Made in the USA: The Rise and Retreat of American Manufacturing

by Vaclav Smil

In Made in the USA , Vaclav Smil powerfully rebuts the notion that manufacturing is a relic of predigital history and that the loss of American manufacturing is a desirable evolutionary step toward a pure service economy. Smil argues that no advanced economy can prosper without a strong, innovative manufacturing sector and the jobs it creates. Smil explains how manufacturing became a fundamental force behind America's economic, strategic, and social dominance. He describes American manufacturing's rapid rise at the end of the nineteenth century, its consolidation and modernization between the two world wars, its role as an enabler of mass consumption after 1945, and its recent decline. Some economists argue that shipping low-value jobs overseas matters little because the high-value work remains in the United States. But, asks Smil, do we want a society that consists of a small population of workers doing high-value-added work and masses of unemployed? Smil assesses various suggestions for solving America's manufacturing crisis, including lowering corporate tax rates, promoting research and development, and improving public education. Will America act to preserve and reinvigorate its manufacturing? It is crucial to our social and economic well-being; but, Smil warns, the odds are no better than even.

Genres: Economics, Business, History, Nonfiction, Politics, Science, Technology

263 pages, Hardcover

First published August 16, 2013

About the author

Vaclav Smil is a Czech-Canadian scientist and policy analyst whose work spans energy, environment, food, population, economics, history, and public policy. Educated at Charles University in Prague and later at Pennsylvania State University, where he earned his Ph.D. in geography, Smil emigrated from Czechoslovakia to the United States in 1969 following the Soviet invasion, before beginning his long academic career at the University of Manitoba in 1972. Over the decades he established himself as a leading voice on global energy systems, environmental change, and economic development, with particular attention to China. Smil has consistently argued that transitions to renewable energy will be gradual rather than rapid, emphasizing the persistence of coal, oil, and natural gas and highlighting the difficulties of decarbonizing critical industries such as steel, cement, ammonia, and plastics. He has also been skeptical of indefinite economic growth, suggesting that human consumption could be sustained at much lower levels of material and energy use. Widely admired for his clear, data-driven analyses, Smil counts Bill Gates among his readers, while colleagues have praised his rigor and independence. Known for his reclusiveness and preference for letting his books speak for him, he has nonetheless lectured extensively worldwide and consulted for major institutions. A Fellow of the Royal Society of Canada and a member of the Order of Canada, Smil remains a highly influential public intellectual.

Reviews

[Tobias · Rating 3 out of 5]

Frustrating, poorly written book. Most of the first half of the book consists of a dry recitation of statistics. One could get away with only reading the fifth chapter, which seems to summarize the rest of the book. I accept Smil's argument that deindustrialization has not been a good thing for the United States, and believe that it was not inevitable, but Smil's critique of US policy problems is unimaginative, hysterical, and driven more by media sensationalism than cool analysis. And ultimately he concludes that the "rise of the robots" makes it unlikely that manufacturing jobs will ever return to the US, undercutting his whole argument. Bringing manufacturing back to the US in a significant way seems like closing the barn door after the horse has gone out. It's time to think about serious investment in education and training but also a basic national income in recognition of the fact that there may never be a replacement for the middle-class manufacturing jobs of yesterday.

I would recommend Stein's Pivotal Decade instead of this book for an account of American deindustrialization.

[Callum Lamb · Rating 3 out of 5]

Vaclav Smil needs to learn about graphs.

[Chuck · Rating 4 out of 5]

Bill Gates recommended this book and I just finished Making in America: From Innovation to Market, so I decided to read this to follow-up. I recommend reading Making in America before this book. That book offers much more original content, using recent studies and surveys, and provides a greater focus on the current status of American manufacturing.

Smil's book, in contrast, examines the history of American manufacturing with a variety of statistics. He looks backward to the nineteenth century, tracing the rise and fall of American manufacturing in the United States, which became an interesting compendium to Making in America. The history demonstrated the importance of manufacturing to the American econonomy and gave a normative value for it. Smil argues that manufacturing is integral to allowing the American middle class to survive.

Smil also offers some recommendations about American manufacturing, which he coats deeply in rhetoric. In chapter five, his roaring trash talk about Jagdish Bhagwati made me cheer but wasn't particularly elucidating. Throughout the book, he denounced the value of the American finance sector. Both analyses placed him clearly in the Occupy camp.

