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What Jimmy Carter and Jerry Brown Can Teach Us About Deregulation – Reason.comI can’t help but believe that in the future we will see in the United States and throughout the western world an increasing trend toward the next logical step, employee ownership. It is a path that befits a free people.
Walter Reuther was one of the first major labor leaders to advocate that management and labor shift away from battling over wage and benefit levels to a cooperative effort aimed at sharing in the ownership of the new wealth being produced. He was looking far beyond the next contract. There is a story that Reuther was touring a highly automated Ford Assembly Plant when someone said, Walter, you’re going to have a hard time collecting union dues from all these machines. Reuther simply shot back, not as hard a time as you’re going to have selling them cars.
Reuther was killed in a tragic place accident in 1970, so he did not live to see passage of legislation sponsored by Senator Russell Long of Louisiana that provides incentives for Employee Stock Ownership Plans, or ESOP’s.
In recent years, we have witnessed medium-sized and even some large corporations being purchased, in part or in whole, by their employees. Weirton Steel in West Virginia, Lowe’s Companies in North Carolina, The Milwaukee Journal, Lincoln Electric Company of Cleveland, Ohio, and many others are now manned by employees who are also owners.
The energy and vitality unleashed by this kind of People’s Capitalism-free and open markets, robust competition, and broad-based ownership of the means of production- can serve this nation well. It can also be a boon, if given a chance, to the people of the developing world. Nowhere is the potential for this greater than in Central America.
"We really need to realize that there is a limit to the role and the function of government," Carter said in his first State of the Union address, in 1978. "Bit by bit we are chopping down the thicket of unnecessary federal regulations by which government too often interferes in our personal lives and our personal business."
If that sounds more like your conception of Ronald Reagan than the peanut farmer from Plains, it may be time to check your premises.
After televised hearings chaired by Democratic Sen. Ted Kennedy, based on academic spade-work by the liberal economist Alfred Kahn, featuring testimony from consumer advocate Ralph Nader, Carter in 1978 signed the death warrant for the Civil Aeronautics Board, thus breaking up the regulatory cartel that had kept the same four national airlines virtually unchallenged the previous four decades.
Thus began a federal assault on "price and entry" regulations, or rules that determine which companies can compete in a given industry and what they're allowed to charge.
Carter also lifted individual prohibitions, most notably (thanks to an amendment by California Democratic Sen. Alan Cranston) on brewing beer at home. Result? You're drinking it. There were fewer than 50 breweries in the United States when Carter deregulated basement beer-making; now there are more than 5,000. In two generations, America went from world laughingstock to leader in the production of tasty lagers and ales.
Such was Carter's conviction about deconstructing chunks of the administrative state that he dwelled on it at length in his only presidential debate with Reagan.
"I'm a Southerner, and I share the basic beliefs of my region [against] an excessive government intrusion into the private affairs of American citizens and also into the private affairs of the free enterprise system," he said. "We've been remarkably successful, with the help of a Democratic Congress. We have deregulated the air industry, the rail industry, the trucking industry, financial institutions. We're now working on the communications industry."
Here in California, then fresh off its Proposition 13 tax revolt, Jerry Brown, in his first stretch as governor, was sounding similar themes. Government must "strip away the roadblocks and the regulatory underbrush that it often mindlessly puts in the path of private citizens," Brown said during his bracingly anti-statist second inaugural address in 1979. "Unneeded licenses and proliferating rules can stifle initiative, especially for small business….[M]any regulations primarily protect the past, prop up privilege or prevent sensible economic choices."