The Golden Years: From Dominance to Decline
At the end of World War II in 1945, America's steel industry was the most powerful in the world. Its plant capacity was almost double that of all "iron curtain" countries combined, and there was no apparent chance that the devastated facilities in Germany and Japan would ever again rise to challenge American mastery.
Secret collusion is undoubtedly common, but it has its drawbacks and risks, and can hardly be described as the norm toward which a typical oligopolistic industry tends. That norm, it seems clear, is a kind of tacit collusion which reaches its most developed form in what is known as "price leadership."
Paul A. Baron and Paul M. Sweezy
On the eve of the United States' entry into World War II, Henry Luce described the remainder of the twentieth century as "America's Century." By the end of the war Luce's characterization proved accurate. While the rest of the industrial world suffered from the devastation wrought by armed conflict, U.S. industrial might thrived as never before. Fueled by the productive requirements of international conflict, in a four-year period the nation's GNP more than doubled, jumping from $100 billion in 1940 to $210 billion in 1944.1
U.S. hegemony emerged as the dominant international economic characteristic in the period immediately following the war. By 1947, for instance, U.S. industry produced almost 50 percent of the world's manufactured goods. But America's unchallenged economic supremacy threatened to undercut its future success, for domestic producers