I did walk away with an increased understanding of the value of American manufacturing, and I suppose the book is worth reading for that reason.

[Sivakumar Thangavelu · Rating 5 out of 5]

I thoroughly enjoyed this book! Specially the last 30%.

For an Industrial Designer like me working in China, I could see a lot of sense in what Smil is trying to tell in this book. I would say this as a very comprehensive and neutral outlook towards American manufacturing since it rise in the 19th century till now.

After reading his book, I went to YouTube to watch a few lectures / interviews by Vaclav Smil (on other topics as well) and I was amazed by how smart this guy is and how funny he puts across facts to the listener. I am really surprised how this guy is not so famous as I would expect him to be. I am going to read all of his books in the coming days!

Vaclav Smil is a genius!

[Noass · Rating 5 out of 5]

On top of all of the other pending dooms (climate change, partisan politics, Putin), Smil places the lack of manufacturing/loss of income parity/erosion of american supremacy prominently among my concerns. Highly detailed sociologic/economic history of manufacturing's role in the emergence of the US as a THE superpower, and frighteningly vivid portrayal of the crumbling of our power through dissection current trends.

[Rebecca · Rating 5 out of 5]

The book is full of facts and figures to bolster Smil's overall assessments of the background, evolution and current state of manufacturing in the USA. Unfortunately, the book was written and researched well before Donald Trump became president and Boeing's 737 MAX crisis, so the book's "now" is no longer the present. Things have changed, and do change ever faster in the 21st century. I would love an updated version.
Nevertheless, Smil covers all the bases. He explains why manufacturing as an economic sector per-se is only one part of the overall US productive output, and arguably the most important. Technical innovation drives economic growth and manufacturing has always been the main R &D sector. If manufacturing is in decline, then there is a strong case made for US leadership in innovation declining too.
Non-industrial sectors such as agriculture, transportation, service and communications play a big role in GDP and the broad economic picture. There is increasing overlap with the service industry, which has emerged as the strongest sector in the US economy, something that may not be good for the future. This is not to say that there is not much manufacturing in the USA. Using 2005 dollars as the measure, US manufacturing was still the world leader $1.762 trillion to China's $1.654 trillion, but in 2010, China pulled ahead to $1.922 trillion to USA $1.856 trillion. "Moreover such a simple quantitative comparison hides major qualitative difference: China relies overwhelmingly on deploying masses of low-paid manual workers, while US manufactures a much higher share of value-added products...US manufacturing in 2010 was adding roughly 2.5 times as much value to the country's GDP as did Chinese manufacturing to its GDP."
Trade deficits also are covered. "The only reason the United States has been able to sustain such a long period of high trade deficits is because it holds the world's reserve currency and can finance the deficits by continuous sales of US Bonds to foreigners."
"First things first: 'superior' is a wrong term to use, but manufacturing (now including its many 'service' components) is fundamentally more important than arranging dubious mortgages, investing in even more dubious hedge funds, and boasting about the exploits of a new dog a Facebook page."
"There are abundant signs that the long run [economic hegemony] might be coming to an end."

[Clay · Rating 3 out of 5]

American manufacturing is retreating and it's not just because of high US salaries from a 'strong' dollar. Our infrastructure (D rating overall), workforce training (80% of high schools students are not prepared for college), health care/taxes, labor unions that have hidden costs (pensions), and regulations. There is a half-a-trillion dollar trade deficit and we only have two sectors of manufacturing where we still dominate, but are beginning to slip; chip fabrication and aerospace. This isn't just about manufacturing either; every dollar of manufacturing sold has $1.40 of additional economic activity happening in the background (accounting, e-commerce, job training) which is higher than other sectors; $1 for transportation; $.60 for retail and business services.

The people on the top of the economy, the fabled 1%, still see growth year over year in their wages because they can pull the strings and reap benefits of the manufacturing plants they place abroad, but once the manufacturing leaves the wages of the 99% become flat. In fact, even when it is still economical to make manufacturing, or even assembly plants, in the US companies choose not to; Apple eschewed the US to make build an iPhone plant in China even though they have a 50% profit margin on the phone and China commits serious industrial espionage.

