Reindustrialize/Reimagine- Part I - The Past

My friend Juma Crawford likes to say America is not a country, it’s a business. And I agree.

?

Underneath our social and political structures, our legal architecture and mix of cultures, are the fundamental economics that guide our system. It is why social movements that address the hearts and minds have no enduring staying power; because unless the economic roots are addressed little will change.

?

In April of 2024, Juma brought a group of Oakland community leaders and I to Montgomery Alabama to learn about the present-day struggle of Bryan Stevenson’s Equal Justice Initiative and other social entrepreneurs like Michelle Browder, to reclaim the narrative of America in the Cradle of the Confederacy. Bryan Stevenson is a trial attorney who has dedicated the past 40 years of his life to defending Death Row inmates in Alabama and advocating for prison reform across the USA who came to popular fame with the book and movie of the same title, Just Mercy. At EJI’s Museum, From Slavery to Mass Incarceration, he puts America on trial for its original and enduring sin of Black exploitation. In the first gallery, after you walk through the dismembered bodies of African people on the shores of the Middle Passage, you learn about the founding of each of the 13 colonies. As a history teacher I know it, but it recalls remembering, many of the 13 colonies were founded by joint stock companies under the charter of the British monarchy. From inception, America was a business enterprise, and the conquest of the Americas over the next 300 years enriched Western Europe and lead to the Rise of the West as the dominant global power starting in the 1700s… a relative recent phenomenon. The economic calculus of chattel slavery is at the root of America’s economic might, and the compounding wealth it created together with our geographic isolation, has made the United States the hegemonic global power to begin the 21st century. It is the fear of losing this status that drives our politics on the right and the pain of addressing our exploitation on the left that provides the tension and fragmentation of our nation today. Our perspectives divide us, our desire for continued prosperity unites us.

?

Here is my attempt to provide a very condensed version of American History to explain how we got here:

?

Q1 Centralized Vs. Decentralized

?

Last summer I visited Valley Forge in PA with my family. My kids love national historic sites and parks, and we hit every landmark we can during our family trips. I was a history major at Lafayette College, and taught US and World History for over a decade. I am a historical thinker. All I see are patterns; these stories we tell ourselves are my native language. In the book shop at Valley Forge, I bought Christian Parenti’s Radical Hamilton which does a phenomenal job of explaining the economic philosophy of industrial manufacturing embedded into our national fabric. I love Lin Manuel Miranda’s musical Hamilton, because it brought the foundational issues at the heart of America to the masses, and in color; but I encourage us all to go deeper, because Hamilton’s story is the story of Reindustrialize/Reimagine and a debate we are still having today.

?

There was almost no United States of America. During our Revolutionary War period, we were fighting against monarchy and for self-government and economic freedom. We were weak and fragmented; Great Britain was the largest and most powerful empire in the world. As George Washington’s right-hand man, Hamilton had a front row seat to the chaos of a weak government with no centralizing power to raise resources and mobilize people. At the recognition of the ineptness of the system he had a nervous attack and lost his capacity to act. His body's experience was a great metaphor for our early nation; we simply had no capacity to survive amongst rival nations without strengthening our national bonds and centralizing power. Washington’s army survived the winter in Valley Forge, and Hamilton came back from death’s door with a fanatical desire to create a strong and unified federal government. Out of the furnace of war he realized that if the fledgling USA was going to have a chance in a new world dominated by European powers, we would need to industrialize, create our own internal economy, tie the monied interests of the wealthiest citizens to the health of the federal government, and embrace a ruthless vision of industrialization spurred by public investment. He understood a basic principle of survival during the age of nation states, which we are still in, that only a strong state could build a strong and wealthy economy, which could fund a strong military, and ensure national survival and sovereignty. After the war, and as our nation’s first Treasury Secretary, he created the conditions for us to pursue this path by assuming the debts of the states, created the first National Bank, establishing stable credit and setting ambitious goals and measuring industrial progress.

?

