Beyond the City Limits: Urban Policy and Economics Restructuring in Comparative Perspective

3. Industrial Restructuring, State Intervention, and Uneven Development in the United States and Japan

CHAPTER 3 Industrial Restructuring, State Intervention, and Uneven Development in the United States and Japan Richard Child Hill This chapter explores the interplay among industrial production systems organized by transnational corporations, urban and regional development strategies mounted by local and national states, and distributional outcomes for companies, workers, and communities. The reflections and contrasts presented here stem from research on the auto industry and autodependent regions in the United States and Japan. l I will approach issues of economic restructuring from the vantage point of industrial production systems. Production system is a concept for analyzing how labor processes and economic exchanges among firms are socially organized over space. Firms become linked into production systems as they develop, manufac60 Copyrighted Material Industrial Restructuring 6r ture, and market specific commodities (see Hamilton 198 I i Scott 1983; Holmes 1986). In the automobile industry, for example, production systems involve thousands of firms, including parents, subsidiaries, and subcontractors. These firms specialize in the production of component parts (some 15,000 go into a car) or in a stage of the production process (for example, dashboard assembly). Firms ranging in size from enormous transnational companies to family workshops are interlinked in value-added hierarchies that function over regional, national, and international space with varying degrees of logistical precision and efficiency. The spatial concentration and growth of enterprises knit together in production systems generates local employment and regional development (Jacobs 1984). Balanced development, that which passes the benefits of industrial investment onto the local population as a higher standard of living, will advance to the extent that a region's localities can maximize their share of a production system's forward and backward linkages, high valueadded intermediate goods, services and components, and professional , technical, and scientific expertise (Hymer I 97I i Sklair 1985). Therein lies the potential for structured conflict among the development concerns of localities, the industrial policies of nation-states, and the production strategies of transnational corporations . Why draw comparisons between the United States and Japan? Because the two societies now intermesh in such a fashion that political-economic events in one often influence political-economic outcomes in the other. Interactions between the United States and Japan via the world market and the international relations system are transforming production organization, reordering state priorities, and posing critical urban and regional issues in each society. In the analysis to follow, I emphasize the interplay between features distinctive to each society and the commonalities the two societies share by virtue of their mutual engagement in a global political economy. On the economic front, U.S. manufacturers are under pressure, via the competitive strength of Japanese exports from abroad and Japanese direct foreign investment at home, to restructure their Copyrighted Material 62 URBAN POLICY Fordist mass-production systems in the direction of Japan's Toyotaist flexible-production paradigm. Japanese manufacturers, on the other hand, are under pressure, via the U.S.-dominated international relations system, to restructure their regionally concentrated and nationally protected production systems along U.S. global production lines. In both societies, economic restructuring poses severe problems of social dislocation and challenges each nation's capacity for social reorganization. On the national political front, many state and local governments in the United States have responded to international economic competition by altering their functional priorities-from an emphasis on regulation and social welfare to a model, strongly influenced by Japan's "developmental state," that emphasizes government-facilitated economic growth. In Japan, on the other hand, Western pressures for more domestic consumption (to reduce Japan's trade surplus) and the threat of regional deindustrialization (from the globalization of manufacturing) have recently prompted government policies more in tune with a U.S.-style regulatory state. In both Japan and the United States, industrial restructuring and rearranged state priorities are generating new patterns of uneven development and political cleavage. Genus and Species Just as two old buildings look similar until an earthquake reveals their different structures, so the similarity of the industrial societies was in part an illusion, encouraged by a world that did not test their differences. (Piore and Sabel [1984, 16411 North American social science provides a rather weak foundation for the comparative study of capitalist political economies. The problem, Chalmers Johnson has argued (1987, 1988), is that Western political economists of every stripe have been preoccupied with elaborate general theories about social processes while remaining largely indifferent to variations in the concrete institutions through which...