Where is all this headed then? Smil believes that we are headed towards a declining manufacturing sector that will go out with a whimper and I don't believe he's wrong. There is hope, however. The US is resilient and still has the world's greatest innovators. Perhaps a future filled with electric cars, reusable rockets, solar panels, home battery systems, and next generation robots will bring us back from the brink. It seems our fate could be in the hands of just a few companies; Tesla; SpaceX; Blue Origin; Boeing; Lockheed Martin; Boston Dynamics; Intel; AMD. Just a few companies to keep us afloat before we enter a new era of American Excellence.

[Brook · Rating 5 out of 5]

Like everything esle from Mr. Smil, this book is DENSE as heck. But it is an argument for American manufacturing, and the continued importance of manufacturing for all nations going forward. It doesn't exactly "dispel the myth" of the service economy, but rather notes how much Americans still produce, even though there is a trade deficit. The best example is early in the book, where we learn about the manufacture of the iPhone. Smil, as always, never takes a side or gets political, but he does mention the Foxcomm company "producing" iPhones in China. Then you learn what percentage of the phone, by value and volume, is produced elsewhere (spoiler, most of the value of the phone comes from American-manufactured processors).

I was also of the mindset of "well, now we 'build' ideas here, not furniture or clothing, and that makes us an advanced economy." Smil points out how manufacturing affects other industries (manufacturing is inexorably tied to agriculture, as we have to make the tools to farm, e.g.), and how critical it is to our economic well-being. He also wades through the "trade deficit" numbers to show how Chinese (for example) manipulation of their currency can also change the trade deficit numbers. Devalue your currency, and it looks like you are exporting more, as your currency is worth less, but the raw numbers (billions of yuan/dollars) make it seem larger.

This is, again, a DENSE book. But if you want a college course on global trade and manufacturing, and to learn some really interesting facts about American Manufacturing, this is an absolutely amazing book. It's not Mary Roach, who is the best at making complicated subjects approachable, but Smil's books have more meat to them than any other author I have read.

[Allen Fan · Rating 5 out of 5]

In "Made in the USA," I encountered a thought-provoking exploration of the factors that influenced the retreat of American manufacturing and rise of Chinese labor in the 1990s. Prior to getting myself into this well-researched exposé, I held a preconceived notion that the primary attraction for foreign companies was the availability of inexpensive labor in China. However, Vaclav Smil's comprehensive analysis sheds light on a more complex landscape.

Personally, one of the book's key revelations is the unspoken offerings provided by China's ruling party to attract foreign investment. The government's unwavering control over its populace plays a pivotal role, offering foreign corporations stability through a tightly managed police state. Additionally, the Chinese provide a workforce that operates under conditions marked by minimal labor rights, often enduring extended hours and severe discipline, all while residing in substandard accommodations. This strategy ensures social and political stability through strict control and surveillance, a methodology that exemplifies authoritarian or police state tactics. Viewed through a Marxist lens, it can be interpreted as a means to consolidate the ruling party's power and a tool for safeguarding the state's interests in achieving economic growth.

In essence, the book offers a nuanced exploration of these dynamics, prompting readers to consider the intricate interplay between culture, politics, economics, and labor practices in China during this period, which favored high productivity but came at an undeniable opportunity cost for American manufacturing. Smil's analysis also underscores the ongoing exploitation of labor, wherein disciplined workers endure challenging conditions and gigantic demands while contributing to surplus value generation for both capitalists and the state who seek better margins and more growth.

[Davor · Rating 5 out of 5]

A serious topic about serious consequences. The book is really good, I enjoyed reading it. A lot of statistics backed up by data, with valuable historical examples and progress through course of time.

The book sets a frightening tone for good reason, offshoring is one of the worst things you can do for your economy in the long run. Sacrificing long term growth for short term profit is nothing but irresponsible thinking. The author presents a way better explanation than I do.

What honestly shocked me was the story about the iPhone, and it's cost to build and assemble. That the actual assembling in the factory makes up less than 10% of the total price and if wished, it could be assembled in the U.S.

Recommended read.

