In 2016, Trump snapped the nation’s attention back to the critical issues of this century. Our economy has left behind the whole manufacturing sector. Progressives have captured our media, our cultural institutions, even the corporate boardroom. Our state’s capacity to handle international crisis is crumbling after repeated failed military interventions abroad. Migrants are flooding the country, completely unimpeded.
Seven years later under President Biden, these remain live issues. And yet the political right has fallen back into the trap of the short-term. On the Republican primary debate stage, candidates gain traction by quipping and hurling personal insults. News cycle commentators offer little substantive analysis of current events. And Trump himself only seems to reanimate his term’s grievances and half-victories. We all seem to have gotten lost in the particulars and forgotten the lessons learned in 2016.
We must look beyond the problems of 2023 and instead ask: What can achieve America achieve in the coming decades? What kind of lives do we want our children to lead? How can we bring back the stable, robust economy that previous generations of Americans took for granted?
The answers to these questions are complex. But one program may go far in addressing all three: a program of reindustrialization. As the most recent data from the Bureau of Economic Analysis show, almost twice as much of our economic output comes from the entertainment, services, information, and finance sectors than from industries like manufacturing, agriculture, construction, and transportation. The result? During the pandemic, two-thirds of US workers were deemed “non-essential.” To be sure, every healthy economy needs its professionals, its programmers, and its performers. But trade relations can sour; supply chains break down; natural disasters strike. When demand slackens for virtual or luxury services, we will wish we were busier making stuff – real stuff.
Since the time of President George Washington, the federal government has directed the course of our nation’s economic development by prioritizing certain sectors over others. Alexander Hamilton pioneered the concept as Secretary of the Treasury. In 1791, he stated that “it is the interest of a community with a view to eventual and permanent economy, to encourage the growth of manufactures.” At the time, many would have seen Thomas Jefferson’s vision of a nation of independent farmers as more suited to the realities of America’s economy. Hamilton’s idea of a strong developmentalist state seemed impractical and implausible – but today, he is understood as the visionary of the two.
Hamilton proved prescient in predicting the course of global development. In most historical examples, manufacturing has proven the only pathway out of a raw-goods and extraction economy. The manufacturing sector enables the formation of a middle class; it buffers against political capture by resource-hogging autocrats, as occurs in much of the Middle East and Africa; it lays a platform for a nation to launch into the upper-income stratum. China provides a textbook case: with its strong state and large labor pool, Beijing rapidly built out China’s manufacturing sector in the late 20th century, bringing it among the ranks of upper-middle-income nations.
This approach has continued to keep China’s economic engine chugging along. As China’s Minister of Industry noted, to keep a country economically competitive, one must “keep the proportion of manufacturing industry to GDP basically stable” and “make the real economy stronger, better and bigger, and provide a strong material foundation” for the nation’s power. The same holds true for advanced, ‘post-industrial’ economies.
As China surged ahead over the past decades, the US fell behind. Production chains were vertically dis-integrated and offshored. American manufacturing employment rates sank precipitously – even as automation rates lagged (and still lag) behind East Asian countries. Other nations, absent neoliberal economists’ rosy notions of post-industrial affluence, made it more attractive for international corporations to set up shop there.
As the ladder to middle income vanished in the US, despair struck the Rust Belt. Drug use and suicide spiraled; men perished in their prime. The national life expectancy fell. Other emerging economies, especially in Latin America and Africa, were hit even harder: Brazil and Guatemala were set so far back in the industrialization race that their per capita GDP growth has stagnated since 1980. In many West and Central African countries, GDP has even declined in absolute terms.
As China amassed industrial capacity, then, other nations paid the price of foregone potential. In advanced economies like the US, strong manufacturing was the glue which held together the middle class. In politically sidelined regions, Trump surged in popularity among the formerly middle-class disaffected. Political life became more volatile.
The Biden administration’s “Build Back Better” agenda took shrewd note of these lessons. Last year, Democrats passed the Inflation Reduction Act (IRA), a massive $437 billion package of investments and incentives to rebuild US industry and buttress fragile supply chains. Though the IRA does focus on pro-industrial ends, it suffers severe flaws. The National Association of Manufacturers (NAM), a manufacturing industry trade association, opposes the IRA because it raises corporate tax rates across the board. The IRA also did little to ensure that crucial technology manufacturing actually happens in the US. These shortcomings could be addressed by a conservative administration with a serious mercantilist agenda. A revised version of the IRA should strategically limit the tax burden on manufacturers and restructure incentives to onshore advanced manufacturing – the surest way to protect our supply chains and bring back jobs.
Advances in manufacturing technologies – assembly lines, for instance – propelled America forward in the early 20th century. Wartime innovations, such as interchangeable firearms parts and mechanical automation to make up for war labor shortages, made the US par to none in advanced manufacturing. After World War II, the federal government built a public–private innovation system to remain competitive. The new R&D pipeline skipped manufacturing because continued US supremacy in the field was assumed. This legacy R&D system still focuses on basic products, such as pharmaceuticals and software, rather than on advanced manufacturing. We are seeing now how public investment in manufacturing advances is fueling China’s economic dynamism. The US must mobilize its advanced manufacturing research and production pipeline, as in wartime, and take the lead again.
