Can American Cities Manufacture Again?
Industry needs lower taxes and fewer regulations, rather than more economic-development policies.
The coronavirus pandemic has intensified concerns about America’s industrial base. Our inability to ramp up production swiftly of masks, ventilators, and medical supplies revealed that we’re not the manufacturing powerhouse of yesteryear. These worries reinforced earlier ones about the flight of industry from depressed regions, such as the Midwest’s long-suffering Rust Belt. Many Washington politicians, including Republican senator Marco Rubio, think that the government should revive the idea of “industrial policy” and subsidize certain manufacturing sectors and lagging regions. Many state and local politicians are trying to stimulate manufacturing “clusters,” or groups of related industries, in their own backyards.
Yet government has had little success in such ventures. The emergence of industry in one city and not in another is often due to happenstance, or to long-standing historical ties not understood by contemporary politicians. To comprehend the peculiar problems of America’s manufacturing cities, we need to recognize the entrepreneurial culture that made them thrive—and how it can best be revived.
Time to Take Out the Regulatory Trash