Response to Finance and Manufacturing

In contrast with the technological fatalism of recent books on the state of U.S. manufacturing—Vaclav Smil’s Made in the U.S.A. (2013) and Andrew McAfee and Erik Bryjolfsson’s The Second Machine Age (2014) come to mind—the Production in the Innovation Economy project demonstrates that scalable innovation cannot function in an institutional vacuum.

Suzanne Berger poses precisely, and originally, the right questions: What critical functions and services were lost with the demise of the great vertically integrated corporations, and how can we reconfigure them—if at all—in a finance-dominated neoliberal economy? Her proposals, based on the German manufacturing model and on state and federal policies that support public-private restoration of industrial ecosystems and suppliers, are also compelling. If a responsible partner-company such as Timken, operating with only the remnants of the old verticality, is prey to hostile takeovers (and by teachers, no less), surely there must be a way of giving manufacturers protected status in our tax codes and financial regulations. However, in our current political climate, also thirty years in the making, that seems nigh impossible. Free markets won’t stand for “picking winners and losers,” and only “talent” deserves to win.

If policy prescriptions that support manufacturing are to gain traction, a massive shift of sensibility across the political spectrum, and particularly among the libertarian left and right, will be required. And that shift, in turn, must coincide with a revived culture of production that at the very least complements our ramped-up consumer culture—abetted by the digital revolution—and embraces a sober understanding of innovation and its structural limitations. For all the wistful talk of “making things again” among those engaged in local agriculture, artisanal manufacturing, makerspaces, and hacking, few grasp what a fully developed post-knowledge economy—and culture—might really look like.

The key to reconstructing productive culture after thirty years of financial freebooting lies in demystifying the marvels of innovation, which has assumed cult-like status. Innumerable TED talks and popular books such as Brad Feld’s breathless guide Startup Communities (2012) speak endlessly about creating networked “entrepreneurial ecosystems” from scratch. These networks are ostensibly non-hierarchical, though in Feld’s worldview, there are “leaders and feeders”; “charismatic” entrepreneurs should lead, and feeders, such as university and federal research labs and “not self-aware” state and local economic development officials, should play “a support role.” Remarkably, Feld mentions but lends little credence to the fact that Boulder, where he and his fellow entrepreneurs set about creating something “out of nothing,” is an old IBM and Ball Aerospace town, as well as home to no less than three national research labs and a major state university. That is hardly “nothing.”

Historian Raymond Williams argued that one can penetrate the heart of a culture by identifying its keywords and subjecting them to critical examination. Using Williams’s approach, we can see just how much the language of innovation has edged out the values and virtues of productive culture over the past thirty years. The academic, policy, and popular literature is riddled with keywords such as “talent,” “smart,” “horizontal network,” “knowledge work,” “brain hub,” and, of course, Richard Florida’s coinage “the creative class.” Even glancing analysis suggests that these terms are divisive and disrespectful toward the modest dignity derived from simply providing for one’s needs and those of one’s loved ones. And sure enough, recent books by economists Edward Glaeser and Enrico Moretti hail the big geographical sort that properly rewards tech-based cities and consigns older manufacturing centers, and their productive ethos, to disposal.

The cultural marginalization of productive work is not only rhetorical, but also plays out in urban land-use planning, in response to what Alan Ehrenhalt has called the “great inversion” from suburban to city living. For all its virtues, the Smart Growth movement, as Zelda Bronstein has shown, has been zealously taking urban land out of industrial zoning to make way for dense, transit-oriented, mixed-use residential development for the urban creative class. What is left out of the mix is the light-industrial, middle-class productive work that, as Jane Jacobs argued, is critical to the economic and architectural diversity of any great American city—indeed, to innovation itself.

In light of flickering signs of American “reindustrialization,” Florida has expanded—democratized?—his notion of the creative class and is now calling for a creative culture equal to the moment. That settles exactly nothing. It merely replicates the nostrums and biases of the wholesale promotion of the one-sided innovation economy—as if innovation and modern industry have not been mutually dependent since the 1750s. What we need, in part, is to call things by their proper names. Writ large, the United States is in the grip of a financial economy. To right the balance politically, productive work and culture must be valued again—in schools, in urban planning, and in a world shared with innovative talent.