The TVA and Decentralizationby DAVID E. LILIENTHAL
For we are not safe from the hazards of overcentralization within our democratic structure. The trend is not to other lands. American business statistics, European headlines, the pages of the Congressional Record reveal the same story. The dangers implicit in vast size, the disaster inevitable when power is exercised far from those whom it affectsthese are hazards common to the world today. We must prepare defenses against them if this democracy is to survive and be effective. We must experiment in the administrative decentralization of the functions of our federal government.
The TVA is one such experiment. If its methods of administration prove to be successful, if it can help to solve the problems raised by the flight of power to the center, may mark that down as its most substantial contribution to our national well-being. Its methods are not the only ones which must be tried. Its regional limitation is only remedy. There will be different types of organization and other methods of administration suitable for varying problems and different areas. For diversity will always characterize decentralized administration, just as surely as uniformity is seen to be the mark of central note control. Perhaps each kind of enterprise, public or private, must be considered separately. I am not prepared to write a blanket formula. But I am sure of this: The people of this country have a right to demand that their federal government guarantee to them the benefits of advancements in science and research; they have a right to demand protection from economic abuses beyond the of their political units to control. And they have the further right to insist that the methods of administration used to carry out the very laws enacted for their individual welfare will not atrophy the human resources of their democracy. This is no easy problem, but it must be faced. It must be faced and solved in order to conserve and develop the energies and zeal of our citizens, to keep alive the channels through which our democracy is constantly invigorated, and to make sure that we too shall not be someday mute, our fortunes and our future determined without our voice.
No matter what the field of enterprise, no matter where the scene of its activity, the benefits bestowed by highly centralized authority are similar, and the costs it ultimately levies are the same. In the name of efficiency, independent units of business in the United States have been absorbed by mammoth enterprises, while as the price of peace abroad small nations have been robbed of their sovereignty. Here individual enterprise and local controls in business have been overthrown or outgrown; there, whole peoples have been denied participation in the decisions of their states. Sterile towns and disenfranchised nations, all these alike are paying the tribute finally exacted for the progress advanced by remote control.
There is no question but that progress of a sort has been accelerated by centralization. In business, costs have generally been lowered and the advancements of science and invention have been more promptly made available to the average consumer. And for the most part people enjoy the uniformity which the change has brought. Thanks to nationwide enterprises, window gazers can see the same goods displayed in similar windows from Maine to California; and everywhere in these United States people are reading the same magazines on the same day, listening to the same programs on the radio, or going to see the same movies. People like that.
AT FIRST, JUST AS SMALL TOWNS WELCOMED THE EXPECTED stability of the branch bank, they applauded the goods and services of all the repetitious enterprises. Only the independent business man, the village dressmaker, the owner of the general store, and the small town druggist complained. Towns competed to acquire branches of this corporation and that one. The effect of absentee control was not immediately discernible, and is even yet not fully comprehended. But when it was discovered that profits were often siphoned off as rapidly as new advantages were bestowed, that local participation in the determination of policies was denied, then dying hamlets and sterile towns took stock, and counted the cost of foreign management and central financing in the atrophy of local endeavor and the drying up of community initiative. Now business has felt the impact of the distrust of bigness and the fear of remote control its policies developed. And the people have demanded the extension of new powers to the federal government as one measure of protection against the baleful effect of over-centralization of power in business. For the towns, the counties, the cities, and states of this country found themselves impotent to meet the social and economic problems which nationalized business precipitated. Only the federal government could cope with the' issues. Centralized business has made essential the centralization of public authority in our federal government.
Naturally, but somewhat curiously. centralized business interests have opposed the ,ranting of new responsibility is to our central government. National business associations became spokesmen for the virtues of decentralization. They discovered that social and economic questions were matters for local control and, from their central headquarters, they sought to persuade the country to that view. Their representatives appeared before congressional committees to advocate states' rights. They were peculiarly passionate about it. They fought for no abstract principle. They knew that if the selfish aspirations of centralized business were to be uncontrolled, the central government must be kept forever powerless to affect them.
Big Business and Little Government is an appealing combination to those who look hopefully for the second coming of Mark Hanna. But we need something more realistic and less crudely unfair. A sentimental regard for the good old days is Well enough for a collector of moustache cups; but even a romantic antiquarian cannot ignore the governmental significance of great concentrations of economic power, the revolutionary advancements in communication and transportation. and the swift contagion of our once local problems. It would be wanton disregard of the people's rights, to let the powers of the federal government be hopelessly outdistanced by the trend to centralized control in industry and commerce and finance.