In contrast, Thomas Jefferson, and the Anti-Federalists, had a deep belief in States Rights and the small farmer, the small business, as the ideal for economic development. Freedom and civil rights are enshrined in the Bill of Rights and the division of powers between the Federal government and the States because of this counterweight to the all-powerful central government. Of course, the irony of this focus on freedom was in part to protect the South’s slave economy and increasingly the economic interests of King Cotton.

?

Centralization and Decentralization are at the heart of the American story, it defined our approach to economic development and it's tensions are still with us today.

?

Q2 Industrial Vs. Agricultural

?

U.S. history has 40- and 80-year cycles. The 1820s were a period of disruption with Andrew Jackson’s attack on the national bank, a temporary setback on the establishment of a national economy, but it was the Civil War in the 1860s which really unleashed our industrial might. The victory of the North led to the abolition of slavery, and it crushed the cotton economy that had made both North and South rich, even as it morally destroyed our nation. War is an amazing catalyst to economic growth as it spurs investment and mobilizes resources to new industries; just look at Russia today. The sectional divide between an industrialized free labor North and agricultural slave economy South was broken by the Civil War, and although no true reconstruction of the South occurred, the West was thrown open to development, and by WWI the United States was the largest industrial power in the world and in the dawn of the 20th century the US became the center of global innovation.

?

Before the Civil War there was no love of the entrepreneur. Most American politicians were rich from their plantations, but as Lin Manuel Miranda’s Hamilton quips to Jefferson, “We know who was really doing the planting.” Plantation economics could not compete with the innovation and production capacity of free labor and capital, manufacturing, and the industrial economy. The Astor family was America’s first self-made dynastic family, moving from the American Fur Trading Company to NY real estate. In the era after the Civil War, they would be joined and replaced by railroad tycoons, steel barons, oil, and banks, all monopolized by the consolidated interests of America’s wealthiest families from Vanderbilt and Rockefeller to Carnegie and Morgan.

?

The push back against rapid industrialization, immigration and the loosening of America’s traditional values was the Progressive Movement, originally lead by farmers, but embraced by urban reformers, a broad coalition that worked to pass income tax, women’s suffrage, and break up corporate monopolies. These were counterweights to the dominant historical push towards economic expansion through industrial might, as culture wars mixed with economic progress, creating a tension between pace of innovation and our nostalgia for the past.

?

Q3 Globalization and It’s Discontents

?

The climax of the next 80-year cycle, that created the operating conditions and world view of our modern America were the Great Depression and WWII. Unique in world history, the world wars engaged all the great economic powers on the planet and by the end of WWII, all were destroyed, except for the United States. Our geographic isolation not only allowed for the development of the largest internal market the world has ever seen until the meteoric rise of China in the past 20 years; but it kept the firebombs from destroying our cities and our industrial capacity. We defeated Germany and Japan, not because our soldiers were better or our military strategy more effective; we simply outproduced and overwhelmed the world with our industrial might. We collected the best scientists from around the world to pursue the Manhattan Project and poured unlimited resources into the development of the first atomic bomb. We turned car factories into tank factories overnight and embraced the crisis as an opportunity for national renewal. We started the war on the sidelines, an isolated industrial power with high tariffs and a struggling economy and finished with global dominance and a baby boom.

?

160 years after fighting for our independence, the United States replaced Great Britain as the leader of the Western world, and we remade global institutions from the United Nations to the IMF and World Bank in our image and according to our rules. For the past 80 years the global economy and geopolitics have been according to our frameworks and guided by our economic dominance. We embraced a global world view, shunning the natural foreign policy of neutrality established by President George Washington, and took the center of the world stage. As we rebuilt Western Europe and Japan with our democratic principles and aligned to our economic interests, we created pathways to prosperity at home with the GI Bill, rise of the Suburbs and higher standards of living. We can bemoan redlining and the continued segregation of America, but the 1950s and 1960s was a period of broad shared prosperity with strong unions, economic growth, and expanding civil rights. This national unity was broken by the 1970s and it led to a handful of shifts that are coming home to roost in today’s generational crisis.

?

