The last 40 years have seen our everyday life increasingly influenced by the global economic dynamic. Interconnections among the world economies have resulted in new formal and informal institutions . National governments have progressively changed their role at both domestic and international level. The enlargement of the marketsâ scope has called for specialization, efficiency in production and new ways to do business, fostering processes of international division of labour. Innovation and technological change have determined a rise in productivity and radical processes of structural adjustment in many countries. Globalization has meant new life styles for many people, by varying models of consumption and working, by modifying the development status of societies and by defining new modalities of relation within them.
The ongoing process of global transformation has not had the same impact around the world and within societies. Competition to survive and succeed in the international marketplace, as the founding element of the contemporary global economy, has stimulated private and political actors to put in place strategic actions in order to gain competitive advantage, to reduce threats coming from competitors and to maintain economic supremacy over rivals.1 With this setting, differences in initial endowments of resources and capabilities, in basic institutions and in modalities to participate in global production networks, have discriminated between âwinnersâ and âlosersâ in the international economic game. Rising productivity, income growth and high standards of living for some groups have coexisted with unemployment, marginalization and stagnation for some others.2
In this context, economic power has been one of the fundamental forces to determine the outcome of the global economic game and its evolution over time. Economic power refers to the ability of the members (or subsystems) of the international economy to control and organize productive resources. It is the capacity of exerting an influence over the conformation and results of an organization by determining the allocation of its productive resources. Private and political actors endowed of higher economic power have prevailed in directing productive forces, according to the nature of the interest they intended to pursue.3 Interactions among the different economic power depositaries (i.e. public governments, financial institutions , enterprises, consumers, etc.) have determined the outcome of the international system, in terms ofâfor exampleâwhat types of goods and services have been produced, their amount and distribution, the grade of productive efficiency and technological innovation, capabilities and freedoms made available to the society, relations of production and consumption and future consequences of this general result. Accordingly, the actual conformation of the global economy reflects, to some extent, the distribution of economic power among its members, as the condition that enforces certain interests over others, influences the individual results reached by the agents and determines the direction of the system as a whole.4
In this context, economic power is based upon several individual factors, such as existing endowments of resources, capital and capabilities of specific actors (including, for instance, knowledge, information, skills and technical competences, capacity of analysis and of defining proper goals, attitude to innovate, persuasion abilities, etc.). Moreover, interrelations among members of the system and their different capabilities create collective constraints and incentives that affect the individual actions, by setting a particular institutional framework of reference. Institutions constitute the rules through which economic power can exert its influence over the results of the system. Competition for obtaining and maintaining economic power stimulates the strategic efforts of the actors to gain a ârent positionâ, by improving individual capabilities, given certain rules of the game, but also by controlling the dynamic of institutional change.5
Eventually, changes in the system outcome can be determined by a redistribution of economic power among the agents and by the result of the competition among vested interests. For instance, the dissatisfaction of some actors of the system for the results they achieved, a different perception of their position and role played within the system and new expectations on the outcome to be pursued, can generate internal conflicts and tensions that induce change in economic power distribution, in the fundamental institutions and in the final resources allocation of the organization.6 Understanding how the actors of the global economy have historically achieved, maintained and exercised their economic power is an essential element to explain the results and the changes of the contemporary international system.
This book is about the US economic power in the context of the global system. It analyses the American industrial strategy from the late 1970s to the present day, what is now known as the âneoliberal era â, as the way in which the protection and promotion of the American economic system has taken place in the context of the international âfree market â. The work provides clear evidence of how the economic power of the United Statesâwielded to influence the formal and informal rules of the neoliberal orderâhas been used as a tool for enhancing its competitive advantage against other world economies. In this perspective, the US governmentâs role in promoting the national industrial system is a key standpoint which helps to explain the dynamic of the American economic power .7
This perspective, focused on public intervention in the productive system, could sound exceedingly out of place when referring to the United States, inasmuch a country where the âantipathy for government, and the corresponding belief in individualism, competition, and the marketplace, go back to the days of the foundingâ (Etzioni 1983: 47) . And perhaps this attitude has been particularly true during the neoliberal era , a period characterized by a radical increase in interactions among world economies, a substantial enlargement of the extension of the markets, and a supposed withdrawal of governments in favour of laissez-faire economic liberalism . Indeed, starting from the 1980s, many governments began to change their scope for action, abandoning, to some extent, the protectionist approach that had characterized the previous decades. This neoliberal wave became particularly popular around the world just when President Reagan in the United States (and Prime Minister Thatcher in the UK ) began a campaign of clear opposition to public intervention. In this context, the Americansâ affection for the free market , as a foundation of efficient and dynamic economies, led to painting government intervention into productive dynamics as an unwelcome intrusion, more inclined to respond to rent-seekersâ pressures rather than to improve economic and societal outcome. This spirit started to push the US commitment to the international promotion of free(er) trade with exceptional continuity over time.
Whilst this is the most commonly highlighted narrative in the relevant literature, there is a side of the story that most often remains in the shade. In spite of the American rhetoric of the last 40 years, the analysis on the practices of government intervention depicts the United States as moving away from the image of unconditional and g...