Why Manufacturing Matters

By Landuyt, Eric H. | Monthly Labor Review, October 2016 | Go to article overview

Why Manufacturing Matters


Landuyt, Eric H., Monthly Labor Review


Made in the USA: The Rise and Retreat of American Manufacturing. By Vaclav Smil. Cambridge MA: MIT Press, 2013, 277 pp., $27.95 cloth.

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Made in the USA, written in 2013, is a relevant, well-documented, yet compact commentary on the contribution of the manufacturing sector to the modern American economy. Author and distinguished Professor Emeritus Vaclav Smil, of the University of Manitoba, describes the development of several stages of our economy as they relate to manufacturing. The growth of the manufacturing sector played a key role in taking the economy from the late 19th century into the 20th century. The steps involved, says the author, prove the importance of manufacturing in the reward Americans earned for their hard work. There was a turning point, however, and we are now at a different point in our history, with fewer manufacturing jobs and a more service-oriented economy.

A central effort of the book is to discuss problems that the nation has experienced. Both the problems themselves and Smil's discussion of them are based on different phases of economic growth, especially in manufacturing. The author adds insightful commentary on the current status of manufacturing in the economy. Toward these ends, his most important ideas combine two themes: that manufacturing is a major component of a modern economy and that people dismiss this massive sector of U.S. and world economic output too readily. Smil provides a condensed step-by-step history of the ascent of manufacturing in the United States, from Colonial America to the Civil War, after which the nation became an economic powerhouse. He then leads the reader into the prosperous 1920s, the Great Depression, World War II, and the subsequent years of prosperity and economic expansion spearheaded by the auto and construction industries and showcased by the mass production of consumer goods. After describing the ascent of manufacturing from 1948 until the energy crisis of the 1970s, he identifies an era of decline in American manufacturing: from its peak in the mid-1970s to the present day, the output of goods-producing industries has been decreasing steadily.

Smil's purpose in writing the book is to promote the favorable image he has of the economic importance of manufacturing. He says that those economists who believe that a declining manufacturing sector is normal and to be expected--and is even healthy--in an era of a stronger, more natural, and more relevant services-oriented economy hold a distorted view. One example is Romanian-American mathematician, statistician, and economist Nicholas Georgescu-Roegen, who recommends an economic outlook based on physics' second law of thermodynamics, also known as the law of entropy. …

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