Ever since I argued in the Harvard Business Review last year that we should pay less attention to corporate nationality and more attention to whether our nation's work force was gaining the skills and competences it needed to compete, I've had the curious sense of being shoved -- quite against my will -- to the conservative side of the older debate over American industrial policy My first inkling of this transmigration came when The Wall Street Journal praised me and my argument in its editorial pages. If this were not cause enough for alarm, I found myself the recipient of expressions of shock and outrage from several fellow industrial-policy travelers who accused me of abandoning the worthy cause. And now, to deepen my gloom, comes Laura Tyson.
Anyone wishing to probe my detailed views on all this has only to buy my upcoming book on the subject, The Work of Nations. (Under the circumstances, the editors of this journal surely have no objection to a little blatant book promotion.) But for now, to set the record absolutely straight: I am as committed as ever to the notion that the U.S. government has a crucial role to play in the nation's economic development. Yet I no longer have great confidence in the American-owned corporation as its partner. American firms -- especially firms engaged in tradeable goods and services (more on this in a moment) -- are rapidly becoming global entities with no special relationship to the American economy. Thus, the object of American industrial policy should be to enhance the value that American workers can add to the world economy, not to increase the profitability or global market share of these errant American-owned companies. There is a crucial, and growing, difference between the two.
In the early part of her rebuttal, Tyson takes issue with me on this last point, arguing that there isn't much difference between the American work force and American companies-at least for now. Having (she assumes) disposed of this issue, she then goes on to argue why the U.S. government should promote and defend the interests of the nation in international commerce. As to these latter points, I'm in complete agreement -- except that, in pursuing these initiatives, she still assumes that the interests of American firms are good approximations for the interests of Americans, and I don't. In my view, American industrial policymakers should not treat American firms any differently than they treat other global corporations.
"Us" is the American Worker in Global Commerce
First, Tyson's assertion that corporate nationality still matters a great deal: To make her case, she shows that U.S. multinationals have most of their assets, sales, and employment in the United States. But this fact is entirely tautological. Firms are defined as U.S. multinationals precisely because they have most of their assets, sales, and employment in the United States. Tyson's point that a larger percentage of the assets, sales, and employment of American
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