Fighting the Last War
Posted On May 1, 2025
It is sometimes said of aging generals that they are always fighting the last war. It’s a sign that they’re over the hill and really should just gracefully retire, go home, and polish their medals and regale their grandchildren. Because someone could actually get hurt, as a consequence of their obsession with the vanished past they understand, and a fear of the future they do not.
But this is not just a disease of doddering military minds.
“Re-industrializing America” may be the most consistent mantra of the current administration. They claim they’re going to bring back all those “good manufacturing jobs” that we fondly remember from the mid-twentieth century, and that were lost to (or stolen by) greedy trading partners.
Sometimes with these things, it’s hard to know where to begin.
One might begin fifty years ago, with the gutting of what became known as the Rust Belt, when manufacturing companies shut down factories en masse and moved away, first to the union-hostile Sun Belt, and later to Bangladesh, Indonesia, and Mexican maquiladoras, as well as tax havens in Puerto Rico. Later, they went to China.
This is actually how it’s supposed to work. Labor arbitrage is not generally seen as a bug in capitalism. It’s a feature. In the competition among capitalist firms, labor arbitrage is one tool to drive down costs.
It isn’t the only one, of course, or even the most important.
Another is mechanization, the invention and use of machinery and automation to reduce the amount of human labor needed to create an output. Why are machines purchased and jobs automated? Mainly to cut costs. When capital investment provides an attractive payback, firms will invest. And the payback is more attractive when the labor to be replaced is more expensive. If you can get cheap enough labor, of course, then you won’t bother making big investments. Why is so much construction across the south done with wood framing (i.e., two-by-fours)? Because there is a ready pool of cheap (mainly Mexican) labor that can operate nail guns and Skil saws – small investments that pay back handsomely. And if that labor were to disappear or become expensive, the industry would look to ways to reduce it, like modular pre-fabrication. After all, we’re already 3D-printing homes.
But we’re being told by this administration that we’re in a war, and they claim we’re going to win it with muskets and flintlocks.
I mean, tariffs.
The idea that you can bring back millions of “good jobs” and prosperity for all by reversing history and making manufactured products and their components much more expensive, is more than just the delusion of a doddering mind dreaming of past glory in nineteenth-century industrial America. It’s senile. Like old generals recounting cavalry charges and barrages of “grape and canister”, today’s old guard seems to imagine long rows of lathes and presses and welders operated by hundreds of men, choreographed by scientific time-and-motion studies, laboring until their shift ends with the screech of a steam whistle.
It isn’t news that the creative destruction at the heart of capitalism periodically wreaks havoc on society. You can’t have creative destruction without the “destruction” part. But you also can’t undo it.
I suppose if you truly want manufacturing companies (or any other kind) to locate facilities in America, you do what American states do to lure companies away from other states. You pay them. Tax abatements and development grants provide billions in subsidies to private companies every year, although it’s usually because one region of the country is trying to cannibalize another. There is no national strategy to, for example, establish a cluster of competence where an economically important technology is nurtured by a growing pool of educated people and institutional knowledge, in turn driving new firm creation, catalyzed perhaps by a ban on non-compete agreements in employment (à la Silicon Valley).
That would be a completely new set of weapons, and it might frighten the socks off the old guard. It would require politicians to think and talk about new economic directions beneficial to the entire nation, rather than what ‘messaging’ to adopt during the next election cycle, and require voters to pry their eyes away from the clickbait —
Ah, well…probably best to stop there.
Image by Alexander Lesnitsky from Pixabay
Fighting the Last War
It is sometimes said of aging generals that they are always fighting the last war. It’s a sign that they’re over the hill and really should just gracefully retire, go home, and polish their medals and regale their grandchildren. Because someone could actually get hurt, as a consequence of their obsession with the vanished past they understand, and a fear of the future they do not.
But this is not just a disease of doddering military minds.
“Re-industrializing America” may be the most consistent mantra of the current administration. They claim they’re going to bring back all those “good manufacturing jobs” that we fondly remember from the mid-twentieth century, and that were lost to (or stolen by) greedy trading partners.
Sometimes with these things, it’s hard to know where to begin.
One might begin fifty years ago, with the gutting of what became known as the Rust Belt, when manufacturing companies shut down factories en masse and moved away, first to the union-hostile Sun Belt, and later to Bangladesh, Indonesia, and Mexican maquiladoras, as well as tax havens in Puerto Rico. Later, they went to China.
This is actually how it’s supposed to work. Labor arbitrage is not generally seen as a bug in capitalism. It’s a feature. In the competition among capitalist firms, labor arbitrage is one tool to drive down costs.
It isn’t the only one, of course, or even the most important.
Another is mechanization, the invention and use of machinery and automation to reduce the amount of human labor needed to create an output. Why are machines purchased and jobs automated? Mainly to cut costs. When capital investment provides an attractive payback, firms will invest. And the payback is more attractive when the labor to be replaced is more expensive. If you can get cheap enough labor, of course, then you won’t bother making big investments. Why is so much construction across the south done with wood framing (i.e., two-by-fours)? Because there is a ready pool of cheap (mainly Mexican) labor that can operate nail guns and Skil saws – small investments that pay back handsomely. And if that labor were to disappear or become expensive, the industry would look to ways to reduce it, like modular pre-fabrication. After all, we’re already 3D-printing homes.
But we’re being told by this administration that we’re in a war, and they claim we’re going to win it with muskets and flintlocks.
I mean, tariffs.
The idea that you can bring back millions of “good jobs” and prosperity for all by reversing history and making manufactured products and their components much more expensive, is more than just the delusion of a doddering mind dreaming of past glory in nineteenth-century industrial America. It’s senile. Like old generals recounting cavalry charges and barrages of “grape and canister”, today’s old guard seems to imagine long rows of lathes and presses and welders operated by hundreds of men, choreographed by scientific time-and-motion studies, laboring until their shift ends with the screech of a steam whistle.
It isn’t news that the creative destruction at the heart of capitalism periodically wreaks havoc on society. You can’t have creative destruction without the “destruction” part. But you also can’t undo it.
I suppose if you truly want manufacturing companies (or any other kind) to locate facilities in America, you do what American states do to lure companies away from other states. You pay them. Tax abatements and development grants provide billions in subsidies to private companies every year, although it’s usually because one region of the country is trying to cannibalize another. There is no national strategy to, for example, establish a cluster of competence where an economically important technology is nurtured by a growing pool of educated people and institutional knowledge, in turn driving new firm creation, catalyzed perhaps by a ban on non-compete agreements in employment (à la Silicon Valley).
That would be a completely new set of weapons, and it might frighten the socks off the old guard. It would require politicians to think and talk about new economic directions beneficial to the entire nation, rather than what ‘messaging’ to adopt during the next election cycle, and require voters to pry their eyes away from the clickbait —
Ah, well…probably best to stop there.
Image by Alexander Lesnitsky from Pixabay
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D M Smith