Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-25T08:55:15.542Z Has data issue: false hasContentIssue false
  • English
  • Français

The Effects of State–Societal Arrangements on International Competitiveness: Steel, Motor Vehicles and Semiconductors in the United States, Japan and Western Europe

Published online by Cambridge University Press:  27 January 2009

Jeffrey A. Hart
Get access Rights & Permissions [Opens in a new window]

Extract

Changes in international competitiveness since the Second World War have favoured Germany and Japan over France, the United States and Britain. This applies to competitiveness in general, but is examined here in three specific industries: steel, motor vehicles and semiconductors. Explanations of changes in competitiveness often focus on economic and cultural variables, but an examination of the three industries shows that a better explanation can be found in the way in which each country organizes its state and its society. State-societal arrangements influence competitiveness mainly through their impact on the speed of diffusion of new technologies. The disparate cases of Germany (strong business and labour, weak government) and Japan (strong business and government, weak labour) suggest that there is more than one path to competitiveness. The literature on competitiveness has focused too much on Japan, and therefore on state industrial policies, as the key to increasing competitiveness. The German case shows that increased competitiveness is possible with a relatively weak state, but only if there is a major commitment to upgrading the skill levels of the work force.

Type
Articles
Information
British Journal of Political Science , Volume 22 , Issue 3 , July 1992 , pp. 255 - 300
Copyright
Copyright © Cambridge University Press 1992

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Hart, Jeffrey A., Rival Capitalists: International Competitiveness in the United States, Japan, and Western Europe (Ithaca, NY: Cornell University Press, 1992 forthcoming).Google Scholar

2 The idea of technological transition is taken from a variety of sources including: Kurth, James, ‘The Political Consequences of the Product Cycle: Industrial History and Political Outcomes’, International Organization, 33 (1979), 1–34CrossRefGoogle Scholar; Piore, Michael J. and Sabel, Charles F., The Second Industrial Divide (New York: Basic Books, 1984).Google Scholar

3 The key original works on hegemonic decline are Kindleberger, Charles, The World in Depression, 1929–1939 (Berkeley: University of California Press, 1973)Google Scholar; Krasner, Stephen D., ‘State Power and the Structure of International Trade’, World Politics, 28 (1976), 317–47CrossRefGoogle Scholar; Gilpin, Robert, US Power and the Multinational Corporation (New York: Basic Books, 1975).CrossRefGoogle Scholar More recent discussions of the theory can be found in Gilpin, Robert, The Political Economy of International Relations (Princeton, NJ: Princeton University Press, 1987)CrossRefGoogle Scholar; and Webb, Michael C. and Krasner, Stephen D., ‘Hegemonic Stability Theory: An Empirical Assessment’, Review of International Studies, 15 (1989), 183–98.CrossRefGoogle Scholar

4 I am taking, as a point of departure, the work on hegemonic stability by scholars like Robert Gilpin, Stephen Krasner, Charles Kindleberger, Robert Keohane and others. The idea that variation in state–societal arrangements is tolerated is consistent with John Ruggie's idea of ‘embedded liberalism’. See his ‘International Regimes, Transactions, and Change: Embedded Liberalism in the Post-War Economic Order’, International Organization, 36 (1982), 379–415.CrossRefGoogle Scholar

5 Global Competition: The New Reality, Report of the President's Commission on Industrial Competitiveness, Vol. II (Washington, DC: US Government Printing Office, 1985), p. 6Google Scholar; see also The Cuomo Commission Report: A New American Formula for a Strong Economy (New York: Simon and Schuster, 1988), p. 19Google Scholar; and Cohen, Stephen S. and Zysman, John, Manufacturing Matters: The Myth of the Post-Industrial Economy (New York: Basic Books, 1987), p. 60.Google Scholar

6 For a much lengthier discussion of the variables which explain competitiveness, see Porter, Michael, The Competitive Advantage of Nations (New York: The Free Press, 1990), chap. 3.CrossRefGoogle Scholar

