Pull-out secti: deas Spring 1986
Continuous Ca MIT New~s Service BieggWBaIE39a 89 lBgass5 Cambridge Since v881ie Massachusetts
Volume. 106, Number 17 Tuesday, April 8, 1986 Thurow: America trails Japan Economist says US needs productivity growth |:?:: . ]By Mary Condello, World-Class US Economy." to 21 percent during 1980-81, Earl C. Yen "The American economy died while interest rates remained at Ill l4 and Thomas T. Huang and has been replaced by a world five to six percent in Japan and The United States cannot hope economy," Thurow warned. "We West Germany. American firms to stay ahead of Japan and West- want to be an equal among peers, were at a clear disadvantage, he ern Europe in scientific research not an inferior among superiors." explained. and product development, ac- Macroeconomic policies led to Productivity - the efficiency c~.~ > cording to Lester Thurow, a the escalation of US interest rates (Please turn to page 11) prominent economist at MIT. But
i-~~.`'~. the United States can keep up Professors analyze comparison lidtf~ <>-~~~ thetwith other industrial nations between America and Japan of productivity growth. By Katie Schwarz and labor is an "artifact of high Thurow, Gordon Y. Billard Can the economic success of growth." professor of management and Japan provide useful lessons for * Industrial structure: The 4"5_' " economics, said the federal go- the United States? The answer is oligopolistic nature of Japanese vernment's economic policies a "qualified yes," according to industry - it is dominated by six have led in part to the United Richard J. Samuels, professor of horizontally integrated groups - Tech photo by Sidhu Banerjee States' inability to compete with political science. leads to great efficiency, Samuels Lester C. Thurow, Gordon Y. Billard professor of manage- Japan. He spoke at Friday's Insti- Sarnuels, who directs the MIT- continued. However, Americans ment, addresses the issue of America's efforts to stay com- tute Colloquium titled "Can We Japan Science and Technology are learning to make use of inte- petitive with Japan during Friday afternoon's colloquium. Keep Up with Japan? Building a Program, joined Professor of gration of industries in different Economics Paul Krugman PhD fields, he added. "There is noth- '77 and about 30 students in a ing uniquely Japanese about oli- Japan seen holding technology lead post-colloquium workshop enti- gopoly and vertical integration." Japan's By Anu Vedantham tled "Does the US-Japan com- * Financial structure: All three speakers agreed that major investment and assump- high savings rate, which transfers I view the Japanese of a certain rather large risk parison make sense?" at East "Basically, the United States is losing the tion capital from households to indus- challenge as a management prob- factor to make a commitment to Campus. technology race to Japan. Samuels outlined four impor- try, arises from a "unique set of lem. Their way of handling com- Moses told the audience of 50 new technology," he said. incentives," Samuels said. He plexity and large-scale programs tant points of contrast between that Japan controls fully 50 per- US firms need to the United States and Japan: cited the Japanese practices of .. is unique. . Their large-scale cent of the integrated chip mar- capitalize on inventions * Management practices: Ja- early retirement, lack of retire- enterprises are flexible," said Joel electron- ket, and "in consumer MlIT researchers in 1969 in- pan is known for corporate pa- ment benefits, and nontaxation Moses PbD '67, head of the De- Japanese have practically ics, the growing bet- ternalism and a loyal, coopera- of income from savings. The partment of Electrical Engineer- over the entire business." vented a process for taken Kenney said. tive labor force, Samuels said, United States may or may not be ing and Computer Science. What the Japanese lack in cre- ter silicon crystals, The scientists informed US com- but this view is oversimplified. In able to create equivalent incen- Moses joined James Womack ativity, even in software, they panies of the invention, but no fact, he said, -the-current good re- tives, he said. PhD '83, research associate at- make up for by adequately and -(Please turn to page 11) lationship between management (Please turn to page 11) the Center for Technology, Policy systematically handling large- and Industrial Development, and scale projects, he explained. George B. Kenney '74, tesearch Kenney agreed with Moses that Executive Committee meets students associate at the Materials Pro- management was the problem, By Ben Z. Stanger April 30 meeting will be the com- * a greater emphasis on com- cessing Center, on Friday in a but he also felt that managers Undergraduate Association mittee's first in a year. CJAC may munication between