Hazards of Overcentralized Administration
IN THE FACE OF A FAIT ACCOMPLI OF CONCENTRATED ECONOMIC power, the exercise of national authority is inevitable and essential to the interest of the whole public. Yet we must be quick to recognize that central government faces many of the same dangers, is subject to some of the same temptations, many fall into abuses similar to those that have characterized the :administration of centralized business. True, the public can call a halt to such abuses in government more effectively than when they appear in business. But the freed to find a balance is hardly less urgent for that fact. The advantages of centralized authority we must retain. but for those benefits we must not pay too high a price. We must use our intelligence and inventiveness to protect ourselves against the dangers which we now know are hidden in vast size and overcentralized control.
We must recognize that a central government, like a business empire centrally managed, is bound to suffer from lack of knowledge of local conditions and parochial customs. And when differences in local and regional customs are forgotten, statutes seem irrelevant or harsh. Their effects tend to disturb rather than promote the welfare of the citizen. In a country as vast as the United States, with its range of physical and economic variations, power cannot be administered entirely from the national capital. Excessive centralization in Washington is bound to cause interminable delays before decisions are arrived at, and put into effect in the field. When every recommendation, regulation, and requisition must be submitted for examination, approval and action at headquarters. nothing can be done very promptly. Delay in the field not infrequently spells defeat for a program.
A democratic government must retain the confidence of its citizens to be effective. When that confidence is replaced by anxiety, then fears develop that the granting of further powers may be abused. One of two things will ultimately happen. Either distrustful citizens will refuse to yield to the national government power which it must have for their protection, or an arrogant central government will impose its will by force. In either case the substance of democracy has perished.
We are confronted by a dilemma. There is no reason to conceal its proportions or to deny that the faults inherent in bigness extend to political units. Put in my judgement the remedy does not lie in limiting the powers of the federal government. It must be found through the decentralization of the administration of some of those federal powers.
We must differentiate between centralized authority and centralized administration. We have mistakenly assumed that they were inseparable. We have been resigned to the tradition that with few exceptions all powers of the federal government must be exercised from Washington. We have meekly endured the faults of bigness and have been prepared to accept a top-heavy. cumbersome. centralized administration as the price of granting necessary federal powers.
With that traditional acceptance, I disagree. A strong central government, fixing national policies, is essential. But I do not agree that a highly centralized administration of those functions must follow. Every important administrative decision need not be made in Washington. We who believe devoutly in the democratic process should be the first to urge methods to prevent the administration of national functions becoming so concentrated at the national capital, so distant from the everyday life of ordinary people as to wither and deaden the average citizen's sense of participation and partnership in government affairs. For this sense of participation is the very fire of a democracy.
WE MUST NOT PERMIT THE EVILS OF REMOTENESS WHICH ARE characteristic of centralized business to be duplicated in the sensitive field of government. The warning of de Tocqueville, uttered more than a hundred years ago. sounds in our ears today. He foretold hazards which could befall even a democracy. in which the people consented but did not participate.
Our new lawsdealing with social security, housing, employmentare not remote from the individual citizen. They touch the lives of men and women daily. When federal activities were few, the faults of their administration were only a source of amusement to the average citizen. Now delays and ineptitudes of administration disturb his life, dislocate his budget, trouble his leisure, arouse his distrust. Local conditions and cultures must he taken into account if statutes are to be successfully administered. There must be variation in regulation, adaptation in procedures, more precise adjustments than can he made from a distance. Local participation is not merely wise, it is essential.
The TVA Example
IN THE TENNESSEE VALLEY AUTHORITY centralized authority is expressed through a decentralized administration. In some respects the powers granted in TVA's statute represent a genuine extension of federal activity. In other aspects of its varied program the functions assigned to the Authority have long been responsibilities of existing federal agencies. A wholly novel feature of its charter lay in the unity with which the varied problems of a watershed and its people were conceived. The problems of the Tennessee Valley were viewed as a single problem of many integrated parts, and the program adopted for their solution was entrusted to one agency to carry out, rather than divided into many parts to fit the pigeonholes of existing governmental instrumentalities. Under this concept of integration, Congress vested in the TVA a variety of federal functionsall related to the conservation and control of the natural resources of water and land.
