In the post-World War II period, the United States built economic bridges which spanned the globe.
America was the apostle of a "free market" economy in which U.S. commodities, products, capital, credit and technology could move easily abroad under the auspices of multinational companies.
The vast global structure created during this period is now a central part of the world economy. U.S. com panies have $150 billion invested overseas in a business empire that annually generates $500 billion in sales and $20 billion in profits.
Yet today, the net benefits to the United States from this system are questionable.
All that is certain is that the United States is deeply involved in an international economic game in which most nations now play by different rules than its own -- often to the detriment of American workers and the U.S. economy.
America is experiencing doubledigit inflation, runs a chronic trade deficit and has a devalued dollar. U.S. technology is falling behind that of Japan and Europe in many key areas.
Employment is declining in basic industries in the United States. Foreignmade products are flooding the country. Prices of imported raw materials, on which the country's industrial machine depend, are rising.
"The United States is on its way to becoming another low-growth country with tolerable living standards -- like Uruguay or England." a World Bank official remarked sarcastically in painting a discouraging picture of the nation's future.
The rubber and tire industry is a case in point.
American tire companies have lost the technological lead to a French company, Michelin.
The United States as a result now inports about $1 billion worth of foreign ares annually, compared with a negligle amount only 10 years ago.
U.S. tire output in 1978 was no higher than in 1973, and the number of jobs in the U.S. tire industry has been declining.
Since April 1975, 5,600 U.S. tire plant workers have been declared eligible for federal retraining, money and other benefits under a law that authorizes such help for workers who have lost their jobs because of foreign imports. Paradoxically, the same federal government has provided $80 million in loans and guarantees through the Export-Import Bank to the U.S. tire multinationals for construction of tire plants abroad.
The United States also must import and there is no cheap, effective synthetic substitute for natural rubber in today's high-performance tires.
Most of the five dominant American tire companies, however have adjusted fairly smoothly to these new realities. The diversity and fiexibility of these companies have been a buffer against disaster.
Goodyear, the world's largest tire company, has taken up the slack from stagnating U.S. growth with increased sales overseas. Its worldwide sales in 1978 exceeded $7 billion for the first time and its foreign earnings increased 80 percent to $66 million. Uniroyal, Goodrich and General Tire have diversified into chemicals and other fields.
It is not the American-based multinational tire companies which have borne the brunt of the adjustment to this new world economic order. It is the United States. The companies operate with international balance sheets; the United States does not.
This situation, which does not show any signs of being permanently reversed by President Carter's economic policies raises fundamental questions about the way the United States defends its national economic interests.
Many governments promote their economic interests today in ways that are alien to the United States. The Japanese government unabashedly subsidizes and protects its domestic industry. European governments layishly support industrial research and development, and erect high barriers against American farm products.
The huge Japanese company Bridgestone is selling tires for heavy earth-moving vehicles in the United States at $100 to $200 apiece below the price of comparable American-made tires. Industry sources say Bridge-stone could not sell those tires in the United States at that price without Japanese government subsidies.
The structure of the tire industry in Japan illustrates the effectiveness of what has come to be known as "Japan Inc." --the country's interlocking government-corporate system.
The Japanese tire market is protected against imports by high tariffs and subsidies to the local the companies.
Goodyear, Firestone and Goodrich were only able to get into the Japanese market by purchasing minority interests in Bridgestone. Ontsu and Yokohama tire companies respectively.
The American companies, as a result, provide technology to the Japanese firms. In return, the Japanese companies allocate a share of their domestic production to the three Akron companies, which then sell the tires in Japan under American trademarks.
The end result of this is that while the U.S. multinationals get a foot inside the lucrative Japanese market, American-made tires are kept out of Japan and Japanese companies get U.S. technology.
Japanese companies, in turn, use this technology to make quality tires for export. including export to the United States.
The competitive edge that the "Japan Inc." systems gives Japanese companies is illustrated by Japan's tire and automotive operations in Thailand.
When Japan's Bridgestone Co. built its Thai plant in 1968, Firestone was already in business there and Goodyear also has a plant under construction. Today, Bridgestone is number one in Thailand with almost 40 percent of the market.
Bridgestone gets its nylon tire fabric from the local plant of the huge Japanese Mitsubishi trading house, whose chairman is on Bridgestone's board of directors. Bridgestone's largest customer in Thailand is another Japanese firm, Isuzo Motors. And Bridgestone's main source of synthetic rubber is yet another Japanese company in which Bridgestone has an interest.
