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After World War One, the last significant repository of American System thinking - or something that at least resembled American System thinking - was the U.S. military, in particular the Army. I was just beginning to nose around to research this in the mid-1990s, when I finally was forced by penury to cease my career as a poorly paid "activist" journalist. I think what happened was that the Army's top officers were very shocked at how poorly U.S. manufacturers performed in meeting military requirements during the war. A small group of Army officers created the Army Industrial College in the mid-1920s, and conducted a national survey of every U.S. manufacturing facility, all recorded on index cards. If I recall correctly, the students who passed through this college included some of the most important generals of the next war, such as Eisenhower, Bradley, Hodges, Arnold and others. I have no idea if these officers were directly studying Carey and the American System, or if they were simply determined to find a way to get U.S. industry prepared so that the near disaster of World War One would not be repeated. The "Arsenal Democracy" story is actually mostly myth: U.S. captains of industry had to be dragged, kicking and screaming, into industrial mobilization by some very determined and angry Army officers.

In any event, when Japan and Germany were occupied, the U.S. Army just happened to be America's repository for economic thinking that actually understood the problems of industrial production. So, you get people like W. Edward Deming coming into Japan to help administer and oversee the rebuilding of Japanese industry.

I'll also note here that in the late 1800s, the American System was transmitted to Europe, in particular Germany, by Friedrich List, and to Japan by E. Peshine Smith. When James Fallows went to Asia in the early 1980s to figure out what was driving the unbelievable economic growth of Japan and the "Asian Tigers" he "got an earful" on Carey and the American System, and came back to write a blockbuster article in The Atlantic.  

by NBBooks on Fri Apr 8th, 2011 at 01:59:58 AM EST
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