GOVERNMENTAL PROMOTION AND REGULATION OF BUSINESS.

By Prof.Elmer E. Smead (Government). New York:Appleton-Century-Crofts, Educational Division, Meredith Corporation, 1969. 582pp. $9.50.

Government is playing an ever-increasing role in the United States economy, from a relatively passive participant in the nineteenth century to active leadership in the twentieth. Consequently, it is important to understand the nature of that involvement and the controls exercised.

Professor Smead has made an important contribution with Governmental Promotionand Regulation of Business. Not only does he examine carefully the broad spectrum of government participation from taxes on chain stores to regulation of nuclear energy, but throughout he yields important insights into the relationship between politics and economic regulation. The textbook illustrates how various political forces interact to produce governmental action in the economic sphere. A good illustration is the activity of farmers and small businessmen who, concerned about the non-competitive practices of "big business," encouraged the passage of the antitrust laws, such as the Sherman Act. An underlying thesis apparently is the idea that groups use government to defend their economic security against other groups.

Mr. Smead indicates quite well the various motives for government involvement from the negative one of protection against abuse, such as antitrust to the positive one of promotion, such as the activities related to the merchant marine and airlines. Another important benefit for students of government and business is an understanding of the wide variety of functions performed by government.

The author provides a very interesting treatment of the subjects of advertising, communication, and government business, and includes especially delightful examples, such as the Marmola case. Very enlightening is the discussion of the Panama Steamship Lines.

A great many of the problems of regulating and controlling the economy arise from our system of federalism. Much, if not most, economic activity crosses state boundaries; accordingly the rise of such national enterprises has created the need for units of government capable of regulating them. A great deal of the centralization of power is due to the evolution of economic activity. The book presents an insightful account of federal-state problems involved in regulation and their consequences.

Professor Smead has written an excellent textbook useful to both students and scholars in the field of government and business. It is a valuable textbook not only because of its treatment of the subject, but also because of the numerous highly interesting examples that maintain the reader's interest throughout.

Mr. Blackstone is Assistant Professor ofEconomics, Dartmouth College.