Ezra Vogel is the Harvard professor who for almost 10 years in his writings and lectures has warned Americans to try to learn from the Japanese, instead of writing them off as a people succeeding only by copying from the West or through unfair trade practices.
Six years ago in "Japan as Number One: Lessons for America," Vogel wrote that the Japanese had become so modern, efficient and productive that they might outproduce and outperform the United States, which always expects to be at the head of the pack.
That book, as former ambassador to Japan Edwin Reischauer said at the time, would "blow the minds of many Americans" who felt that there was nothing to learn from the Japanese. Now Vogel -- who of course proved to be right -- has just published another sober, and maybe even more important, book called "Comeback" (Simon and Schuster, $17.95). Given the mounting bitterness between Japan and the United States over trade and economic policy, nothing could be more timely.
Although Vogel believes that we can respond (and in some isolated cases, have responded) to the Japanese challenge, he paints a chilling picture of a "noncompetitive, troubled" America in 1990 unless the country follows a new "aggressive" policy to restore a weakened economic base.
A good reporter with an uncanny ability to understand the complicated Japanese mind, Vogel says that the average Japanese sees his country on the rise, while America is slipping, something like Rome in the early stages of its decline. The thrust of the book is that Vogel thinks that's a pretty good assessment.
Vogel's first book was kissed off by Americans who didn't (and still don't) understand Japan and its drive for success and power. This time around, Vogel will be taken more seriously. It gives those of us who consider ourselves free-traders plenty to worry about: the specter of an economy falling hopelessly behind, its biggest manufacturing companies mere marketing "conduits" for goods produced abroad.
In such a milieu, social problems would multiply, crime would grow. Without an "aggressive" industrial policy to counter the trend, Vogel sees a growing protectionism, and mutually hostile feelings between the Japanese and American publics despite governmental efforts here and in Tokyo to patch things up.
His answer: America must meet the competitive challenge America must meet the challenge from Japan, which will get keener, with a national strategy. Harvard professor Ezra Vogel from Japan (which will get keener) with a national strategy that involves government, industry and labor coordination.
Vogel's advocacy of a form of "industrial policy" is bound to be controversial. The phrase "industrial policy" is usually linked with those who are trying to save or protect declining or noncompetitive industries such as steel, but which have political clout. Clearly, that's not Vogel's objective.
Yet, I fear that "Comeback," designed by Vogel to indicate how America can revitalize itself, actually will reinforce protectionist sentiment in Congress among those flacking for steel and other declining industries -- although that is the last thing Vogel wants to do.
Vogel doubts that the American steel and auto industries "can ever regain competitiveness on a large scale." He says other declining industries will go the way of ships, watches, motorbikes, machine tools and consumer electronics. The "real question" he poses (but leaves unanswered) is whether the national interest "requires the rebuilding" of the steel and auto industries.
Vogel goes on to predict that American companies will face an even tougher competitive struggle in computers, communications, satellites, new materials, biotechnology and other areas the Japanese have "targeted for the future." Japan is poised to expand its high-tech and service sectors as it earlier expanded heavy industry, according to Vogel.
If the United States follows a "selective industrial strategy," Vogel holds that all is not lost. His argument is that the Japanese problem won't go away, as some suggest, just by reducing the U.S. budget deficit and thereby producing a better dollar-yen relationship. Because we have been able to hack it in the past "without a national strategy" doesn't mean we can continue that way, he contends. That attitude "ignores the superior flexibility of Japanese institutions, coordinated by government, to adapt more quickly to new opportunities."
In another new book exploring some of the same themes, "The Power Economy" (Little, Brown and Co., $19.95), Bank of America Senior Vice President and chief economist John Oliver Wilson argues that the Big Five powers, including the United States, should adopt "industrial policies that are reasonable and nonprotectionist in nature."
Can the United States do this -- adopt an industrial policy, not to protect steel or autos, which must shrink, but to encourage new industries and assist displaced workers? This is what Vogel and Wilson suggest. It would require the kind of cooperation among nations that the recent fiasco at the Bonn summit suggests will be difficult to achieve.
"As urgent as our problems are, perhaps we should be thankful we are not moving immediately to a national competitive strategy, for we still have a great deal of work to do in forging the consensus that will make it work," Vogel says.
"A new downturn in the economy may well galvanize us into action, and with careful preparation we can make good use of the opportunity. At best, it will take years to chart our new course. If we succeed, Japan and other countries should be thankful that a major pillar of world trade is again securely in place, and we should be thankful to the Japanese for prodding us to launch our comeback."