As the title says. The challenge is to have American heavy industry reform instead of declining and moving across the Pacific.
AHC/WI: Prevent the decline of American heavy industry
- Thread starter Alternate History Geek
- Start date
Looks like steady growth to me:
The collapse isn't in the industry but in the number of jobs, which is difficult to keep up with technological advances.
The collapse isn't in the industry but in the number of jobs, which is difficult to keep up with technological advances.
Looks like steady growth to me:
The collapse isn't in the industry but in the number of jobs, which is difficult to keep up with technological advances.
One of our other threads claimed that growth is all due to light industry and that heavy industry was actually declining while the light industry more than picked up the slack.
I think you mean the usage of people within heavy industry. Industry in both light and heavy are returning to the United States due to automation. Due to the cheaper cost of automation (per a timeframe) over paying people to put the stuff together, certain aspects of both light and heavy have been returning. But that was a year or ago I think I read that? So this may not be accurate.
Curiousone
Banned
Have the Communists do better in the Cold war, continue to have Bureaucratically dominated economies. China doesn't become the manufacturing/export warehouse it did, India doesn't reform out of it's red tape as a result, so the pool of cheaper foreign labour that makes it uneconomic to have lots of low wage heavy industry guys in the U.S isn't there. Butterfly the Korean war to keep Japan & the later Asian tigers from re-industrializing the way they did and doing heavy industry well like they do OTL.
Do something with Germany so it's economic model of concentrating on manufacturing exports is picked up by an American audience as a more successful kind of Capitalism than the Finance focused Anglo-American model (some stupid financial crash on Wall street?).
Keep energy prices low in the U.S (and expensive elsewhere).
Do something with Germany so it's economic model of concentrating on manufacturing exports is picked up by an American audience as a more successful kind of Capitalism than the Finance focused Anglo-American model (some stupid financial crash on Wall street?).
Keep energy prices low in the U.S (and expensive elsewhere).
Have all countries intensively protectionist about their own industries. Ideas may get traded but it is impossible to buy goods that are not produced at home. Ok its all less efficient and often more expensive and living standrds and technology are at late 50's /early 60's but the US (and the UK) still have their heavy industry.
OR Financial markets are geared to long termism rather than maximising profits in the short term for share holders-sorry wrong forum thats's ASB!!!
OR Financial markets are geared to long termism rather than maximising profits in the short term for share holders-sorry wrong forum thats's ASB!!!
Flocculencio
Donor
India doesn't do much industrial work for the West. It's a huge service provider. Software not hardware, so to speak. It's econimic collapse had little to do with the fall of communism so you're unlikely to see the reforms avoided.
America goes full Swiss on it's balance of payments problem and starts paying negative interest on overseas holdings of Tbills.
No imports without exports and we get our heavy industry back, though we would still lose quite a bit of light industry to imports, that loss would be balanced by increased heavy industry exports.
No imports without exports and we get our heavy industry back, though we would still lose quite a bit of light industry to imports, that loss would be balanced by increased heavy industry exports.
katchen
Banned
States start requiring all cars registered in a state to have been built in the US or at least assembled in the US. Cars can be foreign, but must be manufactured at a plant located in the US. The same with trucks.
OR---the repeal of Right to Work provisions of Taft Hartley in 1972 succeeds. The South is forced to accept unionized labor. With labour's added clout, repeal of the rest of Taft-Hartley follows.
Human rights becomes a major labour rallying point. Legislation is passed through Congress a) requiring all US citizens and permanent residents to pay the US minimum wage to all employees in US dollars or the local equivalent for all goods and services, wherever they find themselves. Paying less than the minimum wage or violation of ANY federal law while abroad can cost an expatriate American his or her US citizenship The CIA is given the additional task of policing the behaviour of American expatriates. A staff of US attorneys and a District Court is created at every US embassy with jurisdiction over all US citizens residing in that foreign nation with a new Circuit Court of Appeals travelling between US embassies and hearing appeals of District Court verdicts.
