On the nostalgia for manufacturing

John Kay in the Financial Times Wednesday makes an excellent observation: "Manufacturing fetishism is back." Kay then unrolls a graceful little essay that takes apart the notion that you can't have a growing, prosperous economy without making things -- a theme that tends to arise at times like this when folks are shaken up by recession and crisis. Kay patiently works his way through a kind of Econ 101 disquisition, which mostly involves the links between productivity and the division of labor, then dips into a short and trenchant lesson in economic history. In most of mankind's history, you couldn't shuffle papers for a living in large numbers -- or teach, or write, or dream up software or deals -- because productivity was abysmal and the division of labor mostly involved killing animals or growing food. But, as Kay writes, "Attitudes formed in those more primitive times remain deeply embedded." In other words, we feel guilty, and we, in his term, "fetishize" labor.

"Today manual labor is cheap because the world has no shortage of hands," writes Kay. "The iconic manufactured goods of modern life are the iPod and the cruise missile, the Viagra tablet, and the Coca-Cola can. For each the resource content is a negligible part of the value of the product and so is the manufacturing cost. They are, in reality, packaged services."

This seems right. I would add a few thoughts. First, this dream of a return to manufacturing is an integral part of the larger complex of arguments that come and go with economic cycles: competitiveness, decline, we-don't-make-stuff-anymore. Second, while we provide lip service to the desire to return to the days when children could follow their daddies into the local steel mill, most parents would rather their children become accountants or M.B.A.s. In other words, manufacturing is for other folks, not us, given a choice. Third, based on the political chatter that's flying around, manufacturing packed up and left the U.S. in the administration of Barack Obama. Hardly. We've been shedding our manufacturing base probably since the '60s, certainly since the '70s, and some of those decades were pretty prosperous. Fourth, as a considerable amount of reporting by our own Matt Miller suggests here, here and here, a tremendous amount of basic industry has left to nations that can do it more cheaply. But there is still a decent amount of new company formation and old company retrofitting going on around cities like Pittsburgh, Milwaukee, Cleveland, Chicago, Los Angeles. The problem is there are fewer jobs, because these companies tend to be extremely high tech and efficient. And the days when someone could drop out of school and take a job at the local chair-making plant are gone -- unless you want to move to China.

The major danger to a post-industrial society that depends more on brains than brawn is if it suddenly gets really stupid (that doesn't just apply to our financial woes). The major way for this to occur, of course, is to allow the educational system to decay and collapse. OK, that's a big issue right now, and it's a little unclear where we're going. But for all our anguish over primary and secondary education, we still have a large and impressive, if frighteningly expensive, higher-education system. Another way to true post-industrial decline, which is currently in vogue in certain circles, is to resort to the old isolationist notion of autarchy. There's a lively American tradition here: Let's go it alone. Screw the foreigners. Since globalization provides all those willing hands to make things so cheaply, let's pretend They don't exist. Let's buy American. Let's restrict immigration (thus cutting off a source of both cheaper labor and brains, not to say youthful souls to support us in our old age). Let's raise trade barriers and subsidize basic industry. This, in essence, is the nostalgic, let's-return-to-the-'60s impulse. Let's make like a larger, more complex version of, say, Myanmar or North Korea or Albania before the Albanians got smart.

Indeed, even those who wouldn't get caught dead spouting isolationist sentiments are really suggesting such a step when they argue that the government can somehow revive the manufacturing base that existed 50 years ago.

Markets need not be totally free, but the autarchic impulse would be fatal, if only because it will restrict Kay's division of labor, making us steadily poorer, not to say less safe. Part of the problem, of course, is that competing with brains rather than brawn (and natural resources) is tough: It's like being a startup company in a particularly fluid, fast-changing industry. The rewards can be great, but there is no safety net and competition is unrelenting. Over time, wealth may increase, but your pre-eminence may flag. You will sense decline. You will tire of struggle. You will recall those glory days of a robust working class and of cities full of smokestacks. You will believe the way to get those good, secure, union jobs back is to reduce the ranks of the symbolic analysts, the abstract thinkers, the paper pushers, the M.B.A.s because, after all, it's a zero-sum game. Us and them. Of course it's not, just as international trade is not.

But when you feel that manufacturing fetishism coming over you, consider one historical reality: In the days of industrial ascendancy, roughly from the post-Civil War to post-World War II, most of America peered yearning backwards at what they saw as the true spring of authenticity: the family farm. Who wants to get up and milk the damn cow? - Robert Teitelman

Robert Teitelman is editor in chief of The Deal.