[Joseph Bredesen · Rating 2 out of 5]

The author paints a pessimistic look at the nature and future of the problem in America. He remarks in the last chapter of the America’s ability to revive itself but paints the problem with too much severity to be solved and it is this: the trade deficit in manufacturing and with it the decline in the middle class and our economic growth. He makes many statistical remarks on why this is but to paint two scenarios to make the point: Detroit, Michigan currently where half of all house are vacant and ex-plants sit idle and then Facebook, which officially contributes to our economic growth, where the author claims “Facebook is just a communication and entertainment platform, an addictive and rapid means of verbal and pictorial messaging, gossiping, and display” versus manufacturing whose involvement is much more tied up in our wellbeing from healthcare, to transportation, construction and more.
He takes very much an engineer’s approach to the economy: very hands-on or manipulating it or as some may say social-engineering it with a combination of taxes, subsidies, regulations (the author speaks of the terrible safety quality in things like Chinese children’s toys), prohibitions versus what Milton Friedman claimed and that is that engineers make poor economists; we ought to let the free market run its course, but as the author states there is a gradual evolution from an industrial economy into a service economy; we become rich enough to buy our goods from somebody else, but at times these goods are goods like Facebook as I described in the above paragraph. But no is what the author describes; we ought to fight this and remain an industrial economy.
He defends his thesis in theory but doesn’t use history and with it statistics not that his theory is indefensible just it needs to be developed (a good book on this is “Sapiens: A Brief History of Humankind” where the author describes the scientific-industrial revolution) or does he go on to defend the inedible consequences of an American manufacturing: a military and the wars it has created but simply assume America’s rightness in world affairs, which is a whole other book in itself, but the assumptions are there from the Cold war, to WW2, to the Gulf War, to the wars on terror. He goes on to describe the policies of WW2 in manufacturing and the drastic increase in engineers and the sector of manufacturing in that era. Some may say it was an “artificial economy” but much of what was found out was used in civilian matter. The cost of war was drastic to the world. Not so much for America, but we developed a plane and applied it to cars as an example. He cites a book on if there would there be economic growth and innovation (of which three-quarters of economic growth comes from innovation) without war, and likewise defends private patents and tax deductions for private R & D, but economists have studied about 85% of our top medical innovation comes from heavy government subsidy, but to go on, you could say the same thing about healthcare R & D sponsored by the government instead of war R & D. R & D drives innovation and innovation drives manufacturing. It’s just Chinese steals it.
He likewise speaks highly of the German model which has an excellent workforce training has shared universally amongst government, unions, corporate an individuals and significant laws passed to make this go into effect. Japan is our other trading competitor. Again likewise he goes on to make the claim that manufacturing plants can lack basically skilled individuals in reading, writing and arithmetic of which is a discussion in and of itself. The author claims with Japan and for instance Ford it was primarily our inability to innovate caring more about cosmetic features versus things like good engine quality. He cites an extended period of time when fuel mileage didn’t budge and claims you could deliver and equally safe car at half the mass as present cars.
He makes the point that Detroit’s unions demanded too high of wages in comparison to the rest of the world; we ought to let other countries catch up. He makes the claim that it is not only low wages; it is also workplace training, which makes sense in light of the history of Dunwoody being founded in 1914; America’s industrialization occurred post-civil war versus during out founding when 90% of people worked on farms, where much infrastructure still used today was laid. He cited the “D” rating by civil engineering organizations and likewise goes on to defend tax deductions in general, budget cuts and specifically tax deductions for R & D. Whether that will work I remain unconvinced for one we have generally had higher economic growth under high tax rates and there is a discussion whether the rich and corporate simply move to the degree that they do upon high taxation; much of that can be funneled into workforce training and health programs which develops your workforce which drives growth in turn, without further enforcement of international norms with regards to intellectual property of which the author goes into explicit detail using again many statistics which I will not go into; but a glaring example is upon the helicopter crash that kill Osama Bin Laden the Chinese swooped in there to salvage our equipment to reverse engineer it. The most drastic of measures to be taken would be along the lines of kicking the Chinese out the WTO, of which the trade deficit drastically increased following there acceptance; America has won every complaint filed upon them at the WTO. Overall I give this book four stars.

[Carlos José Zilveti Arce M. · Rating 4 out of 5]

A book that make you think, are manufacturing jobs important?

The answer is yes, they are. For any country.
This is a nine year old book, but its topic is as valid and true today as it was when first released. Public policies for US manufacturing are needed. What we saw at Trump’s administration was import duties raise, that didn’t work for creating manufacturing jobs back, there’s no simple solution for complex issues.
The author uses good data sources and goes deep in his analysis.