Immigration is discouraged by the simple expedient of taxing non-citizens at a significantly higher tax rate for both income and capital gains tax than citizens. (Citizens who missed voting in any election happening where they reside also pay higher taxes than voters, in order to encourage everyone to vote).
b) pay full US income taxes and especially, capital gains tax on ALL income earned abroad even if that income is also taxed by the host country. This makes it extremely difficult for US citizens to live and work abroad profitably. Which is the entire point. The US government and Congress, based toward popular sentiment, prefer to bias and default toward autarky ITTL. The idea is to keep American's assets inside the US where the US government can get it's share of taxes and to keep US banks beholden to US depositers and mortgage holders and US businesses doing a preponderance of their business, again, in the US where it's employee-stakeholders are. (All of these measures are practiced in other countries).
And if trade does get liberalized, this is only for nations that maintain at least as good a human rights record as the US. Most favored nation status is something that any party, be they a human rights NGO, a labour union or an environmental organization or even a competitor can sue and get the courts to overturn, forcing the reimposition of 40% Hawley-Smoot tariff levels for imports from that country. And those rights include the right to form independent labour unions.
Eventually, an award wage system similar to that of Australia's is instituted in the US to curb inflation. This award system keeps wages rising steadily, though moderately, curbs inflation and prevents almost all strikes while promoting a middle class.
OR---the repeal of Right to Work provisions of Taft Hartley in 1972 succeeds. The South is forced to accept unionized labor. With labour's added clout, repeal of the rest of Taft-Hartley follows.
Human rights becomes a major labour rallying point. Legislation is passed through Congress a) requiring all US citizens and permanent residents to pay the US minimum wage to all employees in US dollars or the local equivalent for all goods and services, wherever they find themselves. Paying less than the minimum wage or violation of ANY federal law while abroad can cost an expatriate American his or her US citizenship The CIA is given the additional task of policing the behaviour of American expatriates. A staff of US attorneys and a District Court is created at every US embassy with jurisdiction over all US citizens residing in that foreign nation with a new Circuit Court of Appeals travelling between US embassies and hearing appeals of District Court verdicts.
Immigration is discouraged by the simple expedient of taxing non-citizens at a significantly higher tax rate for both income and capital gains tax than citizens. (Citizens who missed voting in any election happening where they reside also pay higher taxes than voters, in order to encourage everyone to vote).
b) pay full US income taxes and especially, capital gains tax on ALL income earned abroad even if that income is also taxed by the host country. This makes it extremely difficult for US citizens to live and work abroad profitably. Which is the entire point. The US government and Congress, based toward popular sentiment, prefer to bias and default toward autarky ITTL. The idea is to keep American's assets inside the US where the US government can get it's share of taxes and to keep US banks beholden to US depositers and mortgage holders and US businesses doing a preponderance of their business, again, in the US where it's employee-stakeholders are. (All of these measures are practiced in other countries).
And if trade does get liberalized, this is only for nations that maintain at least as good a human rights record as the US. Most favored nation status is something that any party, be they a human rights NGO, a labour union or an environmental organization or even a competitor can sue and get the courts to overturn, forcing the reimposition of 40% Hawley-Smoot tariff levels for imports from that country. And those rights include the right to form independent labour unions.
Eventually, an award wage system similar to that of Australia's is instituted in the US to curb inflation. This award system keeps wages rising steadily, though moderately, curbs inflation and prevents almost all strikes while promoting a middle class.
Curiousone
Banned
It doesn't now, but if China's labour was unavailable on the cheap for Heavy Industry India's would likely be.
India's economy started to be reformed around 1991, it wasn't Communist but there was a legacy of Bureaucracy from the colonial era. The examples of success of a reformed China & the collapse of Centralized economies in the FSU made the status quo unbearable, so no in a way it did.
Hoist40
Banned
Looks like steady growth to me:
The collapse isn't in the industry but in the number of jobs, which is difficult to keep up with technological advances.
Anyone know how they calculate imports into this data?
For example if a automaker assembles a billion dollars worth of vehicles in the US but the engine comes from Mexico, the tires from Canada, the radio from Japan, the interior from China, etc do they count the whole price of the vehicles or do they only count the assembly cost as industrial production?
I went to the Fed website which covers this data but I can’t find anything about component parts imports and how they calculate where to assign the manufacturing numbers.
I would also think that taxes and deductions play a big part on how companies report things, its well known that companies will shift the numbers to countries with favorable tax systems when you are dealing with reports on production and profits. If a company gets a good tax break for assembling cars in the US it might downplay the value of imported parts and increase the value increase in assembly
To maintain, for instance, 1945 levels of manufacturing as a percentage of GDP, the most plausible way is to have CPUSA take power. The combination of lower levels of economic development, and autarky or near-autarky, would result in a much larger industrial sector as a proportion of the GDP.
