Business review; Economic growth

From the national educational radio network here is a Business Review ASSOCIATE PROFESSOR ROSS Wilhelm of the University of Michigan Graduate School of Business Administration presents his views and comments of business and economic activity in a dynamic growing economy such as we have in the United States it's fairly obvious that if we're to maintain high rates of change we must be capable of rapidly and easily shifting people. He quit machines and even organizations to meet the new conditions with economic growth the demand for some products become satiated while the demand for other products remain stronger as gold is growing. As a consequence we must be able to shift people and machines from producing the unwanted goods to producing the wanted things if we're to keep on growing. Someone must have flexibility in the ways we produce products if we are to continue to use the least costly ways of producing things. One of the strongest arguments for doing as many things as possible in the private sector of the economy instead of having the government do them is because it's easier faster and less expensive to change things in private companies than it is in government. The reason for this is that if a private firm does not adapt itself to the changing conditions and

soon finds that either it cannot sell its products or its costs are too high and either case the firm must adjust or else will go bankrupt and out of business. Such flexibility does not get exist in the government however since government agencies receive their money from the Congress or a legislature there is far less incentive for them to change so long as the Congress or the legislature continues to provide the money. As a consequence it's not the least uncommon to find government agencies following costly antiquated ways of doing things that have long since disappeared from the everyday practices in the rest of society. A good example of this can be found the large number of government agencies at the federal state and local levels which still will not accept individuals checks for payment. And far too many cases the pay to pay money to a government agency. You must either pay cash or a certified check or postal money order or cashier's check. This is a practice that is at least 25 years behind the rest of the society. And yet these government agencies continue to follow the same out-of-date practice simply because there is little incentive for them to change. It also is extremely difficult to make any organizational

changes in government operations even when most agree that the objective facts demand a change almost every year we see the great difficulties the Department of Defense encounters when it tries to close down a needed installation such as an air base or an army camp or a shipyard. Almost invariably we see political pressure brought on the Congress in the Defense Department to continue to operate the unneeded installation and in far too many cases the pressure works and the government continues to operate and pay for a base It doesn't need. It appears that we're going to see another example of the inherent resistance to change in government in the near future in the case of the post office. Almost everyone agrees that the Post Office is a sick organization despite the fact the postal rates are one of the fastest rising prices in our economy. The post office continues to run huge deficits each year. More importantly we have seen horrible instances of mail not being delivered for weeks on end because the Post Office simply could not handle the volume. Last year the cabel Commission made recommendations to change the organization of the Post Office Department to cure its ills.

Almost everyone agreed that the recommendations were sound and they were needed although many did not feel I for one. But the recommendations went far enough. However the basic recommendation was that the post office be divorced from politics and it be established as a separate independent government owned corporation. Recently President Nixon recommended that this be done by the Congress. And yet despite the widespread agreement of the need for change it appears that there is going to be strong opposition in the Congress. Apparently the postal Postal Employees Union has decided that it doesn't want the change and apparently has been able to persuade many congressmen to go along as long as it's not possible to bring about changes in the way government does things as rapidly and is easily as it has done in the private sector. Government operations cannot be as efficient as the private sector and the government will slow down and hamper economic progress and change. That was Associate Professor Ross Wilhelm of the University of Michigan Graduate School of Business Administration. With his views and comments on business and economic

activity Business Review is recorded by the University of Michigan Broadcasting Service. This is the national educational radio network.