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In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the key to Future Prosperity Hardcover – September 9, 1999
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The supertanker is the image that has come to symbolize America's economic might over the last decade--rock solid and steady. Low inflation, high productivity, and a booming stock market have combined to help create one of the most prosperous periods in American history. But Eamonn Fingleton would argue that this ship is steering the wrong course, and that lurking just below the waterline are some troublesome leaks.
Fingleton argues that American business is sacrificing its once valuable manufacturing base in favor of the new economy, or postindustrialism--an umbrella under which he includes the service, software, information, and entertainment industries, among others. While he writes that he does not seek to dismiss the merits of postindustrialism--although he calls the financial-services industry a "cuckoo in the economy's nest"--Fingleton finds fault with the new economy in three areas: the mix of jobs it produces, its slow income growth, and the fact that postindustrial activities don't export very well. At the same time, he believes that modern manufacturing has become wrongly associated with low-wage or stagnant economies--Japan, in particular, which, he argues, is not the basket case that many believe it to be. At the heart of Fingleton's argument is the idea that postindustrial activities are relatively easy to pursue compared to manufacturing, which requires much more capital and know-how but offers far more upside in the long run. His prescription for revitalizing manufacturing includes boosting savings, directing much of it into industrial investment, and instituting a trade policy designed to allow manufacturing to thrive in the United States.
While Fingleton's dour assessment of the new economy seems overdone, his basic argument about the relative worth of manufacturing is well articulated. In Praise of Hard Industries is a good contrarian read for policymakers, managers, and anyone interested in a different view of both the U.S. and Japanese economies. --Harry C. Edwards
From Publishers Weekly
A former editor of Forbes and the Financial Times, Fingleton ably articulates a contrarian thesis, arguing that manufacturingAnot America's "postindustrial economy" based on services and information technologyAis best equipped to deliver high wages, low unemployment and a bedrock for future prosperity. His scathing, selective tour of the U.S. computer, financial services and entertainment industries turns up colossal waste, puny exports, mismanagement and hype. Noting that, since the dawn of the computer revolution in the early 1970s, America's rate of growth in productivity has actually fallen, Fingleton suggests that the Internet has done and will do remarkably little to benefit the U.S. economy. He joins a diverse band of critics of laissez-faire globalism, including James Fallows, Patrick Buchanan and Jerry Mander, adding his own unique slant on East-West relations and manufacturing conditions. He contends that, contrary to Western press reporting, Japan is not an economic basket case, but is instead an affluent dynamo poised to challenge the U.S. for global economic leadership (a theme he set forth in his 1995 book Blindside). Bolstered by close analysis and chock full of intriguing examples of manufacturing triumphs and untapped opportunities, Fingleton's sobering report deserves close scrutiny by CEOs, labor leaders and policy makers.
Copyright 1999 Reed Business Information, Inc.
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Top customer reviews
In summary of the thesis, the pathology of the nation's declining economy is manifest in the hollowing out of the manufacturing sector. We will be generations correcting the problem, or we will be another Argentina.
Like a skilled coroner dissecting the victim of a brutal murder, Mr. Fingleton takes apart the myth of "postindustrialism," certainly as it pertains to the consensus of economic thinking in the US. Oh Gods of Hubris, what violence have we wrought upon our once mighty American economy by following the chimera of well-packaged economic fads.
So you think steel and shipbuilding are rust-belt industries, better suited to the "third world" and without which the US is a better place? Not after you read this book. So you think we should be teaching children that their goal in life should be to grow up and be computer programmers because that is the pathway to a good job and secure future? Not so fast, pilgrims. So you think that the US does not need these so-called "commoditized" high tech manufactures like the chips and circuitry that go into the guts of even a run of the mill computer? To paraphrase a certain disgraced former President of the United States, "It all depends on what you mean by 'commoditized.'"
You will probably never understand what is happening to the US economy unless and until you read this book. I am not in the business of giving advice to the President of the United States, but I will make an exception and recommend that he read "In Praise of Hard Industries." Heck, I will send him my copy if he wishes. And then, I hope that he recommends the book to every Cabinet officer, sub-Cabinet official, Member of Congress, Federal Judge, and any one else whose decisions affect policy in this country. This book is that important.
Eamonn Fingleton is in the first category and should be listened two whether one agrees with his thesis at the outset or not.
Japan is counter-intuitive for most Americans and Europeans. It is another civilization and should be recognized as such.
For those academic and journalistic "flatlanders" who think that all countries are converging on the US model so quickly that differences can be ignored, Eamonn Fingleton's book is a clear and well-argued protest to the contrary. Japan (and many other Asian countries) do not follow the American model and do not plan to. We ignore this at our peril, no matter what many of our Euro-centric, "flatlander" journalists and academics say. There are far fewer universal truths than most of them admit, even in business and economic policy.
Perhaps they should live in Asia for a decade or more, and marry a Japanese woman as Mr. Fingleton has done.
They might learn just something--like a more humble attitude toward the genuine intellectual diversity of the world. Mr. Fingleton's book is an excellent pointer in the right direction.
P.S. The author has worked for Japanese bosses at IBJ and at two American companies in Japan for a total of five years, and has been involved in Japan-related business since 1985 (including an academic appointment in the Harvard Program on US-Japan Relations). He has been married to a Japanese-born wife since 1980.
Nothing is more central to the vast expectations of the post industrial economy than those associated with software, telecommunications or financial services, which form its bulwark. Fingleton's analysis clearly shows that software is inherently transitory and unstable. Telecommunications is touted as a vehicle for a vast expansion of consumer markets, yet as became painfully clear in the dot.com collapse, there is little proof of that potential. Gambling and porn remain the internet's most profitable commodities. Financial services has devolved into deregulated boutiques speculating in exotic currency and equity instruments, in markets trading at unheard of multiples and expansion. All these 'industries' employ a specific type of intellect and skill set, which might apply to a highly educated 20% of the labour force. Nothing is reviled more than the old 'rust' belt industries in the free market ethos. Steel, ship building, textiles, that can offer capital intensive high technology enterprise integrated into well payed, labour intensive associated manufacturing are disappearing from the First World's economic arsenal.
The New Economy's extreme marginalization of certain employment sectors, its inequity in distribution of wealth, and its unpredictability, have only now started to bite into previously secure areas of the social demographic. No surprise then that social turbulence is starting in disparate protest movements. The divisions being created in our society ensures the haves will need to use draconian measures to control the have nots, with an inevitable and equal reaction. Fingleton falls himself into the chimera of new age economics when his remedies call more for the much over rated effect of 'savings' as opposed to tariffs, progressive tax systems and direct involvement of national governments in economic and currency management. However, this book is an accessible study of the effects of the globalization and de-industrialization in Western economies. Post industrialism runs on the mumbo jumbo of futurists, buzz words, intentionally complex rationalizations. These obfuscate its real intent and encourage public ignorance and apathy. The book is a welcome, if limited, contribution to cutting through the fog of claims to show how thread bare the cloth of the New World Order really is.