Steel-Industry Economics: An International Review of Some Recent Literature

• DOI: 10.1177/0003603X7401900417
• Date: 01 December 1974
• Published date: 01 December 1974
• Subject Matter: Article

BOOK REVIEWS

STEEL.INDUSTRY

ECO'N'OMICS:

AN

INTERNATION,AL

REVIEW

OF

SOME

RECENT

LITERATURE

901

A decade ago professors Adams

and

Dirlan

wrote an arti-

ole- in which, among other things, they

cast

some doubt on

the technological prowess of the American steel industry.

It

evoked a number of comments in professional journals

and

even in the daily

press

and loud

protests

from

industry

spokesmen.

In

the meantime global steel production

has

increased by

more

than

60 percent, steel has become a scarce commodity in

many

parts

of the world, prices

are

at

record levels,

and

the

technological

gap

between

major

steel

industries-measured

as the difference in the adoption

rate

of new

processes-has

narrowed,"

Few

steel producers

are

losing money these

days;

furthermore, the chances

for

the occurrence of a steel market

recession in the

present

decade

are

remote.

Nevertheless, significant differences

persist

in the or-

ganization of the

large

steel industries.

The

books selected

for

discussion may help

impart

an idea of some of these dif-

ferences since, in

varying

degree, they all contain some inter-

national comparisons of

industry

structure, business conduct,

and

economic performance.

I

Walter

Adams

and

J.

B. Dirlam,

"Steel

Imports

and

Vertical

Oligopoly Power," American Economic Review,

Sept.

1964,

pp.

626-55.

:

With

respect to

the

oxygen refining method,

the

adoption

rates

are

about 80

percent

for

Japan

(nearly

all

the

remaining

por-

tion

of steel is produced by

the

scrap-based electric

method),

and

60

percent

for

the

USA

and

the

ECSC. Concerning continuous cast-

ing,

the

rates

'are,

very

roughly, 18

percent

for

Japan,

14

percent

for

the

USA,

and

13

percent

for

the

ECSC.

The significance of

these

rates

should

not

be exaggerated.

For

example, of

total

invest-

ment

outlays made by

the

ECSC

industry

1954-1971, only .13.4

percent

were

for

all refining methods .eombined

(in

recent

years almost ex-

clusively oxygen

and

electric

furnaces),

19.9

percent

for

the

blast

furnace

stage,

including

coking

and

ore beneficiation,

and

45.4

per-

cent

for

all types of rolling mills.

ECSC,

Statistical

Office, 1972

Yearbook, p. 257.

902

THE

ANTITRUST

BULLETIN

These books

are

as follows:

[1]

William T. Hogan, Economic History of the Iron and

Steel Industry in the United States, Lexington,

Mass.: D. C.

Heath

(1971), five volumes, 2,178 pages.

[2] William T. Hogan, The 1970s: Critical Years for

Steel, Lexington, Mass.: D. C.

Heath

(1972), 132

pages.

[3] Georg-Heinrich Elkmann, Moglichkeiten und Gren-

zen der K onzentration in der Eisen- und Stahlindus-

trie, Diisseldorf:

Verlag

Stahleisen (1970), 155

pages.

[4]

Hermann

R. Schenck, Baukosten und betriebliche

Verarbeitungskosten der Stahlwerksverfahren, Diis-

seldorf:Verlag Stahleisen (1970), 595 pages.

[5] Kiyoshi Kawahito, The Japanese Steel Industry, with

an Analysis of the U.S. Steel Import Problem, New

York:

Praeger

Publishers (1972),203 pages.

[6]

Franco

Peco, L'Acier face

aua;

Theories Economi-

ques, Milan: Nuove Edicioni Milano (1971), 317

pages.

[7]

Lennart

Friden, Instability in the International Steel

Market, a

Study

of

Import and

Export

Fluctuations,

Stockholm: Beckmanns (1972), 236 pages.

The first

author

whose works will be reviewed is William

T. Hogan, professor of economics

at

Fordham

University.

He is known around the world in steel-industry circles, ap-

pears

at

almost every national

and

international steel in-

stitute conference, publishes a

stream

of

short

commentaries

and

predictions on steel matters,

and

claims to have inspected

every

major

steel

plant

in the world. He is

not

well known in

the economics profession

nor

do his six volumes about the

American steel

industry

manifest

that

he knows, or cares to

know, of the contributions made by members of the economic

fraternity.

It

is indeed difficult to find

any

economic analysis

in his total of 2,300 pages.

There

is some vague hypothesizing