Comments on the Marcus Alexis Article

Harold Black

Marcus Alexis's "Government Intervention" is an article in search of a consistent theme. The title is indicative of only half of what is pre- sented. The other half, which is not well integrated with the first half, concerns Professor Alexis's thoughts on blacks and the political process. Neither subject is tied to the other, and what is left is confusing at best. What exactly is Alexis trying to tell us?

Given that there are two disjointed themes, each one wiil be dealt with separately. The first is government intervention in the marketplace. Here Professor Alexis mixes the popular press with the academic in order to restate familiar themes and conclusions. One is to stress the role of spe- cial interest groups and to implicitly indicate that all of us belong to at least one special-interest group. The other is that government interven- tion raises costs to the group by less than it raises benefits, and that is a motivating factor for lobbying. In so doing Alexis obviously draws from the work of academicians Gordon Tullock and especially Mancur Olson but neglects to cite them.

The weakest part of this theme is an overdrawn and rather labored illustration of the revolving door between industry and nonelective politi- cal office. Indeed, Alexis even makes the baldly incorrect statement that "politics and economics are harmonious bedfellows." Nothing is farther from the truth, and Alexis is too good an economist to believe that. Too often politics runs counter to economics--resulting in regulatory bottle- necks, inefficiencies, a misallocation of resources, and increased costs. Indeed, that is what government intervention is all about. Moreover, one wonders if Alexis would describe the revolving door between govern-

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ment and academia in a similar manner. Do they share a common out- look, a common culture--and are they symbiotic?

After six pages, Alexis suddenly introduces blacks as a separate interest group when he refers to blacks and trucking regulation. He notes that blacks did not profit from the regulation of that industry. He recognizes that deregulation had a positive impact on the well-being of black truck- ers. However, he does not develop this point and neglects to cite numer- ous other examples that would corroborate his observation on the nega- tive impact of entry restrictions on blacks. Perhaps even more disturbing is that fact that he ignores the work of Walter Williams and Thomas SoweU. Granted, Williams and Sowell may be a source of embarrassment for some black intellectuals, but should one deny them their due when they are correct?

The section on the federal support of business is the weakest part of the paper. Little is done here. What could have been developed is the theme that most of this support is welfare for the nonpoor. Government worries about its constituencies and caters to them. Emphasis of this theme would have tied nicely into the previous sections but, alas, nothing of the sort occurs, and the reader must make his own linkages.

The section on blacks and organized politics is clearly out of place in Alexis's discussion. As it is presented, it has nothing to do with govern- ment intervention--although it should. There is potential here, but Alexis does not seize it. He states that it is significant that Jesse Jackson's "can- didacy follows on the heels of mayoral victories of black candidates in Chicago and Philadelphia." Why were these cities significant and not Atlanta, Gary, Newark, Los Angeles, New Orleans, Birmingham, Rich- mond, and scores of others?

Alexis interestingly notes that Atlanta is better off than Gary or Detroit because it is less dependent on the federal dole. That is intriguing and should be explored. The question also arises whether blacks are better off under black political control. Mere citation of the Atlanta airport example is not enough. Of course, Thomas Sowell argues that no group has pro- gressed from poverty to affluence through politics. Sowell argues that it is the acquisition of skills rather than political power that is important in group economic prosperity. If Sowell is correct, then Alexis's prediction of the importance of Jesse Jackson's candidacy is inflated. Indeed, if there is a contribution that Jackson has made, it is the emphasis on the role that blacks can play in helping themselves. That theme obviously makes white liberals uncomfortable. It is ironic, however, that it is being articulated by a person who is, himself, so dependent on the federal dole.

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Obviously, I am disappointed in Alexis's effort. There are a few good ideas buried in the article. Perhaps in another effort Professor Alexis will take the time to develop them more fully.

Alexis' Rejoinder:

Professor Black's comments on my article reflect differences in intel- lectual traditions, strategies in organizing and presenting ideas, and, most important, ideology. The first is seen in the literature he accuses me of drawing on and not citing. Gordon Tullock and Mancur Olson have in- deed written on the subject of interest group behavior. But he is wrong in assuming that my analysis is derivative from these sources. Besides rely- ing on my earlier work (notes 14 and 15), I follow the work of and cite Sam Peltzman, James Buchanan and Roger Tollison, Anthony Downs, Robert Axelrod, Kenneth Shepsley, David Halberstam, David Baron, and Thomas Gale Moore (notes 2-8).

Peltzman, Buchanan, Tollison, and Moore (director of domestic policy studies at the Hoover Institution) are to the right of the middle of the road ideologically, as is Professor Black. It is therefore surprising for him to chide me for not citing his two favorite conservatives--Professors Thomas Sowell and Walter Williams. There is a more broadly based scholarship and I have made generous use of it.

