REPRISING MICHAEL PORTER POST

 

Thursday, April 28, 2011

RE PAIN AT THE PUMP? NYT EDITORIAL WE NEED MORE globalism A JAPANESE PLANT STRUGGLES TO PRODUCE A CRITICAL AUTO PART

These gurus, Porter etc,  want us to be better able 'to compete globally', with smart energy.


Porter gave us that classic of global market capitalism The Competitive Advantage of Nations, with a bunch of illuminating diamonds........ 


With some of Porter's schema, could a smart government policy pick winners? (If not, then what is the point anyway?) 


Nothing rational, based on his insights (but, re promoting domestic industrial and commercial export/import substitition; rather than globalistic initiatives), nothing rational, has ever been tried here, can be tried here now, if ever.


I will give the example of why such a rational policy is desperately needed in this ever so fragile global economy, also from the NYT today:


' A Japanese Plant Struggles To Produce A Critical Auto Part '


Apparently this one globalist bottleneck is holding up world auto production in many countries at once. 


Great entrepreneurial planning and thinking going on here.


Terms search many terms here.


Here is a reference to Porter in Thurston's rant:

As our tariffs dropped, American makers of this or that either went out of business or, like me, wisely high tailed it.[1]

 Foreign subs, more than FHA/VHA subsidies or the GI bill, caused deindustrialization and urban decline. 

Many have argued that American firms just weren’t creative or competitive enough.[2] Although maybe true, especially for my firm, trade deals reduced American firms’ chances for survival, even boosted foreign competition. As a result, American firms’ multinational sides had to speed up to compete with trade breaks to lower cost foreigners.[3]

  Absence of an industrial policy, or even a meaning for ‘competitiveness’ as a basis for one, have lessened chances for domestic firms.[4]          

Urban redev efforts were usually paltry local side shows, swimming upstream against global site-competition, even with fed dough.[5]

---

[1] Eckes; Prestowitz; Bluestone; Harrison; Jane Jacobs,Cities and the Wealth of Nations, Vintage, 1985, p. 167.

[2] Good arguments can also be made for incentivized domestic competition, and greater antitrust scrutiny, not just for economic reasons, but for security.

[3] N. Glickman, D. Woodward, The New Competitors, Basic Books, 1989. See especially Ch. 6, “The Domestic Effects of American Investment Abroad.”

[4] See especially Prestowitz; Michael Porter, The Competitive Advantage Of Nations, Free Press, 1990, xii. Unfortunately, Porter has the usual ‘economics’ discipline blinders, going in. He had been selected for the ‘President’s Commission on Industrial Competitiveness.’ His views, in the present context, are best summarized in Ch. 12, p. 617.

As one might imagine, he is not a fan of import substitution, or managed trade. Yet, he says things like: “As a starting point, a nation must identify those industries where its factor advantages today provide some competitive advantage but where other determinants of national advantage are also actually, or potentially, present.” p. 677. (One good antidote for Porteris Johnson, Japan: Who Governs, e.g., p. 99.)

[5] Eckes.