First published on ZNet, May 14, 2013. By now, perhaps, you have picked up a media report claiming a recent and almost miraculous comeback for United States manufacturing – one that is, to quote a recent Time magazine cover story, “defying the narrative of the nation’s supposedly inevitable manufacturing decline.”
“Made in the USA”
There is evidence that factory employment is picking up in “post-industrial” America. The county has grown half a million manufacturing positions in the last three years, a shift from the regular pattern of declining American industrial employment over the last three-plus decades. [1]
There are reasons to think this “Made in the USA” trend will continue. General Electric has announced that it will move much of its appliance manufacturing back to the U.S. from China. Apple has chosen to assemble one of its computer lines domestically, not in China. Europe’s Airbus is going to build JetBlue commercial airplanes in Alabama. Ashley Furniture is building a brand new $80 million plant in North Carolina. The nation’s top out-sourcing platform Walmart has announced that it will increase purchases from U.S. suppliers by $50 billion over the next ten years. The retired left political economy professor Allen Nasser reports that “Companies like Ford, Caterpillar, Wham-O Inc. (Frisbees), Master Lock, Suarez Manufacturing and General Electric have recently relocated production from China and Mexico to Georgia, Ohio, Indiana, Wisconsin, California and Michigan.”[2]
Three Reasons Not to Celebrate “Reshoring”
But how excited do Americans want to get about this “reshoring” (Time) of manufacture? There are at least three good reasons for U.S. workers to be less than enthusiastic. First, China clearly remains far and away the world’s factory, along with other parts of East Asia, particularly when it comes to labor-intensive industries like consumer electronics, furniture, and apparel. There’s little chance that manufacturing will ever come remotely close to offering U.S. workers the employment opportunities it gave them during the early and middle decades of the last century, when it was understood even in the depths of the Great Depression, that “the United States had the largest, most productive industrial machine in the world. It could make almost anything.”[3]
Second, the jobs dividend flowing from American manufacturing’s mini-renaissance is slight in an age of super-automation. Time’s description of a new General Electric battery factory in Schenectady, New York offers a glimpse of the problem: “The 200,000 sq.-ft. facility requires only 370 full-time employees, a mere 230 of them on the factory floor. The plant manager runs the operation – from lights to heat to inventory to purchasing and maintenance – from an iPad, on which he gets a real-time stream of data from wireless sensors embedded in each product rolling across the line…The sensors let the batteries talk to GE via the Internet once they’ve left the factory. Each part of the product and, indeed, the factory, including the equipment and the workers who run it, will soon communicate with one another over the Internet.”[4]
This depiction reminds me of Kurt Vonnegut’s first novel Player Piano (1952), which depicted an automated society where corporations were replacing workers with machines without any concern for the workers’ fate or dignity. The novel was loosely based on Vonnegut’s years as an employee at General Electric, in Schenectady. [4A]
Third, the fact that American and other global capitalists and their corporations increasingly find the U.S. to be a hospitable environment for manufacturing reflects the declining fortunes of the U.S. workers across the long neoliberal era (1970s to the present). The mass “off-shoring” (export) of formerly U.S.-based manufacturing jobs during that era did not occur because big “American” capital was interested in de-industrialization per se. It occurred because capital was interested in maximum profits and reduced costs – reduced labor costs above all [5]. Capitalists who dismantled industry in the “high wage” and once heavily unionized United States were happy to promote a type of industrialization in “developing nations” – ultimately and above all “communist” China (endowed with spectacular supplies of newly available and super-exploitable labor power) – where low wages and weak worker protections promised higher rates of surplus value and profit. It was always implicit that some manufacturing might return to the U.S. if and when American unions were smashed and wages cut.
“U.S. Steel,” that company’s former Chairman David Roderick once commented in explaining why his firm was laying off workers and closing plants, “is in business to make profits, not to make steel.” That was a very candid statement of the cold reality of the profits system. “Rarely is the reality put with greater clarity,” notes the prolific Marxist analyst David McNally: “under capitalism, use is irrelevant; profit is king. Capitalist enterprises have no particular attachment to what they turn out, be it flat-rolled steel, loaves of bread, or pairs of jeans.” [6]. An obvious fact should be added: capitalism has no particular attachment to turning out anything material or tangible [7] in any particular country.
If manufacturing is reviving in the U.S. to any significant degree, it is not because of any particular commitment to the United States on the part of investors. It is happening because U.S. labor, materials, energy, transportation and/or other production costs have fallen so low that capitalists finally find it competitively advantageous to make more things in the so-called homeland.
