Shipbuilding's Lessons on Industrial Policy

Spoiler: federal involvement is not an easy button for long-term manufacturing success

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As the drumbeat grows in support of reindustrializing America, so do calls for our nation to enact a broad industrial policy. While that general idea can mean lots of different things to different people, I think it’s a notion very much in the “be careful what you wish for” realm.

Why? Because we have our whole national history’s worth of exactly what heavy government involvement in an industry does. We’ve had an extremely active industrial policy in shipbuilding almost since America’s founding.

I just finished reading The Abandoned Ocean: A History of United States Maritime Policy by Andrew Gibson and Arthur Donovan. Published in the year 2000, it details the nonstop efforts to use federal power to bolster American shipping and shipbuilding. (Many thanks to William Cahill, who has been an excellent advisor for me as I’ve studied this end of the manufacturing world, for his recommendation that I read this magnificent book.)

An honest assessment of the results isn’t pretty. America hasn’t been economically competitive as a shipbuilding nation since the days of wooden sailing ships, when we had both tremendous advantages in both materials and skills. But even then the policy efforts proved detrimental, shielding domestic producers from the need to innovate as other nations became expert at steam power and metal hulls.

American resistance to oceangoing steam propulsion, and to building the iron ships that soon came to be associated with it, arose from vaarious considerations. The more positive were that the United States still had plenty of wood with which to build sailing ships and that Americans were demonstrating through superior ship design and construction that the limits of this technology had not yet been reached. A more negative consideration was that the United States was in no position to compete with Great Britain in the industrial technologies of steam power and iron construction. Great Britain, the pioneer of the industrial revolution, had what appeared to be an insurmountable lead in the production of iron and machinery. British preeminence was most visible in the work of Isambard Kingdom Brunel, perhaps the greatest engineer of the age, who completed his pioneering iron-hulled, steam-powered Great Britain in 1846. If forced to compete in this arena, the United States would never become a first-rate maritime power. And so the U.S. maritime industry stuck to what it did best, building and operating wooden sailing ships, and for several more decades the traditional materials and crafts held their own. (The Abandoned Ocean, p. 49.)