The Competition: Dealing with Japan , and: Comeback (review)

Abstract

BOOK REVIEWS 231 The authors also imply that Europe's technological malaise is in truth a failure of management rather than one of science. European managers have been inflexible rather than innovative in their introduction of technology to the marketplace. This is a conclusion with broad implications for European industrial policy: If the problem is management rather than scientific backwardness , the best thing European governments can do is to limit their actions to the creation of an environment that encourages managerial creativity. This is not to deny that governments have a great role to play in promoting new technologies in Europe. But as Feldman's examples illustrate, they have not always performed well in the past. Europe has the capability to be competitive in the future. What is needed by both government and industry, Sharp underscores, is the will to compete. The Competition: Dealing with Japan. By Thomas Pepper, Merit E. Janow, and Jimmy W. Wheeler. New York: Praeger Publishers, 1985. 374 pp. $24.95/cloth. Comeback. By Ezra Vogel. New York: Simon and Schuster, 1985. 320 pp. $17.95/cloth. Reviewed by Michael Friend, M.A. Candidate, SAIS. These days, the only things selling faster than Nissans and Nikons are studies of the Japanese economy and the reasons for its phenomenal success in world markets. Pepper, Janow, and Wheeler's The Competition and Ezra Vogel's Comeback are two such books. What distinguishes them is that, while Vogel couples his analysis of the Japanese economy with recommendations for U.S. planners and businessmen, the authors of The Competition stick to discussing the Japanese success story without identifying the lessons for the United States. The Competition, somewhat misleadingly subtitled Dealing WithJapan, is a sober, nonpolemical analysis of the basis for Japan's international competitiveness . Chapters on theJapanese financial system, the infamous Ministry of International Trade and Industry (MITI), and, perhaps most interesting, a chapter on Japan's declining industries — yes, they exist — are detailed and informative . But the authors shy away from drawing any prescriptions for U.S. policy. Their discussion of the effectiveness ofJapanese neomercantilism shows a naive faith in "interdependence" and "economic cooperation" as the proper U.S. response to Japan's growing trade dominance. The United States, they argue, should not expect the situation to change significantly in the near future and should not take any action which is "primarily a political response to adverse macroeconomic conditions." Nor should the United States attempt to emulate Japanese industrial policies: "Those who argue that the United States should adopt an explicit industrial policy model along Japanese lines should ask themselves whether the adoption of a Japanese model is likely to work in the . United States, given that inJapan itself it no longer works the way it once did." Ezra Vogel finds this answer unsatisfactory. He feels that the United States can and should find lessons in the Japanese experience. Vogel, whose Japan 232 SAIS REVIEW as Number One was one of the earliest and best studies of the ascendantJapanese economy, bases his new book on the idea that the United States can adopt some of the strategies employed so effectively to increase Japanese exports and industry and fashion them into a program for government-business cooperation leading to an American industrial renaissance. He looks at several industrial sectors in both the United States and Japan in which government and business cooperation has been effective both for periods of growth and decline— shipbuilding, machine tools, Kyushu coal mining, telecommunications and computers for Japan, the NASA lunar program, agricultural export promotion, private housing, and North Carolina's Research Triangle for the United States. It is significant that only one of the U.S. cases directly involves international trade, for Vogel's point is that we have yet to bring our resources to bear on the problem of international competitiveness or even to recognize it as a serious problem. There are precedents for effective government-business-labor cooperation in the United States, but this cooperation has not been focused on the questions which have and will determine the future of American competitiveness , for example the development and commercial application of leading-edge technologies. What is needed is a new American attitude toward...