“Europe’s Mexico”
The labor dimension is critical. Nasser provides a chilling perspective on how the three decades-plus slashing of U.S. workers’ income and power – so pronounced that the U.S. now functions as a low-wage periphery for European capitalists – creates the basic context for capital’s increased willingness to invest in U.S. manufacturing. As Nasser notes:
“It is not far-fetched to see a growing resemblance of US and poor-country workers. High-priced economic forecasters and consultants are known to refer to the US as ‘Europe’s Mexico.’ In the near future, they predict, some US states, mostly in the South but also including California and the Rust Belt, will be not only the cheapest manufacturing locations in the developed world, but also competitive with India and China. Wages are rising in the production- and service-oriented poor countries and falling in the rich ones. And US workers tend to quiescence, while unrest is brewing in the periphery. Costs of production are gradually converging between China and the US: declining-wage US workers are more productive, and fuel prices are expected to continue to rise, making it increasingly expensive to ship goods around the world. Non-union workers contracted by Ford to do inspection and repairs at the Dearborn truck plant make $10 an hour without benefits, which is projected to be less than the Chinese average by 2015.”[8]
According to Paul Ashwroth, chief U.S. economist for the research firm Capital Economics, “The offshoring boom…appear[s] to have largely run its course.” Time explains Ashworth’s comment in the following terms: “U.S. factories increasingly have access to cheap energy, thanks to oil and gas from the shale boom. For companies outside the U.S., it’s the opposite: high global oil prices translate into costlier fuel for ships and planes, which means some labor savings from low-cost plants in China evaporate when the goods are shipped thousands of miles. And about those low-cost plants: workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the last decade. Suddenly the math of outsourcing doesn’t look quite as attractive.”[9]
Time might have added that the neoliberal White House has won massive concessions from labor. “The Obama administration,” left analyst Joel Geier notes in the latest issue of International Socialist Review, imposed a two-tier wage system in the auto industry, slashing new hires’ wages from $28 to $16 an hour, “as the price of bailing out GM and Chrysler.” It’s part of the American ruling class’s “template” for U.S. “restructuring” by turning the nation into “the cheap labor market of the industrialized world.” [10]. For its part, Vonnegut’s old employer General Electric took advantage of the Great Recession to slash entry level wages from $24 to $13 of its own accord.
Dismantling Livable Ecology
Along with cheap “homeland” labor, U.S. industrial competitiveness and “restructuring” is receiving a further boost from cheap “homeland” energy obtained in some very ugly ways. “Oil and gas from the shale boom” is Time’s polite way of referring to the recent explosion of domestic hydraulic fracturing (“fracking”) and horizontal drilling inside the U.S. –environmentally disastrous practices [11] that promise to make the United States the largest world producer of oil within a few years [11A] while wreaking havoc on U.S. water sources and safety. The ecologically deadly way in which this dramatic and in itself eco-cidal increase in planet-baking oil and gas production has been achieved is a reminder that capital dismantles more than a nation’s former manufacturing base. It is also tearing down sustainable ecology and the prospects for a livable future at home and abroad.
The Green-Red New Deal
For what it’s worth, an alternative exists. The Green New Deal advanced by the officially invisible Green Party would attack both the nation’s economic crisis and the climate crisis by creating “5 million jobs in green energy, sustainable agriculture, public transportation and infrastructure improvements—as well as jobs that meet our social needs, including teachers, nurses, day care, affordable housing, drug abuse and violence prevention and rehabilitation. It would be funded,” Green Party leader Jill Stein notes, “by scaling back the oversized military budget to year 2000 levels, adopting a Medicare-for-All insurance system that would save trillions of dollars, requiring Wall Street gamblers to pay a small (0.5 percent) sales tax, taxing capital gains as income, and taxing income more progressively.” All of the Green New Deal’s key components receive majority support from Americans in poll after poll [12].As should surprise nobody familiar with business-rule-as-usual in the U.S., Stein’s proposal has been thoroughly ignored in the nation’s dominant corporate mass media – a typical reflection of what it means to live under “the unelected dictatorship of money.” [13]
Those on the radical left who worry that pursuing a Green New Deal means moving off the struggle against “the 1%” (the capitalist elite and its corporations and politicians) and for a socialist “world turned upside down” can rest easy. The great green economic conversion required for human survival will be bright rouge. With its inherent privileging of private profit and exchange value over the common good and social use value, its intrinsic insistence on private management, its inbuilt privileging of the short-term bottom line over the long-term fate of the earth and its many species, its deep investment in endless quantitative growth, wasteful marketing and production and the carbon-addicted way of life and death, and with its attachment to the division of the world into competing nations and empires that are incapable of common action for the global good, capitalism is simply and finally incapable of making or permitting the environmental changes required [14]. “Green capitalism” is an oxymoron. It is naïve to think that the environmental production conversion required for civilization’s survival can take place without an epic confrontation with – and defeat of – the capitalist elite.
Paul Street (paulsteet99@yahoo.com) is the author of many books. His next, They Rule: The 1% v. Democracy will be published in January of 2014. Street will speak at three panels at the Left Forum (www.leftforum.org) in New York City next month: “The Green-Red New Deal: Capitalism, the Climate Catastrophe, and the Alternative;” “Black Politics at the Tail End of Obama;” and “The Marginalized Left: Lessons From Past and Recent Histories.”
