How We Got Here (12)

May 30, 2014

 

Economic Trends

Militarily, the U.S. moved, in the twentieth century, from regional player to global colossus. Beginning again at the year 2000, looking at economics, we see a picture that (as always when we’re dealing with history) may be read many different ways.

Here is one reading: America’s economic performance in the 20th century is still impressive, but in some ways it peaked a couple decades after World War II ended, and then began to decline.

Maybe. But here is another reading: Economically, America in the 20th century reinvented itself successfully at least three times, and is probably in the process of doing so again.

Which way is most correct, only time will tell. Let’s look at the story.

At the end of the 20th century, several American industries that had been crucial to its earlier success were no longer viable. Take the steel industry. You could find a couple of modern steel mills, but mostly if you wanted steel or products made of steel, like ships, you had to turn to Asian manufacturers such as Korea. Take electronics, a much more modern  industry that America had pioneered. Electronic instruments and gadgets no longer were made in America. Even the iconic Apple computer had parts made  in China and other places overseas. In the 1980s, a fire in one of two factories on Taiwan that made silicon chips caused a crisis in the American computer industry. Even service jobs such as hotlines were being farmed out to lower-cost English-speaking countries such as India. A pessimist might ask, where is the future for an industrial economy that keeps losing its pre-eminence in basic industries?

Yet, at the same time, new industries were springing up that promised to replace those lost. In 1986 the world watched a two-person airplane circle the world in 10 days without landing and without refueling. Not everyone who kept track of the Voyager flight, though, noticed that it was designed to showcase the strength, durability, and light weight of new composite materials as a replacement for the aluminum skins airplanes had depended upon for half a century. And, in those same years, few noticed another development that promised to become a huge new industry: 3D printing. An optimist might ask, with new composite materials and 3D printing, who needs the old steel industry? It’s cheaper and easier to substitute new materials, and fabricate them in a new way, and import whatever steel we need for other uses.

Time will tell which way of seeing things is more correct. Chances are, it will turn out to be a mixture of both.

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