Knowledge that Transforms

The principal impacts of population growth in the U.S. on resource commodity availability and on environmental quality are examined. An overall picture indicates a decrease in scarcity of resources; the U.S. does however rely on foreign sources for some important raw materials such as oil iron ore bauxite copper lead zinc and other metals. A favorable outlook for resource commodities is predicated on several points: continuation of free international trading and investing system of scientific and technological progress translated into economic production and of improvements in plicy. The quality of the environment must be assured at some minimum level to sustain population and economic growth. The major sources of pollution are solid waste the motor vehicle electric energy production and chemical fertilizers. Other environmental quality deterioration includes traffic congestion poor housing noise and failure to protect and properly manage nature parks and wilderness areas. If the gross national product continues to increase at 4% per year 3 of the points will be due to productivity increase. A population-resource-environmental policy is needed to: 1) foster improvements in material and nonmaterial levels of living for all and 2) protect human life and sustain the capacity of the biosphere indefinitely.

The rapid increase in the number of new PhD economists and the recent slowdown in the growth rate of academic vacancies has forced increasing numbers of new PhD's to take first jobs in government and industry. The majority of first jobs are still in educational institutions, but this percentage has recently fallen.' (See Table 1.) Also, it seems likely that new PhD's are being forced to lower prestige institutions than previously. Nevertheless, while type of employer has changed, as Professor Boddy indicates in his paper, very few PhD economists are actually unemployed. The much-discussed crisis arises, then, not from a failure to obtain employment but rather from disappointment about first jobs and unsatisfied expectations about the start of one's career path. These expectations in turn are determined by a common set of values most of us hold, values which are implicitly or explicitly acknowledged when we chat about what it takes to be a economist. I think it is useful to articulate these values, for they not only explain current disappointments but also explain why new PhD's may continue to be disappointed in the future. Professional bliss for most economists seems to be employment at a high-status university and a research career, only lightly sprinkled with teaching responsibilities. Evidence of a successful career is a lengthy bibliography, appointment to A.E.A. committees and the A.E.R. editorial board, and now even the chance of a Nobel prize. Put more directly, a economist is a research academician at a big-name university who stresses publication and identifies with other research economists. What accounts for this widespread emphasis on academic affiliation? Given that an individual wants to pursue a research career, it seems reasonable to argue that opportunities for research can be found outside the university. Admittedly, the intellectual stimulation of an academic department may be missing, but it would seem on balance that government and industry do have challenging research opportunities and the advantage of seeing one's analysis put to use. * This paper benefited materially from the comments of Richard Schramm, Cornell University. 'There is a good deal of variation among disciplines in the percentage of first jobs that are in educational institutions. Generally, the humanities send the highest percentage back into academe; 86.7 percent of the 1969 doctorate recipients in philosophy went to educational institutions. In the social sciences the figure was highest for sociology (79.6 percent) and lowest for psychology (50.2 percent), while in the sciences the majority of new PhD's did not go into academe. Respective figures for engineering and chemistry were 28.3 percent and 17.7 percent.

One always writes a paper on the assumiiption that a certain background knowledge of principles is shared by the reader. When this is not the case, commnunication can become very protracted, and when there is the kind of imperviousness to understanding that is revealed in the comment bv Richard Fullenbaum, Ernest Carlson, and Frederick Bell (FCB), colmnunication may be inmpossible. But I will do what I can in this reply to explicate those aspects of mn original paper, with which FCB are having difficulties.

In a recent issue of this Review, Vernon L. Smith advanced a general miiodel of the economiiic aspects of production from natural resources. Unfortunately, Smith makes a nuimber of unsound assumptions and methodological errors in formulating his general model of natural resource exploitation. We shall show, using commilercial fishing as a particular example, that the structure of Smith's model leads to absurd conclusions. In addition, we shall develop the correct specification for the competitive recovery of a fishery resource.

FCC has recently been considering the issue of of of the broadcast media. This issue stems in part from the belief that the present degree of concentration adversely affects competition in the markets for time. This implies that the distribution of ownership affects the price of time, or stated differently, the price of TV audiences. FCC is mainly concerned with the substantial control of TV licenses by newspapers and radio stations in the same market areas, and with the extent of group ownership of stations particularly in the largest fifty markets where group ownership is felt to be excessive. As a result, it began to exercise its right to question license transfers and renewals which perpetuated or increased undue concentration of ownership, and in its 1965 policy statement indicated its intent to give greater weight to diversity of ownership when determining license grants through comparative hearings. Most concretely, the FCC has adopted a rule forbidding any party from holding more than one full-time broadcast license in any market. This rule did not require divestiture and under pressure from the Department of Justice, the FCC is now considering requiring licensees to reduce their holdings in any market to an AM-FM combination, a TV station or a newspaper. But in all these deliberations the underlying approach has been to assert that concentration is too great without specifying what adverse effects it has, or how changes in ownership would affect them. I first consider group ownership. fixed number of TV stations in a given market area might collude in order to restrict the supply of audiences or to facilitate price discrimination. I have found no evidence of discrimination in the sale of time.' Therefore, it is my view that collusion would only occur to restrict the supply of audiences. question then becomes what difference would group ownersip make, since in any given market, only one TV station can be owned by a single licensee. One could argue that group ownership reduces the costs of collusion and thus increases its likelihood. For example, group ownership increases the probability that in any market two or more firms meet in some other market. If collusion is more likely where an arrangement covers more *I thank Professor R. H. Coase and Richard 0. Zerbe for helpful comments. sources of information for this study are as follows: the 1967 market rankings, the number of TV stations by market in 1967, and the prices of time were obtained from Spot Television Rates and Data, Apr. 15, 1967, vol. 49, No. 4; the number, location and circulation of newspaper firms from Ayer Directory of Newspapers and Periodicals, 1968; audience sizes from American Research Bureau, Day-Part Television Audience Summary, Feb./Mar., 1967; the ownership of stations from Broadcasting Yearbook Issue, 1968 and Hearings on S. 1312 Before the Subcomm. on Antitrust and Monopoly of the Senate Comm. on the Judiciary, 90th Cong., 2d Sess., pt. 7, at 3303-60; the number of radio stations from Broadcasting, Feb. 10, 1969, at 45-59. All measures of the number of TV stations exclude, whereas audience measures for each TV station include, owned booster and satellite facilities. Because of the length of the original manuscript, it was cut by the editor. 1 See, Peterman, The Clorox Case and the Television Rate Structures, 11 J. Law & Econ. 321 (1968).