Customer Reviews

The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry

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Out of print? This book should never be out of print. But then again, Jean Renoir's Rules of the Game was almost destroyed during the Second World War. Greatness is sometimes fragile.

Barry is something of a personal hero of mine so I do have a bias of sorts regarding this book and its follow-up, The Great U-Turn. Reviewing this book is like reviewing a classic music album: everything written in the last 20 years about Economic Policy and investment has been influenced by what Barry and Bennett wrote here and there is no more hated book by Reaganauts who would like you to believe THIS NEVER HAPPENED.

This book was the first book to talk about how industry in the United States was dismantled, in particular the Auto and Steel Industries of the midwest. The book traces decisions made by corporations in the 1970's and why these decisions were made, in light of perceived opportunities in Central America and the Far East. Could have the decision been made to do the reinvestment in the US (particularly in light of the modern day relative success of Saturn)? The answer is clearly not without the calculated weakening of powerful unions in auto and steel. If the unions were weakened, however, communities such as Flint, Michigan and Youngstown, Ohio were almost wiped out by disinvestment. There was considerable denial at the time about what was happening but Barry and Bennett's book makes clear that industry was dismantling and disinvesting and not coming back.

The awareness raised by this book probably saved a bad situation from becoming much worse. If the dinosaurs left the continent, though, maybe in retrospect we are better off for their having left. Car makers from Japan and Korea have been willing to make the autos that US carmakers have only made with the greatest of reluctance, and creating assembly plants here in the US as well. But it has taken a generation to recover from the wholesale deindustrialization and the cost was much greater than people should have been asked to bear.

Never again should American industry be allowed to tear out its roots and toss them aside. If you want to know why, this is the book to read. Please read the great final chapter on Reindustrialization with A Human Face for helpful guidance and insight on where to go from where we are at, insight that 20 years later still makes a great deal of sense.

From the backdrop of World War II, American business emerged as the World's undisputed industrial economic leader and lender. The expansion of American investment in Europe, Asia, the Americas, and further assured its prominence by the establishment of the U.S. currency as the capitalist world's principle reserves, while labor strenuously acquired the motifs of a welfare state. Such unprecedented success created an ambivalent relationship between capital and labor where each party had acquired a win-win situation. This brief cease-fire came to an abrupt halt with the threat of foreign competition and sluggish growth development spurred what Bluestone and Harrison termed as the `deindustrialization' of America. In a panic to maintain the capitalist status quo, business owners closely emulated Japanese zaibatsu's in purchasing many non-related businesses to expand their economic clout versus improving their current facilities. The failure of industries meeting excessive profit percentage justified many corporate executives of closing down factories to minimize labor costs and outsource to less constraining economic contingencies and forever disrupting people's and the communities livelihood. Drastic improvements in network technology, communication and transportation permitted micro and macro control of factories despite distance. Thus companies are no longer confined by regional or national boundaries can effectively utilize segmentation tactics against unions, local, state, and national officials in gaining unequal terms. Corporate outsourcing has manifested itself into dual the phenomenon of boom-town and bust-town causing unforeseen problems. American urban areas such as Houston and Silicon Valley have grown in attracting Northern city businesses, foreign investment, and becoming known as tax heavens.

"The DeIndustrialization of America" explores the problem of multinational corporations reducing their US industrial payrolls and directing all investment to foreign countries. Multinationals produce abroad for sale into the United States, thereby making American workers compete against foreign starvation wages.

The federal tax code actually encourages speculation, mergers and acquisitions, and foreign rather than domestic investment.

Unbelievably, the taxpayers, through the US Export-Import Bank finance the transfer of equipment from American plants to subsidiaries in the Third World. This capital flight is also creating and financing our own future competition.

We are also creating a dual economy at home, have/have not, with a missing middle class. Most Americans are aware that this nation has experienced widespread closing of industrial facilities. Probably a lot fewer realize that our standard of living is lower than in Switzerland or Denmark.

We can look forward to unemployment, underemployment, and increased government costs for welfare & food stamps. These jobs are being replaced (if at all) by jobs with less pay and benefits, less security, and often part-time work. Also the ripple effect touches everyone in town, and of course the charities. Loss of property taxes affects schools and police.

This book's conclusion is that the global economy is synonymous with a reduced standard of living for all Americans. The trend will end with Third World status for the US, and inability to afford our current large social safety net (entitlement programs). Without a middle class, there will be nobody to pay for it. Reducing government social programs will be mandatory.

Unfortunately, the book's style was dry like a college textbook, with plenty of statistics and charts and too much effort to explain opposing viewpoints.

The last 70 pages are pure leftist drivel. The solutions? More of the same things that goofed things up in the first place! Central planning and "lively experimentation with bureaucratic forms." The book was great on defining the problem, clueless about the solution.