GFIR 838: INDUSTRIAL GOVERNANCE

HERMAN SCHWARTZ
Tuesday 2:00-4:30 Cabell 130
OFFICE HOURS: Cabell 248C, x4-7818 T & R 11-12:00, or by appt.
class #: 74332
e-mail (hms2f@virginia.edu) is generally the easiest way to reach me.

Course Description:

This course examines differences in the political organization of markets for finance, labor and firms, and the consequences this has for the economic and social resources the three dominant capitalist states - the US, Japan & Germany - have brought and are capable of bringing to bear in a world market characterized by increasing competition, many stagnant sectors and political intervention in trade. The course focuses on the policy constraints and opportunities created by existing patterns of policy making, multinationalism, and particularly production and labor relations. After an overview of the political structures governing "industrial politics," we will look at shop floor and firm organization in the context of world markets. Finally we will look at between 3 to 5 specific industrial sectors depending on student and instructor interest.

Classes are discussion oriented; students will be asked to prepare critiques/explications of various weeks' readings and to write a seminar paper on a sector or problem of their choice. Grading is based on the seminar paper (40%) discussion (35%), and the presentation/critiques (25%).

Highly recommended:

• A. Shonfield: Modern Capitalism Oxford 1964. Now out of print, but it remains the classic examination of the early post-war period, empirically and normatively. we will read or skim7 chs, buy it if you can find it.
  
• M. Dertouzos, Made in America, (MIT, also in paper as a Harper Perennial) and
  
• M. Porter, Competitive Advantage of Nations are particularly fine resources which we will not use. Both (especially the detailed sector studies in MIT's working papers) contain a wealth of information. Try to look at them even if you don't buy them.
  
• Suzanne Berger and Ronald Dore, National Diversity and Global Capitalism (3-4 chs)
  
• P. Schmitter, Governing Capitalist Economies (Oxford, 1994 - still only available as a very expensive hardback!)
  
• Robert Thomas, What Machines Can't Do, UCal 1994, anywhere from 3 to 7 chs
  

less recommended, but we will read portions:

• J. Hart, Rival Capitalists Ithaca: Cornell UP 1992 (unsophisticated use of corporatism as only explanatory variable, about 30%)
  

Somewhat out of date but useful for historical coverage

• P. Katzenstein, ed.: Industry and Politics in West Germany, Cornell 1989 (3 chs) best current collection on topic
  
• P. Katzenstein: Between Power & Plenty Wisconsin 1976 (3 chs) best study of the 1960 to oil shock period, a classic of 'state-centered' analysis though out of date
  
• J. Zysman & L. Tyson: American Industry in International Competition Cornell 1983 (3 chs) best collection on sector level policy in the 1970s
  
• John Zysman, Governments, Markets, Growth (Cornell 1985). Mostly about UK and FR, butthe locus classicus of 'financial system' centered arguments; we'll read 2 chs.
  

ALL READINGS ARE ON RESERVE AT CLEMONS

20 jan Introduction, historical overview, syllabi




SECTION I: THE STATE AND POST-WAR CAPITALISM

27 jan States, firms, and the organization of the 'free market'


• F Hayek (Chiaki Nishiyama, ed.): Essense of Hayek ch 11 & 14
  
• H Kitschelt, "Industrial Governance Structures, Innovation Strategies and the Case of Japan: Sectoral or Cross National Analysis?" International Organization 45:4, Autumn 1991, pp. 453-493.
  
• Charles Perrow, Complex Organizations, ch 7 (reprinted in Zukin, ed., Structures of Capital)
  
• W Streeck: "Community, Market, State - and Associations? The Prospective Contribution of Interest Governance to Social Order," pp. 1-29 in Streeck and Schmitter, eds., Private Interest Government OR Hollingsworth, Schmitter, Streeck, ch 1 of Governing Capitalist Economies

recommended: Mark Grannovetter: "Economic Action and Social Structure," American Journal of Sociology 91:3 (nov 85) pp 481-510

RESOURCES
S. Berger, ed.: Organizing Interests in Western Europe p. 1-62; P. Hall, ed., Political Power of Economic Ideas; P. Hall Governing the Market




3 feb An overview of the post-war political economies


• P Gourevitch: "Breaking with Orthodoxy" International Organization winter 1984 (ch 4 in Politics in Hard Times)
  
• P Katzenstein, ed: Between Power & Plenty, (BPP hereafter) ch by Maier (#2)
  
• M Piore & C Sabel: Second Industrial Divide ch 1-6.
  
