ABSTRACT
This chapter proposes to raise some central but neglected questions about the political economy of power and public policy is economic giantism relevant to an understanding of the shape and practical consequences of government policies? It examines the impact of corporate giantism on regulatory policy in the automobile industry. The chapter explores the consequences of Bigness for international trade policy in steel. It describes the significance of economic giantism for macro-economic stabilization policy and highlights some general public policy implications. The elegant analytical exercises make no allowance for the possibility that corporate power might be mobilized to sabotage even the most finely tuned incentive-based regulatory policy. Steel is an important basic input in the manufacture of many products throughout the economy, including automobiles, consumer appliances and other consumer durable goods, and in the construction of factories, plants, and equipment. It is a fundamental tenet in economics that protection of domestic industries from foreign competition is harmful to society.