First, the response to the economic stagflation of the 1970s was increased globalization. If economic competition from a rebuilt and more competitive world was threatening the bottom line of America’s corporations, Wall Street, and the c-suite, embraced the free markets. We deindustrialized, breaking the unions and the pact with the American workers, and shifting our manufacturing base overseas, primarily to China. Nixon’s embrace of China was a strategic move, weakening the Soviet Union and leading to its collapse less than two decades later. It also had unintended consequences.

?

Our decision to gut our manufacturing was based on the free market principles of Adam Smith, the Wealth of Nations belief in the division of labor across nations. This works, if you are not in conflict with your supply chain, and your national security and sovereignty are not at risk. This is crisis number 1 we face today, and thus the urgent mandate to Reindustrialize.

?

Second, giving up manufacturing and the American worker was seen as net positive, because we embraced the information age and the digital economy. Out of the electronics revolution spurred by WWII we created Silicon Valley and in the 1980s and 90s we shifted from the Rust Belt to the Bay Area, Boston, and Dallas/Austin technology corridors. California would be the big winner of this economic shift and today it stands as the 5th largest economy in the world. Finance and technology have driven the US corporate economy, with a healthy dose of real estate investment around the core markets, and those on the prosperity train have seen exponential growth of their assets.

?

Our shift to the digital economy has led not to broader shared prosperity, but economic aggregation by the platform economy and more entrenched wealth building. While the educated and elite embraced the free market, the working class of all races was left with the service economy and 40 years of a declining small business wealth as a percentage of GDP. It is felt in California and communities like Oakland, where the GDP continues to grow, but the quality of life is diminished by the extremes of poverty and wealth co-existing, a bifurcated nation tied together yet moving in opposite directions. Our fragmentation and our inequality are our crisis number 2, which requires us to Reimagine our social contract and create new business models for the Next Economy.

?

Finally, the 1960s and 1970s broke our trust in government, broke our spirit of community, broke the Family, the Church, all our established institutions. It set us free from oppression, but it set us adrift morally and spiritually. I am not foolish enough to wade into these waters, as we all have different values and beliefs. Reproductive rights, same sex marriage, the role of government in our affairs, DEI and reparations, immigration and the path to citizenship, the electoral college, and the fairness of our elections… everything is up for debate, and we are at odds with one another. Politically we are as dysfunctional as I can recall in my 50 years of life, with an inability of either party to effectively lead domestically, let alone on the world stage. Economically, there is incredible insecurity for most, and extreme comfort for some, as those who own homes and have retirement accounts, can pass down generational wealth and navigate the disruptions of the coming AI economy, while the majority of Americans will be dependent on a weakened social safety net to manage the coming disruptions.

?

Our climate is changing, it always has as a basic fact of life on this beautiful planet, and 8 billion people burning fossil fuels and aspiring to a middle-class American life Hollywood has projected around the world as the apex of freedom is speeding it up. Yet, even the science of Climate Change is up for debate as the Establishment is not trusted and Fake News goes mainstream. We uncovered that the emperor has no clothes, and now everyone, from QANON to the AOC Squad, from the Freedom Caucus to Black Lives Matter can stake their claim to the failure of the system and the need to take back America, Build Back Better, Make America Great Again, create the Beloved Community.

?

America has always viewed itself as a City Upon a Hill, an exceptional nation, not determined by history but a shaper of it. It is the one thing that unifies us, a belief in our destiny, as corny as that may seem in this age of cynicism. Without a higher ideal and our faith in our ability to work together, to work for something bigger than ourselves and our own narrow interests, it is going to be difficult to imagine how we meet this moment and embrace the painful, but necessary path through the storm ahead. We need to be able to say we LOVE our country, the only nation must of us know, the place we were born, chose to move to, or choose to remain; and we can LOVE an imperfect parent. We can love even as we disagree, as we admit the wrongs and attempt to redress the past, not perpetuate the othering that is so much of our story.

?

We do not need to be right. We need to dialogue for the common good.

?

If one side holds onto a purified view of American Exceptionalism that denies the lived experience of millions of American citizens, while another holds onto the hurt which prevents seeing the progress, freedom and hope which is uniquely American, we break the heart we all collectively call home.

?

We are one people, with one heart, on one planet, under one God.

?

We don’t like to admit it, but we need one another. We share one body.

?

We live and we die together.