• Andrew Shonfield: Modern Capitalism, ch 4, (and skim 11-14)

recommended: all of Shonfield

RESOURCES:
E. Mandel: Europe vs. America; B Harrison & B Bluestone: Deindustrialization of America ch 5-6 (skim); R. Gilpin: US Power and the MNC, p. 215-262; W. Avery & D. Rapkin, ed: America in a Changing World Economy, p. 29-76.




10 feb Financial market organization and its consequences


• John Zysman: Governments, Markets, Growth. (GMG Hereafter) chs. 2, 5
  
• K Dyson: "The State, Banks and Industry: The West German Case," p. 118-141 in Andrew Cox: The State, Finance and Industry. (On reserve as a XEROX)
  
• Mark Roe, "Some Differences in Corporate Structure in Germany, Japan, and the US," Yale Law Journal 102:8, June 1993, pp. 1927-2003

RESOURCES: see me




17 feb The market for firms and the control of firms


• Ronald Gilson and Mark Roe, "Understanding the Japanese Keiretsu: Overlaps Between Corporate Governance and Industrial Organization," The Yale Law Journal 102:4, Jan 1993
  
• C. Johnson, etal, Politics and Productivity, ch 4
  
• W. Carl Kester, "American and Japanese Corporate Governance: Convergence to Best Practice?" Ch 4 in Berger and Dore, National Diversity

Recommended: Stephen Reed, Making Common Sense of Japan (skim!)

RESOURCES: see me




24 feb The market for labor and the control of labor


• W Lazonick: Business Organization and the Myth of the Market Economy ch 1-2 (pp 23-91)
  
• Tom Juravich: Chaos on the Shop Floor (SKIM)
  
• David Thomas: What Machines Can't Do ch 1
  
• recommended: R. Edwards, Contested Terrain
  

3 march States and their markets


• C. Deubner: "Change and Internationalization in Industry: toward a Sectoral Interpretation of West German Politics" International Organization 38:3, Summer 1984, pp. 501-535
  
• JR Hollingsworth: "The Governance of the American Economy" pp. 221-252 in Streeck and Schmitter, eds., PIG
  
• Johnson, etal, Politics and Productivity, ch 3
  
• EITHER-OR: D Okimoto, Between MITI and Market, ch 1; R. Samuels, Business of the Japanese State, ch 1
  

recommended:

RESOURCES:
P. Katzenstein: "Problem or Model: Germany in the 1970s." World Politics 32:4 July 1980 p. 597-598; K Dyson: "Politics of economic management in West Germany." West European Politics 4:2, May 1981 p. 35-55; P. Katzenstein: Small States in World Markets (skim!). EJ Horn: "Germany: A Market Led Process," pp. 41-75 in Duchene and Shepherd, eds., Managing Industrial Change in Western Europe; E. Vogel, Japan as # 1, C. Johnson, MITI & the Japanese Miracle, C. Prestowitz, Trading Places; C Freeman: "Japan: a New National System of Innovation?" pp. 330-348 in Giovanni Dosi, et al., eds., Technical Change and Economic Theory; Chikara Higashi, Internationalization of the Japanese Economy; E Lincoln, Japan Faces Economic Maturity. F McC Rosenbluth, Politics of Japanese Finance; M Dertouzos, Made in America, appendices; T J Lowi, End of Liberalism; K Phillips, Staying on Top; D Encarnation, Rivals beyond Trade




10 march -- READING BREAK -- and 17 march: I'm out of town.

SECTION II: ARE THINGS CHANGING?

