- What We Thought We Were Doing in Alaska, 1965-1972
While often neglected by nonhistorians, it is useful in policy analysis to understand what the policy participants had in mind when formulating it. This is perhaps especially the case when decades have passed since the events themselves. With that in mind, this is a personal account of a number of major policy initiatives and recommendations for policy concerning economic development in Alaska from 1965 to 1972 in which I participated. During those seven years, I held (successively) the positions of Chief Economist of the Federal Field Committee for Development Planning in Alaska (a presidential committee), Special Assistant for Regional Economic Development to the U.S. Secretary of Commerce, and Senior Legislative Assistant to U.S. Senator Mike Gravel of Alaska. In these roles, I had the opportunity to play a significant part (indeed the jobs required it) in making and shaping a wide range of projects and proposals intended to advance the economic development of Alaska. Four are treated here in varying degrees of detail: the sale of the Alaska Communications System from public (federal) ownership into private ownership; the settlement of the Alaska Native Land Claims; the disposition of the abandoned Dutch Harbor naval facilities into private hands; and the production of three studies providing fundamental economic information about the state (including the creation of its first econometric model).1 Each one should be viewed in the time and context in which we were operating and the surrounding assumptions and motivations that guided our actions. The first part of this article will specifically identify and elaborate on these perceptions and propositions. What is intentionally omitted is any attempt to evaluate how well or badly the initiatives worked over the intervening decades. That is [End Page 226] better left to others. In short, the subject is merely a retrospective on what our mind-set was at the time and just what we were trying to accomplish in each case.
Occasion and Approach
Responding to the Good Friday 1964 earthquake that struck south-central Alaska, the federal and state governments issued counterpart executive orders for the planning and administration of the immediate reconstruction efforts to rebuild the stricken areas.2 By October of that year, President Lyndon Johnson signed a new executive order that shifted the focus from short-term relief to the larger task of providing for the longer-range economic and resource development of the state.3 The idea really was to help bring Alaska into the Union in a fiscal sense (sound economic base), recognizing that politically it had become a state only five years earlier. The instrument established to assist in this major endeavor was the Federal Field Committee (FFC), which reported to a cabinet-level Review Committee in Washington, D.C. I was appointed Chief Economist to the three-person FFC in 1965.
We found the conventional wisdom about the nature of the Alaskan economy to be largely correct—and added to it ourselves. It was characterized by a number of structural imbalances: too "thin" a population in size and concentration in comparison to the land expanse, differential opportunities for Natives compared to non-Natives to participate in the mainstream economy, an economy that was raw material and primarily product-based compared to finished goods and manufacture, and the disproportionate availability of public capital compared to private capital. It was also characterized by a number of habits of mind and behavior hurtful to economic advance, such as price-level inflation, which could not always be explained by cost differences, a willingness to experience "bust" periods as long as they were preceded by "good booms," the relatively little use of modern marketing and managerial methods (though the commercial service sector was fairly sophisticated), insufficient detailed inquiry into the composition, interrelationships, and pressure points of the state's macroeconomy, and a tolerance (perhaps preference) for monopoly markets over competitive ones.
Against this backdrop, we considered several approaches. One was an area approach, in which the emphasis would be on recommending programs designed for geographic regions (for example, southeastern Alaska, northern Alaska); the second was a time-period approach, where the focus would be on...