Heavy industry in the Developed world is primarily centered around big goods and the supplies for them that people need. For consumer products, this is cars, electronics, building supplies and the materials for them, particularly steel and aluminum. Steel being produced in huge amounts would require America to import iron ore, as American reserves of iron are not sufficient for huge-scale production. America would also have to import bauxite for the same reason.
Now, as far as keeping the employment up, automation will invariably reduce the employment at many places, which means to maintain employment you have to increase production. That's hard, because they have to be able to sell the goods, right? So, the key would logically to be either making the products so good that they sell everywhere or you increase the world's economic status in a lot of places that would buy American products. Protectionism would help in the short term but trade wars tend to not help anybody. One other big help to this could be large-scale recycling programs and industries to make new raw materials for said industry.
I mentioned how to keep the American auto industry powerful in Streets of Detroit. That in itself would go a long, long way towards employing many more people in such industries. Now also make it so that a lot of good electronics are made in America (Apple makes its wares here rather than in China or Taiwan, perhaps?) and the steel, glass, plastics and components for them are made stateside (as well as the aluminum for cars and electronic components) and you'll be off to a good start.
Now, as far as keeping the employment up, automation will invariably reduce the employment at many places, which means to maintain employment you have to increase production. That's hard, because they have to be able to sell the goods, right? So, the key would logically to be either making the products so good that they sell everywhere or you increase the world's economic status in a lot of places that would buy American products. Protectionism would help in the short term but trade wars tend to not help anybody. One other big help to this could be large-scale recycling programs and industries to make new raw materials for said industry.
I mentioned how to keep the American auto industry powerful in Streets of Detroit. That in itself would go a long, long way towards employing many more people in such industries. Now also make it so that a lot of good electronics are made in America (Apple makes its wares here rather than in China or Taiwan, perhaps?) and the steel, glass, plastics and components for them are made stateside (as well as the aluminum for cars and electronic components) and you'll be off to a good start.
Bumping TheMann's excellent points w a few additions:
Like any developed country- it takes a fuckload of capital to get the people and physical plant's productivity and profitability up via automation, custom manufacturing using CAD/CAM and thus flexibility to be competitive.
It was cheaper and simpler for many firms during the LBO frenzy to lock the gates or sell off the industrial units which had good and bad effects.
Finding a way to butterfly the 1980's rise of the financial industry and its various games that distorted the thrust of American business toward quarterly profits instead of long-range strategies would be another big help.
Some of the Japan-panic of the 1980's got things going in better directions but still, the US still was hooked on military spending to keep the specialty industries (electronics, aerospace, shipbuilding, etc) humming instead of making stuff for export.
One major problem is that since a lot of the US's best ideas and bleeding-edge tech were generated by DARPA or defense contractors, they had a shit-ton of export controls on them.
Despite being a Social Democrat, I think autarky's silly.
It creates a false sense of security and diverts resources from profitable endeavors into a bunch of white-elephant projects that might keep people employed but once the political winds blow a different direction, those folks are just as messed over.
I prefer the ordo-liberal approach Germany and Japan took of targeted investments in both upgrading technical education and the physical plant of manufacturers to be more competitive. Workers made good money, companies were profitable, and everyone wins.
YMMDV but those are my thoughts.
- American manufacturers realizing in 1960 that the rest of the world's a much bigger market than the US domestic market and producing/marketing accordingly.
- Adopting the metric system and getting serious about using it at all levels
- Seriously- read the Streets of Detroit.
- Getting health care costs under control via a UHC scheme during the Nixon Administration at the latest before it became a millstone around everyone's neck.
Like any developed country- it takes a fuckload of capital to get the people and physical plant's productivity and profitability up via automation, custom manufacturing using CAD/CAM and thus flexibility to be competitive.
It was cheaper and simpler for many firms during the LBO frenzy to lock the gates or sell off the industrial units which had good and bad effects.
Finding a way to butterfly the 1980's rise of the financial industry and its various games that distorted the thrust of American business toward quarterly profits instead of long-range strategies would be another big help.
Some of the Japan-panic of the 1980's got things going in better directions but still, the US still was hooked on military spending to keep the specialty industries (electronics, aerospace, shipbuilding, etc) humming instead of making stuff for export.
