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Silicon Valley, Hollywood, Wall Street,
Big Steel and the Auto Belt have all been targeted for investment
by Japanese conglomerates who intend to manage their holdings
in these industries in ways that will eventually lead to
a dominant position in America's major markets. This strategy
traces its roots to the late nineteenth century Japanese
industrial empires known as the zaibatsu.
These Japanese conglomerates deploy policies
designed to produce a single result -- control of targeted
industries from top to bottom.
In his study of Japanese investment in the
United States, Robert L. Kearns reveals the dynamic inner
workings of today's Japanese conglomerates, modelled structurally
on the long since outlawed zaibatsu mercantilist
operations, and now known as keiretsu. He shows how
Toyota is now producing 200,000 cars a year in its Georgetown,
Kentucky plant through a network of independent Japanese-owned
suppliers. In Sunnyvale, California, Fujitsu and other Japanese
electronics giants, having weakened their American competitors
by flooding the market with microchips, are now funding
the next generation of American computer research and development.
In Hollywood, Sony and Matsushita, through their respective
acquisitions of Columbia Pictures and MCA Universal Studios,
are piggybacking entertainment software with hardware. Operating
from the center of the keirestu are powerful Japanese
superbanks, including Dai-Ichi, Fuji, Sumitomo, and others.
These banks make low-cost capital available to their sister
companies for the long-term investment needed to create
successful market domination.
Kearns warns that while the current infusion
of Japanese investment in America, now one of the largest
transfers of capital in the history of the world, has provided
a temporary boon, particularly to local and state economies,
our losses far outweigh this initial gain. In fact, we are
rapidly losing control of the vital parts of our economy.
However, he also believes that by learning from and responding
to the zaibatsu challenge, by improving our work
force, increasing our research and development efforts,
and clarifying our economic policies, we can reassert ourselves
as a productive and competitive nation and regain control
over our economic future.
Robert L. Kearns has been a reporter
for Forbes, Reuters News Service, and The Chicago
Tribune, and was a Bagehot Fellow at the Columbia University
School of Journalism. He is now a fellow of the Economic
Strategy Institute in Washington, D.C.
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