The Myth of the Post-Industrial Economy

The cancellation of Donald Trump’s tariffs cannot stop what is a painful, but potentially gainful, reindustrialisation of America. Leadership across both parties – excluding the libertarian fringe on the right and the socialists on the far left – supports such a step, and the vast majority of Americans favour the large-scale reshoring of industry, primarily from China.

Yet wanting something and getting it are two different things. In the US, and much of the West, there is immense inertia favouring the continuation of offshoring, particularly to China and its satellites. Wall Street, based in a thoroughly deindustrialised New York, has traditionally embraced offshoring. Similarly, Silicon Valley, the other node of power in America, has followed suit, led by megafirms like Apple and Nvidia.

The idyll of a post-industrial economy – the idea that countries can thrive without producing tangible goods or even providing jobs – has proven disastrous. Between 2000 and 2007, the US haemorrhaged 3.4million manufacturing jobs, about 20 per cent of its total, and lost a further 1.5million manufacturing jobs between 2007 and 2016. From 2004 to 2017, the US share of world manufacturing shrank from 15 to 10 per cent, while reliance on Chinese imports doubled, even as Japan’s and Germany’s reliance on Chinese goods shrank.

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