PROFITS WITHOUT PRODUCTION

by Seymour Melman ‧ RELEASE DATE: Oct. 25, 1983

Critics of declining American industrial productivity--and vanishing industrial jobs--have made much of this argument before, though not all; but Columbia engineering professor Melman--who, as he rightly notes, foresaw Our Depleted Society in 1956--presents it with exceptional thoroughness, rigor, and technological sophistication, ""The decline of production competence,"" Melman states, ""has been caused by two forms of managerial success: profittaking from expanded private nonproductive or foreign investments; and the ability of government managers to extend their powers of decision over an enlarged military economy."" It is the latter part of the argument that is new, but the two are also inextricable--for in his lead-off look at the machine-tool industry (""How the Yankees Lost Their Know-How""), Melman shows how, because of government cost-plus contracts, cost-maximizing replaced cost-minimizing; American firms, ""under less pressure to try for high productivity in their US plants,"" found it more attractive to offer foreign buyers equipment from foreign plants; and Japanese firms, adopting America's old cost-minimizing strategy, captured the lead in production-innovation. Analogously, American firms have failed to make optimum use of computerized equipment by upgrading workers' skills. (Instead, they've reduced their ratings and pay.) The resultant fall-off brings us to a potential ""point of no return."" The body of the book then reviews the individual factors of declining production: the closing of US facilities, and the transfer of capital and jobs abroad; managerial emphasis on short-term profit; B-school training ""for control rather than for production""; managerial priority to administrative, not production, functions; channeling of state resources into military development (for the aggrandizement of public and private managers); use of new technologies to extend managerial control, not to upgrade working conditions or worker responsibility; production deterioration--plus German and Japanese ascendancy--industry by industry; costly, ""idiosyncratic"" military technology; infrastructure (bridges, waterworks, etc.) decay. In sum: ""A castoff nation is created when its working people--all grades--are progressively discarded by decision-makers determined to make money outside production, outside the country, and by military work that contributes no life-serving product."" What to do? Up technical skills--with foreign help. Shun the idea of a post-industrial society and other current alibis (including the sunrise/sunset thesis). But Melman puts greatest stock in production-and-worker oriented management (vs. the profits/power breed) and ultimately in workplace democracy. More orderly, and less polemical, re The Deindustrialization of America, than Bluestone and Harrison (1982); complementary to Abernathy et al., Industrial Renaissance (p. 342), as well as James O'Toole's Making America Work (1981). And distinct in its military-production emphasis.

Pub Date: Oct. 25, 1983

ISBN: N/A

Page Count: -

Publisher: Knopf

Review Posted Online: N/A

Kirkus Reviews Issue: Oct. 1, 1983

Categories: NONFICTION