One major problem is that since a lot of the US's best ideas and bleeding-edge tech were generated by DARPA or defense contractors, they had a shit-ton of export controls on them.
Despite being a Social Democrat, I think autarky's silly.
It creates a false sense of security and diverts resources from profitable endeavors into a bunch of white-elephant projects that might keep people employed but once the political winds blow a different direction, those folks are just as messed over.
I prefer the ordo-liberal approach Germany and Japan took of targeted investments in both upgrading technical education and the physical plant of manufacturers to be more competitive. Workers made good money, companies were profitable, and everyone wins.
YMMDV but those are my thoughts.
Canada is a special case. Under the Auto Pact of 1965 and the later NAFTA agreement, vehicles and parts can be moved between the two countries without tariffs (or much paperwork). Under the law as it is, most of the proposals mentioned here requiring vehicles to be mainly US-built would be illegal, and more importantly the remaining auto makers would not agree to them. They would be firmly against any provision that disrupted their current business plan by forcing them to build factories in the US to replace the ones they currently operate in Canada, especially factories that might only be needed until the next election.
There's even some discussion that the new US rules requiring public transit vehicles to be over 50% US-built may have to be changed, because there are only so many bus manufacturers out there and one of the big ones (New Flyer) does much of its chassis work here in Winnipeg. They fit the interiors in the US now, but doing so drives up the cost - which means that cities are either buying fewer buses or are buying used or economy buses that aren't as accessible or as fuel-efficient as they could be.
There seems to be some merit in this- steel production has been fairly flat:
Automotive production seems to be on a long-term downwards trend:
TxCoatl1970 and TheMann are more or less correct in their approach- US companies became complacent, unwilling to innovate, and perfectly content to remain in a domestic market. Looking at several sectors, you find a failure to invest in technological improvement until for many firms it simply was too late, the cost of catching up too high.
Autarky is of course complete nonsense, and it is the complete opposite of what the US ought to be doing- the US needs to be focusing on finding export markets for its goods. In order to do this you need trade agreements with other nations, and ideally if developing nations can discard protectionist policies sooner, this would push development (and thus markets) somewhat sooner.
For example with the steel industry, foreign firms adopted the more efficient continuous casting method, but US firms did not. Had trade barriers been lowered, this increased competition might have become apparent sooner, stimulating the adoption of such technologies, rather than later when the costs of catching up were too high to surmount.
Of course, for steel, you need markets. The US shipping industry all but collapsed in the face of foreign competition. The Jones Act, which prevents any foreign flagged or foreign built ship from shipping goods between US ports, played a key role in its demise. This meant that any American shipping line could only buy American-built ships, a large protectionist barrier. As there was no incentive to increase efficiency or productivity, American ships became more and more expensive, until their captive market, US shipping lines, were driven into bankruptcy! If US shipping lines have the option of buying foreign-built vessels, not only will they be able to stay afloat for that reason, the shipbuilders will be compelled into becoming more competitive. And the steelmakers will have a larger market.
We see the same thing in the US Navy- it's closed to foreign competition and thus the Navy is completely subject to the mercy of the shipbuilders. (Oddly, the same people supporting such protection are quite often the same people saying we should cut defense spending...)
And it is correct to note the parasitical, role played by the rise of "shareholder value" short-termism, butterflying that (and corporate raiding) would definitely give companies more room to make improvements with the view of long-term sustainability and profitability rather than short term returns. (Whether this is true, of course, is the current debate in economics today- as is evidenced by this year's Nobel Prize given to economists for their work on the theory of efficient markets- who hold opposite opinions!) You see that the shutdown of Bell Labs is attributed to the focus on "immediately marketable" fields.
There would need to be a system of educating factory workers about the new technologies... or perhaps increasing foreign immigration.
Looking at our present (semi)revival, we see that one of the major things propelling it are low energy costs in the United States- here shale oil and gas. Lowering energy costs would be a major help in the 1970s- ideally/most plausibly from nuclear energy. We also see low freight rail costs playing a role.
Looking further in the past, industry would also be helped by a stronger rail sector, which was killed largely by government intervention and favouritism (for airports and the government-built IHS). If the ICC can approve mergers sooner than they did, this would help. If, for consistency's sake, the government agreed to create an Amtrak-analogue sooner than it did in reality, taking over the loss-sustaining passenger sectors, this would help avoid the total collapse of the rail industry and help freight. Deregulation (heavy and restrictive cost controls) and a successful weakening of labour (in all sectors, not just rail) would help as well.
