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First, Washington will involve itself more and more as a goal setter and rules maker for business—largely because many business leaders want it to do so. Banker David Rockefeller, General Motors' ex-Chairman James Roche and A.T. & T. Chairman H.I. Romnes are among the prominent nonrevolutionaries who have endorsed the National Urban Coalition's proposed "counter-budget." which calls for the Government by the mid-1970s to establish a guaranteed annual income, start a national health-insurance program, and double federal outlays for education. Only the Federal Government is in a position to direct an attack on a wide array of national problems—environmental pollution, urban deterioration, auto and job safety. The business community is too fragmented, and individual managers are too preoccupied with their own companies' affairs, to undertake the task alone.
At the same time, the federal role will be restricted by the fact that not even the Government is rich or powerful enough to solve all the nation's needs and problems without help from business and the public. A prime example is pollution control. Businessmen are urging the Government to set clear, firm national standards. Only in that way can entrepreneurs compete on equal terms; no one will be able to use plain self-interest or lax local laws to cut his antipollution costs. But if the Government were to attempt to spend all the billions necessary to clean up the nation's air and waters, it would break the already deficit-ridden federal budget. The cost of cleanup is so enormous that it can be met only by adding to the prices of the major products of pollution—gasoline, electric energy, steel, fertilizers and others—and thus ultimately making consumers pay the bill. Thus the Government may set the goals and standards, but the problem can be solved in the private market.
Second, the Government will become a sterner policeman of private enterprise. Responding to a surge of rising public expectations about corporate performance, Washington is stepping up its regulatory efforts. Nixon-appointed heads of federal agencies are already outdoing their Democratic predecessors in bedeviling businessmen with tougher rules on auto safety, toy safety, food and drug quality, truth in advertising, disclosure of financial information and other securities practices, as new regulations proposed last week by the SEC indicate (see BUSINESS). In 1970 Congress passed environmental protection and industrial safety acts that empower the Government to seek court orders banning certain methods of production, and even closing down some plants in basic industries—notably autos, steel, oil, electric power and coal mining—when they violate federal pollution or job-hazard standards. By 1975, federal officials will be responsible for almost as many basic decisions in auto design as the auto companies' engineers. Stiffer regulation, however, is not a constraint on free enterprise. In an increasingly large and complex economy, regulation is what prevents the pursuit of profit from leading to harmful products, destructive dis-economies like pollution, the exploitation of customers and other threats to the stability of the business system.