High-Definition Mercantilism
LIKE Paris couturiers, Washington policymakers have their fashion seasons. This spring, the policy rage in the capital is: Let's all pitch in on high-definition television. HDTV is advanced television technology that produces a much sharper image. At stake in the race to develop it is more than just being able to see ``Knots Landing'' better; the technology is expected to have wide computer and communications applications of commercial and military importance. Commerce Secretary Mos bacher calls HDTV ``a major catalyst for technological progress.''
Japanese and European companies have taken a big lead in the HDTV competition, and some American government and business leaders want to mount an all-out drive to overtake them.
The most concrete proposal so far is to loosen United States antitrust laws so that American companies may collaborate in the production of HDTV. This would go a step beyond Congress's earlier relaxation of limits on joint research, which allowed US semiconductormakers to form a consortium to develop microchips.
Less clearly stated, but obviously hovering around the HDTV issue, are hopes that Washington will do more than just fiddle with the Clayton Act. There's vague talk of government ``seed money,'' subsidies, and tax breaks, and then there are hints that various regulatory and trade measures might be helpful in assisting the ``infant industry.''
At the risk of having the wrong hemline, we're not wholly comfortable with this rush to form a ``private-public partnership'' to produce high-definition TV. Not without clearly spelled-out answers to some questions:
Why is the US, with its research prowess, so far behind on HDTV? Just how do laws against anticompetitive behavior impede its development? Why is the US electronics industry angling for ``corporate welfare'' when the US has the world's best venture-capital market? Once the exchequer starts doling out taxpayer money, will the government be in for a dime, in for a dollar? How much other protectionism may be required to nurse HDTV along?
Whatever fancy designer label may be attached to the HDTV plans sweeping through Washington, they're still a reappearance, with a few additional buttons and bows, of what a season or two ago was called ``industrial policy,'' which itself was just an updating of that hoary - and discredited - economic theory called mercantilism.
Whenever a nation feels itself threatened economically, the seductive blandishments of public-private partnerships, industrial policy, mercantilism, or whatever one wishes to call government intervention and central planning seem alluring. Yet recent generations of American leaders have resolutely opposed mercantilism and its accompanying protectionism.
HDTV may have a significant role to play in the US's economic future. But is it really so important as to justify a major departure from America's tried - and proven - tradition of competition?
In economics, as in fashion, the basics never go out of style.