Donald Trump’s program to rebuild American industry is ambitious, yet its results so far remain modest. That should not surprise anyone: you cannot rebuild a nation’s productive base in a few months. You cannot construct a new factory—much less an entire industrial sector—overnight.
Still, the outlines of a new direction are visible. The protection of the domestic market is vital, but, as economist Ilona Švihlíková warned a year ago, protectionism alone is not enough. Here, we must concede that Trump’s approach is inconsistent—and that the more radical transformation may have to wait for a President Vance.
What’s missing?
First, education and training.
America lacks skilled workers in the manufacturing trades, and that is not a problem the market can solve on its own. A shortage of 400,000 welders, for example, would not be catastrophic if 50,000 people were currently in welding courses and another 350,000 were on the way. But they aren’t. The same applies to machinists, toolmakers, and technicians. Only massive public programs can fill that gap.
Second, taxation of the financial sector.
When public services—health care, education, firefighting—fail, people must buy them privately. To buy them, they must borrow. To borrow, they must pay interest. And when workers are forced to pay the banks, their labor becomes expensive. The effect is the same as if factories had to pay a direct tax to the financial sector.
Can this be reversed? Yes, it can. By taxing the banks and using the proceeds to fund public services. It is no coincidence that the collapse of America’s productive economy began with the radical cutting of corporate and financial taxes.
In other words, reviving productive capitalism is impossible without measures that today’s orthodoxy calls “socialist.”
That may sound paradoxical to some, but it is the simple logic of a nation that wants to make things again, rather than merely speculate on them.