Last week, the bluest of the blue chip American corporations was sold to a foreign purchaser. Of course the United States Steel Corporation has faded from its blue chip status many years ago as it entered a period of long decline together with the rest of American heavy industry. Born on March 12, 1901 with J.P. Morgan and Andrew Carnegie as its organizers, US Steel was an iconic symbol of American industry and growth. It died on December 18, 2023 as its board of directors approved its sale to Nippon Steel Corporation for approximately $14 Billion. As recently as 2008 ‘Big Steel” was the eighth largest steel company in the world. By 2022 it had sunk to the 24th largest. It was in a state of terminal decline. The Biden administration has said that the sale will undergo scrutiny by the government. What such scrutiny will accomplish is highly speculative.
The decline of the American steel industry represents the decline of American manufacturing. Today, the number one steel producer in the world is China (PRC) followed by India and Japan with the US in position number four. Automobile manufacturing is equally sad. It is almost impossible to purchase American manufactured goods and the computer this is written on is “designed in California and manufactured in China”. In a sense, this post is an obituary for American industry as our economy increasingly is a service economy. Already major portions of our service economy are being transferred offshore. Economic theory posits that comparative advantage is essential to determining where production of different products would be most efficient. Today, the US has virtually no comparative advantage in any product or service thanks to an American government which is hell bent on developing the world at the cost of American decline. I do not advocate industrial policy but free trade and the World Trade Organization are stacked against the United States. Free trade is fine but the world has long mastered non-tariff barriers to the entry of American products. It is time for the United States to wake up before it is too late.
On May 22, 1957 the US Post Office issued a stamp honoring the American Iron and Steel Institute. The stamp carried the text “America and Steel Growing Together”. The reader may draw their own conclusion.
Garry S. Sklar
At sea in the South Pacific
Dec. 25, 2023
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