[Rob Pruden · Rating 3 out of 5]

Interesting book, but hard to read as it is full of statistical data that slows down the narrative and lost me at times. The bottom line is that the book scared the Hell out of me and the prospects of this once great country. Having been published 9 years ago, I can only surmise that the problems that faced the USA 9 years ago have only gotten worse and that is very unfortunate for our future. I sure wish that our elected officials would read such a book and have a closed door discussion until they developed the guts to solve things.

[M.Shimbo · Rating 5 out of 5]

Must-read book about ups and downs of American manufacturing might.

Excellent and detailed historical developments of American manufacturing growth and decline. Detailed and sumptuous statistics make the arguments trustworthy. Threat of China’s economic expansion may be highlighted more since China has no intention to accept the American social regime, let alone democracy.

[Kevin]

Dense, rational, and worth every minute it takes to read it. If you want to see behind the hype to the real nuts and bolts of the state of american manufacturing and how it got there then read this book. Is it a breezy easy summer read - oh heck no! is it worth it, if you have an interest in the subject than yes.

[Olivier Dardant · Rating 4 out of 5]

A very good overview of manufacturing historically in the US, what caused its decline over the past 40 years, and why manufacturing remains important. I have it 4 instead of 5 stars as the last part of the book discussing potential solutions to manufacturing felt very shallow in comparison to the rest of the book. I understand the problem, but there isn’t a solution presented.

[Kenneth · Rating 5 out of 5]

This was an excellent work, containing much that is conventional wisdom and much which is original thinking but, rare amid the debate on the issue, robust and contextualized analysis of the problem and the challenges of manufacturing in the United States. This is a sweeping and penetrating discussion of the issue, very very well done.

[Nick Harriss · Rating 5 out of 5]

An interesting book from an author I am increasingly enjoying. A bit statistic-heavy in places but the quality of the insight makes up for this. The book is now over a decade old, but the vast majority of his foresight has proved correct. It is a pity that more politcians do not read books like this before making policies.

[Mikayla Maki · Rating 5 out of 5]

Fantastic book that attempts to explain the productivity paradox in terms of production. There’s some populist rhetoric with poor economic knowledge but generally incredibly well researched and with many interesting points.

[Roger A · Rating 4 out of 5]

Excellent work yet again by Vacaville Smil

Smil covers a huge amount of ground in a very thorough but also very readable fashion. A highly recommended text for those wanting understand what happened to US manufacturing and why it is so important.

[Adam Weiss · Rating 3 out of 5]

Not the most thrilling read, but an interesting look into the history of American manufacturing. I think I am too young to remember the age of manufacturing so it was interesting to see how much America used to build and learn why it all came tumbling down.

[Becky L Long · Rating 4 out of 5]

Audiobook. Another must-listen from vaclav smil. Even though I am a small part of American manufacturing in 2022 this is quite eye opening. The author is amazing at breaking down complex ideas and making them real. This was originally published in 2013. I would love to see an update post pandemic.

[Alek Zayas-Dorchak · Rating 2 out of 5]

Yeah this book annoyed the hell out of me about 5% of the way in. Honestly I had to skim it pretty liberally the rest of the way. There are books out there that actually paint a picture of American manufacturing without just stating stats at you.

[Brian Pond · Rating 5 out of 5]

Not a particularly exciting read as it’s dense and informational, but it’s extremely well cited and researched, and still written in a way that isn’t hard to follow or digest for those with the attention span and interest in the subject matter.

[Daniel Barker · Rating 4 out of 5]

Dense, and lacking visualizations of data (per usual from Smil), but brilliantly insightful, nuanced, and relevant. Intensely researched, as is always the case from Smil.

[Eissa Allam · Rating 2 out of 5]

Didn't like it. Book is boring and getting into deep financial details that I personally couldn't understand.

[terence mulhall · Rating 4 out of 5]

Interesting topics but a very dry read. The book could benefit from the use of graphics to display information.

[bob · Rating 3 out of 5]

Good intent .Dry implementation

[Robert Bob · Rating 4 out of 5]

Symbiosis- relation of society & economy . . .historical take through agrarian to manufacturing to service industry in America.
- a great documentary on Socio-Economical Change.
Well researched