Building Hubs, Building Resilience

Foroohar’s strength is her focus on economic resilience and the role that technology can play in rejuvenating smaller municipalities and reshoring production. She explains the potential to “decentralize” and “localize” supply chains — that is, to allow smaller, more nimble manufacturers to recapture production from multinationals. New manufacturing start-ups, she argues, could help less-prosperous cities and regions repurpose their industrial heritage. The idea is that niche production hubs will no longer be restricted to gentrified places like Brooklyn, San Francisco, Seattle, and Cambridge, Massachusetts.

Such hubs would build resilience by reducing the vulnerabilities of far-flung supply chains (which are subject to unscrupulous contractors who exploit meager-to-nonexistent labor and environmental standards in the global periphery), and rehabilitate poorer regions by re-embedding their products and services within larger commercial centers. One outcome, Foroohar argues, is that we will more likely avoid dramatic shortages in the event of another crisis like the COVID-19 pandemic.

At the same time, Foroohar eschews a romanticized view of smallness and localism. Venture capital and larger firms will undoubtedly play a role in scaling up the operations of emerging innovators, she writes. Relatedly, regionalization will revive some of the vertical integration that once undergirded corporate research and development in the mid-twentieth century. Before the financialization of the 1980s and 1990s assured the absolute primacy of shareholders and quarterly profits, Foroohar reminds us, large firms had maintained extensive in-house production or contracted with local suppliers, which limited outsourcing to other countries.

Much like arguments for “supply-side liberalism,” the upshot is that denser, more proximate networks of production will reproduce the “multiplier effects” that characterized the apex of postwar economic growth. Foroohar argues that because of mounting international uncertainties and the increased financial costs of less-efficient global supply chains, American capital might finally commit to long-term domestic investments that tax cuts have repeatedly failed to stimulate.

The Power Behind Investment

To better illustrate how regionalization might take fuller shape, Foroohar surveys a handful of newer firms in agriculture, textiles, 3-D printing, and beyond. Each of these companies, she contends, are capable of creating sustainable growth. Plenty, a high-tech innovator of vertical farming, for example, could contribute to domestic food security; ICON, which Foroohar writes is already building concrete homes via an industrial printer, could eventually provide mass housing, in turn shaving the enormous carbon emissions currently produced by the housing sector’s global supply chains.

These forms of entrepreneurship, Foroohar believes, create more social value than financialized markets and provide an illustration of the benefits of what she calls “stakeholder capitalism.” Accordingly, while she has faith that some capitalists can be agents of social (not just technological) progress, Foroohar recognizes that regionalization cannot succeed without popular support.

The main deficit of Homecoming concerns how this popular support comes about, and how it might ensure regionalization actually benefits the working class. While Foroohar is sympathetic to trade unions and adeptly summarizes how neoliberal policies have harmed workers, she lacks a fleshed-out account of the social forces that are needed to bring about the egalitarian changes she envisages.

In her vision of economic resilience, coordination between state and industry takes precedence. (It is unsurprising that German corporatism and Mittelstand manufacturers are frequently invoked by Foroohar as positive models for cooperation between US industry and labor.) How the working class shapes this purported renewal of democratic capitalism — and wins major social reforms that complement regionalization — is mostly absent from her discussion.

As it happens, the neoliberal era shows how labor could again end up on the margins of a major shift in political economy. During the presidencies of Bill Clinton, George W. Bush, and Barack Obama, global capital favored major metropolitan areas with a concentration of financial services, increasingly upscale real estate, burgeoning tech firms, and highly educated populations. In the instances in which investment was not drawn to these financialized hubs, it trickled to the regions in the United States where labor standards are worst.

American Giant, a domestic clothing manufacturer that helped boost mask production in the early months of the pandemic, is, in Foroohar’s view, a bright spot among these patterns of uneven development. Like the other firms she profiles, it is meant to illustrate how regionalization might finally reduce the gap between peri-urban hinterlands and blue cities.

Foroohar depicts American Giant’s CEO Bayard Winthrop — a former Republican, she writes — as someone who wants to invest in his workforce and expand it. Yet one of the main reasons that Winthrop chose to base operations in North Carolina, Foroohar acknowledges, is because it is a right-to-work state. Regardless of Winthrop’s drive to build a reputable “Made in America” brand, the case reminds us that there is nothing intrinsic to regionalization that will fundamentally challenge capital’s power over investment and labor.

