“The United States today is like a cruise ship on the Niagara River upstream of the most spectacular falls in North America. A few people on board have begun to pick up a slight hiss in the background, to observe a faint haze of mist in the air on their glasses, to note that the river current seems to be running slightly faster. But no one yet seems to have realized that it is almost too late to head for shore.”
– Chalmers Johnson, professor and author, 2008
If you feel that the late Chalmers Johnson’s analogy is accurate, then Andrew Liveris, the Dow Chemical Company’s CEO, is one passenger aboard the good ship America who wants the boat to change course immediately. Liveris has sketched out a map for the crew to use to get to safety, in the form of his new book Make It In America: The Case for Re-Inventing the Economy.
On the question of whether the US will act in time to save its manufacturing sector, the choice, according to Liveris, could not be more stark. “Between 2001 and 2010,” he writes, “US companies were forced to shutter more than 42,000 factories. A third of all manufacturing jobs – a full 5.5 million – have disappeared. The entire sector is hemorrhaging.”
He adds: “We are losing [manufacturing jobs] because we aren’t competing for them, because around the globe, other countries have stepped up to attract companies to build facilities in their cities, while the United States has wrongfully assumed that its status as the world’s only superpower would somehow save the day.”
But what’s the solution?
“We can be like the United Kingdom,” Liveris writes – which long ago became an industrial backwater, after embracing the idea that its future lay more in British expertise in sectors like financial services and banking than it did in British expertise in making things.
“Or we can be like Germany,” Liveris offers as a contemporary alternative – which, unlike the UK, has taken intelligent measures over the years to ensure its entire manufacturing sector was not packed up and shipped off to some low-wage, Third World dump.
Liveris’ book offers a menu of choices for policymakers and business leaders worried about US manufacturing to mull over, covering everything from energy policy, immigration, infrastructure and business taxes, to carbon pricing (Liveris is for it), more science education for young Americans and a more street-smart approach to free trade agreements.
Free trade/free market purists won’t like Liveris’ preference for a more state-intervention-friendly approach over the laissez-faire UK model. It will be interesting to hear how Liveris deals with criticism along these lines as reaction to his book accumulates. Some will call it evidence of the usual “rent-seeking” by a CEO hoping to receive favors from Washington.
And historically-minded readers may question how Liveris could write a book about US manufacturing without including a single reference to Alexander Hamilton, first US Treasury Secretary and author of a 1791 document known as the Report on Manufactures. This study helped focus attention on the need for the young Republic to industrialize itself. Even if Hamilton isn’t mentioned directly, however, there is something of a Hamiltonian spirit to Liveris’ book.
Still, I think Liveris might have been able to strengthen his case for more government/industry cooperation by pointing out that at least one key Founding Father, Hamilton, did not see such cooperation as harmful to the US’ free political institutions.
Indeed, Hamilton could fairly be said to have seen government/industry cooperation as key to the maintenance of those free institutions, as it contributed to the economic growth and stability of the Republic.
It was heartening to see a reference in Liveris’ book to Eamonn Fingleton, the Irish journalist who has dedicated a large chunk of his recent writing to highlighting manufacturing’s importance to the United States’ economic health. (In this, Fingleton resembles in some ways his countryman, the 19th century Irish-American publisher Mathew Carey, a friend of America’s manufacturers.)
Andrew Liveris has produced a well-written and timely book that deserves wide circulation. Everyone concerned about America’s economic difficulties should read it.