24 march changing modes for controling labor


• Piore & Sabel: The Second Industrial Divide ch 7-10
  
• Masahiko Aoki, "A New Paradigm of Work Organization and Coordination? Lessons from the Japanese Experience," pp. 267-293 in S Marglin, ed., The Golden Age of Capitalism
  
• M Kenney: "Beyond Mass Production: Production and the Labor Process in Japan," Politics and Society 16:1, 1988, pp. 121-151
  
• H Kern and M Schumann: "New concepts of production in West German plants" in Katzenstein, Industry and Politics

31 march changing modes for controling organizations


• C Sabel, "Moebius strip organizations and open labor markets," pp. 23-62 AND
  
• Rosabeth Moss Kanter, " The Future of Hierarchy and Bureaucracy," pp. 63-94 BOTH in P. Bourdieu & J. Coleman (Eds.), Social Theory for a Changing Society
  
• O. Williamson, "Comparative Economic Organization," Administrative Sciences Quarterly 36, 1991, pp. 269-296
  
• W Lazonick: Business Organization ch 3 (pp 92-111)

recommended: Eli Goldratt, The GOAL; C Sabel: Work and Politics

RESOURCES: Jacoby, Employing Bureaucracy; Harley Shaiken: Work Transformed; RM Kanter, When Giants Learn to Dance; Shoshana Zuboff, Work in the Age of the Intelligent Machine; Malone, The Virtual Corporation, M. Best, The New Competition



SECTION III: CASES and PAPERS April 7-28


CASE 1 Textiles


• Zysman & Tyson, ch by V. Aggarwhal, p 249-312.
  
• B. Ike: "Japanese Textile industry" Asian Survey 20:5, may 1980, pp 532-552
  
• T. Ozawa: Multinationalism: Japanese Style, ch 3
  
• G. Shepherd: "Textiles: new ways of surviving in an old industry." in G. Shepherd, Saunders, & Duchene: Europe's Industries: Public and Private Strategies for Change.
  
• Folker Frobel, etal: New international division of labour ch 6, 8, 9

RESOURCES:
V Aggarwhal: "The unraveling of the Multi-Fiber Agreement." International Organization 37:4, Autumn 1983, pp. 617-646; HR Friman: "Rocks, hard places and the new protectionism: textile trade policy choices in the United States and Japan" International Organization 42:4, Autumn 1988, pp. 689-723




CASE 2 Automobiles


• K. Dohse: "From fordism to toyotism? social organization of the labor process in the Japanese automobile industry" Politics & Society 14:2 1985, pp 115-145
  
• R. Kaplinski: "Restructuring the Capitalist Labour Process," Cambridge Journal of Economics 12:4, 1988, pp. 451-470
  
• Robert Thomas, What machines can't do, ch 5
  
• Jeffrey Hart: Rival Capitalists read 3 European case studies on autos
  
• Zysman & Tyson, ch by D. Friedman (autos)
  
• W. Streeck: "Lean Production in the German Auto Industry," ch 5 in Berger and Dore National Diversity (Or, older: "Successful adjustment to turbulent markets: the automobile industry," in Katzenstein: Industry and Politics)
  
• Scherrer ch 7 in John Campbell, Governance of the American Economy
  
• Wolfgang Streeck "Industrial Relations and Industrial Change: the Restructuring of the World Automobile industry in the 1970s and 1980s," Economic and Industrial Democracy 8, 1987, pp. 437-462

recommended: J. Dunn: "Automobiles in International Trade" International Organization 41:2, spr 1987, 225-252; Womack, Jones, and Roos, Machine that Changed the World

RESOURCES: Altschuler et al: Future of the Automobile, K. Satoshi: Japan in the Passing Lane; M Cusumano: Japanese Automobile Industry; W. Streeck: Industrial Relations in West Germany: the Motor Industry; P Windolf: "Industrial robots in the West German automobile industry" Politics and Society 14:4, 1985, pp. 431-458;OECD: Long Term Outlook for the World Automobile Industry, Paris, 1983.




CASE 3 Semiconductors


• J Hart: Rival Capitalists read 3 European case studies on semiconductors & computers
  
• J. Zysman & Tyson, ch 4 by Zysman (electronics)
  
• G. Fong, "State Strength, Industry Structure, and Industrial Policy: American and Japanese Experiences in Microelectronics," Comparative Politics 22:3, April 1990, pp. 272-299
  
• Laura Tyson, Who's bashing Whom?, ch 4, 6

suggested: D. Okimoto, Sugano, & Weinstein: Competitive edge: Semiconductor industry in the US & Japan (skim!) and Dosi, Nelson, Freeman, etal Technical Change and Economic Theory, chs on national systems of innovation. K. Flamm & J. Grumwald: Global Factory ch on semiconductors

