During the 1920s, the "black decade" of British steel, nearly everyone agreed that the industry's revival depended on replacing obsolete equipment and instituting modern technologies that would increase production and decrease costs. Despite consensus, these goals were not reached and, even after wartime and postwar reconstruction needs were met, the industry continued its steady decline. Steven Tolliday advances three hypotheses for this stagnation.

First, the problems of British steel, Tolliday suggests, were embedded in the structures of individual firms and of the industry as a whole—both unchanged since the prosperous years of the nineteenth century—and after World War I fractured by conflicting interests (share holders, managers, family members, bankers, creditors). Second, the two external institutions that might have enforced reorganization and modernization—the banking system and the government—were overcautious, had complex and contradictory goals, and lacked the management skills to exploit their potential financial leverage. Third, the many attempts at reform by banks and government collapsed because these establishments, like the industry itself, were constrained by traditions and antiquated structural rigidities.

This excellent example of a new direction in business history—analysis of a given industry by conveying the interaction of technology, markets, companies, financial institutions, and government—brings many important theoretical questions into focus and also contributes substantially to the scrutiny of specific problems, such as why the British economy appears to be in irrevocable decline.

It is often alleged that late Victorian businessmen in Britain displayed little of the vigor of their fathers in competition with the new industrial powers of the late nineteenth century, Germany and the United States. This allegation has been the foundation for a great many interpretations of the end of British domination over the world's economic life and of the economic difficulties that Britain has faced subsequently.

The British iron and steel industry is taken traditionally as the prime example of entrepreneurial decline. Mr. McCloskey shows, however, that businessmen in the industry performed on most counts as well as their German and American counterparts. The lack of evidence of entrepreneurial failure in the industry casts serious doubt on the importance of the entrepreneurial factor in Britain's relative decline. It suggests, indeed, that the supposed failure was a mere reflex of Britain's early attainment of economic maturity and the contemporaneous drive to maturity of Germany and the United States.

McCloskey uses relatively uncomplicated economic tools to establish these points. The central tool is the measurement of total factor productivity in the iron and steel industry in Britain and abroad. It is supplemented by analyses of supply and demand (to remove the influence of slowly growing demand at home from the record of the British industry): of the profitability of adopting the basic open hearth process of steelmaking (to show that the slowness of Britain to adopt it-which has been the keystone of the case for entrepreneurial failure-was economically rational); and of the competitiveness of the industry's markets (to validate use of these simple tools).

The book is based on a thorough study of the trade newspapers of the industry, its scientific journals, its statistical annuals, and the many reports of the British government and contemporary observers on its activities. It combines, therefore, the virtues of the "old" and the 'new" economic history. And although the book is historical, its conclusions are relevant to any study of economic growth past or present, in particular to the study of the role of entrepreneurship.

This book, a revision of Mr. McCloskey's Ph.D. dissertation, was awarded the David A. Wells Prize for l970-7l. The author is Associate Professor of Economics, The University of Chicago.

How can workers retain job security in an industry currently experiencing extensive restructuring and retrenchment? In the United States, massive layoffs in the 1980s in industries like steel have resulted in increased worker demands for job security provisions in collective agreements and legal protections against layoffs. In many Western European countries, where private-sector practices ensuring strong job security and laws regulating layoff practices were well established, the 1980s brought strong pressure from business to relax job security in order to facilitate rapid restructuring.

Susan Houseman's book presents some of the first hard evidence on the economic effects of providing job security, evidence gathered during the restructuring of the European Community's steel industry in the 1970s and 1980s. The author reviews personnel practices by the Community's leading steel companies, basing her analysis on extensive interviews with employers, workers, and government officials in West Germany, France, Britain, Belgium, Luxembourg, Italy, and the Netherlands. Drawing on economic theory, she shows that the extent of workers' rights to job security will affect how an industry optimally adjusts to a decline in demand and to a situation of excess capacity.

Using detailed plant data, she shows that job security for workers affected decisions concerning employment, production, investment, and plant closures in the industry, While job security for workers may slow the process of industrial restructuring and result in lower productivity, the author points out that it also generates important social benefits, including community stability and a more equitable distribution of the risks and costs of economic change.
This book will draw the attention of policymakers in government and in international organizations such as the European Community, the OECD, and the ILO. It will also be of interest to scholars in labor economics, industrial relations, public policy, and business.

When, how, and why did the state enterprise system of modern China take shape? The conventional argument is that China borrowed its economic system and development strategy wholesale from the Soviet Union in the 1950s. In an important new interpretation, Morris Bian shows instead that the basic institutional arrangement of state-owned enterprise—bureaucratic governance, management and incentive mechanisms, and the provision of social services and welfare—developed in China during the war years 1937–1945.

Bian offers a new theory of institutional change that explains the formation of China’s state enterprise system as the outcome of the sustained systemic crisis triggered by the Sino–Japanese war. This groundbreaking work combines critical analysis of government policies with case studies of little-studied enterprises in heavy industries and the ordnance industry. Drawing on extensive research in previously unavailable archives, Bian adds a valuable historical perspective to the current debate on how to reform China’s sluggish and unprofitable state-owned firms.