Notes Notes to the Introduction 1. Chalmers Johnson, The Industrial Policy Debate (San Francisco, Cal.: Institute of Contemporary Studies, 1984), p. 2. 2. Stuart Bruchey, Enterprise: The Dynamic Economy of a Free People (Cam- bridge, Mass.: Harvard University Press, 1990), p. 208. 3. B. Guy Peters, American Public Policy: Promise and Performance (Chatham, r-u: Chatham House, 1993), pp.174-5. 4. Adam Smith, Wealth of Nations (New York: Dutton, 1964). 5. David Ricardo, The Principles of Political Economy and Taxation (Lon- don: Dent, 1973). For contemporary neoclassical economists, see: Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962); Jagdish Bhagwati, Lectures: International Trade (Cambridge, Mass.: MIT Press, 1983); Jagdish Bhagwati, Protectionism (Cambridge, Mass.: MIT Press, 1988); Jagdish Bhagwati and Hugh Patrick (eds), Aggressive Unilateralism (Ann Arbor, Mich.: University of Michigan Press, 1990); Jagdish Bhagwati, The World Trading System at Risk (Princeton, NJ: Princeton University Press, 1991). 6. Quoted in Stephen Bailey, Congress Makes a Law (New York: Colum- bia University Press, 1950), p. 6. 7. John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace, 1936). 8. Robert Kuttner, "Economists Really Should Get Out More Often," Business Week, April 24, 1989; Clyde Prestowitz, Alan Tonelson, and Robert Jerome, "The Last Gasp of GATTism," Harvard Business Re- view, March-April 1991, p. 134; Laura D'Andrea Tyson, Who's Bash- ing Whom? Trade Conflict in High-Technology Industries (Washington, DC: Institute for International Economics, 1992), p. 3. 9. John Frendreis and Raymond Tatalovich, The Modern Presidency and Economic Policy (Itasca, IL.: F. E. Peacock Press, 1994), p. 170. 10. Robert B. Reich, The Next American Frontier (New York: Times Books, 1983), p. 233. 11. Johnson, Industrial Policy, p. 8. 12. Quoted in Johnson, ibid., p. 18. 13. Martin and Susan Tolchin, Selling our Security: The Erosion of America's Assets (New York: Alfred A. Knopf, 1992). 14. For discussions of strategic trade theory, see: Paul Krugman, "New Theories of Trade among Industrial Countries," American Economic Review, 73, May 1983; R. W. Jones (ed.), International Trade: Surveys of Theory and Policy (Amsterdam: North-Holland, 1986); Klaus Stegemann, "Policy Rivalry among Industrial States: What Can We Learn from Models of Strategic Trade Policy," International Organiza- tion, 43: 1 (Winter 1989); Helen V. Milner and David B. Yoffie, 241 242 Notes "Between Free Trade and Protectionism: Strategic Trade Policy and a Theory of Corporate Trade Demands," International Organization, 43: 2 (Spring 1989), pp. 239-73. 15. Tyson, Who's Bashing Whom? (Washington, DC: Institute for Interna- tional Economics, 1992), p. 250. 16. "Report and Recommendations of the Senate Republican Task Force on Industrial Competitiveness and International Trade," March 16, 1983, p. 1. 17. US Congress, House Energy and Commerce Committee," Report on HR 4360, reprinted as House Report 98-697, part 2, p. 23, quoted in Robert W. Russell, "Congress and the Proposed Industrial Policy Struc- tures," in Claude Barfield and William Schambra (eds), The Politics of Industrial Policy (Washington, DC: American Enterprise, 1986), pp. 319, 324. Notes to Chapter 1: Steel and Automobiles 1. Paul A. Tiffany, The Decline of American Steel: How Management, Labor, and Government Went Wrong (New York: Oxford University Press, 1988), p. 117. 2. William T. Hogan, Economic History of the Iron and Steel Industry in the United States, 5 vols (Lexington, Mass.: Lexington Books, 1971); Kenneth Warren, The American Steel Industry, 1950-1970, A Geographical Inter- pretation (London: Oxford University Press, 1973); Robert W. Crandall, The US Steel Industry in Recurrent Crisis (Washington, DC: Brookings, 1981); Donald F. Barnett and Louis Schorsch, Steel, Upheaval in a Basic Industry (Cambridge, Mass.: Ballinger, 1983); William Scheurman, The Steel Crisis: The Economics and Politics of a Declining Industry (Westport, CT: Greenwood Press, 1986). 3. "Impromptu Remarks of the President," in AISI Yearbook, 1925 (New York: AISI, 1925), p. 222. 4. Tiffany, Decline of American Steel, p. 85. 5. Edward N. Hurley, "Cooperation and Efficiency in Developing our Foreign Trade," in AISI Yearbook, 1916 (New York: AISI, 1916), p. 192. 6. Gerald T. White, Billions for Defense: Government Financing by the Defense Plant Corporation during World War II (University of Alabama Press, 1980); Richard A. Lauderbaugh, American Steel Makers and the Coming of the Second World War (Ann Arbor, Mich.: University of Michigan Research Press, 1980), pp. 123-4. In 1945, Washington sold off its steel plants to private industry at a fraction of its costs. 