Policies for Competitiveness: Comparing Business–Government Relations in the Golden Age of Capitalism. Edited by Hideaki Miyajima, Takeo Kikkawa, and Takashi Hikino. Oxford: Oxford University Press, 1999. Pp. xii, 344. A History of Japanese Trade and Industry Policy. Edited by Mikio Sumiya. Oxford: Oxford University Press, 2000. Pp. viii, 662

Readers may remember some of the ironies of the 1980s debate—largely an American debate—about Japan and industrial policy, the outlines of which are recounted by Takeo Kikkawa and Takashi Hikino in Policies for Competitiveness. On the one hand were the institutional economists, who believed that government industrial policies could be good for growth, and that Japan was a clear illustration of the fact. Institutionalists were themselves divided into those who drew the conclusion that stagnant America could use a strong dose of industrial policy itself, and those (who became known as Japan-bashers and level-playing-fielders) for whom Japan's industrial policies were simply an unfair, quasi-communist arrangement for taking market share away from virtuous Americans who truly believed in freedom. On the other hand were the Chicago true believers, who knew from first principles that interference with market forces was always bad, and so attributed Japan's success to the dynamism generated by brisk market competition. That argument, since it seemed to be not on price but on quality that American industry was losing market share, rather left them in the unpatriotic position of suggesting that America was intrinsically unable to compete.