Troubled Industries In The United States And Japan

For both the United States and Japan, the changing circumstances of the world economy since the 1970s have brought into sharp focus the need for each country to restructure industry. This book, the outcome of a three year joint project by American and Japanese economists, provides new insights into the subject of industrial restructuring. It compares U.S. and Japanese experiences, with perspectives from economic theory, empirical analyses of anti-dumping, cartels, and resource allocation. Overviews of U.S. and Japanese policies are backed up by careful case studies of the adjustment experiences of selected troubled industries.

Robert M. Uriu analyzes the industrial policy-making process in Japan for industries faced with sudden economic decline. He takes exception to the traditional view that policy bureaucrats in Japan are autonomous and insulated from societal pressures, arguing that the private sector in Japan has been actively involved in developing and implementing industrial policy. After carefully defining his conceptual framework, Uriu presents case studies of four industries: cotton spinning, steelmaking in minimills, synthetic fibers, and ship building, along with less detailed examinations of coal mining, aluminum smelting, paper, and steelmaking in integrated mills. These industries, he suggests, have sought public policies that enable them to manage competition domestically. In particular, they have fostered cartels to control production or capacity levels in an attempt to stabilize their industry's conditions. In textiles, steel, and ships, Uriu focuses on several of the industries most important to Japan's early postwar economic successes, the very ones first to confront the problems of decline and adjustment. Uriu also shows how Japan's policy choices more recently have become constrained by changes in the domestic antitrust environment and in Japan's external relations. In particular, pressures from Japan's trading partners have limited the policy tools available to Tokyo. As a result, industries have experienced increasing difficulties over time in managing competition in the domestic market. Analysts need to integrate domestic and international factors more carefully, Uriu argues, in order to trace more accurately the interactions between industry actors and the policy environment they face.

During World War II, Japanese fighters, such as the famed Zero, were among the most respected and feared combat aircraft in the world. But for decades following the defeat of Japan in 1945, a variety of political and economic factors prevented Japan from developing its own modern national fighter. This changed in the 1980s. Japan began independently developing its first world-class fighter since World War II. After several years of contentious negotiations, the Japanese agreed to work with the United States to cooperatively develop a minimally modified F-16, the FS-X. The new fighter, however, has evolved into a world-class aircraft developed largely by Japanese industry primarily due to errors committed by the U.S. side. By the fall of 1995, fifty years after the end of World War II, the Zero for the 1990s will have made its first flight, catapulting Japan into the elite ranks of nations capable of developing the most advanced weapon systems. In "Troubled Partnership, "Mark Lorell traces the evolution of the FS-X, disclosing the conflicting economic and security objectives advanced by U.S. officials, the flawed U.S. policy of technology reciprocity, and the challenges of international collaboration. Its deep intimacy with the interplay of policy and economy will make this volume of intense interest to political scientists, military studies specialists, historians, and government officials.