From: louis@aupair.cs.athabascau.ca (Louis Schmittroth)
Newsgroups: sci.econ
Subject: Re: An American strategy for world trade
Date: 15 Dec 92 01:30:20 GMT
Distribution: na

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

>In <louis.724185334@aupair.cs.athabascau.ca> louis@aupair.cs.athabascau.ca (Louis Schmittroth) writes:

||2.  Establish *something like* the Japanese MITI, the Ministry of
||    International Trade and Industry.  but American in conception 
||    and implementation.

|MITI's greatest success has been in self promotion.  If you look at the
|entire record, not just the advertised successes, you will find that MITI
|has been an abject failure.
|Below, you mention HDTV and microelectronics, let me talk about these two
|further.
|HDTV, seeing an opportunity to further dominate the TV market, MITI pushed
|manufacturers to invest billions in developing several HDTV systems.  These
|systems are analog based since that was the best technology at the time.
|The american companies decided to bide their time.  Now the americans and
|the europeans are designing systems using digital technology that promises
|to blow the pants of the Japanese systems.  The Japanase systems are closer
|to market, but so what.  Their systems were obsolete before they were
|installed and will never be installed anywhere outside of Japan.

If this is indeed the case, and HDTV will be an American success story,
great.  But that is not the message I get from reading Thurow and
Prestowitz.  Prestowitz, "Trading Places," page 491, says "HDTV is the
next wave of television technology.  While plans are already well
advanced for its introduction in Europe and Japan in 1991 [written in
1988], there is nothing beyond research activity in the U.S."

In Thurow, "Head to Head" page 293ff, he says:  "In 1989 and 1990 the
Bush Administration was engaged in an internal debate revolving around
the HDTV: Should the Defense Department subsidize research on HDTV?  
Sadly the debate remained an abstract ideological debate about the
merits of government interference in the market rather than a real
debate over whether HDTV was the place to jump back into consumer
electronics, and if so, how?  The ideological crusaders in the While
House, a troika of John Sunumu, Richard Darman, and Michael Boskin, beat
the advocates of government research subsidies in the Commerce and
Defense departments ..."

You seem to forget the great days of DARPA, when it funded Sutherland
at Lincoln Labs, timesharing at MIT and Berkely, BSD, and DARPANET,
with enormous benefit to American industry.  These are examples of the
kind of "strategic" research and development that an American
counterpart to MITI, whatever the form might be, should be undertaking.
Not interfence in the market, and not directing, but helping American
firms to compete in a New World Order, where the rules are no longer
made in the USA, but made in Europe and Japan.

|Microelectronics.  MITI thought that if Japan were to become the dominant
|player in the DRAM market, they could use the profits and knowledge to
|lever a takeover of the other sectors of the microelectronics markets.
|This did not happen.  At one time, one of the most expensive portions of
|your PC was the memory, now it is almost an after thought.
|The knowledge of how to make faster and cheaper memory chips has led to
|only one thing, faster and cheaper memory chips.  The Japanese were
|unable to take what they learned making DRAM's and apply it to things
|like programmable array's and CPU's.  These high level chips are where
|the value is inside your PC, America leads in these areas, and our lead
|is increasing.
|Meanwhile the Koreans and others are doing to the Japanese, what the Japanese
|did to the US.  They are becoming the low cost producers of commodity
|parts.

Well, I see there is some hope in the semiconductor field, and wonder
how much of the present turnaround is due to Sematech?  I've asked this
before but no one has responded.  Time reported recently that the
efforts of Sematech have indeed been effective.

||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. 
--
Louis Schmittroth louis@cs.athabascau.ca
NW 1/4 18 67 21 W4 Alberta.