By Sylvia Nasar N.Y. Times News Service Must commerce among
nations always be a dog eat dog fight for absolute advantage?
Economic Darwinians fear that America's loss of leadership in a
few key industries is the beginning of an irreversible decline in
competitiveness. A more sanguine school, which holds that
industrialized economies will ultimately converge, maintains that
Japan and Germany will catch up with the United States, but not
As it turns out, reality isn't unfolding quite according to
either script, some economists say. While the level of output per
employee in Japan and Germany and the United States has converged
since the 1950s, productivity in individual industries has begun to
Instead of catching up across the board, countries seem to be
specializing in the things they do best. While Japan and Germany
have surged ahead in some industries, the United States has widened
its lead in others and stayed ahead, if by a narrower margin, in
"If you lose one industry, there's no sign you'll lose them
said Edward N. Wolff, an economist at New York University.
"Just because Japan has taken over consumer electronics does not
mean that Japan will triumph in mainframe computers or medical
A book by Wolff and David Dollar, a colleague at the World
Bank, called "Competitiveness, Convergence and International
will be published by MIT Press this fall.
That pattern of specialization, which started to emerge after
the early 1970s, said Dale W. Jorgenson, an economist at Harvard
University, suggests that the United States still stands to gain
from expanded world trade, but that it continues to face the
possibility that trade conflicts will develop
"We can take some of their markets and they can take ours,"
said Jorgenson. "So we will have to stamp out little moves toward
protectionism and make sure our trading partners do too."
Productivity is a handy measure of an industry's competitive
Industries with high levels of labor productivity tend to
export a lot.
"If you're the most efficient country in the world in making
planes, you tend to dominate world aircraft trade," Wolff said.
"High productivity reflects how much investment you've poured into
an industry as well as how sophisticated the technology you have."
For 25 years after World War II, the overall level of
productivity among industrialized countries did converge.
Productivity grew faster in Germany and Japan than in the United
States during the 1950s, 1960s and early 1970s.
"The U.S. was once the dominant economy," said Wolff. "Now it's
the first among equals."
Using output per worker as a yardstick for productivity, the
United States is about 45 percent more efficient than either
Germany or Japan, who are roughly equal.
Of course, using that measure instead of output per hour
understates Germany's efficiency and overstates Japan's because
German workers put in fewer hours on the job than Americans while
their Japanese counterparts put in more.
"Many parts of Japanese businesses operate below United States
standards," said Jorgenson. "Japan has world class factories in
many industries, but getting things to and out of the factory is
incredibly inefficient. …