Politics, economics and the international steel industry (original) (raw)

1982, IEE Proceedings A Physical Science, Measurement and Instrumentation, Management and Education, Reviews

The international steel industry has worked itself into a state of perpetual crisis, wherein politics rather than economics is becoming important as the determinant of global production and trade relationships, and political decisions are replacing market decisions in determining the location of production. The peculiarities of the industry, together with increasing national concern for problems of economic adjustment have stimulated the direct and indirect intervention of government in the industry, and encouraged firms to engage in protection-seeking rather than adjustment-oriented behaviour. More than in most other industries, this protection-seeking behaviour has been successful, and has seriously eroded the role of market competition. The paper explores the evolution of the international steel industry, and develops a politicaleconomic model to explain such behaviour, and evaluate its results. 2 Evolving saga of international steel There are four principal characters in the international steel story: the USA, the EEC, Japan, and a geographically dispersed collection of the more advanced developing countries, with supporting roles played by Canada, South Africa, and certain Eastern European countries. The broad sweep of the main story-line-focused on long-term shifts in competitive advantage at the industry level-generates a number of subplots, which differ widely among countries and regions. 2.1 USA The global pre-eminence of the US steel industry lasted for over 70 years, based on the existence of a large domestic and export market, international technological leadership, low