What President Trump Can Do With The American System 2.0 - Flipbook - Page 15
How to Become a Manufacturing Superpower:
Technology and the Productive Powers of Labor
In many respects, America is fast approaching the condition of a Third World, developing
nation. We have lost hundreds of thousands of
factories. Go into a Wal-Mart, a Home Depot,
or shop on Amazon and you will 昀椀nd almost
everything is imported, and what is left of our
manufacturing sector, like the automobile and
aerospace industries, likewise is dependent on
imports. Look at the machines being employed;
look at the individual parts used in the 昀椀nal
product; look at the bolts, the machine tools,
the electronic components. Almost all are made
overseas. This is also true of the defense sector,
where the question of foreign supply chains becomes a ma琀琀er of national security. We are vulnerable as a nation.
As President Trump and others realize, we can
and must use tari昀昀s and other American System measures to bring manufacturing production back to America. But, the secret to making
this work is to rapidly increase the productive
powers of our labor force, ensuring domestically produced goods are of the highest quality
and manufactured at the highest levels of productivity. This means new technologies, higher
capital intensity, and higher levels of energy
昀氀ux-density—concepts few understand today.
Promethean Action
To see what true productivity increase looks
like, look at the long-term changes in agriculture. We went from requiring 95 percent of
our labor force to be engaged in agriculture at
the time of the American Revolution, to only 2
percent today. How was such a revolutionary
transformation possible? At the founding of our
nation, farmers had relatively simple tools, powered only by human and animal physical power, leading to a relatively low level of productivity per farmer. At these productivity levels, the
majority of the population had to be engaged in
agriculture simply to feed the nation.
Then, in the 18th century, steam engines and
heat-powered machinery were introduced,
powering the Industrial Revolution. Industrial
mass-production put more tools into the hands
of the farmer (capital intensity), including tools
that embodied higher technologies. This included the use of heat-powered machinery in tractors and farm equipment directly used by the
farmer, which increased the quantity and concentration of energy applied to the agricultural
productive process (energy 昀氀ux-density). Further, water projects ensured stable freshwater
supplies, while the expansion of rail networks
enabled the cheap transportation of capital
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