7 ‘Competitiveness is associated with rising living standards, and an upgrading of employment.’ Cohen, and Zysman, , Manufacturing Matters, p. 61.Google Scholar

8 This issue is discussed in Hart, Jeffrey A. and Tyson, Laura, ‘Responding to the Challenge of HDTV’, California Management Review, 31 (1989), 132–45CrossRefGoogle Scholar; Reich, Robert B., ‘Who is Us?’ Harvard Business Review (01–02 1990), 53–64Google Scholar; and Tyson, Laura, ‘They Are Not Us: Why American Ownership Still Matters’, The American Prospect (Winter 1991), 37–49.Google Scholar

9 See Hart, and Tyson, , ‘Responding to the Challenge’, pp. 37–9.Google Scholar For a contrasting view, see Porter, , Competitive Advantage, pp. 6–11.Google Scholar Here Porter argues that national competitiveness is either meaningless or simply a proxy for productivity. Porter does not accept the idea that some industries may be economically strategic. He notes, however, the tendency of firms in any given nation to be competitive in clusters of related industries.

10 The logic behind this last measure is that quality differentials between domestic products and imports will be indicated by low price elasticities of imports. See Global Competition: The New Reality, p. 8Google Scholar; and Cohen, and Zysman, , Manufacturing Matters, pp. 61 and 68.Google Scholar

11 Porter, , Competitive Advantage, p. 6.Google Scholar

12 The trade surplus from exports of petroleum in Britain (which ended in 1983) complicates using the trade balance as a measure of the competitiveness of Britain.

13 Scott, Bruce R., ‘National Strategies: Key to International Competition’, in Scott, Bruce R. and Lodge, George C., eds, US Competitiveness in the World Economy (Boston, Mass.: Harvard Business School Press, 1985), p. 27.Google Scholar

14 Dertouzos, Michael L., Lester, Richard K., Solow, Robert M. and the MIT Commission on Industrial Productivity, Made in America: Regaining the Productive Edge (Cambridge, Mass.: MIT Press, 1989), p. 31.Google Scholar

15 Cohen, and Zysman, , Manufacturing Matters, p. 67.Google Scholar Cohen and Zysman cite the following source: Kremp, Elizabeth and Mistral, Jacques, ‘Commerce exterieur americain: d'où vient, où va le déficit?’ Economie prospective Internationale, 22 (1985), 5–41.Google Scholar

16 Borrus, Michael, Millstein, James and Zysman, John, International Competition in Advanced Industrial Sectors: Trade and Development in the Semiconductor Industry (Washington, DC: Joint Economic Committee of Congress, 1982), p. 106.Google Scholar

17 Bylinsky, Gene, ‘Japan's Ominous Chip Victory’, Fortune, 14 12 1981, p. 55.Google Scholar

18 Dataquest data presented by Procassini, Andrew A., President of the Semiconductor Industry Association, at Stanford University, on 21 10 1988.Google Scholar

19 All data cited in this paragraph are from the US Industrial Outlook (Washington, DC: United States Government Printing Office, 1988 and 1989).Google Scholar

20 US Industrial Outlook.

21 MITI data from the census of manufacturers as cited in Facts and Figures on the Japanese Electronics Industry (Tokyo: Electronic Industries Association of Japan, 1988), p. 29.Google Scholar These figures include employment in the manufacturing of all types of electronic components and systems and not just employment in semiconductor manufacturing.

