In this book, Stephen S. Cohen and John Zysman belabor a fairly evident point, one which, in all probability, largely conforms to what most Americans already believe. The book is not, however, superfluous. For Cohen and Zysman, professors at the University of California, Berkeley, seek more than passive public assent or even scholarly validation. They seek the broad national consensus needed to bring about a fundamental change in the way Americans approach corporate and public policy. They wish to do no less than move a diverse and often-divided country to a level of concerted action not achieved since World War II.
The first part of the book’s message is efficiently summarized in its title. For reasons that will be outlined below, the United States cannot merely shrug off its sagging competitiveness in manufacturing by hypothesizing the emergence of a postindustrial economy based on world leadership in services. It follows, therefore, that manufacturing matters. In order to preserve the nation’s wealth and power, Americans must become more competitive manufacturers.
The authors move on from this preliminary conclusion to reject responses to the American manufacturing malaise based on protectionism or drastic reductions in wages. Instead, they advocate hard thinking, serious public debate, and a bold national policy with regard to technological development, including possibilities offered by automation and other advances in manufacturing techniques. Thinking and acting in concert, Americans must meet the future head-on or else tumble headlong into an economic (and social) abyss.
As should already be clear, the key to this book’s credibility lies in its effort to show that current economic trends do not, in fact, indicate the obsolescence (or even permanent subordination) of manufacturing in the American economy. Cohen and Zysman offer a number of arguments in support of this central proposition.
They begin by observing what should be readily apparent to all: At present, no matter what trends may be underway or what characteristics are utilized to define “services,” the heart of the nation’s economy remains manufacturing.
More compelling with regard to the book’s overall purpose, however, is a cluster of arguments aimed at showing that the “postindustrial” economy is not only a fiction at present, but also highly problematic in the near or even the distant future. The authors raise the question of linkage between manufacturing and services. Just how much economic activity in services is tied either directly or indirectly to the geographic proximity of manufacturing concerns? If factories are located abroad, will not many providers of services also be forced out of the country? Cohen and Zysman also raise doubts about whether American performance in services really outstrips that of its international competitors, about the willingness of foreign governments to allow American domination of their markets even if Americans do offer superior services, and about the compatibility of a postindustrial economy with national security.
Taken together, these arguments are more than a little compelling. Indeed, for their purposes, Cohen and Zysman really do not need to offer evidence that is conclusive. They simply have to raise reasonable doubt about the supposed demise of manufacturing. This modest goal is accomplished ably. Nor is this surprising, since relatively few observers go so far as to say that manufacturing does not matter.
The authors, however, go well beyond this point. They reject currently offered responses to the problem of competitiveness which hinge on the dramatic reduction of wages or imposition of protectionist barriers against foreign competition.
The arguments against competing with cheap labor are both empirical and normative. At one time, wage differentials might have been a factor in damaging the market position of American firms. In the late twentieth century, however, European and Japanese wage scales have become more or less commensurate with those in the United States. At this point, Americans are losing out because production has fallen (qualitatively and quantitatively) in relation to man-hours, not because wages are high. To be sure, the authors realize that wage...
(The entire section is 1758 words.)