The cases examined in the four previous chapters tell a story of gradual yet dramatic policy change. Between the 1983 machine tool case and the 1989 policy debate over HDTV, policy makers in Washington discovered the growing potential dangers of defense dependence and sought new remedies to counter them. In some instances, new policy responses such as industry-led consortia were created. In others, efforts to create new institutional mechanisms were rejected.
Despite these differences in outcomes, the episodes also highlighted another consistent trend: learning by policymakers as they sought to address the problem of defense dependence. In the past, policy toward ailing U.S. industries veered between extremes of laissez-faire or blanket protectionism. And, in most cases, trade protection was based on the political power, not the national security significance, of ailing industries.
By the 1980s, many observers reached the conclusion that this stark "either-or" choice was no longer sufficient. Advocates of government intervention sought new methods to justify public action and to develop rigorous criteria for determining industries worthy of support. They also sought new means to support industry without resorting to protectionism. At the same time, many free market advocates realized that sole reliance on market forces could not always offer sufficient protection from potential security threats.
This search for solutions coalesced with the development of industrial policy concepts and strategic trade theory by economists and public policy experts. These concepts offered a potential third path which helped transform U.S. defense industrial base policy.
To put it differently, the 1980s witnessed the collapse of an existing DIB policy monopoly based on the concepts of free trade and nonintervention at home. New ideas have been injected into the policy debate. However, a new institutional structure has not yet replaced the understandings that underpinned earlier policies. The result has