22 Eurostat, , Industrial Production: Quarterly Statistics, 3rd quarter (Luxembourg: Eurostat, 1990), p. 173.Google Scholar

23 Inmos was sold to SGS-Thomson, a Franco-Italian semiconductor firm, in 1989.

24 For a more complete description and analysis of these data, see Hart, Jeffrey A., ‘Crisis Management and the Institutionalization of Corporatist Bargaining Mechanisms’, paper delivered at the Conference of Europeanists of the Council for European Studies, Washington, DC, 10 1985.Google Scholar

25 For a convincing argument that agricultural groups need to be included in descriptions of social dynamics in earlier historical periods, see Rogowski, Ronald, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (Princeton, NJ: Princeton University Press, 1989).Google Scholar

26 The discussion of the concepts of state and civil society in this work must, by necessity, be brief to the point of caricature for those who are familiar with the vast literature on this subject. For more lengthy discussions, see Badie, Bertrand and Birnbaum, Pierre, Sociologie de l'État (Paris: Bernard Grasset, 1979)Google Scholar; Carnoy, Martin, The State and Political Theory (Princeton, NJ: Princeton University Press, 1984)CrossRefGoogle Scholar; Nordlinger, Eric A., On the Autonomy of the Democratic State (Cambridge, Mass.: Harvard University Press, 1981)Google Scholar; Bendix, Reinhard, ed., State and Society (Boston, Mass: Little, Brown, 1968)Google Scholar; Tilly, Charles, ed., The Formation of National States in Western Europe (Princeton, NJ: Princeton University Press, 1975)Google Scholar; Hall, John A. and Ikenberry, G. John, The State (Minneapolis: University of Minnesota Press, 1989)Google Scholar; and Stepan, Alfred C., The State and Society: Peru in Comparative Perspective (Princeton, NJ: Princeton University Press, 1978).Google Scholar

27 See Held, David and Krieger, Joel, ‘Theories of the State: Some Competing Claims’, in Bornstein, Stephen, Held, David and Krieger, Joel, eds, The State in Capitalist Europe: A Casebook (Winchester, Mass.: Allen & Unwin, 1984).Google Scholar

28 I owe this formulation of the fascist ideal to Kasza, Gregory, Administered Mass Organizations (forthcoming).Google Scholar

29 A very clear statement of this ideal is in Streeck, Wolfgang and Schmitter, Philippe C., ‘Community, Market, State – and Associations? The Prospective Contribution of Interest Governance to Social Order’, in Streeck, Wolfgang and Schmitter, Philippe C., eds, Private Interest Government: Beyond Market and State (Beverly Hills, Calif.: Sage, 1985), p. 10.Google Scholar See also Lehmbruch, Gerhard, ‘Introduction: Neocorporatism in Comparative Perspective’, in Lehmbruch, Gerhard and Schmitter, Philippe C., eds, Patterns in Corporatist Policy Making (Beverly Hills, Calif.: Sage, 1982).Google Scholar

30 On this subject, see Ikenberry, G. John, ‘Conclusion: An Institutional Approach to American Foreign Economic Policy’, in Ikenberry, G. John, Lake, David A. and Mastanduno, Michael, eds, The State and American Foreign Economic Policy (Ithaca, NY: Cornell University Press, 1988), pp. 223–5Google Scholar; and Krasner, Stephen, ‘Approaches to the State: Alternative Conceptions and Historical Dynamics’, Comparative Politics, 16 (1984), 223–46, at p. 234.CrossRefGoogle Scholar

31 The works that inspired this formulation are Schonfield, Andrew, Modern Capitalism (London: Oxford University Press, 1965)Google Scholar; Katzenstein, Peter, ed., Between Power and Plenty (Madison: University of Wisconsin Press, 1978)Google Scholar; Zysman, John, Governments, Markets, and Growth; Financial Systems and the Politics of Industrial Change (Ithaca, NY: Cornell University Press, 1983)Google Scholar; and Hall, Peter, Governing the Economy: The Politics of State Intervention in Britain and France (New York: Oxford University Press, 1986).Google Scholar

32 A peak association is an association that aspires to represent all organizations of a certain type (e.g., businesses or labour unions) in a given society. Examples of business peak associations are the US Chamber of Commerce, the Japanese Keidanren and the German Bundesverein der Deutschen Industrie. Examples of labour peak associations are the US AFL–CIO and the German Deutsche Gewerkschaftsbund.

