French Industrial Policy

French Industrial Policy

French Industrial Policy

French Industrial Policy

Excerpt

William James Adams

From the Presidency of Franklin D. Roosevelt to that of Jimmy Carter, American norms for the organization of business activity underwent remarkably little change. In most industries, it was argued, government should promote competition. It should do so by enforcing the antitrust laws at home and by advocating liberalization of trade and investment abroad. In those few industries where competition was thought to be undesirable, government was urged to rely on independent commissions to regulate entry and profitability. Although people disagreed about the exact boundary between competition and regulation, neither the intensity nor the profundity of their debate ever sufficed to create a top-priority issue for public action. As late as 1972 any veteran of the New Deal would have felt comfortable in discussions of government's role in the world of business.

During the past decade, however, the United States has experienced structural and macroeconomic imbalance. As a result, many Americans have begun to question traditional governmental approaches to business. Some, sensitive to the problems of bureaucracy and the perversities of regulation, argue that government intervenes too much in the market mechanism. They urge a comprehensive effort to deregulate the economy. Others, confronted by structural unemployment, decaying industrial regions, and rapid technological change, have become disenchanted with reflex reliance on market forces. They advocate new forms of intervention based on the promotion or protection of specific industries. Although fuzzy in definition, and sometimes in content, "industrial policy" is the name now given to such intervention.

In its current phase of fermentation, the debate on government intervention in business has induced the United States to experiment amply with deregulation. In transportation, for example, it has eliminated the Civil Aeronautics Board and curbed the Interstate Commerce Commission. It might even return the old Penn Central railroad to private hands. In finance and telecommunications, deregulation is proceeding less decisively. Nevertheless, it promises to transform its industrial objects dramatically.

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