I wanted to like this book more than I did. Uchitelle has a long history on writing about this subject, and I think in some way that history makes him nostalgic in a looking backward sort of way and not in proposing new solutions.
In the book, he looks at the relative decline of manufacturing as an urbanized phenomenon and wants to get back to that. He hates the factories that do exist in smaller communities near the interstate using more robotics. What he really doesn’t like is the race to the bottom in terms of state giveaways to corporations for locating their factories in one place and not the other. He is right to emphasize that these are zero-sum giveaways.
But he also misses some things and under-emphasizes others. Reading this I wanted him to talk not just about the tax incentives to bring factories but also right to work laws that allow manufacturers to pay less. Deunionizaion is only mentioned in passing when for me it is a huge part of the story. The other miss is that the decline in manufacturing is only on some metrics. Manufacturing output has grown almost every year as productivity grows. Gone is the need for armies of men stamping metal and instead you have much fewer manual jobs but the jobs that do exist are skilled up – this plus the deunionizaion mean that we make more with fewer people. The other side of the coin is that manufacturing has not been shrinking, but growing at a slower rate. More services are in the marketplace so these have overtaken manufacturing. I’d also map to that the entrance of more women in the workplace over the last generation. Things that were internal to the family now hit the national accounts.
But how to fix it? He really wants manufacturing to make up a larger percentage of the GDP. Which means either more done here or less in services (got to hit the top or bottom of the fraction there). He wants to bring back a national industrial policy akin to one proposed by Reagan so that the central government would dictate to private companies where to build and where to source from while nationalizing those zero-sum state subsidies and an incentive for reshoring. But this industrial policy as described in the book feels so Pollyannaish that reading it made me mad. He wants to reverse globalization and have the state (with cooperation between the parties, no less) dictate to corporations, but even he admits that that horse left the barn. For me the whole think is looking too far backwards to want to try to regain the glories of the 50s and 60s when the economy was growing and the gains were more equally spread. But that is not here or maybe possible at all. What we need is economic policy that is forward looking to face the challenges of the 21st century and not try to return to the 20th.
