ABSTRACT
In the shipbuilding descriptive model, pride of place was assigned to the state and its role as arbitrator of aggregate shipbuilding activity. In truth, the state occupies a position not of disinterested observer in the affairs of the industry; but, on the contrary, it actively seeks to regulate the activity levels of whatever portion of the industry falls within its jurisdiction. By virtue of the fact that the state adopts the position of intermediary between the economic milieu and shipbuilding enterprises, it also reserves for itself the right to intervene in regulating economic conditions at one extreme, while frequently taking up the option of direct intervention at the enterprise level at the other. Examples of the former have already been remarked upon in earlier chapters: the provision of aid 'packages' to underwrite ship prices and hence, boost demand was noted in Chapter 3; whereas the state's function as a monopsonist in warship markets received attention during the discussion of demand cycles in Chapter 5. The second issue was, by and large, dealt with in Chapter 6 under the rubric of industrial organisation and, therein, state enterprise was shown to behave in a comparable manner to private-enterprise shipbuilding. The object of this chapter, however, is to amplify the role of the state as a systematic agent in shaping the shipbuilding industry. For that purpose, it is addressed from four thematic viewpoints. The first considers the state's role as a purchaser of warships and explores the implications of naval procurement on those shipbuilding enterprises which choose to act as defence contractors. As such, the state can be regarded as occupying a direct role in demand management: formulating naval programmes and contracting out such programmes at appropriate times and to preferred suppliers. In this way, the state 309often appears to be supporting shipbuilding as a kind of implicit regional policy. Certainly, it uses the power accorded it as a monopsonist to maintain some form of employment-stability among various shipyards; although whether its prime concern is alleviation of localised unemployment or the maintenance of a defence capability seems to vary over time. By way of contrast, the second theme harps on the state's role as an indirect force in demand management. In particular, the provision of subsidies to shipyards and shipowners alike are described. An attempt is made (using the USA as a case study) to elicit the degree of dependence of shipbuilding upon government assistance of this kind. The third theme is concerned with the place of shipbuilding within the overall context of industrial strategies as reflected through development planning. To this end, the example of South Korea is cited; for, not only has that state intentionally fostered industrialisation as a means to promote rapid development but, also it has put great stress on the value of shipbuilding as a key instrument in its industrial planning designs. This example, incidentally, serves to pinpoint the corporate alliance between government and private enterprise in the attainment of national development goals. Finally, the fourth theme raises the spectre of total state interference in shipbuilding; which is to say, it considers the terms under which shipbuilding functions within command economies. In so doing, the prospect of state regulation of merchant shipbuilding as well as naval shipbuilding excites concern for that ultimate in total demand management: state control of the economic milieu combined with the day-to-day running of the shipyards by the state. The example of the People's Republic of China is given prominence in this context.
