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It may be that we are going to have to arrange a profit system for our industry which permits them to contribute more to the upgrading of people who are marginal and submarginal, people whom they wouldn't hire if all they had to do was to maximize their profit in a competitive business. This is also going to take a lot of doing, but I think that is exactly what we are talking about. I agree with you.

Mr. DADDARIO. You don't mean that you increase the opportunity to take care of these problems of our society at the lower level by depressing the opportunities at the higher level, do you? The more education and the more opportunity you have for more people, the more concern there is about this problem and more ability to handle results. It is because we have this concern that we appear to be in such violent conflict.

Dr. STEVER. Mr. Chairman, I would like to get in a plug for the young people of today. They are much maligned for a lot of things, but I have never seen any time in my life in which more of them are willing to go at these tougher jobs that you are talking about. This is an encouraging thing. A large number of our graduates want to get into the tougher problems of education and don't want just to go possibly to the top in sometimes easier things.

Mr. DADDARIO. What you are saying we should organize so that there will be an opportunity for them to participate in a meaningful way.

Ďr. STEVER. That is right. I agree. I absolutely agree. That is why I say broaden the concept of education. That is why I say in industry, broaden the concept of employment.

Mr. PETTIS. We took a step in that direction the other day on the floor when we passed some legislation which would actually give some emphasis to thewhat do we call them-gifted child. All right, so we do something for the gifted child, but what about the kid that isn't gifted ?

Dr. STEVER. That I think is a very large problem in our society. Mr. PETTIS. Also there was something the same day for them.

Mr. DADDARIO. You do seem to be going to each extreme. What about the ones in between?

Dr. STEVER. You mean like all of us?
Dr. STEVER. I think we will work on them, too.

Mr. DADDARIO. You have given us a few priorities. They relate themselves in a way. You can't really separate them. How would you structure them?

Dr. STEVER. Well, I think that with respect—let's take the first priority—to education, a very large number of the innovative things not only for the top level of this scale but the bottom level as well, come as a result of grants by people in industry and in foundations who are anxious to move things in that direction. I think you should begin to put pressure on the education agencies of this country to address those problems more than they have and to make the colleges and universities address them by educating people who are interested in helping the lower scale as well.

I think you should give aid to industry to broaden the concept of employment; that is, industry and craft unions and all the unions and all kinds of employers, not just industry, but all employers. That is going to take a lot of time.

On the second priority, with respect to the pollution and the environment, I really think here is where we need much stronger organization, not simply of basic science, but of the entire problem for application. Here I really think we can move it faster. We can use more money. We can use better organizations. We ought to tackle this in the same kind of emergency way we tackled space 10, 15 years ago.

The third area, which was transportation and improvement of the physical things that we want, I think here we can beef up current agencies to do a better job. These are all applications of science.

Going back to one other thing, I still point out that one gets the people interested in our society, in doing the things we have been talking about, and we get those people mainly from

our colleges and universities. They are the ones who are going to lead, with certain exceptions. The people who are leading unions, for example, are not usually college people, but a large number of our leaders, leaders here in this Congress and so on, come from our colleges and universities. We have got to make sure that colleges and universities stay strong, especially in science; to have them stay strong will depend on government support. There is no question.

Mr. DADDARIO. Dr. Stever, would you excuse me for one moment. The Chairman is cailing me on a long distance call. Will

you take care of it, George, for a moment? Mr. BROWN. Shall we have a recess? Mr. DADDARIO. No, just go ahead.

Mr. Brown. Dr. Stever, let me bring up a subject or an aspect of this subject of the environment which may or may not be relevant here, but I was recently reading a paper by an eminent ecologist from my own State in which he pointed out that what you have in most forms of environmental pollution-and you can look at it from many different ways—is that pollution, in effect, constitutes a social cost that somebody

If the automobile creates smog, why, the smog constitutes a cost and it is borne by someone. It adversely affects, say, the surrounding agriculture, the health of the people, and the farmers have to move or the people have additional medical costs. He suggests that one imperative in terms of doing something is to recognize that the costs of pollution have to be internalized in the institution which creates the pollution. It is not always easy to identify the specific institution, but let us use the automobile as an example, and I don't want to pick on them, but let's say they are responsible for the air pollution that exists in Los Angeles. Presently, the air pollution cost is being met by the citizens in terms of adverse effects on their health and other environment.

