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192 SAIS Review SUMMER-FALL 1994 The paradigmatic failure of classical "Anglo-American" economics to explain the success of extensive planning in East Asian economies, is likewise evident in accounting for some ofrhe failings ofrheAmerican economy in die 1980's. Nowhere, according to the principles of free trade, did die United States hold a more pronounced comparative advantage than in the microchip industry in 1980. The industry was intensely competitive. Firms like Apple, Intel, and Hewlett-Packard employed not only die newest technologies but die newest managerial techniques. They had access to die world's finest designers and engineers. They reinvested profits in research and development. The market was new and booming; the expansion of demand for computer products seemed infinite. The pace of innovation was extraordinary. Microchips were finding application in an extraordinary range of products, from electronic goods to kitchenware to automobiles. Japanese enterprises which challenged this American advantage were not merely rhe benefactors of state planning, they were rhe very creations of it NEC, Toshiba, and Hitachi developed vertically integrated manufacturing capacities, producing their own inputs for their own final products, rhus ignoring the conventional Western conception of the benefits ofspecialization. By 1985 Japanese producers held 90% ofrhe world market share of microchips and were aggressively dumping in die U.S. market Fallows portrays rhe Japanese, Korean and Taiwanese economies as different species from the American one. His description of rheir ability to forgo short-term profits for long-term market share by insuring a sustained access to investable capital goes far to explain their competitive advantage. According to Western "laboratory economics", what they have accomplished should be impossible. Fallows construes this as an indictment offree market economic theory, which he finds characterized by a constraining orthodoxy, and a disinterest in practical application. Its preoccupation lay radier wirh madiematical modeling and problem-solving in which all-inclusive equations hold constant all but a few variables at one time. The author expresses some outrage rhat rhe enigma ofJapanese success has in no way jolted economics in die United States out of this comfortable narrowness. It has elicited no scientific revolution in rhe Kuhnian sense, and Fallows argues rhat it should have. To spark such a revolution seems to be the purpose of Looking at the Sun, and whether or not it suceeds in this, the skillfulness of Mr. Fallows' criticism should assure some reexamination of basic rheoretic assumptions which may very well warrant greater scrutiny rhan rhey have received in recent years. India and the United States: Estranged Democracies. By Dennis Kux. Washington, DC: National Defense University Press, 1993. 514 pp. $26.00/Paperback. Reviewed by Joseph P. Manzi, BA Wesieyan University, MA Johns Hopkins University, PhD Candidate Johns Hopkins University. BOOK REVIEWS 193 Relations between the United States and India over rhe pastfiftyyears have been lukewarm. They have oscillated between euphoric hopes for major cooperation and sullen disappointment when such cooperation failed to materialize. On the surface, rhis instability seems puzzling. As the two largest democracies on rhe planet and offspring of common British political, legal, and linguistic traditions, India and the United States share many political values despite dieit differing cultures. Each nation appeared to offer much to the promotion ofthe other's most loudly vocalized beliefs. During a Cold War ostensibly fought by America to preserve democratic values, folly one half of the people living under elected governments resided widiin Indian borders. For India, a nation desperate for economic development die United States possessed huge reserves of capital and technology for foreign aid and investment While these traits periodically coincided for mutual benefit, no enduring commitments emerged. Few published works have attempted to divine die causes of this curious estrangement With some notable exceptions, most research on Indian-American relations has been conducted by Indian scholars and retired political leaders. Traditionally, American writers have tended to focus upon either the United States' relations widi South Asia as a region or rhe importance of the area to the Cold War competition with the Soviet Union. Further, academics rather rhan diplomats or statesman provide the bulk ofAmerican publications. With the end ofthe Cold War, American writers have begun to consider rhe future importance ofIndia to the United...

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