Although Japan's labor productivity has been rising, some U.S. industrialists dispute the view that productivity accounts for Japan's phenomenal success in the international marketplace.
"There is simply no evidence to support that belief," says board chairman John J. Nevin of the Zenith Radio Corp. "The explanation lies in advantages Japanese manufacturers have obtained from tax rebates and from their continued ability to violate U.S. antidumping, customs fraud and antitrust laws."
But Japan is not an isolated example of a case where a government intervenes in support of local industries. The French government in the 1960s forced Goodyear to go into partnership with Michelin in synthetic rubber manufacturing as a condition for allowing Goodyear to expand its synthetic rubber facilities in Le Havre. Michelin thus gained access to advanced American technology for making polyisotrenic synthetic rubber.
At the same time, the example presented by the Organization of Petroleum Exporting Countries has inspired developing countries to move more forcefully to control and exploit foreign companies based on their soil.
The Brazilian government has been a leader in devising administrative controls, inducements and penalties that force multinationals to work in Brazil's interest.
Brazil and Mexico -- countries rich in resources and endowed with alluring potential markets -- are economic powerhouses which can dictate terms to multinantional companies anxious to do business with them.
It is only recently, however, that attention has begun to focus on the impact of the multinationals' activities in the developing countries on the United States.
In 1977, foreign affiliates of U.S. companies generated dividends and interest of $19.8 billion, and another $3.7 billion in royalties and technical fees.
A substantial part of that $23.5 billion was not returned to the United States. Some $7.3 billion was reinvested abroad, and an unknown amount was left overseas to finance imports, to be reinvested in European bonds, or to sit in offshore banks and tax shelters.
Another $4.7 billion flowed out of the United States to foreign affiliates as loans or as capital for new expansion.
Congress, ironically, has repeatedly refused to repeal the law that permits multinationals to defer U.S. taxes on substantial amounts of their foreign earnings, despite support from the Senate and from Democratic administrations for such repeal.
Some critics of the multinationals in the U.S. labor movement also argue that if American overseas affiliates and subsidiaries were not selling more than $500 billion in merchandise a year, more products made by American workers in the United States would be exported.
"The export of $31 billion in capital during the 1960s resulted in not fewer than 3 million and as many as four million jobs foregone in the United States," worte Seymour Melman in his book "The Permanent War Economy."
Businessmen, on the other hand, contend that the country would not be as well off today if U.S. companies had not expanded all over the world in the 1950s and 1960s.
They point out that there are many intangible benefits accruing to consumers from America's open market system, and from the access that multinational companies have provided to vital raw materials and foreign customers. Yet, in this allegedly open economy, Americans did not get the benefits of the steel-belted radial tire for nearly a decade after Europeans did.
Experts argue that the United States must not respond to the present situation by espousing protectionism -- a policy that wrecked the international economy in the late 1920s.
But they say that fundamental policy adjustments have become an urgent necessity.
"We've had a transformation, but U.S. tax, antitrust, research and investment policy is still based on national horizons," says economist Ronald Muller.
The Carter administration is presently fighting in international negotiations in Geneva for more relaxed worldwide trade policies, including moderation of the trade controls imposed by debeloping countries.
But even if trade liberalization were to reverse this trend -- a prospect that seems unlikely -- the United States economy faces serious challenges.
Technological superiority long fueled American economic growth, high productivity and high wages.
Today, the United States has become a net importer of manufactured goods and the continued erosion of the U.S. position abroad seems likely to continue.
As a result, there are calls for the government to aid industrial technological development under ground rules that assure that the benefits go to U.S. consumers and workers.
Some note that U.S. government aid of this kind would not be unprecedented.
Since 1933, the government has heavily subsidized U.S. agriculture with research money, price supports, aid to farmers, wheat export subsidies, and foreign aid programs that sent billions of dollars of unsold grain surpluses abroad. U.S. agriculture was promoted by the government -- sometimes with all the ruthlessness that "Japan Inc." practices abroad today.
The government has also subsidized the arms industry through defense contracts.
Today arms and grain are two of the most formidable pillars of a tarnished American economic order, a fact that must give pause to the remaining American apostles of free market ideology.