7. AlSI, Annual Statistical Report (cited years); Duncan Burn, The Steel Industry, 1939-1959 (Cambridge: Cambridge University Press, 1961), p. 132. 8. AISI, Annual Statistical Report (cited years). 9. The Statistical History of the United States: From Colonial Times to the Notes 243 Present (New York: Basic Books, 1976; Series D 970-85), p. 179. 10. US Senate, 90th Congr., 1st Sess., Committee on Finance, Commit- tee Print, Steel Imports (Washington, DC: Government Printing Office, 1967), pp. 299-304; Gerald Manners, The Changing World Market for Iron Ore, 1950-1980 (Baltimore: Johns Hopkins Press, 1971), p. 99. See also, Robert A. Pollard, European Security and the Origins of the Cold War, 1945-1950 (New York: Columbia University Press, 1985); William Lockwood, The Economic Development ofjapan (Princeton, NJ: Princeton University Press, 1954), pp. 64-77; Chalmers Johnson, MITI and the japanese Miracle: The Growth of Industrial Policy, 1925-1975 (Stanford: Stanford University Press, 1982); William S. Borden, The Pacific Alliance: United States Foreign Economic Policy and Trade Recovery, 1947-1955 (Madison, Wis.: University of Wisconsin Press, 1984), pp. 176-87; David A. Baldwin, Foreign Aid and American Foreign Policy (New York: Praeger, 1966). 11. AISI, Annual Statistical Report (cited years). 12. Otto Eckstein and Gary Fromm, "Steel and Postwar Inflation," Study Paper No.2, US Congress, JEC, 86th Congr., 1st Sess., Materials Pre- pared in Connection with the Study of Employment, Growth, and Prices Levels (Washington, DC: Governing Printing Office, 1959); Bureau of Labor Statistics, US Congress, JEC, 88th Congr., 1st Sess., Hear- ings, Steel Prices, Unit Costs, and Foreign Competition (Washington, DC: Government Printing Office, 1963), p. 35. 13. Walter Adams, "The Steel Industry," in Walter Adams (ed.), The Struc- ture of American Industry, 5th edn (New York: Macmillan, 1977), p. 1l0. 14. Walter Adams and J. B. Dirlam, "Big Steel, Invention and Innova- tion," QJl-arterlyJoumal of Economics, 80 (May 1966), pp. 167-89; Edwin Mansfield, Industrial Research and Technological Innovation (New York: W. W. Norton, 1968), pp. 83-108; Tiffany, Decline of American Stee~ p. 133. 15. US Steel Corporation, Steel and Inflation, Fact vs. Fiction (New York: US Steel Corporation, 1958), pp. 181-5; Manners, Changing World Market for Iron Ore, pp. 24-5. 16. US Congress, JEC, 88th Congress, 1st Sess., Hearings, Steel Prices, Unit Costs, Profits, and Foreign Competition (Washington, DC: Govern- ment Printing Office, 1963), PP. 124-5. 17. Robert Crandall, "Investment and Productivity Growth in the Steel Industry: Some Implications for Industrial Policy," in Walter H. Goldberg (ed.), Ailing Steel: The Transatlantic (btaTTel (New York: St Martin's Press, 1986), p. 193. 18. Tiffany, Decline of American Stee~ p. 116. 19. AISI, Annual Statistical Reports (1965), p. 8. 20. AISI, Annual Statistical Reports (1970); Barnett and Schorsch, Steel, Upheaval in a Basic Industry. 21. Thomas R. Howell et al., Steel and the State: Government's Intervention and Steel's Structural Crisis (Boulder, Colo.: Westview Press, 1988), pp.502-3. 22. Howell, ibid., p. 503. 244 Notes 23. John Holusha, "Why American Steel is Big Again," New York Times, July 21, 1994. 24. Jonathan Hinks, "A Comeback for Big Steel in the US," New York Times, March 31, 1992; John Holusha, "Steel Mini-Mills could Bring Boon or Blood Bath," New York Times, May 30, 1995; John Holusha, "Big Steelmakers Shape Up," New York Times, April 16, 1996. 25. John Rae, The American Automobile Industry (Boston: Twayne, 1984), pp. 18, 17. 26. US Federal Trade Commission, Report on the Motor Vehicle Industry (Washington, DC: Government Printing Office, 1939), pp. 29, 632. 27. Mira Wilkins, "Multinational Automobile Enterprises and Regulation: An Historical Overview," in Douglas H. Ginsberg and William J. Abernathy (eds), Government, Technology, and the Future of the Ameri- can Automobile (New York: McGraw-Hill, 1980), pp. 224-8. 28. Robert Thomas, An Analysis of the Pattern of Growth in the Automobile Industry (New York: Ayer, 1977), p. 324; see also, Rae, American Auto- mobile Industry, pp. 61, 63, 69; Harold C. Katz, The Decline of Competi- tion in the Autombile Industry, 1920-1940 (New York: Arno Press, 1977). 29. Sydney Fine, The Automobile under the Blue Label (Ann Arbor, Mich.: University of Michigan Press, 1963), p. 19. 30. Freedom's Arsenal: The Story of the Automotive Council for War Production (Detroit: Automobile Manufacturers Association, 1950), p. 193. 31. Rae, American Automobile Industry, p. 96. 32. See William Nester, Japanese Industrial Targeting: The Neomercantilist Path to Economic Superpower (New York: St Martin's Press, 1991), pp.99-118. 33. Rae, American Automobile Industy,