experience tells me I could find

professors and other qualified people

who would be willing to teach in the

evening or a summer course, or take part

in some other form of collaborative venture.

What we lack is a structure to set certain priorities. so people could really

focus on the priority needs and figure out

a way on every campus to get them done.

As it is now, the problem is enormous,

and nobody's quite sure of where they

should be beginning—and since there arc

so many other problems, they just don't

get to it. It doesn't have to be like this;

universities cou1d do much better. I

would likc to see them rail and and challenged to do so.

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: Robert S. McNamara

: Secretary of Defense

1968,

served as U.S.

from 1961 until

He then served

n

Forum as President of the

World Bank Group of

the World Commission on Environmen(

and Development, which pub] i shed the

landmark document, Our Common

Future. This document focused

international attention on environmental

Speakers -

Institutions until 1981, issues and led to the U.N. Conference

Since his retirement.

Mr. McNamara has served on the boards

of several corporations, and he is

currently associated with a number of

nonprofit institutions, including the

World Resources Institute, the Trilateral

Commission, and the

Overseas Development

Council. Mr. McNamara

is the author of The

Essence of Security; One

on Environment and Development. Mrs.

Brundtland has received a number of

awards, including the Third World Prize

for 1988, the Indira Gandhi Prize for

1988, and the Onassis Foundation’s

Delphi Prize for 1992.

Hundred Countries, Two Billion

People: The McNamara Years at The

World Bunk; Blundering Info Disaster;

and Out of the Cold. He is the recipient

of numerous awards, including the

Presidential Medal of Freedom with

Distinction and the

Albert Einstein Peace

Prize.

Gro Harlem Brundtland’s

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● third term as Prime Minister of Norway

Laura D’Andrea Tyson is

Chair of the Council of

Economic Advisors.

Prior to that, she was

professor of economics and business

administration at the University of California at Berkeley and co-director of its

Berkeley Roundtable on the Internatiomal Economy. She has worked with

the Cuomo Commission on Trade and

Competitiveness, the Advisory Board

of the Economic Strategy Institute,

the Conference Board Economics

Colloquium, the Economic Policy Institute Research Council, the Council

on Foreign Relations, and the Subcom-

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● began in November 1990. She chaired

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54 :
mittee on a Global Economic Strategy Derek Bok was president of Harvard

for the United States. University from 1971 to 1991. He is

now Harvard's 300th Anniversary UniArnold S. Relman is Editor-in-Chief Emeritus of

the New England Journall of Medicine and

Professor of Medicine

and of Social Medicine at the Harvard

Medical School. During his 30-year

career as clinician and researcher, Dr.

Relman published extensively in his

area of expertise (nephrology and electrolyte and acid-base balance). In recent years he has written widely on the

economic, ethical, legal, and social aspects of health care. Dr. Relman is a

Trustee of Columbia University and

serves on the board of the Hastings

Center for Bioethics. He is a member

of the Institute

of Medicine, the

American Academy of Arts and

Sciences, and

versity Professor and pre -

viously serveed as professor and then dean of the

law school. Mr. Bok is

on the board of the International Peace Academy and of the

Citizens Democracy Corps and served

until recently as a member of the National Commission on Public Service.

He has authored a number of books and journal articles, including:

Universities and t h e

Future of America;

the Phi Beta Kappa Senate. He is the

recipient of numerous professional

awards and holds several honorary

degrees.

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the Community. A graduate of

Harvard Law School and a former

Fulbright Scholar. Mr. Bok is

also the recipient of numerous

honorary degrees.