In @rowanmg's @techreview feature "Unmade in America," we get a vivid picture of how little industrial capacity remains in America and how much that has harmed the country's resilience to disasters and crises.
technologyreview.com/2020/08/14/100…
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technologyreview.com/2020/08/14/100…
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Gerety describes the mad scramble early in the crisis to manufacture PPP onshore, and the deep structural problems with doing so: America doesn't merely lack the machines to do this, it lacks the labs to test the materials, the people who know how to do the tests, and so on.
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The entire pipeline is empty. The only people qualified to do the work are in their 70s, on the verge of retirement (some have retired since the crisis started). There are no people coming up behind them because deindustrialization means there's nowhere to train or practice.
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From there, Gerety goes on the road with Jon Clark, a scrapper who's spent 30 years buying the equipment from closed factories and selling them overseas. Clark, more than anyone, has a bird's eye view of the literal demolishing of American industrial capacity.
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These tangible phenomena reveal the invisible, intangible workings of the market system running beneath the surface: the 40 year neoliberal project that asserted that if it was profitable, it was sustainable.
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The reason we can't make textiles onshore anymore is investors like Wilbur Ross, the (self described) billionaire who made his fortune buying up textile firms, shuttering them, and moving their production overseas.
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These overseas operations are more profitable in part because the workers earn 10% of what their US counterparts take home - but also because the territories the factories relocated to had weak health, safety and environmental regs.
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But economic orthodoxy holds that this is actually a net positive, that whatever problems arise from these transactions are offset by the gains.
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Hayek's conception of the market as an aggregator of "information" from buyers and sellers insists that all of these downsides are "priced in" to the final outcome.
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Garety goes over some of the funny math that "pricing in" uses: for example, if a TV factory shutters in the US and moves overseas, and TV prices fall from $1000 to $500, the net loss to America is $500 - but the town has lost $1,000 worth of work.
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But the real funny math comes from the loss of reslience. Stripping America of its domestic capacity to create and maintain its infrastructure and vital supplies is a "negative externality" - a cost everyone bears, even as the investors behind the operation profit.
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These costs are never priced into the market transaction, because the political system - which makes the rules of the market - allows those who incur them on all our behalf to act as though they don't exist.
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Negative externailities are endemic to market systems: the CO2 that firms subject the rest of us to, the evictions that property speculation fuels, the national brittleness and weakness that offshoring creates.
These are features, not bugs, in "free market" capitalism.
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These are features, not bugs, in "free market" capitalism.
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