In some fashion or other, the automobile industry ought to internalize that cost, either by allocating funds to produce a nonpolluting engine, or something of that sort. Of course, this raises a number of questions.

At what point, for example, do you set a standard at which the social costs have to be seriously considered. A little pollution isn't really that bad, and most everybody can tolerate it, but at some point you have to set a limit and begin to require that the social costs be taken into consideration.

has to pay.

Is this line of thinking one that you would feel is a practical way of approaching this? It applies to, say, industrial plants on a river. By throwing their waste into the river at a very low cost, to them, they are creating a very large cost to the other users of the river; and by making industry internalize that cost-and it could be a very serious cost-you are going to effect a lot of economic relationships between industries, between plants, between processors. It might, in effect, reorganize our whole economic or industrial system in some degree.

Can we do that? Is that a practical thing to do?

Dr. STEVER. Well, I worded a little differently what you call social costs or costs to society. I called it risks, and in the pollution area, we do incur these risks or costs; but I think there is one missing thing in your analysis.

The reason we have automobile pollution is not because the automobile companies make automobiles; it is because the people buy automobiles and use them. So, the cost will come to the user and not to the industry. We can't put the automobile makers out of business by making it so unprofitable that they have no investment, so they just go out of business. We are going to have to solve that by having society pay for the cost. In this particular case, if the automobile companies are forced by legislation to do better with respect to pollution or introduce entirely new kinds of engines, if they can do it, the people who buy those and use them will be the ones who pay, so the cost is not to the industry. We have really got to get this concept across. The same principle applies to airplane noise, for example, or airplane safetv.

In the end, it is not our objective to put those companies out of business. It is our objective to get what they furnish society, which we all want, and to pay for it.

Now, you know, I was thinking about how the automobile companies could help on pollution, and let's take an extreme way. Suppose regulations were passed which limited the power of engines for a given size. Suppose we just cut the total horsepower in this country by 50 percent. All right, we would have a broad-ranging impact, because there would be less oil sold and the cars wouldn't be able to accelerate so fast. They might be less safe in certain situations, but we would reduce pollution.

So I think we have to work through this pretty carefully and, you know, it may be in the end we would have to do something extreme like that unless somehow our technology can come up with some answers where we can, in fact, have high power, burn as much petroleum as we do, and not give off the bad pollutants. Yes, this is obviously our big problem.

Mr. Brown. The way I phrase the point makes it appear as if I thought you could force the automobile companies to absorbs a total social cost of their product. Obviously, ultimately the consumer of the product always bears the full cost.

The question is one really of the process of allocating cost in a situation and determining when certain costs must be allocated in a different way.

To take again the smog example, at present we will say a large part of the cost in Los Angeles is borne by, say, the 10,000 old people and invalids whom the doctors say have to move out of Los Angeles because of the smog, and none of them own cars. We will assume that.

They are bearing a very heavy cost which should be borne by the people who drive cars.

The process of reallocating that cost would be to say that the automobile manufacturers will produce an engine that doesn't produce smog and pass the cost on to the people who buy the engines. In that way, the old people, who are forced to move out of town because of the smog, can continue to live there and won't be bearing the cost.

Dr. STEVER. I think that goes back to an earlier statement I made. I think we have got somehow to get across the concept to industry and everybody else involved that there are tremendous opportunities for them if they move into these things, into solving these problems.

Mr. PETTIS. To pursue this just a little further, we have had examples, in the past, where industry has not done what it could have done, and rather economically, to clean up the air, because I think industry and society thought we just had all kinds of air and this was really no problem. In California, in the Los Angeles Basin, from which both Mr. Brown and I come, I think it was, in 1953, that there was an invention of an antipollution device. I don't know who invented it, but the automobile industry came by this invention. There was a sort of cross licensing agreement in the industry, and that device did not show up on automobiles until 1964, when the State of California passed a law. You know, that old cartoon, there ought to be a law.

