A deeply disturbing report on Adam Smith run amok--or how the Reagan and Bush Administrations, pursuing laissez-faire free-trade policies, presumably allowed foreign competitors to undermine the technological base underlying American military power. Having detailed the dangers of overseas capital (Buying into America, 1988) and deregulation (Dismantling America, 1983), the Tolchins (Martin: a national correspondent for The New York Times; Susan: Public Administration/George Washington Univ.) now use statistics and in-depth case studies to illuminate why America slept on the high-tech front. While aiding their own multinational companies through subsidies, protective trade barriers, and a benign eye toward collusion, our Japanese and European allies, the authors say, exploited the government's need for foreign dollars to finance the deficit, its indifference to takeovers, and its willful nonrecognition of technology's importance. The result: the US, despite the biggest peacetime military buildup in its history, squandered its lead in such strategically significant technologies as semiconductors, supercomputers, optoelectronics, and digital imaging. Just as painfully, foreign multinationals snapped up the last major US producers of robots and silicon wafers. The Tolchins do more than engage in mere Japan-bashing, however, for they enumerate the costs incurred by the flat-footed US response to overseas incursions (even the much-vaunted victory over Iraq, they point out, was accomplished with weaponry whose components came from abroad). Moreover, they suggest positive steps the US can take to compete more successfully in the new global economy. Despite its sober tone, an alarming wake-up call about our national slippage.