|
|
|
| Current Issue |
|
|
| Resources |
|
|
|
Is Trade a Battlefield?
| Article
# : |
20473 |
|
|
Section : |
BOOK WORLD
|
| Issue
Date : |
5 / 1992 |
2,953 Words |
| Author
: |
Alan Reynolds
Alan Reynolds is director of economic research at the Hudson
Institute, Indianapolis, Indiana. |
HEAD TO HEAD
The Coming Economic Battle among Japan, Europe, and America
Lester C. Thurow
New York: William Morrow & Co., 1992
325 pp., $25.00
The subtitle "The coming economic battle among Japan, Europe, and America" aptly describes the theme of Lester Thurow's latest book, Head to Head. By 1993 an economic common market will be formed by many Western European countries, whose combined output is already larger than that of the United States, and will be larger still if the European Community embraces Eastern Europe. Sheer size, according to Thurow, will let Europe set the rules of the game regarding world trade. Japan's advantage is different. Japan is said to be more "communitarian" than the United States, with people working as a team to "build an empire," even when that means accepting low living standards and low profits. The United States, by contrast, is said to be too concerned with current consumption and short-term profits, selling off assets and neglecting the future.
If we begin by assuming that the United States has not been doing well in world trade or manufacturing, as the author would like us to, then it would follow that we might learn a lot from Japan and Europe. What are the foreign practices that the author most admires?
The Japanese secret is to be found in the fact that they have tapped a universal human desire "to belong to an empire, to conquer neighboring empires." Armies clearly fulfill some fundamental human needs. "Humans are individuals, but they are also herd animals." People obey and sacrifice because they wish to join.
If Japan were really like that, it is hard to imagine that American workers would want to emulate such an obedient, self-sacrificing herd. Actually, Japanese auto companies, among others, are finding it increasingly difficult to attract and retain young workers, which is one reason they built their best new plants in the United States. There may indeed be more company loyalty in the 30 percent of Japanese firms that offer lifetime job security, but this is not due to some mysterious herd instinct or lust for imperial conquest. Instead, the benefits of secure employment in cyclical industries are a result of paying 25-50 percent of salary in the form of biannual bonuses, which vary with the profitability of the firm. Such profit sharing makes labor costs very flexible, so that firms can
...
Read Full Article
Look for this article in Ask.com
|
|