What I asked myself is, why was there 11 years between the invention of a device which wasn't too expensive - and I think the time frame since 1964 proves that it isn't too expensive. We are selling more automobiles in California than we ever did before with the device. Why can't we involve industrial concerns with a little more concern for social and scientific problems?

Dr. STEVER. Well, I don't think we can blame automobile pollution on the industry. They operate with certain constraints on them. If society puts another constraint on them, which is Mr. Brown's social cost, then I think they can operate with that constraint on them. You know, they do have to operate. They conduct their business with lots of fences around them, to make them operate in a certain way, and I think another fence, they can adjust to it. I see no reason why they shouldn't, and I think this is really what we will always face as we bring in new costs.

You know, it isn't just the automobile industry. We talk about pesticides.

Mr. PETTIS. We just used the automobile as an illustration.

Dr. STEVER. I think this is a problem of society to express the cost to it of eliminating pollution and to give some indication through the processes which we have, the passing of laws and regulations to get people to move constructively in this way.

Mr. Brown. This brings us right back to the fundamental problem we are addressing here, the organization of science. The prerequisite condition to establishing these fences is an understanding. It is knowledge. These fences aren't erected just to put roadblocks in the way of companies seeking to fulfill a public goal. They are seeking to enhance the fulfillment of public goals. We, therefore, need the best organized knowledge possible in order to establish these public goals.

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It happens that a great share of these problems today are bound up with knowledge of what is happening. We don't seem to be getting an adequate relationship between the sources of knowledge, the sources of political power to set up the fences, and the sources of private power that have to live within those fences. We are concerned about how the structure of this organization can be made more effective.

Dr. STEVER. Let's not decry our success. The very fact that you people are interested in getting the knowledge which will help you make the laws and regulations better is definite progress. The contribution of science is that knowledge. If in science's relationship to lawmakers and administrators and industrialists, we begin to realize the kinds of fields in which our new knowledge is in demand, why, we will turn to those fields. I see much hope in what we are doing; we now understand the problems.

There was a time in this country when we thought we had all the air and all the water and all the land and all the everything that we needed. The reason I put my second priority on the environment is that we are now getting so many proofs that we don't have all of these that we need. Every place we turn we see that we don't and that what we are doing is affecting our environment and, therefore, we ought to get the long-range planning you are talking about.

That is also why I said that now is the time to take emergency Government organizational action to tackle this. It is not a purely science problem. It is a much broader one.

Mr. DADDARIO. If we don't do that planning, I would guess that soon you would have to move environment up to number one.

Dr. STEVER. Yes, indeed, and/or population control and lots of other things.

Mr. DADDARIO. Dr. Stever, you again come back to organization. What ought we do in the organization within Government of our science and technological activities to attract the funding necessary to achieve these ends? It appears that despite some of the adjustments you have made in your testimony from the standpoint of the questions that have been asked, you think we ought to strengthen what we presently have.

This subcommittee, some time ago, looked to the future and recognized unless we could make a better case for science, technology and engineering, that we would soon be running into difficulty. We thought this way, even prior to the squeeze that has come about because of the Vietnam situation. It didn't appear possible that we could increase the level of expenditure without people in the country and in the Congress examining these matters carefully. The Vietnam situation adds an extreme additional burden.

I do believe that the way they are organized and administered is related to our ability to get the necessary funding. Because of this, I wonder if we ought not to move somewhat away from where we are

Dr. STEVER. Organizationally.

Mr. DADDARIO (continuing). In organization. What's your thinking about the direction of change and the necessity of doing it?

Dr. STEVER. If we are to move, I think on one side we should have an organization which looks to the seed corn, essentially the education and bringing along of young scientists and young engineers and young social scientists, to get them into the labor pool to tackle the problems.

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