After the real-life Iron Man and the new era Lu Xun, Musk has been given a new title: the American version of Wang Anshi.
On November 13th local time, Musk proposed an aggressive plan: to streamline the existing 428 federal agencies in the United States to 99, and to carry out large-scale layoffs in government departments, with a layoff rate of up to 77%.
The intensity is far greater than that of China in the early 1980s.
The next day, the “Government Efficiency Department” account posted a recruitment notice: a small government reformer with ultra-high intelligence is needed and willing to work more than 80 hours a week. If you are such a person, please send your resume directly to this account, and Elon and Vivek will review the top 1% of applicants.
Looking at it together, the abolishment of redundant government positions is not only to save expenses, but also to introduce fresh blood and create conditions for future reforms.
Donald Trump wants to reindustrialize the United States, while Musk wants more. He even wants to promote the fourth technological revolution and realize his ultimate dream.
These are undoubtedly extremely difficult.
But now, at least it’s a good start.
- Realistic difficulties
Industrialization is difficult, and re industrialization is equally difficult.
Unlike agriculture and the service industry, industry has always been the most complex production activity in human society.
It’s definitely not as simple as hiring people, building factories, and then starting work.
Objectively speaking, the United States, which has already industrialized, faces at least four direct challenges in reindustrializing and even rebuilding the world’s factory:
1) Labor force
As of June this year, the labor force in the United States was 168 million, and the actual number of employed people was much smaller than this figure.
80% of them are engaged in the service industry, and the number of employees in the secondary industry has remained around 10 million for a long time.
As a comparison, the number of employed people in China’s secondary industry is as high as 210 million
Without a significant leap in productivity, it is very difficult for the United States to rebuild the world with its current labor force.
2) Industrial chain
Although the United States has mastered most of the world’s cutting-edge technologies, its practical skills are still a weakness.
Since half a century of deindustrialization, a large number of basic industrial chains have been lost. Out of 666 industrial subcategories and 41 industrial categories, less than 5% are able to operate independently.
Taking industrial raw materials as an example.
The United States does not lack minerals, but it is in great need of processing industries; And China holds over 40% of the world’s largest industrial raw material market share.
Once the manufacturing industry is redeveloped and imports of Chinese goods are restricted, how will this problem be solved.
Although it is possible to support the processing industry in other markets, it will inevitably require time and higher financial costs.
3) Energy
Or more specifically, how to solve the problem of power supply?
In 2023, the total electricity generation in the United States is about 4.49 trillion kilowatt hours, with industrial electricity consumption of about 1.01 trillion kilowatt hours, accounting for less than 23%.
1 trillion kilowatt hours of industrial electricity may seem huge, but it has remained almost unchanged since the 1990s, clearly reflecting the phenomenon of deindustrialization in the United States.
As a comparison, China’s total power generation in 2023 is about 8.8 trillion kWh, with industrial electricity consumption exceeding 6 trillion kWh, accounting for about 68%.
If China’s electricity consumption structure is taken as the standard for the “world factory”, then the total electricity generation in the United States should be approximately 3.48 ÷ 0.32=10.875 trillion kWh.
Even if the standards are lowered a bit, it means doubling the electricity production.
Let’s take another look at the value scale of the existing US power system
Undoubtedly, this is a mega project that requires not only trillions of dollars in funding, but also a significant amount of time and manpower.
4) Logistics
In terms of waterways, there are currently none of the top ten ports in the world in the United States.
The largest port, New York Port, with a throughput of up to 600 million tons, is still far behind existing mega ports.
In terms of land transportation, it is slightly better. The 400000 kilometer railway is just old and not completely abandoned.
Anyway, overcoming these challenges requires a significant amount of money and time.
In 2021, Joe Biden launched a $1 trillion infrastructure investment plan, of which less than 20% was used for ports, railways and roads, which can be said to be a drop in the bucket.
The above list is not comprehensive.
But just looking at these, the cost Donald Trump needs to spend to promote the return of the manufacturing industry, and even make the United States become the world’s factory again, to achieve greatness again, will also be astronomical.
Especially, it is almost impossible to achieve goals within a few short years of one’s term.
Unless the industrial logic that has been maintained for over half a century is fundamentally rewritten, production efficiency and wealth creation will evolve tenfold or even tens of times again
- The pinnacle of industry
Before China, there were only two undisputed world factories in history, the United Kingdom and the United States.
Although they are all called “world factories”, the three have similarities but more fundamental differences.
The most crucial factor is the different positions in the global industrial chain; Secondly, the development path is also completely different.
Britain’s ability to become the world’s factory stems from the first energy revolution.
The steam engine freed factories from their dependence on human and animal power.
From 1760 to 1860, the productivity of British workers increased 20 times, contributing half of the world’s industrial production to 2% of the population.
At its peak, British factories produced about two-thirds of the world’s coal, five sevenths of its steel, 50% of its iron, 50% of its cotton fabric, and 40% of its metal components… The total industrial output accounted for as much as 51% of the world’s total.
