1.

2.

3.

4.

B.

1.

Sweden...

European Common Market (EEC).

Other Countries....

III. SPECIFIC PURPOSES OF ECONOMIC STOCKPILING

A. Conceptual Logic of Economic Stockpiling

....

Possible Functions of an Economic Stockpile.

Economic Trends and Cycles of Stockpiling.

Types of Benefits and Costs Involved in Economic Stockpiling.

Rationale for Federal Government Support of Economic Stockpiling

5. Total Net Benefits of Economic Stockpiling.

Development of Economic Stockpiling Policies for Initial Consideration

National Policy Objectives.

2. Eleven Stockpiling Policies (SP) Studied..

37

37

37

41

41

41

43

44

45

46

46

46

47

Methods of Analyzing Economic Impacts

C. Interviews with U.S. Business, Labor, Government, and Civic Action Groups .. 48

Classification of Stockpiling Policies for Detailed Analysis..

D.

E.

1.

2.

Problem Origin, Function, and Principal Impact Mode of Eleven Policies..

Five Stockpiling Policies Selected for Detailed Analysis ..

Decision Criteria-A Model for Developing and Implementing Economic

Stockpiling Policy

1. Components of the Decision Criteria Model.

2. Materials Selection Criteria ....

3. Modified Delphi Technique Used To Identify Problem-Related Materials

IV. APPROACHES USED TO ASSESS IMPACTS OF ECONOMIC STOCKPILING.....

A.

1. General Description of Economic Welfare Model.

50

50

51

64

3.

Discussion of Computer Program Developed to Estimate Economic Impacts

of Stockpiling..

Economic Impacts of Stockpiling to Discourage or Counteract Cartel or Unilateral

Political Actions Affecting Price or Supply (SP−1)....

Discussion of Partial Economic Benefits and Costs for Each Phase of

Stockpile Operation for SP-1.

99

5.

C.

Summary of Economic Net Benefits and Partial Benefits for SP–1. .

Economic Impacts of Stockpiling to Cushion the Impacts of Nonpolitical Import

Disruptions (SP−2)...

102

104

Discussion of Partial Benefits and Costs for Each Phase of Stockpile Opera-

tion for SP-2. ....

111

4.

Summary of Economic Net Benefits and Partial Benefits for SP-2.

D. Economic Impacts of Stockpiling to Assist in International Materials Market

Stabilization (SP-3) ..

113

115

Discussion of Partial Benefits and Costs for Each Phase of Stockpile Opera-

tion for SP-3.....

122

4.

Summary of Economic Net Benefits and Partial Benefits for SP-3........

124

X

Economic Impacts of Stockpiling to Conserve Scarce Domestic Materials (SP−4)

Derivation of the Benefit Function for SP-4..

E.

1.

3.

Discussion of Partial Benefits and Costs for Each Phase of Stockpile Opera-

tion for SP-4....

125

125

127

130

4.

F.

Summary of Economic Net Benefits and Partial Benefits for SP-4..

Economic Impacts of Stockpiling to Provide a Market for Temporary Surpluses

and Ease Temporary Shortages (SP-5)

Discussion of Partial Benefits and Costs for Each Phase of Stockpile Opera-

tion for SP-5....

140

4.

Summary of Economic Net Benefits and Partial Benefits for SP-5. . . . . . . .

141

B.

VI. MANAGEMENT AND INSTITUTIONAL CONSIDERATIONS FOR IMPLEMENT-

ING AND OPERATING AN ECONOMIC STOCKPILE

A. Decision Criteria-A Model for Developing and Implementing Economic

Stockpile Policy.

1. Components of Decision Criteria Model...

2. Specification of Functional Nature of Stockpile.

Unique Information Requirements ..

Requirements for a Materials Information System

Conclusions Regarding Information Requirements.

Organizational Options for Establishing an Economic Stockpile.

Safeguards Against Stockpile Abuse...

D. Interrelationship of an Economic Stockpile with other Materials Policies

VII. ALTERNATIVES TO ECONOMIC STOCKPILING.

A. Reasons for Considering Alternatives to Stockpiling.

Alternative Methods to Increase Supply

1.

2.

Direct Subsidies to Producers Working Marginal Resources..

Tax Incentives to Encourage Production From Marginal Resources.

171

172

3.

Research and Development To Increase Production From Marginal

Resources or To Process Substitute Materials

173

4.

Low Interest Loans and Investment Guarantees To Encourage Exploration

and Production

176

Tariff Concessions to Countries Producing Raw Materials.

Increased Recycling of Secondary Materials. . .

Role of Public Lands in Increasing Domestic Supply.

Alternatives to Maintain Stable Levels of Supply

5.

6.

7.

C.

176

177

178

179

179

181

....

E. Summary of Alternatives and Impacted Sector Groups

1. Alternatives to Economic Stockpiling Policies . . .

2. Sectors Impacted by Alternatives to Economic Stockpiling.

VIII. LEGISLATIVE CONSIDERATIONS REGARDING ECONOMIC STOCKPILING....

A. Options for Considering Economic Stockpile Legislation...

1. Evolution of Current Public and Private Systems Without Enacting New

Legislation

182

182

185

185

186

187

187

187

187

191

191

191

C. Public Policy Issues Related to Establishing an Economic Stockpile .

IX. GLOSSARY...

198

201

205

Appendix A History, Management, and Problems of Stockpiling in the United States

Introduction...

221

221

Appendix B-Case Studies....

A. Long-Term Program for Disposal of Government Stockpiles of Aluminum

241

241

B.

Titanium Stockpile Program, 1972-75.....

245

C.

Expansion of Copper Producing Capacities: The Defense Production Act of

1950, as Amended...

249

...

A.

B.

H. International Cartels...

Appendix C-Economic Stockpiling in Foreign Countries...

A. The European Economic Community Stockpiling Program.

B.

Stockpiling in Japan.

C. Stockpiling in France..

D. Stockpiling Incentives in Sweden.

Appendix D-Relevance Trees and Weighting Matrices...

Introduction ....

Relevance Trees

314

323