RUTHFULLY YOURS

David “Spengler” Goldman writes: Dr. Henry Kressel’s essay on industrial laboratories may be the most important piece of economic writing I have read in the past several years. It’s a practical guide to restoring American technological prowess and productivity growth.

Between 1999 and 2016, the U.S. share of global high technology exports dropped from 18 percent to 7 percent. From one of the world’s leading technology product exporters prior to 2000, the United States has become a net importer since then, and the deficit keeps growing. During this period, China’s share of exports increased from 3 percent to 26 percent, reflecting the shift of manufacturing overseas—including important high technology industries that were pioneered in the United States as early as the 1950s—suchas telecommunications systems, consumer electronic products, microelectronics, and solar energy converters.1

While we have seen the emergence of innovative U.S. companies in information industries, of which Google is a prime example, we have not seen a similar development in technology sectors involving domestic manufacturing. In fact, the sale of Westinghouse’s nuclear energy division to Toshiba is an example of a domestic loss of control over an industry vital to the United States Navy (though the company now appears likely to be sold back to U.S.-led private equity consortia). Or consider another example among many: key components of advanced computing technology essential in military systems, such as custom processing chips, may be designed here but are manufactured in Taiwan.

The domestic decline of important and vibrant technology industries impacts economic growth and contributes to the loss of well-paid manufacturing jobs. It also adversely affects military and other technological capabilities. The loss of a domestic manufacturing base for vital industries means that continuing innovations in those sectors are difficult to create or control. Computer displays, for example, are produced overseas, and that is where the innovations are now being developed and commercialized—because core innovations need to be embedded in the manufacturing process. While the migration of industries from developed to emerging countries is a common historical tendency, the shift away from the United States in recent decades has been unprecedented in its speed. To solve this problem, the United States must increase the rate of domestic industrial innovation and secure the domestic base of advanced industries. This calls for a major initiative involving industry, universities, and government over a period of many years. Every year we fall further behind makes it harder to recover.2

There are precedents for successful U.S. national efforts to boost critical technological innovation, such as the space program under President Kennedy and the ballistic missile defense initiatives (“Star Wars”) under President Reagan. With combined federal and corporate commitments and funding, remarkable progress can be made in moving breakthrough innovations from concept to product—and in the process creating major new industries.

Replicating those big innovation programs today, however, calls for a different execution strategy, because the industrial landscape has changed. The biggest change is the disappearance of corporate laboratories, which were part of large companies and had funding that allowed for long-term projects with potentially big impacts. These labs also brought together interdisciplinary teams of scientists and engineers for extended periods. Furthermore, the parent companies of these laboratories had the resources to move concepts into the market. The point is that maintaining a leading-edge economy the size of the United States requires combining the skills of the most talented people with appropriate resources to build market leadership, and corporate labs were critical components of this process.

America once had a few large, well-funded, and well-managed multidisciplinary corporate laboratories that housed some of the most brilliant technological researchers. They worked in environments where exceptionally creative people could innovate and see the fruits of their work translate into breakthrough products. A major virtue of such labs was that unexpected product ideas could emerge as researchers followed their curiosity to discover new phenomena. New materials and devices were invented without the pressure to produce quick results or to work only on low-risk, evolutionary product development—the typical task of most engineering departments associated with product divisions in corporations.

Two op-eds in this weekend’s Wall Street Journal and one on this website brilliantly call attention to aspects of the vast political and cultural change, still in its early stages, that is gathering force in this country as inexorably as the spring thaw breaks up a frozen river, first as a trickle and then a torrent. Donald Trump figures in all three stories. He is at once a cause and an effect of the change—the Tea Party movement embodied and in power, and as much a rejection of the existing order of things as the mob that swarmed onto British ships in Boston Harbor 245 years ago and flung overboard their cargo of tea whose tax they refused to pay in a gesture of defiance that declared “No more!” And they meant it.

Peggy Noonan’s Journal column observes that after Trump there will never again be a “normal” president. Never again, that is, will we elect some apparatchik from the haughty, out-of-touch, overpaid political class that has given us generations of arbitrary rule by the Administrative State’s unelected “experts” too inept to see a financial hurricane brewing; that has allowed the Supreme Court to cram the ethical beliefs of the coastal elites down the throats of a gagging nation—so that nuns have to sue not to hand out birth control, as if freedom of conscience were not the first of our freedoms; that admits immigrants by the carload without a thought of whether they will help or harm America and Americans; that goes to war foolishly believing that toppling dictators will magically turn their tribal subjects into democratic republicans; and that lets the IRS tax as tyrannically as George III. No more!

In the same paper, Shelby Steele points out that the lesson we should draw from the National Football League protestors—whose kneeling at the National Anthem drew much-publicized jeers from Trump and drove fans away from the stadiums—is that the days of black protest are over, because past years of heroic protest succeeded in making black Americans truly free (as Gene Dattel’s Reckoning With Race argued recently). The campus snowflakes’ worries about microaggressions, the Black Lives Matter protests, the armies of deans of diversity are all obsolete. For all their vociferousness, they are lost in a vanished past, and we no longer have to listen to them. The problem now, Steele notes, is that too many blacks feel naked without their victimhood, feel ashamed that most of Chicago’s or Baltimore’s myriad murderers are black, and don’t know what to do with their freedom. Time to man up, make a worthwhile life, and stop whining. No more!