The area of its operation, based upon geographic and economic realities rather than political boundaries, has made a decentralized administration possible. But even more important for the development of methods of decentralization has been the tact that the Authority's organic act assures the autonomy which guarantees its flexibility in operation, The statute was designed to permit the Authority to make its decisions in the held close to the people and their problems, where adjustment can be made to fit each local situation. That power to decide in the field is he heart of any program of decentralization.
For six years now the TVA has been making a conscious effort to push its administration farther down into the grass roots. We are trying it on every front of a varied program, a program that encompasses almost the full sweep of modern industrial and technical activity. The men and women who carry on the TVA are not only building one of the largest water control projects ever undertaken by the people of the United States and producing electricity for more than a third of a million homes and businesses with an annual revenue of over $15,000.000; they are also inventing industrial machinery and processes and developing remarkable new chemical formulae. They have to added knowledge concerning the malaria mosquito and the design of public recreation facilities; they have advanced the science of mapping and of soil chemistry; they have developed techniques in the organization of cooperative business; they have made advances the field of low cost housing and in methods of cooperation between organized labor and management. The philosophy of the grass roots administration is carried out in these and scores of other activities.
Two Essentials of Decentralization
First: A decentralized administration is one in which the greatest possible number of decisions is made in the field, of at a remote headquarters. An over-centralized administration, in public or private business, is always characterized by he fact that its field officers tend to become messengers and errand boys. Administration can never be decentralized that way. In a decentralized administration, field officers are selected, trained, and supervised with a view to increasing their capacity to decide questions on the ground.
Learning how to decentralize the administration of centralized authority cannot be achieved by abstract thinking. Experimentation is required. Methods must be tried out, improved here, abandoned there. I should like to describe in dome detail a few of the methods now in use in the TVA's program. Consider, as the first instance, the decentralization f what is generally accounted a business operationthe TVA power system whereby electricity is supplied to an area almost as large as England.
Decentralizing a Power System
THROUGH THE MEDIUM OF THE PUBLIC UTILITY HOLDING COMPANY, the business of providing electricity has developed into one of the most highly centralized industries in the United States. The Commonwealth and Southern Corporation, for example, controls in detail the fortunes of a vast empire extending over ten states. The management of the entire system is highly centralized. Questions affecting the daily lives of hundreds of thousands of people, and even many of the everyday problems of operation, are determined not by the state or local managers, but in the New York headquarters of the holding company.
I am convinced that a decentralized power administration can be achieved without sacrificing the progress of the past two decades, and with distinct social gains. We are trying it out in TVA. We have centralized the management of the only activities in connection with electricity supply which are common to a large integrated area and must be carried on by a single agencygeneration and transmission. In the TVA system, these responsibilities are carried on under the Control of the Authority itself. Obviously, this degree of centralization produces certain economies and assures security and efficiency in power supply which cannot be effected in any other way. But we have decentralized the ownership and management of the distribution systems. And this is important. This is the part of the electricity business which touches the average consumer. This is where the great economies are possible, where failures in good management are most quickly apparent. These distribution systems, real yardsticks, are wholly decentralized in management under TVA's system. The decision to participate or to remain outside the regionwide power program was made voluntarily by each community. By referenda, by action of town and city councils, by public meetings of farmers, the people pressed their will. As a result, the ownership and responsibility for those municipal and cooperative systems which liver the power directly to the consumers in the cities, farms, and villages are lodged with the people themselves, according to their expressed desires.
The Authority is today supplying power at wholesale to approximately one hundred separate and independent distribution areas. Thirty of these are operated by cooperatives, and the remainder by municipalities. Federal standards laid It in the TVA act are maintained by means of provisions the Authority's wholesale power contracts. But the ownership and the ultimate control of the local electricity distribution systems are vested in the people themselves.
The Agricultural Program at the Grass Roots
ITS PROGRAM OF SOIL CONSERVATTON, THE AUTHORITY'S decentralized administration is quite literally at the grass roots. he TVA took over a wartime factory at Muscle Shoals, and the TVA statute directed TVA to use that plant for experimentation in the producing of plant foods to conserve le nation's soil. It was further directed to conduct demonstrations on the land in the use of the fertilizer thus produced, and to engage in a program of soil conservation. On the advice of experts it was decided to devote the plant to le production of new and more efficient forms of phosphorus fertilizer; and as soon as the chemists had invented and produced a satisfactory new material in sufficient quantities r testing purposes, experiments on the land began. From the beginning, the TVA has used existing local agencies for its work. To set out the basis for the cooperative effort, now in its seventh year, written agreements were executed with the agricultural experiment stations associated with the land grant colleges in each of the seven Valley states. These are all local institutions staffed by men of long experience and familiarity with local conditions. Each experiment station undertook to test the new types of plant foods under conditions of scientific control and observation. And when the tests yielded adequate technical data, a program vas developed to test and to demonstrate the new products under practical farming conditions. Then, in its steady march toward the grass roots, the TVA began its program f securing the active participation of the farmers themselves. This is the way that testing is being done in the field today.
