Referring to nations where government does more steering of the economy, President Clinton argued during his campaign that we ought to "copy our competitors." Some administration officials - as well as others outside the government - have pointed to Japan as an example.

Many Americans believe that the Japanese have triumphed in nearly all their economic endeavors and that benevolent guidance by the Japanese government, particularly the Ministry of International Trade and Industry, or MITI, is the reason. The fact is that Japanese industrial policy offers very little to envy or copy. Japan has enjoyed economic success not because of government planning but in spite of it.

• In the 1950s, MITI tried unsuccessfully to force the Japanese automobile industry into a single company - because planners were certain multiple competitors would only weaken each other; because the MITI effort failed, Japan now has nine vibrant, competitive auto builders.

• In 1953, MITI was unimpressed with a small company named Sony and gave it permission to buy transistor-manufacturing rights from Western Electric only after persistent badgering by Sony's founder.

• MITI pushed a giant, force-fed steel industry buildup during the 1960s and 1970s; in the last five years, the industry has laid off more than 50,000 workers and scrapped costly but underutilized plants.

• MITI's expensive attempts to build up Japan's aluminum and nonferrous metal industries, aircraft and aerospace industries and biotechnology industry have all been debacles.

There have also been massive failures of areas of industrial policy under the supervision of other ministries.

The Japanese economy has many weak sectors, and most are the ones that government has subsidized or otherwise shielded. Many of the strongest industries - like consumer electronics, cameras, robotics, precision equipment, pianos, bicycles, watches and calculators, numerically controlled machine tools and ceramics - developed on their own, with little help from MITI or other agencies.

Ironically, as some Americans and many Europeans edge toward Japanese-style industrial policies, Japan is moving away from government involvement. It has privatized the national railway and the national airline and begun privatizing the telephone monopoly and deregulating the oil industry. Deregulation and sharp reductions in ministry guidance are also under way in banking and financial services.

Source: Karl Zinsmeister, "MITI Mouse: Japan's Industrial Policy Doesn't Work," Policy Review, Spring 1993, No. 64, Heritage Foundation, 214 Massachusetts Avenue, NE, Washington, DC 20002, (202) 546-4400.

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