From Tablet Magazine:
The Russian invasion of Ukraine has made it clear that what Boris Yeltsin in the 1990s called “the cold peace” has given way to Cold War II. The first Cold War was a struggle not only of nations and alliances but also of systems—capitalism versus communism. The second Cold War is already a struggle among systems as well, pitting countries that focus on manufacturing (China) and resources (Russia) in the physical world against an alliance led by the United States, which for the last generation has sacrificed much of its own manufacturing and mining to specialize in global leadership in finance, services, and entertainment. To put it another way, the contest of models in Cold War II is not about ownership of the means of production; it is about material production versus immaterial service provision.
The other side in the new Cold War is very good at making things, mining minerals, and growing food. In contrast, the U.S. economy, although it still manufactures many products and is highly productive in energy and agriculture, rewards and celebrates those who make apps and loans—after a generation in which American business and financial elites made fortunes by offshoring industrial jobs and facilities to China and Taiwan.
Beginning in the Clinton years, policymakers and economists of both parties celebrated the shift of the United States to a “post-industrial economy.” In a speech titled “The Challenges of Success” to tech executives and investors in San Francisco on April 28, 1998, the neoliberal economist Larry Summers, then deputy secretary of the treasury, celebrated the allegedly immaterial information economy: “The twin forces of information technology and modern competitive finance are moving us toward a post-industrial age,” he said. Silicon Valley and Wall Street, not manufacturing or agriculture or oil and gas, symbolized the “new economy.” Summers listed examples of this new economy—“AIG in insurance, McDonald’s in fast food, Walmart in retailing, Microsoft in software, Harvard University in education, CNN in television news.” Let backward, old-fashioned East Asians and Germans make cars and TV sets and telephones and computers; America will sell insurance and infotainment to the world.
In the post-industrial economy, large firms regulated and supported by government and negotiating with organized labor would give way to spunky startups founded by overnight tycoons, according to Summers in 1998: “Look right here in California, where millions are invested before revenues, let alone profits come, and anyone with a good idea can make their first million before buying their first tie.”
A quarter-century later, when it turned out during the COVID pandemic that the United States had ceased making many essential drugs and medical supplies and was dependent on autocratic, anti-American China for many of them, the same Larry Summers was apparently shocked to learn that many things are no longer made in America. On March 21, 2020, Summers tweeted: “Thoughts at the end of a long week: Why can’t the greatest economy in the history of the world produce swabs, face masks and ventilators in adequate supply?”....
....MUCH MORE
