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From: radford@calgary.UUCP (Radford Neal)
Newsgroups: net.politics.theory
Subject: Re: Strange Bedfellows: and a new topic
Message-ID: <605@calgary.UUCP>
Date: Wed, 4-Dec-85 20:41:57 EST
Article-I.D.: calgary.605
Posted: Wed Dec  4 20:41:57 1985
Date-Received: Fri, 6-Dec-85 21:37:30 EST
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Organization: University of Calgary, Calgary, Alberta
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> >So do any "socialists" out there want to defend shoe quotas against the
> >libertarians...
> 
> Heavens, no.  Our trade dilemma is, however, a perfect example of
> the failure of our government's dogmatic non-interventionist philosophy
> and scatter-shot interventionist practice.
> 
> One way to compete successfully with "Japan, Inc" might be to adopt
> a "If you can't lick 'em, join 'em" attitude.  The Japanese seem
> to have found a way to maintain a healthy business climate within
> a larger fabric of national economic planning.  The US "free market"
> philosophy is not merely a myth--it is totally out of sync with
> the reality of the highly interdependent international marketplace.
> By which criterion, incidentally, both new-line libertarianism and
> old-line socialism equally miss the mark.
>
> ken perlow

I assume you favor the government developing an "industrial strategy" or 
some such to deal with the "highly interdependent international marketplace".

Such policies take money away from people and/or industries which are
not favored by the planners and use it to subsidize the favored industries.
Note that they do not, initially at least, *create* any wealth. It is 
therefore not at all obvious that they would help the economy.

The only way they *can* help the economy is if the planners are better at
making investment decisions than private investors are, or if private 
investors have somehow been directed into less profitable ventures by other 
government interventions.

The first does not seem particularly likely, especially given the large
amount of pork-barrel politics which will be laid over the planner's 
decisions before they are implemented.

The second is certainly true to some extent - e.g. mortgage interest
deducibility in the US channels investment into homes rather than industry.
The solution is obvious.

Does anyone know of any studies showing that Japan's MITI or other planning
agencies have actually helped them? Just because they're there doesn't
mean they are responsible for Japan's prosperity.

      Radford Neal