2. Contextualizing the American Industrial Strategy in the Neoliberal Era

See Library of Congress, https://​www.​loc.​gov/​exhibits/​lewisandclark/​transcript56.​html, last accessed 9th March 2017.

In the subsequent years, with the Transportation Act of 1920, the role of the ICC was further strengthened, acquiring both the authority to set tariffs on the railroads market and the more general task of maintaining adequate levels of quality of the railway service (Bingham and Sharpe 1998). The ICC, however, did not deal only with the railroads. From the first half of the twentieth century, and for many decades to come, the entire transport sector was regulated by this Commission. The Motor Carrier Act of 1935 entrusted the ICC with the control of entry of the entire American transport market, managed through concessions, licences and regulation of the tariffs (Cochran 1950; Hill 1951; Carter 1968; Lloyd 1982; Dobbin 1994; Bingham and Sharpe 1998; Di Tommaso and Schweitzer 2013; Di Tommaso and Tassinari 2017).

For example, in 1920 the U.S. Steel Corporation (quoted above), despite its lowered weight on the domestic market (which had fallen to 40%), was accused of predatory pricing. However, the indictment dropped soon because the Supreme Court ruled that the Attorney General had failed to demonstrate that the Company had adopted illegal monopoly practices. No sanctions or punitive actions were taken against the U.S. Steel Corporation, though the government demonstrated to the counterpart to be vigilant and ready to open up a new phase of negotiation (Stein 1998).

It has to be considered that at the end of the First World War, 31% of all manufacturing was in the hands of the corporations, giving work to 86% of the entire workforce (Williams 1966: 536).

In those years, the automotive industry began to occupy a central position for the development of the entire American economy, thanks to the high demand that it formulated to the backward-linked sectors. Thus, this industry was becoming subject of government’s attention by remaining publicly supported on several occasions throughout the Twentieth century (Vlasic 2011; Ingrassia and White 1995). From 1913 to 1934, import product tariffs in the sectors fluctuated from 25% to 50%, to stabilize at a level of about 10% in subsequent years (Nester 1997). With the Federal Highway Act of 1916 and 1921, the car industry was further supported by the massive financing of transport infrastructures that these programs provided (Bingham and Sharpe 1998; Williamson 2012). During these years the “Big Three” American car manufacturers (Ford, Chrysler and General Motors) established their relevance in the American economy.

See, for example, https://​sites.​google.​com/​site/​wartoendallwarsc​om/​home/​industry-during-ww1 (last accessed June, 2017).

See, for example, https://​sites.​google.​com/​site/​wartoendallwarsc​om/​home/​industry-during-ww1 (last accessed June, 2017).

Even in the decades following the Great Depression, the agricultural sector continued to be supported by the government. For example, with President Eisenhower (1953–1961), farmers were further subsidized to reduce production and to implement the rotation of the productions over the years (Bingham and Sharpe 1998).

Apple—that is today one of the global giants in consumer electronics and computer software—was among the companies that benefited from these public programs. During the start-up phase in 1970s, the company received public funds for an amount of $500,000 from the Small Business Investment Company (SBIC) program (Mazzucato 2013; Audretsch 1995). In the subsequent years, technologies used by Apple in its products (microprocessors, memory chips, hard disks, touch-screen, GPS, LCD screens, lithium batteries) were created thanks to DoD support, and in particular within the DARPA-funded Spintronics project of 1995, with an investment of $100 million. Likewise, years later, DoD’s activism explains a lot about the development of the iOS products (iPod, iPhone, iPad) launched by Apple. For more details on the Apple case , see Mazzucato (2013), Dediu and Schmidt (2012), Adner (2012), Prestowitz (2012), McCray (2009), Brodd (2005), Irwin and Klenow (1996).

Policies inspired by the ideals of the Great Society were directed, in most cases, to mitigate the problems that characterized the urban environment. These were actions aimed at improving the quality of life in the metropolitan areas, which were the most degraded ones, and especially where differences in living conditions of the population had long been accentuated. In this context, social issues such as juvenile delinquency (with the Juvenile Delinquency and Youth Offenses Act of 1963), mental illness (with the Community Mental Health Centers Act of 1963), poverty (with the Economic Opportunity Act of 1964), the degradation of neighbourhoods (with the Demonstration Cities and Metropolitan Development Act of 1964) were addressed. These programs were especially directed at the populations of the central areas of the cities, which had become, in many cases, insecure, unhealthy and incredibly poor, while the middle class had chosen new peripheral districts (Piven and Cloward 2005). The Great Society project was also interested in training and education (ERP 1966, Chapter 3): along with (primary, secondary and higher) education funding programs, specific initiatives were launched to improve the skills and productivity of the workforce. At the same time, efforts were made to make the mechanisms for meeting the demand and supply of job more efficient. The programs developed under the Manpower Development and Training Act (MDTA) provided, for instance, basic training and education for unemployed people with previous work experience, in order to upgrade their professional skills. Between the adoption of the law, in 1962, and the end of its effectiveness, in 1965, these programs had reached a total of 370,000 subscribers (ERP 1966: 99). Furthermore, Healthcare programs had important implications on workforce productivity, as well as on the development of the health sector’s supply chains. In this context, for example, the Great Society project promoted an important increase in funding for medical research. Total health-related spending in 1965 was around $1.9 billion, which corresponded at almost 9% of the total national research and development expenditure. This sum was more than ten times higher than that of 1950, with an annual increase of almost 18%. Public investment in health research was channelled mainly through the National Institute of Health (NIH), whose overall research, structure and training budget grew over ten years from less than $100 million to over one billion in 1965. NIH’s spending in this year represented two-fifths of the total medical research expenditure in the United States (ERP 1966: 104).