We'd Better Watch Out

We'd Better Watch Out

July 12, 1987 | Robert M. Solow
The article by Robert M. Solow, published in the New York Times Book Review, critiques the notion of the "deindustrialization" of the U.S. economy and the idea of a "post-industrial" economy. Solow argues that the U.S. cannot rely on exporting services to balance its trade, as it needs too many goods and there are not enough services. He emphasizes that American manufacturing must improve its productivity, quality, and design to regain competitiveness against rivals like Japan, South Korea, and West Germany. The authors of "Manufacturing Matters: The Myth of the Post-Industrial Economy," Stephen S. Cohen and John Zysman, make valid points about the inseparability of high-productivity business services from the production they serve, but their arguments become vague and speculative. Solow also criticizes their reliance on truisms and lack of concrete policy prescriptions, suggesting they should focus on specific insights and hypotheses. He notes that while the authors acknowledge the importance of flexibility and adaptability in modern manufacturing, they fall short in explaining why Japan and West Germany overtook U.S. industry. Solow concludes by praising their emphasis on skilled work organization and education but wishes for more modesty and concrete policy recommendations.The article by Robert M. Solow, published in the New York Times Book Review, critiques the notion of the "deindustrialization" of the U.S. economy and the idea of a "post-industrial" economy. Solow argues that the U.S. cannot rely on exporting services to balance its trade, as it needs too many goods and there are not enough services. He emphasizes that American manufacturing must improve its productivity, quality, and design to regain competitiveness against rivals like Japan, South Korea, and West Germany. The authors of "Manufacturing Matters: The Myth of the Post-Industrial Economy," Stephen S. Cohen and John Zysman, make valid points about the inseparability of high-productivity business services from the production they serve, but their arguments become vague and speculative. Solow also criticizes their reliance on truisms and lack of concrete policy prescriptions, suggesting they should focus on specific insights and hypotheses. He notes that while the authors acknowledge the importance of flexibility and adaptability in modern manufacturing, they fall short in explaining why Japan and West Germany overtook U.S. industry. Solow concludes by praising their emphasis on skilled work organization and education but wishes for more modesty and concrete policy recommendations.
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