The Reindustrialization of the US

Published in El Colombiano
(Colombia) on 28 November 2022
by Juan David Escobar Valencia (link to originallink to original)
Translated from by Patricia Simoni. Edited by Lisa Attanasio.
The U.S. has the best ecosystem in the world for innovation and business and the best energy supply conditions for the next two decades.

In March 2020, I claimed as others did that "the world has become highly dependent on Chinese production; therefore, it is necessary to consider decentralizing the model. Examples might include diversifying sources for the production of raw materials and basic components and/or making economically viable the approach between the areas of production and final consumption.”

The Chinese model is beginning to reveal structural failures, such as the decline of its financial viability and the accelerated aging of its population, indications that concentration of production in China has, in the best of cases, reached its limit.

Geopolitically, the confirmation of Xi Jinping as president predicts that political developments between China and the U.S. will fail to produce greater commercial and productive integration — quite the contrary. The decision by the U.S. regarding the production and availability of microchips will in itself have significant consequences. This particular constraint will have an impact on China in the coming years.

But why is the U.S. considered an alternative if it also has problems and weaknesses? Because there are no better candidates.

The Third World continues to have the advantage of relatively cheap raw materials and labor, although we cannot forget that the cost of labor is really a manifestation of its productivity. But the entrenched problems of infrastructure, productivity and political instability disqualify it. In addition, there is its cognitive inability to understand that Marxism is a historically proven failure.

Mexico might be saved, without Andrés Manuel López Obrador. Mexico might serve as a sort of China, with proximity to the U.S. for productive processes requiring cheap labor, until robotization and artificial intelligence take hold.

Europe and especially its productive leader, Germany, will hardly emerge unscathed from the energy crisis resulting from the Russian invasion of Ukraine, even if the conflict were to be miraculously resolved soon. German industry will not be the same, even if Germany, which historically speaking needs to be wrong twice about important matters before it can understand its mistakes, understands that Russia is not to be trusted.

The U.S. is not free of stupid politicians in both parties; some of its highway infrastructure is aging, lacking the skilled labor it requires for repair; but in the land of the blind the one-eyed man is king. Its ecosystem for innovation and business is still the best in the world; its demographics are the least decadent of the truly developed countries; and it has the best conditions for reliable and relatively cheap energy supply for the next two decades.

Industrialists are not casino speculators. They think in the long term, and that is why Americans themselves, along with Europeans and Asians, are relocating part of their manufacturing to the U.S., as evidenced by the recent Kearney report on factory relocation.


En marzo de 2020 dije, como otros, que: “el mundo se volvió altamente dependiente de la producción china y por ello hay que considerar la necesidad de descentralizar el modelo, como por ejemplo, diversificando las áreas de producción de materias primas y componentes básicos, y/o viabilizando económicamente el acercamiento entre las áreas de producción y las de consumo final”.

Aunque nadie sensato piensa reemplazar completamente a China como la fábrica mundial, hay circunstancias para pensar que parte de la producción industrial probablemente se instalará o reinstalará en EE. UU. El modelo chino ya empieza a evidenciar sus fallos estructurales como el decrecimiento de su viabilidad financiera y el envejecimiento acelerado de su población, lo que indicaría que la concentración productiva en China, en el mejor de los casos, tocó techo. En el ámbito geopolítico la confirmación de Xi Jinping como emperador, augura que las evoluciones políticas de China y EE. UU. no favorecerán una mayor integración comercial y productiva entre ellos, todo lo contrario. Solamente la decisión estadounidense sobre producción y disponibilidad de microchips tendría importantes consecuencias. Esta limitación, aparentemente tan específica, determinará en parte qué, cuánto y cómo será producido en China en los próximos años.

¿Pero por qué EE. UU. es una alternativa opcionada si también tienen problemas y debilidades? Porque no hay mejores candidatos. El tercer mundo tiene “todavía” la ventaja de materias primas y mano de obra relativamente baratas, aunque no olvidemos que el costo de esta última realmente es una manifestación de su productividad. Pero sus enquistados problemas de infraestructura, productividad e inestabilidad política lo descalifican, sin mencionar su incapacidad cognitiva para entender que el marxismo es un fracaso comprobado históricamente. Se salvaría México, sin Amlo, que podría ser una especie de China cercana a EE. UU. para procesos productivos que exijan mano de obra barata, hasta que la robotización e inteligencia artificial se consoliden. Europa y especialmente su líder productivo, Alemania, difícilmente saldrá indemne de la crisis energética por la invasión rusa a Ucrania, incluso si milagrosamente el conflicto se resolviera pronto. La industria alemana no será la misma, ni siquiera si Alemania, que en asuntos importantes históricamente necesita equivocarse dos veces para comprender su error, entiende que Rusia no es de fiar.

EE. UU. no está libre de políticos estúpidos, en ambos partidos, parte de su infraestructura vial está envejecida y no dispone de toda la mano de obra calificada que requiere, pero en tierra de ciegos el tuerto es rey. Su ecosistema para innovar y hacer negocios es todavía el mejor del mundo, su demografía es la menos decadente de los países realmente desarrollados y tiene las mejores condiciones de abastecimiento energético confiable y relativamente barato para las próximas dos décadas. Los industriales no son especuladores de casino, piensan en el largo plazo y por ello los propios estadounidenses, incluso europeos y asiáticos, están relocalizando parte de la manufactura en EE. UU., como lo evidencia el reciente informe Kearney de relocalización fabril
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