A White House aide yesterday dismissed growing demands for a national industrial policy as "inappropriate" for the American system, and credited Japan's economic successes to superior management, not government programs.
"It is difficult to see how industrial policy can account for the better Japanese management practices," presidential aide Edwin L. Harper told a U.S. Chamber of Commerce lunch audience.
Harper, in charge of policy development in the White House, appeared to be shaping the Republican response to the growing cries from Democrats for a national economic policy, which is developing as a major campaign theme for the 1984 election.
In both the House and Senate, Democrats are pressing studies of industrial policy, as is the AFL-CIO's Industrial Union Department. The Democratic politicians, including many of the presidential hopefuls, are being heavily influenced by a new breed of economic advisers who say a coordinated industrial policy is needed to end America's economic malaise and make the nation more competitive internationally.
"The president believes," Harper said in the Reagan administration's first response to the push for a national industrial policy, "that the marketplace must have the dominant role because it is indeed the dynamic and guiding force in our economy. Government's role should be to build a firm foundation and keep the rules of the game fair."
He said the "heavy reliance on government direction of investment" called for by most proponents of industrial policy runs counter to the basic American suspicion of "big business, big government and big labor" and to the country's preference for the free-market system.
Furthermore, Harper said, "emerging industries" supposed to be the winners under a national industrial policy are likely to end up as losers, since the major smokestack industries believed to be declining--such as steel--have more political clout.
He also said an industrial policy "can easily turn into protectionism" through temporary import restrictions that later become permanent.
Harper said the demands for an industrial policy arose from spreading technological change, low economic growth, America's declining foreign trade position and the perception that Japan--which has an industrial policy--is doing better.
But studies of Japan's machine tool and auto industries, Harper said, show that "better management systems" were more important to their success than government policies. There are enough anecdotes, he continued, to "make us wary of any absolute claims that industrial policy has been the prime reason for Japan's success."
As evidence, he cited a report that Japan's industrial planners tried to persuade Honda not to make cars, which it saw as a declining "sunset" industry.
The White House aide suggested that American industrialists have lagged in adapting to new competitive realities, especially in realizing the importance of overseas sales.
The Japanese, for instance, tailored their cars to fit American consumers' desires while "American auto manufacturers have refused to develop a specialized product line for the Japanese market."