The Public Interest

Managing the War Industries

Nicholas Eberstadt

Summer 1984

THE current debate over the merit of an "industrial policy" for the American economy has to date avoided a simple but important fact. Today's "new ideas" about strategic cooperation between governments and business are not untested abstractions. Quite the contrary, they have actually been put into practice for many decades in a large and vital sector of our national economy: the "militaryindustrial complex." Far-reaching collaborations of the public and private sectors in the name of innovation and productivity are standard operating procedure in the armaments business. To the defense planner, federal investments to stimulate technological breakthroughs, government-supported and -guided "structural reorganization" of multibillion dollar markets, direct governmental participation in private companies' design, development, and manufacture of new products, are all quite familiar. If the American government's involvement in directing and channeling the development of our war industries sounds reminiscent of the "nurturing" that Japan's Ministry of International Trade and Industry (MITI) targets at favored industries, this is hardly a coincidence: In an earlier incarnation, Japan's now-fabled MITI was known to American GIs as the Ministry of Munitions.

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