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A history of long and effortless success can be a dreadful handicap. but, if properly handled, it may become a driving force. When the United States entered just such a glowing period after the end of the Second World War, it had a market eight times larger than any competitor, giving its industries unparalleled economies of scale. Its scientists were the world’s best, its workers the most skilled. America and Americanswere prosperous beyond the dreams of the Europeans and Asians whose economies the war had destroyed.
It was inevitable that this primacy should have narrowed as other countries grew richer. Just as inevitably, the retreat from predominance proved painful. By the mid-1980s Americans had found themselves at a lossover their fading industrial competitiveness. Some huge American industries. such as consumer electronics,had shrunk or vanished in the face of foreign competition. By 1987 there was only one American television maker left, Zenith. (Now there is none: Zenith was bought by South Korea's LG Electronics in July.) Foreign-made cars and textiles were sweeping into the domestic market. America's machine-tool industry was on the ropes. For a while it looked as though the making of semiconductors, which America had invented and which sat at the heart of the new computer age. was going to be the next casualty.
All of this caused a crisis of confidence. Americans stopped taking prosperity for granted. They began to believe that their way of doing business was failing, and that their incomes would therefore shortly beginto fall as well. The mid-1980s brought one inquiry after another into the causes or America's industrial decline. Their sometimes sensational findings were filled with warnings about the growing competition from overseas.
How things have changed! In 1995 the United States can look back on five years of solid growth while Japanhas been struggling. Few Americans attribute this solely to such obvious causes as a devalued dollar or the turning of the business cycle. Self-doubt bas yielded io blind pride. "American industry has changed itsstructure, has gone on a diet, has learnt to be more quickwitted," according to Richard Cavanagh, executive dean of Harvard's Kennedy School of Government. ”It makes me proud to be an American just to see how our businesses are improving their productivity," says Stephen Moore of the Cato Institute, a think-tank in Washington D.C. And William Sahlman of the Harvard Business School believes that people will look back on this period as "a golden age of business management in che United States.”
