Making It

The growth of the American economy and related changes in the twentieth century were driven by achievements in manufacturing: the innovations of technology, the incomes of manufacturing workers that fueled a growing consumer economy.

But at least since the 1970s the manufacturing sector has been in decline.  Americans were buying more and more products made in Japan and China, and other countries even when made by ostensibly American companies.  For awhile it was fashionable to see this as a natural transition to a different kind of economy, based on services and consumption.  But there have always been doubts about how smart and sustainable that might be.  Those doubts, furthered by various bubbles and crashes caused by the so-called "services" of financial institutions, are urgently expressed in these three books.

America's Assembly Line by David E. Nye (MIT Press), while written in straightforward and undramatic prose, manages to say something interesting on almost every page.  The facts and stats can be deceptive--it's the selection and the focus that's so fascinating.  In one way, it's 20th century history and culture as seen from the factory floor, and as reflected in the assembly line.  (Among the many factual gems is that the term "assembly line" was popularized by FDR, and wasn't in general use until the 1940s.)

The assembly line itself of course goes further back, to methods of mechanizing production in the late 19th century.  But the 1940s gave it a mystique through the U.S. production of the weapons that won World War II (though Nye also cites German mass manufacturing--using U.S.-born innovations--as a factor both in the rise of the Nazi government and the German war effort.)

The assembly line  is most associated with the American automobile industry, and so Nye chronicles its history, including the 21st century .  The auto industry itself became the symbol of the American middle class, buying its shiny new cars with wages earned in its factories.  The threat to these jobs by automation had long been feared, and combined with other factors, the rise of robots has made those nightmares come true, with pretty much none of the remedies that scholars debated being applied.

The result is the U.S. with the highest divide between rich and the rest, while falling behind other industrial nations in production.  Yet Nye doesn't lose track of the manifest ills of the assembly line--not so long ago considered the breeding grounds for alienation and cultural stupor.  He briefly looks into alternatives and concludes that the entire American economy built around the assembly line needs to be rethought, for environmental and resource reasons as well as global economics.  But he offers only a vague revisionism.  "In 2013 it was time to reinvent both production and consumption and construct a greener assembly-line America."

Made in the USA: The Rise and Retreat of American Manufacturing  by Vaclav Smil (MIT Press) goes through the same historical period in a more generalized way, making a case for how essential manufacturing was and remains for the American economy.  He pays a bit more attention to the present and the future however, with somewhat mixed results.  But he does highlight a present danger, in noting that the U.S. has not only lost much of its manufacturing business but also its manufacturing capacity, and direct access to crucial manufactured products.

He emphasizes materials needed for the much vaunted high technology and information economy that is supposed to be America's strength.  There are parts and products no longer made in the U.S. that are essential to every computer in the country.  Smil however doesn't draw the essential conclusion, for he believes that "subcontracting and outsourcing have made the concept of the country of origin of many manufactured goods a rather meaningless notion."  But it would take only disruption of cheap transportation or a geopolitical crisis to put meaning back into it.  Similarly, he points to a future of more sophisticated and pervasive robotization without much to say about how to deal with even further loss of income and employment.

He does trace the rise and fall of Japanese industry since the 1980s, when it was poised for supremacy, and notes a chilling contribution to the decline: the inability of Japan to make political decisions.  He also notes the current rise of German manufacturing, which (he writes) is based on moderate-sized companies embedded in local communities with family ownership.

Making in America: From Innovation to Market by Suzanne Berger with the MIT Task Force on Production in the Innovation Economy (MIT Press) is a compact but wide-ranging report based on a two-year study of 250 manufacturers in Germany and China as well as the U.S..  Here manufacturing history is the backdrop and the future is the focus.  Again, the case is made that manufacturing is important to the U.S. economy, its people and the U.S. itself.  The emphasis falls on technologies and how they are used, and how companies are organized to reflect new technologies in all parts of the business. They seem to favor small, flexible, sophisticated firms over the industrial giants of the past.  Notably this book concludes that Chinese firms prosper not chiefly because of cheap labor but "because they are able to translate between advanced product designs and complex manufacturing requirements."

The last part of the book focuses on the key question of employment.  Their survey found that at least in 2012, finding employees with the requisite skill levels wasn't the problem a lot of people were saying it was.  The needed skills were at the high school graduate level.  "So there is little evidence of across-the-board skill demands that go beyond the capabilities and credentials of the population. Nor...does the demand for advanced skills seem to be rising rapidly."  But there are problems finding advanced skills for the more innovative firms, and the book goes into the need for new relationships between firms and educational institutions, since small firms can't do the kind of training large companies used to do.

New ways of pooling and organizing skills and other efforts beyond single companies to regenerate "the industrial ecosystem" are discussed.  While these have a familiar ring--public-private cooperation and a kind of social media emphasis on continuous communication--the task force has some success stories to go by.  But they also found that some managers who complained they couldn't get qualified workers were coincidentally not paying competitive wages.  The core problem of decently paid employment is not adequately addressed, nor is the Third Industrial Revolution Smil alluded to, when a new generation of more sophisticated robots goes to work, with little chance they'll take off to a higher paid job.