RESOURCES:
Primary: M Borrus, Competing for Control; G. Dosi, Technical Change and Industrial Transformation; T Howell, The Microelectronics Race; OECD, Strategic Industries in a Global Economy (also: OECD Reviews of National S&T Policy)
Secondary: Margaret Sharp: Europe & the New Technologies; GR Fong: "The Potential for Industrial Policy: Lessons from the Very High Speed Integrated Circuit Program" Journal of Policy Analysis and Management 5:2, 1986, pp. 264-291; Stowsky ch in C Johnson, etal: Politics and Productivity; Soon Kyoung Cho: "Labor process & capital mobility: the limits of the new international division of labor" Politics & Society 14:2 1985, pp 185-222




CASE 4 Computers


• M. Anchordoguy: "Mastering the market: Japanese government targetting of the computer industry," International Organization 42:3, Summer 1988, pp. 509-544 (or) Anchordoguy, Japan Inc.
  
• K. Flamm: Targeting the Computer: government support and international ... Ch 4
  
• H Milner & D Yoffie: "Strategic trade policy and corporate trade demands" International Organization Spring 1989, 43:2
  
• Robert Thomas, What machines can't do ch 3
  

RESOURCES: as above, plus H. Dorfman, ??, B Bowonder: "Measuring Innovativeness of an Industry: an Analysis of the Electronics Industry in India, Japan and Korea," Science and Public Policy 15:5, October 1988, pp. 279-303. W Zegveld: SDI and Industrial Technology Policy: Threat or Opportunity?




CASE 5 Machine Tools


• D. Jones: "Machine tools: technical change and a Japanese challenge" in Shepherd, Europe's Industries
  
• D. Friedman: Misunderstood Miracle ch 3-4
  
• G. Herrigel: "Industrial order and the politics of industrial change: mechanical engineering" in Katzenstein, Industry and Politics; or ch by Herrigal in Governing Capitalist Economies
  
• D. Noble: "Social choice in machine design" Politics & Society 8:3-4 1978
  
• Thomas, What machines can't do, ch 2

RESOURCES: D. Noble: Forces of Production: a social history of automation; I. Magaziner & M Patinkin: Silent Wars ch 5; M Fransman: "International competitiveness, technical change and the state: the machine tool industry in Taiwan and Japan." World Development 14:12, December 1986, pp. 1375-1396; R. Kaplinsky: "Electronics Based Automation Technologies and the Onset of Systemofacture: Implications for Third World Industrialization," World Development 15:3, March 1985, pp. 423-438; PS Adler: "Automation and Skill: Three Generations of Research on the NC Case," Politics and Society 17:3, September 1989, pp. 377-402




CASE 6: Civil airframe manufacturing


• Laura Tyson, Who's bashing Whom?, ch 5
  
• Thomas, What machines can't do, ch 2
  
• Vicky Golich, "From Competition to Collaboration in the Commercial Aircraft Industry" International Organization 46:4, Autumn 1992, pp. 899-934
  
• B Majumdar: "Upstart or Flying Start? The Rise of Airbus Industrie" The World Economy 10:4, December 1987, pp. 497-518.
  

CASE 7: Steel


• J Hart, Rival Capitalists p 46-57, 190-198, 237-248 (FR 100-111, UK 150-157)
  
• M Borrus, "Politics of Competitive Erosion in US Steel," in J. Zysman & L. Tyson, eds., American Industry in International Competition
  
• Yves Meny and Vincent Wright, The Politics of Steel: Western Europe and the Crisis Years, chs by Messerlin, Fach/Esser OR ch by Messerlin in Geoffrey Shepherd, Europe's Industries
  
• Patricia O'Brien, "Governance Systems in Steel: US & JP" in Governing Capitalist Economies
  
• Thomas, What Machines can't do ch 4 (aluminum as a surrogate)
  
• Scherrer ch 6 in Campbell, Governance of the American Economy
  

RESOURCES: J Hoerr, The Wolf Came, J Strohmeyer, Crisis in Bethlehem




28 april Life at the end of the century.


• Economist, "Between two worlds: a survey of manufacturing technology" 5 March 1994
  
• Thomas, What Machines Can't Do, ch 6, 7
  
• Boyer (ch 1) and Wade (ch 2) in Berger and Dore, National Diversity