From: louis@aupair.cs.athabascau.ca (Louis Schmittroth)
Newsgroups: sci.econ
Subject: Re: An American strategy for world trade
Date: 16 Dec 92 17:02:56 GMT
Distribution: na

mwilson@ncratl.AtlantaGA.NCR.COM (Mark Wilson) writes:


|And meanwhile back on the farm.  While the government was debating 
|how it should interfere in the HDTV development, private businesses went
|ahead and developed it on their own.

Meanwhile the world, that is Europe and Japan will continue on their
merry way of "cooperative capitalism," which allows and even encourages
cooperation between private or semi-private companies, and the US rides
off into the sunset with the Lone Ranger style of capitalism.  Regarding
HDTV, here are some questions:

1. Will an American firm ever sell an HDTV system in the Japanese
   market?  Please note that when the US had TV technology all to
   itself, and production costs were a fraction of those in Japan --
   that would be late 50s and during the 60s, not a single American set
   was sold in the Japanese market.  Even with superior technology and
   cheaper (much cheaper) prices, there was not market presence.  They
   were kept out by a combination of government "interference" and
   keiretsu collaboration.  Reference:  Prestowitz.
2. Will the Japanese manufacturers dominate the American market or will
   the Europeans?  Or are you willing to predict any share for American
   firms employing Americans in the United States?

>The best thing that the government can do to help business is to set up
>an environment in which business can proseper and then get out of the way.
>Such as investment and R&D credits.
         ^^^^^^^^^^^^^^^^^^^^^^^^^^
I agree with investments and R&D credits, but they should be aimed at
creating jobs _in the US_.  

>|Well, I see there is some hope in the semiconductor field, and wonder
>|how much of the present turnaround is due to Sematech?

>None.  Sematech is a project that has absorbed a few billion in revenue
>to create a few million in results.  All of the major participants have
>either pulled out or are seriously considering pulling out.

I have no way of refuting this, living as I do in the bush of northern
Alberta, but I do get Time, and a recent issue mightily contradicts what
you say.  I threw the issue away.  I would be interested in getting some
references that I can read on this issue.  What have you read that leads
you to this statement of a "few billions" wasted.  

>|||5.  Put some rules on all foreign investment.  Welcome it, but not at
>|||    the expense of US jobs.

>||How do you think foreign investment hurts US jobs.

>|Thurow says that so far the Japanese investment in the US has caused a 
>|net loss of 49,000 jobs.  When the Toyota plant was built in Kentucky
>|the general contractor was the construction firm in the Toyota keiretsu,
>|suppliers were brought in from Japan. 

>This makes no sense to me.  Is Thurow trying to claim that fewer jobs
>would have been lost if we had instead imported the cars, pre-assembled
>from Japan

I am not sure, but he likely is saying, compared to those produced in
American owned facilities either in Canada or the US.  BTW the
Canada-US Auto Pact is the kind of thing that you will see more of
inthe future, not "free trade" but managed trade.  When I buy a car
made in an American plant, I know that I am not causing  job losses in
Canadian plants, since there is a quid pro quo.  Japanese transplants
in the US or Canada on the other hand import a significant fraction of
their components, including all of the most sophisticated parts.  The
R&D, engineering, is Japanese, eroding the skills pool of the US.
Japanese transplants import 4 times per worker as much as domestic
firms.

Let me pose a question to you:  Do you see any role for a national
strategy for world trade?  I mean of course a strategy for the US,
and almost by default for Canada.  1992 is not 1952.  The rules have
changed.  What Thurow calls "commuitarian capitalism" as practiced by
the Germans and Japanese has won.  Cowboy type, tall in the saddle
capitalism, profit-maximizing at all costs, is dead.
--
Louis Schmittroth louis@cs.athabascau.ca
NW 1/4 18 67 21 W4 Alberta.  
Newsgroups: sci.econ