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Let’s compete not repeat

The slogan “Make America Great Again” sounds inspiring. At least at first blush. But I have a problem with the word “again.”

That word sounds as though we believe doing what we did to make America economically great in the first place bears repeating today. That nostalgic thought conveys a forgetfulness of what America faced when it became the world’s greatest economic power as well as the economic challenges America faces now.

America came to dominate the world economically right after World War II. From 1945 until the 1970’s, we remained the only major nation in the world with intact infrastructure, businesses, and housing. Europe and Asia had been reduced to a shadow of their former selves.

There was little competition, and through a strong national effort, the United States became the world’s number one economic power. It still is.

Today, however, our infrastructure is an embarrassment. Our leaders decry the haunting nightmare of shuttered plants in the rust belt, while Europe and Asia continue to build their modernized infrastructure, housing and manufacturing plants…AND have increasing numbers of consumers. They have won market share for many of the manufactured goods we used to create, and have now turned toward industries of the future. Americans are 6% of the world’s population but we still manufacture 25% of the world’s goods. We need to export. We need to trade.

Our reaction to this state of affairs has been to place the largest share of blame on trade agreements like NAFTA rather than cheap labor abroad for our current slow and uneven economic growth, and to assert that the problem’s solution is to bring back outsourced jobs. Trade deals do, indeed, share some of the blame: NAFTA forced many non-competitive American industries to close plants and lay off workers.

On the other hand, trade deals have made it possible for Americans to buy a wide variety of inexpensive imported goods, raise U. S. GDP by 0.5% and forced us to become more productive and competitive.

Today, many see these past real trade-agreement disadvantages as America’s principal problem. But as Marc Munro has reported in the MIT Technology Review: “Since the 1980s USA manufacturing output has increased, but employment has declined. The problem is not that the manufacturing industry is shrinking, but the output is greater and more driven by technological improvements, not by increasing labor.”

Today, automation, not trade, is our biggest problem.

Unfortunately, many Americans, including Donald Trump, have mistakenly concluded that a new American resurgence will depend predominantly on the return of manufacturing plants.

Not so.

In Munro’s words, “The 30-year receding tide of the manufacturing sector won’t be turmed if only we have more trade barriers.” The lyrics Bruce Springsteen sang in his 1984 hit, “My Hometown,” are as true today as when he first sang them: “…these jobs are goin’, boys, and they ain’t comin’ back”.

Instead of being future-oriented in facing the realities of globalization and automation, we are being tempted to focus exclusively on bringing back jobs in industries that were once labor-intensive but are no longer so.

Many of these industries now depend on automation and employ a fraction of the people they once did.

Not only are other countries capitalizing on jobs they took from us, they are investing in modern infrastructure and education programs to support new jobs of the future.

Wayne Gretsky famously said: “I skate to where the puck is going to be, not to where it’s been.”

It would be a mistake if the United States skated economically to where we’ve been and not to where the action is going to be.

So, for example, we seem willing to cede pre-eminence to China and Germany in one huge industry of the future; the development, manufacture, use and international export of green technology as we double down on coal and other fossil fuels, placing less emphasis on clean energy.

What will be the industries of the future?

Will they be the esoteric industries such as self-driving cars, desalinization technology, R&D in pharmaceuticals built on the genome code, cyber- protection, cognitive robotics, artificial intelligence, block chain technology, nanotechnology?

Who knows?

Engineers are re-imagining all of the processes and resources of yesterday’s manufacturing models and coming up with ideas as strange-sounding to us as “manufacturers without factories and products packaged with sensor components that give automatic alerts when the product needs fixing.” Manufacturing and service industries of the future will continue to make us great, but they won’t look anything like the ones that made America great in the past.

As Fareed Zacharia reminds us, America is not declining; rather, everyone else is rising. Unlike forty years ago, today the biggest killer of American manufacturing jobs is not trade but automation, the new “cheap labor.”

In this increasingly competitive world, globalization and automation are arguably cornerstones of 21st century economic life.

Consequently, successful countries will be those that prize imagination, innovation and education for next-generation jobs, not on self-defeating protectionism and pining for a return of jobs reduced in number through the introduction of digitization and automation. The way forward is innovation, not protectionism.

There is nothing wrong with wanting to keep “America First.”

But “America First” is not the same as “America Alone.” We became number one by taking the lead in shaping world economic order, not by dictating a one-sided trade regime.

The latter is how “Great Britain” became “Little England.”

We will remain number one by promoting high-tech industries, infrastructure renewal and fairer versions of free trade, not by reviving rust belt industries and engaging in destructive trade wars.

We need to innovate, not regurgitate; to compete, not retreat.

Mannello is a former hospital executive and consultant residing in Williamsport.

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