Still, Foroohar writes, American Giant, like many other manufacturers outside of the country’s major urban nodes of growth, needs more government intervention in the economy, from infrastructure spending to investment in vocational schools and training programs.

The problem for progressive forces is that while firms like American Giant that favor reshoring could be part of a “productivist” coalition, their priorities almost invariably constrict the horizon for social and economic change. This points to the dilemma facing the Biden administration. Even under the guidance of progressive policymakers, it is a legitimate worry that Biden’s industrial policies are geared too much toward capital and lack mechanisms to revive the wage growth that American workers experienced from 1940 to 1980. In the face of a Federal Reserve determined to slash inflation at all costs, the policies behind regionalization may be at once hobbled and severed from workers’ interests.

Other solutions that Foroohar believes could lead to a more equitable economy, such as data unions, will prompt debate. One of the chief concerns of the socialist movement since the nineteenth century has been fighting for freedom from market relations, not just full employment for the sake of greater political and economic power within the confines of liberal democracy. The idea of consumers earning rent from their personal data does not necessarily conjure up increased autonomy but rather the specter of penurious individuals further commodifying their lives to make ends meet.

More generally, despite the lengths Foroohar goes to impress upon readers that markets under regionalization will differ from those of neoliberalism, the distinction is not always clear. Foroohar’s confidence in public-private partnerships is the root of this ambiguity. Outside the few successful cases that she highlights, these types of partnerships — often in the form of small developmental corporations and community nonprofits — have usually struggled to deliver good jobs.

At times, Foroohar’s illustration of how regionalization might unfold unwittingly recalls the ideas of centrist Democrats in the early 1990s before they embraced NAFTA and financial deregulation. Given the almost unfathomable economic challenges that the climate crisis portends, this vision — even under the auspices of green industrial policy, such as those provisions for renewable energy in the Inflation Reduction Act — leaves much to be desired.

Development for the People?

The larger question of whether regionalization will truly lead to more economic democracy looms over Homecoming. Despite Foroohar’s critique of neoliberalism, a technocratic view of progress nevertheless shades her assumptions. After forty years of institutional disempowerment and contemptuous neglect, the working class has no reason to believe regionalization will suddenly result in corporate and political goodwill. Many of the trade and industrial policies that are purportedly cementing regionalization are politically malleable, and could be stripped of provisions meant to support American workers.

Given that the American labor movement — still quite weak by historical standards — is not directly influencing policy decisions that shield (and, in some cases, steer) American industry, regionalization may merely change the distribution of power among different forms of capital.

Without a firm political commitment to permanently expand the welfare state and increase progressive taxation, regionalization could all too easily suit the interests of the non-libertarian Right. Indeed, a world in which a developmental state is designed only for international competition, and in which strong national industries preside over a suppressed working class, is the vision which animates right-wing nationalists around the globe.

But while some readers will sharply disagree with the liberal nationalism that sometimes inflects Foroohar’s analysis, she is correct that regional divergencies which hollow out middle- and working-class communities are a symptom of democratic crisis. And her point about reclaiming our “industrial commons” is not an exercise in nostalgia, but integral to the indicative planning that progressive economists have urged to fight climate change.

With few remaining avenues to goose growth, regionalization may thus be the United States’ last chance to accomplish what eluded New Deal visionaries and the early Republican Party: the full integration and development of the “home market.”

In greater historical perspective, regionalization could indeed look like a fully realized home market 2.0. A more equitable dispersal of economic hubs with high-paying jobs that hasten the green energy transition — complemented by high-speed rail, abundant cheap housing, and universal health insurance — is the domestic vision of Green New Dealers. If industrial policy, which both depends upon and reinforces a degree of regionalization, works, the productive and popular basis of social democracy may consequently be more attainable.

As voices on the old social democratic left such as Wolfgang Streeck have insisted, the nation-state remains the undisputed unit to negotiate modes of production and distribution that serve the needs of the great majority of citizens. A world system in which the most industrialized countries once again lower their Gini coefficients — something that cannot be done through progressive taxation alone — is not inherently incompatible with the continued development of emerging economies.

On that score, the developmental realism that pervades Homecoming is one with which the Left ought to engage. While regionalization is merely one facet of building a better, mixed economy, it should focus our minds on questions of economic geography — questions which determine so much of what we produce and consume and thus the political coalitions that enable (or fetter) egalitarian development. In turn, efforts to reclaim a comprehensive developmental agenda for the people may provide a pathway for a Left that is serious about governing.