33 Lynn, Leonard H., How Japan Innovates: A Comparison with the United States in the Case of Oxygen Steelmaking (Boulder, Colo.: Westview, 1982), p. 23.Google Scholar

34 Together with Britain and the Netherlands, the United States imposed an embargo of iron ore and scrap exports to Japan in July 1941 after the takeover of Indo-China. See Kennedy, Paul, The Rise of and Fall of the Great Powers (New York: Random House, 1987), p. 303.Google Scholar

35 Interview materials.

36 ‘Greenfield’ means that no previous facility was on the site. ‘Brownfield’ means that a previous facility was modernized or renovated. For a discussion of this issue, see Magaziner, Ira C. and Reich, Robert B., Minding America's Business: The Decline and Rise of the American Economy (New York: Vintage Books, 1983), chap. 13.Google Scholar

37 The best single work on this subject is Womack, James P., Jones, Daniel T. and Roos, Daniel, The Machine that Changed the World: The Story of Lean Production (New York: Harper Collins, 1990).Google Scholar

38 See, for example, Streeck, Wolfgang and Hoff, Andreas, ‘Industrial Relations and Structural Change in the International Automobile Industry’, working paper, International Institute of Management, Berlin, 08 1981.Google Scholar

39 The best sources of information on these matters are: Braun, Ernest and Macdonald, Stuart, Revolution in Miniature: The History and Impact of Semiconductor Electronics, 2nd edn (New York: Cambridge University Press, 1982)Google Scholar; Borrus, Michael, Competing for Control: America's Stake in Microelectronics (Cambridge, Mass.: Ballinger, 1988)Google Scholar; and Gilder, George, Microcosm: The Quantum Revolution in Economics and Technology (New York: Simon and Schuster, 1989).Google Scholar Gilder provides an excellent bibliography on this subject on pp. 385–402.

40 For more complete summaries of the results of neo-classical trade theories, see Learner, Edward, Sources of International Comparative Advantage: Theory and Evidence (Cambridge, Mass.: MIT Press, 1984), chaps. 1–2Google Scholar; and Helpman, Elhanan and Krugman, Paul R., Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (Cambridge, Mass.: MIT Press, 1985), chap. 1.Google Scholar

41 See, for example, Neary, J. Peter, ‘Intersectoral Capital Mobility, Wage Stickiness, and the Case for Adjustment Assistance’, in Bhagwati, Jagdish N., ed., Import Competition and Response (Chicago: University of Chicago Press, 1982)Google Scholar; and Tarr, David G. and Morkre, Morris E., Aggregate Costs to the United States of Tariffs and Quotas on Imports (Washington, DC: Federal Trade Commission, 12 1984).Google Scholar

42 For a review of the literature on intra-industry trade, see Helpman, Elhanan, ‘Increasing Returns, Imperfect Markets, and Trade Theory’, in Jones, Ronald W. and Kenen, Peter B., eds, Handbook of International Economics (Amsterdam: North-Holland, 1982).Google Scholar

43 See industry studies A through H in Dertouzos, Lester and Solow, Made in America.

44 This argument can be found in Dertouzos, Lester, and Solow, , Made in America, pp. 35–9.Google Scholar The authors of this work argue that macroeconomic factors alone cannot explain shifts in competitiveness.

45 See, for example, Bergsten, C. Fred and Cline, William R., The United States–Japan Economic Problem (Washington, DC: Institute for International Economics, 10 1985 and revised 01 1987).Google Scholar

46 Dertouzos, , Lester, and Solow, , Made in America, p. 34.Google Scholar

47 Bergsten, Fred, ed., International Adjustment in Finance: Lessons of 1985 through 1990 (Washington, DC: Institute of International Economics, 1991).Google Scholar