The county agricultural agent, who is himself a combination federal, state, and local official, calls together the farmers of the community and explains the testing program and its relation to soil fertility and rural conservation. Then one arm is selected by the farmers themselves to be used as a remonstration unit. That farm must be mapped and inventoried, and changes in his farm management must be made by the farmer-operator with the advice and assistance of a local committee of his neighbors and the county agent. The men who conduct the test-demonstration farms are not experts from afar, but actual farmers, neighbors, and fellow students in a community enterprise. Neighboring farmers visit the demonstration farm, walk over the place, watch for results, talk it all over among themselves at the general store and after church on Sunday.
On March 1, 1940, after six years, there were 28,469 farms cooperating in this demonstration program. a program now going forward in twenty states. in these twenty states 4,553,228 acres of land have been included in active program for the reduction of soil and water tosses under community auspices. Each term is m the center of a group of from 15 to 125 participating farmers. Thus, about 800,000 farmers are now actively engaged in carrying out a national conservation program in their own neighborhoods. The Extension Service provides information anti-leadership in setting up the organization and supervising the record keeping of these demonstrations. The TVA provides the plan of procedure, the fertilizer materials, and funds for assistance in organization and supervision. but the farmers themselves carry on the demonstrations. There is no imposition of regulations designed in remote headquarters. Compliance with any of these plans is never mandatory. The contracts between the federal government and these groups of its citizens are voluntarily entered into and carried out. But a farmer who joins a national program of soil rebuilding is asked to forego a part of his cash income when he sows his land to cover crops for a season. And for the farmer whose family must be fed and educated on a slender margin, this may mean a major dislocation of his personal budget. He may be eager to join for the good of his community and his country, and it is exceedingly important to the well-being of urban industrial centers that he should, but the problem he faces is how to increase the revenues on a part of his land so he can protect the rest.
The TVA early learned from its men in the field that the soil program it was promoting could never be widely adopted in the South until new and cheap farm equipment was designed, and unless means of raising farm income were discovered and demonstrated. The conflicts between the self interest of the individual farmer and the nation's interest in soil preservation have to be removed. Those conflicts can be seen at the grass roots. They are not visible from afar.
All experts agreed, for example, that the planting of small grains on hillside lespedeza sod was desirable to prevent erosion from winter rains, to keep the valuable nitrogen in the sod roots from leaching, and to furnish an extra crop. But the equipment available at the hardware store was too costly for low income farms to purchase, and it took too much of the farmer's time to operate. So TVA technicians designed new equipment. A furrow seeder to be attached to a two-horse plow was developed. Farmers put it to practical tests and demonstrations on farms in fifty counties of the Tennessee Valley, with the technical help of the Extension Service and its county agents. Manufacturers of farm equipment became interested, and now the furrow seeder is being produced to sell for less than $25, and sales to farmers in eight states are already reported. While one group of TVA technicians worked on the problem of term equipment, another was experimenting in methods by which soil conserving crops could be made to produce added income.
No government can expect its citizens to gamble with their scant resources by planting a crop of uncertain returns, even though the conservation of the nation's soil may be promoted by its cultivation. The success of an experiment in the quick-freezing of berries encouraged farmers to increase the acreage planted to these soil-conserving crops. Without risking his family's livelihood, a farmer can put into practice the soil conserving techniques that science has produced and the federal government has brought to his door. Now the freezing process has been successfully applied to all sorts of vegetables, fruits, meats and poultry. Farm marketing may be revolutionized when the equipment goes into general commercial use.
Then there was the problem or encouraging the use or livestock in the farm economy of the South. Another group of specialists worked on that, and as one illustrative result last year in Clarksville. Gal, sixty-one families stored 16,000 pounds of meat and other perishable farm produce in a community refrigerator. It was one of eleven demonstration projects scattered throughout the Tennessee Valley, which serve in all more than 230 families. Rural refrigeration was almost unknown in this area until TVA s research demonstrated that a community cooler could be constructed for a few hundred dollars, and TVA electricity rates made its operation possible at a cost of less than 530 for a year.