NOTES
1. Rana Foroohar and Bill Saporito, “Made in the USA,” Time (April 22, 2013), 23.
2. Alan Nasser, “The Political Economy of Redistribution,” http://www.alannasser.org/articles/offshoring_jobs_markets.html; Foroohar and Saporito, “Made in the USA,” 23-34.
3. Mike Davis, interviewed by Bill Moyers, Public Broadcasting System, Bill Moyers’ Journal (May 20, 2009), http://www.pbs.org/moyers/journal/03202009/watch2.html
4. Foroohar and Saporito, “Made in the USA,” 24-25.
4A. “I quit GE and started my first novel – Player Piano. It is a lampoon on GE. I bit the hand that used to feed me. The book predicted what has indeed come to pass, a day when machines, because they are so dependable and efficient and tireless, and getting cheaper all the time, are taking the halfway decent jobs from human beings.” Kurt Vonnegut, “Short Career,” http://melanconent.com/lib/rev/bagombosnuffbox/shortcareer.html. For reference to Vonnegut’s years in Schenectady and at GE, see New York State Writers Institute, State University of New York at Albany, “Author Page: Kurt Vonnegut,” http://www.albany.edu/writers-inst/webpages4/archives/vonnegutkurt.html
5. Barry Bluestone and Bennett Harrison, The Deindustrialization of America (New York: Basic Books, 1982); Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance During the 1970s (New Haven, CT: Yale University Press, 2010).
6. Roderick was quoted in David Bensman and Roberta Lynch, Rusted Dreams: Hard Times in a Steel Community (New York: McGraw-Hill, 1987), 88. David McNally: Global Slump: The Economics and Politics of Crisis and Resistance (Oakland, CA: PM Press, 2011), 70.
7. Contrary to what you hear from many muckraker critics of Wall Street’s financial capitalism, purely financial and largely parasitic instruments like credit default swaps and collateralized debt obligations are normal capitalist productions no less than a ton of steel produced by a multinational corporation in Gary, Indiana or central China. For good examples of confusion on this score, see Dylan Ratigan, Dirty Bastards: How We Can Stop Corporate Communists, Banksters, and Other Vampires From Sucking Us Dry (New York: Simon and Schuster, 2012), 12, and Matt Taibbi, Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History (New York: Spieel and Grau, 2010), 14. For different analyses that root the financial crisis and its instruments in the timeworn contradictory development of capitalism and capitalist production, see Richard Wolff, Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About it (New York: Olive Branch Press, 2010), 2-148; Richard Wolff, Democracy at Work: A Cure for Capitalism (Chicago: Haymarket, 2012), 19-52; McNally, Global Slump, 1-112; John Bellamy Foster and Fred Magdoff, The Great Financial Crisis :Causes and Consequences (New York: Monthly Review Press, 2009); Fred Magdoff and Michael D. Yates, The ABCs of the Economic Crisis (New York: Monthly Review Press, 2009).
8. Nasser, “Political Economy of Redistribution.”
9. Foroohar and Saporito, “Made in the USA,” 2.
10. Joel Geier, “Capitalism’s Long Crisis,” International Socialist Review, 88 (March-April 2013), 6.
11. Alyssa Figueroa, “5 Weird and Frightening Effects of Fracking You Might Not Know About,” AlterNet (October 20, 2012), http://www.alternet.org/fracking/5-weird-and-frightening-effects-fracking-you-may-not-know-about
11A. Geier, “Capitalism’s Long Crisis,” 11.
12. Jill Stein, “Obama Budget Throws American People Under the Bus,” (April 11, 2013), www.jillstein.org
13. Edward S. Herman and David Peterson, “Riding the ‘Green Wave’ at the Campaign for Peace and Democracy and Beyond,” Electric Politics, July 22, 2009, http://mrzine.monthlyreview.org/2009/hp240709.html; Paul Street. “America’s Unelected Dictatorship of Money,” ZNet (April 14, 2011) www.zcommunications.org/america-s-unelected-dictatorship-of-money-by-paul-street
14. John Bellamy Foster, Brett Clark, and Richard York, The Ecological Rift: Capitalism’s War on the Planet (New York: Monthly Review, 2010); Chris Williams, Ecology and Socialism: Solutions to Capitalist Ecological Crisis (Chicago: Haymarket, 2010); Paul Street, “Our Pass-Fail Moment: Livable Ecology, Capitalism, Occupy, and What is the be Done?,” Critical Education, Vol. 3, No,10 (2012); John Bellamy Foster and Brett Clark, “The Planetary Emergency,” Monthly Review vol. 54, Issue 7 (December 2012), http://monthlyreview.org/2012/12/01/the-planetary-emergency; Paul Street and Janet Razbadouski, “The Ecological Poverty of Liberal Economics,” ZNet (August 12, 2012), http://www.zcommunications.org/the-ecological-poverty-of-liberal-economics-by-paul-street; Paul Street, “Less Than Zero: The 1% and the Fate of the Earth,” ZNet (December 9, 2011), http://www.zcommunications.org/less-than-zero-the-1-percent-and-the-fate-of-the-earth-by-paul-street