The race for industrialization is a mirage

“Around the world,” notes The Economist In its June 14 edition, political leaders are fixated on factories." This is obviously the case today in the United States under Donald Trump, but also in the United Kingdom, India, Germany and Indonesia, the British weekly notes.

According to the magazine, whose cover story is dedicated to “The Great Industrial Illusion,” this “global manufacturing push is doomed to failure. In fact, it risks doing more harm than good.” Because it is based “on a series of misconceptions about the nature of the modern economy.”

The first is that it would create many well-paid jobs for workers without degrees. However, in a long article focused on the United States, the weekly asserts that, even if factories open, it will essentially be robots that do the work previously reserved for workers.

Furthermore, nowadays, as far as pay is concerned, it is, among others, “jobs such as electrician, mechanic or police officer that offer decent salaries to those without a diploma.”

The Economist also refutes the idea that a large industrial sector is essential for economic growth.

And “what about the argument that, given the war in Ukraine and tensions with China, the rich world must reindustrialize in the interests of national security?” Again, the champion of liberalism doesn’t buy it.

In a world where national economies are “ultra-specialized,” attempting massive reindustrialization with massive subsidies would be ineffective. It would therefore be better, The Economist continues, for countries to “work together and trade in an open, loosely regulated economy” rather than “protecting their domestic industries and competing for jobs that no longer exist.”