Dean Ball, a board member of the Alexander Hamilton Institute for the Study of Western Civilization (AHI) and frequent writer on recent technology including artificial intelligence, commented recently on the growing interest in reindustrialization. America’s strengths in high tech, Mr. Ball stresses, are important to its success.
Among some policymakers and their staffs, as well as on social media, he sees “a sense of urgency” that America now needs “to build—new factories, new energy sources, new institutions.” Part of this is what is called reindustrialization.
In “America the Serious?” for his online newsletter Hyperdimensional, Mr. Ball believes, along with many others, in the importance of a more robust manufacturing base. It remains necessary if America is to continue to have its own defense industry. “If basic manufacturing capacity withers, it is entirely possible to simply forget … how to do it. That hasn’t quite happened yet, but it’s a direction we could be headed in.”
“A weak manufacturing base,” Mr. Ball notes, “also means fewer opportunities for knowledge spillovers—the transfer of knowledge between different industries or problems” and fewer “clustering effects—the benefits that accrue when an industry is concentrated in a specific region.” In addition, “America needs a renewed sense of national pride.”
A protectionist trade policy and direct government involvement in capital allocation are the wrong approaches to the difficult challenge of reindustrialization, according to Mr. Ball, a research fellow at George Mason University’s Mercatus Center. Furthermore, the process of restoring a domestic manufacturing base will include the “creative destruction” associated with the dynamic forces in capitalism. But some of the modern American economy’s major strengths, such as software, artificial intelligence, and automation, can be very helping in pushing manufacturing forward, improving that sector’s capabilities and cost structures.
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