students, panel discussion at Ashdown need to be technically skilled in (UA) President Bryan R. Moser schedule a public forum later this faculty and the Corporation; House entitled "Are we losing the the industry they manage. In the '87 and Graduate Student Coun- spring on the Corporation's poli- o a public review of progress technology race?" materials field, it usually "takes a cil (GSC) President Janine M. cy of selective divestment. made by MIT's South Africa-re- Nell G discussed student views on Moser and Nell presented a lated holdings; Txt of moser, el divestment speech MIT's South African investment proposal for the CJAC to be- * a public review of the posi- (Editor's noate: The following is -the text of the proposal pre- policy with the Executive Com- come more active as a "vehicle to tive actions taken by South sented by UndergraduateAssociafion President Bryan R. Moser mittee of the MIT Corporation promote understanding . .. Africa-related corporations; and '87 and Graduate Student President Janine M. Nell G' to the Friday. among students, faculty, and * consideration of other ac- MIT Corporation Executive Committee.) Moser and Nell believe that Corporation members." tions MIT can take to end apart- During the last- few months, the MIT community has consid- this meeting was the first time heid or improve the South Afri- ered resolutions addressing the Institute's investment policies re- students have ever directly ad- See text of proposal, in box can condition. Because the CJAC is not a garding fimns doing business 'in --South Africa. The results of dressed the Executive Committee. Their proposal listed four ob- of the faculty, under- They presented the results of (Please turn to page 10) these referenda indicate tha a majority jectives: graduates, 'and graduate studenits' who voted felt that MIT last month's referenda on divest- should divest of its 'holding in companies doing business in ment, in which over half of par- ~~~~4111-- 11Ieble I ------I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ South Africa. ticipating undergraduates, gradu- " The investment--policy issued by the .Executived Committee of ates, and faculty approved of full *·· '·- ' .,the Corporation indicated that MIT would instead "invest only divestment from firms with oper- `"` , ··- : in.; corporations which -are Sullivan Principle signatories and ations in South Africa. " ;c'u: which are making progress in the implementation of those prin- The meeting was an attempt by ,;;:; ·*··· ,····· -·· ,,, ciples." Unfortunately, a. negative -relationship has resulted be- the Corporation "to show that [it re d·r _· IZ`t tween certain portions 'of the vlIT- community and its adminis- is] receptive to students," Nell a I; trators. In some cases, communications have become limited or said. r- nonexistent. Indeed, the recent arrests of eight students seems to During the meeting, the Execu- ·- have resulted, in part, from a lack of open discussion within the tive Committee decided to recon- --- MIT community. vene the Corporation Joint Advi- -L-~ As the elected representatives of students, we see the need for sory Committee on Institute- (Please turn to page 10) Wide Affairs (CJAC). CJAC's -~---r---r-I M IT unhurt by federal overhead cuts ·-- By Sally S. Vanerian These reductions will not affect approval. ----- The federal government's Of- MIT in 1986, but they may in Federal research funds pay for fice of Management and Budget 1987, according to Kenneth A. both direct research costs - (OMB) is planning to cut re- Smith '58, associate provost and which include equipment and search funds allocated for faculty vice-president for research. The materials - and indirect costs, and staff salaries and other ad- cuts will take effect on July 1 and Smith explained.*r~l~?ruc.---r-u~·---~-_ Indirect costs, ministrative expenditures. are not subject to Congressional also known as "overhead," sup- port services, such as libraries, physical plant and administra- _E I tion, which are used for both education and research. Universities recoup their indi- Mel King: Candidate for the 8th Congressional District rect costs by charging the govern- S seat. Page 2. * ment a fixed percentage, which is Singing cops chase singing robbers in theu annual Tech negotiated each year, of the di- l·c rect costs. This percentage, the Show. Page 9. ~ Happy birthday to Walker Memorial Basement Radio. "indirect cost rate," is added to Tech photo by Sidhu Banerjee Page 1,1. the direct expense in computing Brian Kimmel '87 goes for a ground ball during Satur- Glenn P. Strehle '58 is MIT's newest vice president. the total price tag for a research day's lacrosse match against Nichols College. MIT de- CC~~o-~n·~rr grant. feated Nichols 11-5. Page 1 1. (Please turn to page 12) -a··4 IP---_- _- g ev