A lot could be done, but it involves more liberalism, not less.
Thanks Parterre!
I agree with you that changing the energy mix would've been a good idea but that's assuming folks were on the ball about scarcity of easily-tapped oil and how vulnerable the US was to price shocks in 1960 and made plans accordingly.
M. King Hubbert made his points re: peak oil based on the proven reserves with the known tech/recovery costs in the 1950-60's but whether folks took it seriously until the OPEC price shocks of the 1970's is another thing entirely.
You mention shale oil and gas which aren't next-wave tech but cost so #$%^ much that oil had to be 10X more expensive per barrel to make 'em worthwhile.
Fracking was first used in 1949 as a well-rehab technique, but it wasn't until the 1970's saw a tenfold increase in the price/bbl that it became worth it as a means of starting and continuing well-production.
I'm completely with you re: better rail management/upkeep, increased competition in shipbuilding to where the shipbuilders continued to have a commercial market, and so forth would've been a major help.
You mention weakening of labor though and THAT I have a major problem with. Sure, the craft-based unions historically have been a nightmare of competing factions more interested in featherbedding than corporate profitability.
However, there's basic issues of worker safety and optimizing workflow with enough bodies to do things efficiently and effectively that your average mgmt. analyst doesn't take into account.
Getting labor to realize that 1800's division of labor is over and that they have to work with management to keep the company profitable would've been a help.
Same with management understanding that people can and need to be retrained and having the training/qualification system set up to assure workers there's still opportunities to make good $$$ despite reclassification that would've butterflied so much of the bloodletting that happened in 1970's-1980's.
Your point of EMH is interesting. You look at the ordo-liberal management philosophy strategically targeting investments looking at decade-long trends vs EMH.
It helps to pay attention to new data and new analyses of data that give you new looks to better adjust both goals and tactics.
The problem with EMH that it leads to a lot of fiddling that distorts the picture (making changes just to look like you're paying attention instead of rationally responding to conditions that keeps muddying the picture) creating a cascade effect through the market as dumb money chases smart, often over a cliff b/c most folks aren't doing their homework.
I agree with you that changing the energy mix would've been a good idea but that's assuming folks were on the ball about scarcity of easily-tapped oil and how vulnerable the US was to price shocks in 1960 and made plans accordingly.
M. King Hubbert made his points re: peak oil based on the proven reserves with the known tech/recovery costs in the 1950-60's but whether folks took it seriously until the OPEC price shocks of the 1970's is another thing entirely.
You mention shale oil and gas which aren't next-wave tech but cost so #$%^ much that oil had to be 10X more expensive per barrel to make 'em worthwhile.
Fracking was first used in 1949 as a well-rehab technique, but it wasn't until the 1970's saw a tenfold increase in the price/bbl that it became worth it as a means of starting and continuing well-production.
I'm completely with you re: better rail management/upkeep, increased competition in shipbuilding to where the shipbuilders continued to have a commercial market, and so forth would've been a major help.
You mention weakening of labor though and THAT I have a major problem with. Sure, the craft-based unions historically have been a nightmare of competing factions more interested in featherbedding than corporate profitability.
However, there's basic issues of worker safety and optimizing workflow with enough bodies to do things efficiently and effectively that your average mgmt. analyst doesn't take into account.
Getting labor to realize that 1800's division of labor is over and that they have to work with management to keep the company profitable would've been a help.
Same with management understanding that people can and need to be retrained and having the training/qualification system set up to assure workers there's still opportunities to make good $$$ despite reclassification that would've butterflied so much of the bloodletting that happened in 1970's-1980's.
Your point of EMH is interesting. You look at the ordo-liberal management philosophy strategically targeting investments looking at decade-long trends vs EMH.
It helps to pay attention to new data and new analyses of data that give you new looks to better adjust both goals and tactics.
The problem with EMH that it leads to a lot of fiddling that distorts the picture (making changes just to look like you're paying attention instead of rationally responding to conditions that keeps muddying the picture) creating a cascade effect through the market as dumb money chases smart, often over a cliff b/c most folks aren't doing their homework.
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