My comment that "politics and economics are harmonious bedfel- lows" draws fire from Professor Black. I wish his comments on "regula- tory bottlenecks, inefficiencies . . . " (which he incorrectly claims is what government intervention is all about, completely missing the point that it is about conferring benefits--wealth--on some at the expense of others), were responsive to my argument. A careful reading of my article will show that I make no claim that social (as opposed to private) benefits arise from the marriage of economic and political interests. Far from it; the article, in the space available, gives numerous examples of rent- seeking behavior--the search for differential advantage--by farmers, manufacturers, regulated firms, craftsmen, and educational and charita- ble institutions. One would think that this long list of favor seekers would indicate that business is not unique in using government to further its ends, but rather that because of the structure of its costs and benefits has powerful incentives to manipulate the political process. Halberstam (note 4) and Caro (notes 11 and 12) document these activities.

Black wonders whether I would describe the revolving door between

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government and academia in a manner similar to the way I describe it between government and industry. In a word, yes; similar but not identi- cal. The flow between academia and government is not as great as it is between industry and government, and usually academics do not hold offices as high. But there is certainly a community of interest that mani- fests itself in government support of university research--basic and applied--and in the instruction that prepares students to serve in the gov- ernment as scientists, administrators, and foreign service officers, and in the military (ROTC).

Black criticizes me for not remembering my audience until six pages into my paper. Here, again, our intellectual traditions and ways of orga- nizing and presenting ideas differ. I find it more intellectually satisfying to develop the general case and then to apply it in specific instances. Professor Black obviously thinks I should start out with an explanation specific to blacks. We disagree.

Professor Black chides me for not using other examples of the negative impacts of regulation on blacks. I cite the benefits to black truckers fol- lowing the legislation that eased entry in 1980 because I know it well, having been actively involved as an Interstate Commerce Commission member.

In the section on federal support of business I attempt to make the point that federal expenditures, direct loan obligations, loan guarantees, and tax expenditures are forms of government intervention (I interpret the term broadly, Black does so narrowly)--differential treatment for seg- ments of the economy--and that these activities are related to the struc- ture and operating characteristics of the segments and their political sup- port base. Black would have preferred me to develop the themes that such federal support is "welfare for the nonpoor" and that government wor- ries about its constituencies. That would have truly been laboring the obvious and indulging in rhetoric, for which I would have been criticized by Black.

Professor Black and I have different views on the appropriateness of the section on blacks and organized politics. He asks "why it is "significant that Jesse Jackson's 'candidacy follows on the heels of mayoral victories of black candidates in Chicago and Philadelphia.' Why are these cities significant and not Atlanta, Gary, Newark, Los Angeles, New Orleans, Birmingham, Richmond and scores of others?" That is a valid question and deserves a serious answer. First, with the exception of Los Angeles, the cities Black mentions all have black majority populations. As with

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Boston at the turn of the century, the rise of ethnic majorities (or domi- nant minorities) was followed by the creation of political machines and the election of ethnic mayors- -"Honeyf i tz" Fitzgerald in Boston, James J. (Jimmy) Walker in New York. In contrast, Harold Washington's elec- tion in Chicago demonstrated that a cohesive, well-organized black polit- ical base--with a high registration rate and large turnout--could win in a city where it was not only in the minority but opposed by a powerful party organization. Jesse Jackson was part of that movement. It taught him that a black candidate who could put those elements together and form a coali- tion with reform and other disaffected elements could be a viable political force, possibly influencing the choice of nominee and affecting the de- bate. The victory in Chicago not only galvanized support for Wilson Goode in Philadelphia but contributed to the good showing of Melvin King in the mayoral race in Boston (a city with a history of racial strife) that same year (1983). For these reasons I link the Chicago and Philadelphia elections though they are in many important respects independent events.

Professor Black takes exception to what he infers is my implication that black mayors automatically enrich black populations. He reminds us that Sowell has argued that no group has progressed from poverty to affluence through politics. The Irish, who are legendary for their political acumen and successes, now earn above the average for white Americans, as do the Italians (no political slouches either) and Jews. There is at a minimum an identification problem here. What are we to conclude from the obser- vation that no legislation was passed specifically to enrich any of these groups? I suppose that Professor Black wants to inform us that attempts to legislate black affluence--quotas, affirmative action, set-asides--will not make blacks as a group affluent either. I agree, but that is beside the point. Governments spend billions of dollars yearly, and how it is spent is partly a political decision. Improving the black political power base will result in more of the jobs, contracts, direct purchases, and subcontracting going to blacks just as it did for the Irish, Italians, and Jews. The children and grandchildren of these beneficiaries will acquire more human capital, and the incomes of blacks will rise. Sowell's definition of politics in purely legislative terms is too narrow to encompass the economic benefits that can come from political leverage.

I am disappointed that Professor Black was so preoccupied with his own ideological "message" that he did not take the time to read carefully what I wrote but chose instead to use the article as a launching pad for his own ideological polemic.