Sometimes you can judge a book by its cover. The subtitle of this book reads: Why manufacturing, not the information economy, is the key to future prosperity. That tells me that the author thinks himself capable of central economic planning at the macro level, knowing as he does what economic formula will lead to “prosperity.” Then a glance at the back cover clinches it—fulsome praise from some of America’s most notorious protectionists, including textile magnate Roger Milliken. Judgment based on the cover: Lousy book. But how bad?
Fingleton, an economic journalist and former editor at Forbes (exactly what his domain was at Forbes is not disclosed), begins with an extended assault on his bête noire, “post-industrialism.” By that he means the idea that our economy has advanced beyond the industrial era into a new era based on services and information rather than the production of tangible products. Fingleton is bothered by the fact (if indeed it is a fact, for the book is light on evidence) that manufacturing has gone into retreat in the United States and is being eclipsed by upstarts like software engineering.
So what? In the spontaneous order of a market economy, industries rise and fall with the desires of consumers. Competition to earn profits drives people to commit resources where they will do the most economic good. But Fingleton shows no comprehension of the idea of spontaneous order and indeed often heaps scorn on “laissez-faire zealots.” (In one of the silliest passages in the book, he grumbles that the Nobel Prize in economics has so frequently gone to those “laissez-faire zealots” and explains that the Swedish Central Bank, whose members make the choice, are “laissez-faire zealots” themselves. That’s why the brilliance of protectionists, socialists, and other meddlers is overlooked.) He sets out to prove that a “postindustrial” economy is undesirable.
One undesirable aspect is that, allegedly, a “postindustrial” economy does not provide jobs for a wide range of people. As proof, he observes that software engineering is a field only for extremely smart people. Manufacturing, on the other hand, provides job opportunities for people of all levels of aptitude. Therefore, unless we want high unemployment, we need to return to manufacturing. Obviously.
That is typical of Fingleton’s method of propping up straw-man arguments so he can knock them down throughout the book. Despite some overly enthusiastic statements by “postindustrial” theorists, no one has ever suggested that we should have an economy that is comprised only of “postindustrial” sectors. It would make just as much sense to argue that a “classical music economy” would be undesirable because so many people would be unemployed because of their lack of ability to play Bach. It’s easy to fill up pages in beating up on straw men.
The hand-wringing continues with the author’s worries that “we” are losing “our” manufacturing base. (The book, not surprisingly, is loaded with nationalistic language. Fingleton evidently thinks it is all right to trade with “foreigners” for raw materials, but as Keynes said, “Let goods be homespun.”) Suppose for the sake of argument that there was in fact a pronounced shift away from manufacturing in the United States. Businessmen, whether Americans or those foreigners, would soon discover profitable opportunities to earn high profits by investing in the vacant manufacturing sector. Fingleton, however, never deigns to discuss the dynamics of the marketplace, preferring to continually berate the “postindustrial” enthusiasts who keep leading us, Pied Piper-fashion, into the false utopia of postindustrialism.
In a book arguing that manufacturing has gone into decline, one would expect to read something about the deleterious impact of government policy. Fingleton, however, says nothing about taxes and regulations that hit harder at manufacturing than other sectors. (That’s probably because it’s mainly economists of the “laissez-faire zealot” variety that have pointed this out.) A good argument can be made, for instance, that environmental regulations are much more damaging to manufacturing enterprises than, say, financial services, or that our collectivist labor laws do more harm to manufacturers than to software companies. But Fingleton doesn’t call for changes in or repeal of government interventions. The government isn’t his villain.
Guess what kind of “solutions” our author advocates? Almost exclusively, coercive ones. (One exception—he calls for “relaxation” of antitrust laws, but doesn’t pursue the point in any detail.) Fingleton wants a law that would allow business managers to be “punished personally for laying off workers.” He wants to diminish the attractiveness of careers in the hated “postindustrial” sectors through selective taxation. He wants to boost U.S. savings by imposing high tariffs on foreign goods. It is all dreary stuff, unenlightened by any comprehension of the terrible rent-seeking possibilities that all this new economic intervention would open up.
On second thought, maybe you really can’t judge a book by its cover. In Praise of Hard Industries turned out to be far worse than I had guessed.