By the mid-18th century, Britain had become highly industrialized, with per capita income soaring and production costs topping the world.
At that time, the only place that could undertake the industrial chain was the North American continent, which had long been a dumping ground for British goods and had a certain industrial foundation.
The United States, which is extremely eager for wealth, seized the opportunity and a large number of supporting industries and technical personnel were packaged and transported here.
The first industrial transfer in history has begun.
As a downstream processing plant in the UK industrial chain, the US manufacturing industry began to rise and quickly underwent a qualitative change.
The reason why the United States can become the world’s factory is due to the Second Energy Revolution.
Electricity is the main source, with gas as a supplement.
After Siemens in Germany developed the generator, Edison was the first to apply self-excited generators to lighting and invented incandescent light bulbs, extending the industrial productivity of human society until night.
Just a few years later, Tesla invented the AC generator, which had high power and greatly reduced the cost of electricity generation, providing enormous energy for industry.
The Durie brothers invented the automobile, Ford invented the automobile production line, the Wright brothers invented the airplane with the internal combustion engine
Numerous new technologies have emerged like mushrooms after rain, making the United States the core country of the Second Industrial Revolution.
In 1894, the industrial output value of the United States surpassed that of Britain for the first time, becoming the second world factory, with a total industrial output value accounting for 30% of the world’s total; In 1945, the proportion reached its peak of 56%.
This position has been maintained for 116 years.
It was not until 2011 that China surpassed the United States as the largest industrial power.
It is obvious that the UK and the US have become the driving force behind the world’s factories, both of which are natural results of leading the energy revolution and greatly improving production efficiency.
The rise of China’s industrial production capacity mainly relies on a huge labor force, which is fundamentally different from the previous two.
At least up to now, China cannot be called the “world factory”, a more accurate term is the “world processing factory”.
So, now many people, including many experts, are discussing the various difficulties of reindustrialization in the United States, including the difficulties listed above, based on China as the “world factory”
In fact, it is very difficult to discuss the United States becoming the “world’s processing factory”.
To some extent, this is a logical fallacy.
What Donald Trump called “making America great again” should be said to make America become the world factory again, rather than the world factory.
Strictly speaking, if China is not considered the third ‘world factory’. That is to say, in the past decade or so, the position of World Factory has actually been jointly held by countries around the world.
At this point, does the United States want to rebuild its position as the world’s factory? Should it return to the second world factory that has been maintained for over a hundred years, or build a new third world factory and continue to be its own?
This is the most critical variable of the current era.
If it is the former, the problems faced are as mentioned in the first part, the main direction is to restore the former productivity, and the difficulties mainly revolve around money, energy, and manpower.
If it is the latter, it means making a huge breakthrough in energy or production efficiency, and all the problems of the former are no longer problems.
The current situation is probably between the two.
- Conclusion
There have been three technological revolutions in history, but only two energy revolutions.
This can largely explain why Japan, as a carrier of the US industrial chain and a representative of the third technological revolution, although its industrial capabilities were once brilliant, ultimately failed to become the third world factory.
The reasons are multifaceted, but one thing is certain: there has been no qualitative leap in productivity.
The four dragons, Chinese Mainland and now Southeast Asia are all copying the script of Japan, rather than the path of Britain and the United States.
At this time, according to the logic of the past few decades, the only way for American industry to return to the position of the second world factory is to vigorously build infrastructure and allow the industrial chain to flow back in large quantities.
Donald Trump himself promised that when I returned to the White House, I would immediately sign a bill to approve oil exploration in the United States!
But the biggest change is that Musk suddenly became a key figure in the new government.
Musk’s ultimate goal is not to become a politician, but to have enough industrial power to support his space career.
From difficult to easy, there are at least three conjectures:
1) The energy revolution, currently the most reliable one is still controllable nuclear fusion, but it is still far from practical use.
2) The lowest level things cannot be changed temporarily, but they can still undergo changes in production relations like the third technological revolution, which is commonly known as Industry 4.0.
Although it is not possible to achieve a leap in productivity, it is still possible to significantly reduce production costs and reduce dependence on manpower, solving the most pressing human and financial issues for the reindustrialization of the United States.
3) No matter what, according to Tesla’s model, such as crazy layoffs, the existing theoretical efficiency can also be maximized.
(To be specific, it’s quite complicated. Regarding this topic, we’ll discuss it further in another article.)
Corresponding to three types of results respectively:
The United States continues to lead the new era and become the third-generation world factory;
Restore the glory of the former second World Factory;
The return of manufacturing industry and the resolution of social conflicts have failed to restore its position as the world’s factory.
It depends on how much Musk is willing to sacrifice for his dreams and how much miracles he can create.
Of course, there is a fourth outcome: none of the above three are possible.
You have to admit that at this moment, he is the most crucial person in the world.