The skeptic might claim that we are too far gone; factories are shuttered and skill sets lost. How could the US pivot toward becoming an industrial powerhouse again? These critics would be wrong. We have the institutions we need to recenter our manufacturing industry – they have simply fallen into disuse. American workers remain creative and driven. They only need encouragement and incentive to get industry going again.
First, we must connect and reinforce our manufacturing pipelines across the economy. We need a multi-pronged approach. Use federal procurement to kickstart some valuable technologies and offer scale-up financing for others. Expand and link our various institutes for manufacturing research and certification. Get federal R&D agencies involved in the industry again.
Next, we must widen opportunities for workers to join the industrial sector. Vocational training in the US is fragmented and disconnected from the realities of US manufacturing. We need updated certification and apprenticeship programs, wide manufacturing pipelines from community colleges, and worker upskilling programs.
A cultural shift is also critical. A college degree is still the barrier to entry in many professions. However, with a glut in degree-holders, college has become a costly personal and familial investment that fails to deliver to individuals the income boost they expect.
We owe greater prestige to “unskilled” jobs that don’t require college degrees. Jobs in manufacturing can be hazardous and require true ingenuity. Manufacturing acts as a fiscal multiplier on the whole economy, providing many jobs indirectly, and it does a real, tangible service to the nation. We ought to respect those who earn a living through it. (The same could be said of those in primary school education and policing, which are facing their own labor shortages.)
As industry grows, however, we must reduce the externalities – pollutants and otherwise – that are generated by the manufacturing process. Just as we scoff at the errors of lead paint and asbestos, we should not delay in excising harmful chemicals from our everyday products. Furthermore, an economy based in the world of “stuff” requires that we conserve and grow our natural resource base. I have argued before that expanding conservation efforts will likely generate many well-paid jobs with few educational barriers that develop practical skills. Hand-in-hand with this, we require greater investment in sustainable agriculture projects – to finance experiments in new methods and to implement tried-and-true ones. Finding scalable alternatives to pesticides and chemical fertilizers will prolong the health of our soils, enabling family farmers to increase their land’s productivity and hold their land in perpetuity. Reducing pesticide use also prevents the many unseen back-end costs of cleaning up polluted water for human use. In any case, the status quo is unsustainable. Even in matters as basic as our groundwater, we need to get serious, and fast, about long-term planning.
To keep the country buzzing, we must shift to nuclear power. Nuclear is hugely energy dense: a small, safely disposed uranium input boasts a huge energy output at minimal human risk and with few tradeoffs besides being low-carbon. A nuclear economy will provide us energy independence in the face of geopolitical instability, as it has for France. This will demand big capital investments, but ones that provide lasting, well-paid jobs in the immediate future and the long term. The sooner America switches to this form of energy, the less politicians will feel the need to irreversibly dry out our aquifers with fracking or call for a return to coal.
Nor should we allow the US to be left behind by Beijing in the development of green energy. We should use technology researched, designed, and manufactured here, where environmental standards are higher. If the biosphere truly is at risk due to carbon emissions, the precautionary principle urges us to do what we can to reduce them in a cost-effective manner. The energy transition is an opportunity for America to invent, patent, and sell new technologies around the world. It can also open greater opportunities for workers in the hard sciences and skilled trades.
The IRA signaled an emerging economic consensus in Washington. Democrats now embrace manufacturing and a take guarded, self-sufficient posture towards China. Yet it is Republicans who can claim credit for raising the manufacturing issue, and the GOP is electorally well-positioned to remain the “Made in America” party. If the IRA was the Democrats’ belated concession that the economic nationalists got it right, the gesture isn’t going to win any votes. Liberals scrapped their nationalist bona fides long ago, and they won’t get them back by fomenting racial division and historic mass migration across the border.
To get elected, the GOP must assure key constituencies that they will see lasting benefits from a Republican program beyond a few victories in the culture war. The GOP should tell voters that under their program, their livelihoods will not be dependent on receiving a degree or working a desk job in the metropolis. If the IRA was Biden’s olive branch to the regions hollowed out by global trade imbalances, Republicans must offer America the whole olive grove: an Industrial Resurgence Act.
Without a true course correction, the managerial elite will continue to dominate our economy, our culture, and our politics. As wealth grows in the virtual economy, expect prolonged stagnation for the underclass that produces the “essential” goods and services we all rely upon. If Republicans are to address the core issues of today, they must show voters that the managerial class will hold undue sway no longer. The GOP will not be beholden to neverending demands for “equity,” nor will it be seduced by the laissez-faire siren song that has steered America into stagnant waters. It will think first and foremost of families yet to be formed, children yet to be born, and factories yet to be built. It will hold to the winds of national interest. And to get there, America must manufacture again.
The above is an opinion contribution and reflects the author’s views alone.
Image: Charles Sheeler, Classic Landscape, 1931
(image courtesy of ARTSTOR)
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