These activities are examples to show what we mean in TVA when we talk about a decentralized federal administration. We mean the stimulation and use of state and local agencies, both private and public, and the promotional local energies and skills. We mean a national program; administered so close to the grass roots that it is possible promptly to see and, by enlisting the interest and participation of the citizens affected, to remedy each conflict between the objectives of general regulations and the problems of the individual. I could multiply the examples and describe the experiments in the processing of sorghum, of sweet potatoes, and of cottonseed meal, about the development of electric hay driers, seed harvesters, seeders, threshers, feed grinders, brooders, and the like. It is hardly necessary to add that TVA industrial research is not confined to farm products, but extends as well to new inventions in the processing of regional mineral resources and economic surveys relating to products of the forests. But that is another story, a related story of decentralized industry, too long to include in this space.
ALMOST EVERY ONE OF THESE ACTIVITIES HAS BEEN ADVANCED by cooperation between federal, state, and local agencies TVA has executed dozens of agreements, with state and city governments, with groups of farmers, business men, even sportsmen's clubs. Problems ranging all the way from public health to city planning are being faced by federal and local agencies working together. Let me cite as an example, one demonstration in Guntersville, Ala., a town of about 2,800 people. With the flooding of the reservoir behind Guntersville dam, the city was left at the end of a long, narrow peninsula jutting out into the lake, surrounded on three sides by a broad expanse of water. Extensive readjustments in water supply, sewage disposal, and certain other public; facilities were made necessary; but, on the other hand, excellent opportunities were afforded for the improvement of the physical appearance of the town, and for the development of entirely new facilities for water transportation and recreation. In order to make the most of the advantages of the new situation, whose problems and opportunities TVA had alike created, the Authority contributed funds to the Alabama State Planning Commission for the services of planning consultants and a resident planning engineer in Guntersville Both the Authority and the State Planning Commission have contributed technical advice, the latter agency assuming primary responsibility for directing the development. With this stimulation and technical assistance, an active City Planning Commission has been created. A planning commission ordinance and a comprehensive city zoning ordinance have been adopted to encourage urban growth in an orderly manner, preserving city amenities and property values. The local planning officials not only guide and control the use of private lands within and around the city of Guntersville they also advise with the Authority and are of genuine assistance in helping to develop the most desirable use of the Authority's property in the vicinity. Because the TVA is close to the problems, it is able to make certain that the city will enjoy the maximum advantages incident to the carrying out of a federal program. Its citizens, in cooperation with the federal government, are minimizing the inevitable problems. They are participating partners in the job.
This is the way TVA's program is being carried on today. success is vital to each citizen and to the country whole. And for the future well-being of the people, the experiment in methods of decentralized administration may re to be as important to this country as the stability of physical structures it has built.
The National View
I HAVE DWELT MAINLY ON DECENTRALIZATION AS A METHOD OF channeling the administration of national policies and programs out from the center. But the vitality of democratic decision also depends in large measure upon the extent to which the grass roots can furnish facts and judgment to central authority, so that it may not grow anemic on a of "fundamental principles" and a priori reasoning. And TVA, like the waterway it has created, is not a one traffic artery. A steady stream of ideas and experience, eloped out of actual field conditions and out of the wisdom and creative intelligence of the men and women of the on, moves to the national center.
I have, of course, told only a small part of the story. I e not described the rise of community organizations in 1l sections, nor the hearty way in which men and women in these community groups work together, in a combination of the eighteenth century New England town meeting and a modern business cooperative town. We are all coming to a realization that the test of democracy may prove to be our capacity to create and sustain democratic methods correlative with democratic ends. John Dewey in "Freedom and Culture," wrote:
"The conflict as it concerns the democracy to which our history commits us is within our own institutions and attitudes. It can be won only by extending the application of democratic methods, methods of consultation, persuasion, negotiation, communication, cooperative intelligence, in the task of making our own politics, industry, education, our culture generally, a servant and an evolving manifestation of democratic ideas.... "
So, let TVA be judged not alone by its performance as an electricity yardstick, or as a producer of an improved fertilizer, or as the builder of one of the most extensive systems of water control structures on this continent, but by its failure or its success in, as John Dewey has expressed it, "securing and maintaining an ever increasing release of the powers of human nature, in service of a freedom which is cooperative and a cooperation which is voluntary."