48 Jeffrey Frankel and Catharine Rockett argue that when policy makers do not agree on a model for the effects of macroeconomic policies on performance, then international co-ordination actually makes performance worse than it would have been in the absence of co-ordination. See Frankel, Jeffrey and Rockett, Catharine, ‘International Macroeconomic Policy Coordination: When Policymakers Do Not Agree on the True Model’, American Economic Review, 78 (1988), 318–40.Google Scholar

49 Lodge, George C., ‘Introduction: Ideology and Country Analysis’, in Lodge, George C. and Vogel, Ezra, eds, Ideology and National Competitiveness (Boston, Mass.: Harvard Business School Press, 1987), pp. 2–3.Google Scholar

50 Vogel, Ezra F., ‘Conclusion’, in Lodge and Vogel, Ideology, p. 305.Google Scholar

51 A useful discussion of statist approaches can be found in Ikenberry, G. John, Lake, David A. and Mastanduno, Michael, ‘Introduction: Approaches to Explaining American Foreign Economic Policy’Google Scholar, in Ikenberry, , Lake, and Mastanduno, , eds, The State and American Foreign Economic Policy, pp. 9–14.Google Scholar

52 Johnson, Chalmers, MITI and the Japanese Economic Miracle: The Growth of Industrial Policy, 1925–1975 (Palo Alto, Calif: Stanford University Press, 1982).Google Scholar

53 Johnson, , MITI and the Japanese Economic Miracle, p. 31.Google Scholar

54 For an example of this argument, see Zysman, John and Tyson, Laura, ‘American Industry in International Competition’, in Zysman, John and Tyson, Laura, eds, American Industry in International Competition (Ithaca, NY: Cornell University Press, 1983).Google Scholar

55 Hall, , Governing the Economy, p. 17.Google Scholar

56 See, for example, Samuels, Richard, The Business of the Japanese State: Energy Markets in Comparative and Historical Perspective (Ithaca, NY: Cornell University Press, 1987), p. 8.Google Scholar Johnson acknowledges this in the final chapter of MITI and the Japanese Economic Miracle, p. 312.Google Scholar

57 See, for example, Katzenstein, Peter, Small States in World Markets: Industrial Policy in Europe (Ithaca, NY: Cornell University Press, 1985), chaps 3–4.Google Scholar

58 See Hart, Jeffrey A., ‘Crisis Management’.Google Scholar

59 All of the following recent works use the coalitional approach: Gourevitch, Peter Alexis, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, NY: Cornell University Press, 1986)Google Scholar; Rogowski, , Commerce and CoalitionsGoogle Scholar; Ferguson, Thomas, ‘From Normalcy to New Deal: Industrial Structure, Party Competition, and American Public Policy in the Great Depression’, International Organization, 38 (1984): 41–94CrossRefGoogle Scholar; and Frieden, Jeffry, ‘Sectoral Conflict and US Foreign Economic Policy’Google Scholar, in Ikenberry, , Lake, and Mastanduno, , eds, The State and American Foreign Policy.Google Scholar The coalitional approach is implicit in Theda Skocpol, States and Social Revolutions: A Comparative Analysis of France, Russia, and China (New York: Cambridge University Press, 1979)Google Scholar, but since Skocpol includes the state as an actor along with groups in civil society, her approach is more consistent with the state-societal approach used here.

60 Ikenberry, , ‘Conclusion’Google Scholar, in Ikenberry, , Lake, and Mastanduno, , eds, The State and American Foreign Policy, p. 223.Google Scholar The state–societal arrangements approach is similar to the institutional approach that Ikenberry advocates, but differs in its focus on the distribution of power among the state and two specific social groups – business and organized labour – as a key to understanding state–societal institutions. In this respect, the state-societal arrangements approach is an attempt to build on the strengths of the statist, neo-corporatist, coalitional and institutional approaches, without inheriting their weaknesses.

61 This was the ‘old’ Nippon Steel, the dominant steel firm created by the military regime in 1934, as opposed to the ‘new’ Nippon Steel that was created by the merger of Fuji and Yawata Steel in 1970.