Nation-building Done Right: The Long History of American Developmentalism

Nation-building Done Right: The Long History of American Developmentalism

If America is to find its way through its current troubles, we must look to our past and draw inspiration from the efforts of our forebears. It contains many salutary lessons which Congress and the Biden administration would do well to draw upon.


It must be emphasized that this isn’t the view of the usual free-trade critic, but rather of the Department of Defense itself.

What is to be done? One promising idea would be to establish a National Manufacturing Foundation, as proposed by Sridhar Kota and Tom Mahoney. This institution, modeled on the National Science Foundation, would make targeted-but-heavy investments, create a series of new research centers in public-private partnerships, “restore geographic diversity to manufacturing by building on regional technical and intellectual strengths,” support new manufacturing investment funds, support small- and medium-sized manufacturing firms, and more. Additional proposals include the standard lower corporate tax rates on companies that manufacture domestically; the use of targeted tariffs; the passage of the National Apprenticeship Act of 2020—which would invest “nearly $3.5 billion over five years to expand the scale of apprenticeship opportunities; promote apprenticeships in new, in-demand industries; and streamline the process of access to apprenticeship opportunities for employees and employers”—and a variety of other proposals.


Third, there is the matter of infrastructure. In all three of the previous crises, the construction of infrastructure served two purposes. First, these projects physically and materially united the nation with the goal of preventing internal political division. Second, they laid a foundation for future economic growth and expansion.

American infrastructure is an embarrassing mess. A 2016 report from the American Society of Civil Engineers estimated that the U.S. economy will lose around $7.04 trillion in business sales between 2016 and 2025 due to deteriorating infrastructure, with that number skyrocketing up to around $29.30 trillion between 2026 and 2040. This represents a $3.96 trillion loss in GDP for 2016–2025, and $14.2 trillion for 2026–2040. Millions of jobs will be lost. A separate report by the American Road & Transport Builders Association finds that more than 47,000 bridges (one in three bridges) across the country are in poor condition and in need of replacement or urgent repairs. Data from the Department of Transportation reveals that, on average, 49 percent of the nation’s roads are in shoddy condition.

The Biden administration has proposed an American Jobs Plan to tackle infrastructure needs. However, parts of the plan are rather questionable—particularly what the administration calls “soft infrastructure,” such as spending on child care, family tax credits, and the like. This is not infrastructure spending, but rather a sleight-of-hand aimed at incorporating social welfare proposals and pushing a broader societal transformation. Though there is certainly room to argue the pros and cons of such items, they will not address physical realities that enable daily economic activity. Family tax credits will not, for example, do anything about the recent massive crack on the Hernando de Soto I-40 bridge over the Mississippi River, which could take months to repair. This may sound like a provincial concern, but as the recent obstruction of the Suez Canal by the container ship Ever Given has demonstrated, economic activity depends on such strategic infrastructure. The de Soto bridge crack could put a block to the American Midwest’s entire on-water agricultural export economy at a time of rising food prices. What other markets are at risk because of failing key infrastructure?

Policymakers must take a bolder and more focused approach towards dealing with urgent infrastructure needs. A good start would be to pass the National Infrastructure Bank Act of 2020, put forward by Representatives Danny Davis and Seth Moulton. The bill proposes “the establishment of a United States public deposit money bank [that] would provide direct loans and other financing of up to $4,000,000,000,000 [four trillion dollars] for qualifying infrastructure projects.” This, the bill’s authors argue, “would be adequate to finance all of the United States identified infrastructure needs, in all parts of the country, according to strategic plans.” Additionally, a thorough upgrading of the country’s energy grid should be given priority. Not only can it be made more efficient, but a dramatic shift towards cleaner energy sources would go a long way towards tackling climate change. The passage of the American Nuclear Infrastructure Act—which aims to reinvigorate the U.S. nuclear industry and relevant industry supply chains, streamline licensing processes, and more—is of particular interest. Finally, given the climate change crisis, there exists a compelling case to focus on the issue of water security and management, as forest fires in California, water shortages in the South- and Midwest, and contaminated/corroded waters pipes across the nation (including Flint, Michigan) amply demonstrate. Citizens who live in these areas and suffer from the consequences feel neglected by their government. Perhaps the moment has arrived to revisit grand ideas like the U.S. Army Engineering Corps’ proposed North American Water and Power Alliance, or other ambitious proposals that could increase the available water supply and its effective management—large desalination plants, upgrades to piping systems, and more.

THE REFORMS necessary to rescue the United States will face numerous obstacles, particularly from entrenched interests that prioritize short-term gains. Recent events, however, have laid bare the risk of not undertaking necessary reforms. Look no further than the social upheaval being wrought by political populists who call—with broad support—for radical economic transformation. Modern capitalism itself is arguably in peril, as too many business models today are primarily organized around financial engineering rather than material productivity and development—and all to the benefit of the few rather than the many. If this is what constitutes “capitalism” in the minds of the public, then it is no surprise that many will want to tear the system down.

Ultimately, policymakers, experts, and the public must remember that America’s founding policy, as written in its constitution, is a commitment towards economic progress and supporting the public welfare. If the United States as a nation cannot defend this founding policy, and by extension, its citizenry, then it has, for all intents and purposes, abdicated its reason for existing. It is time to do better.

Carlos Roa is the senior editor of the National Interest.

Image: Clayton Cardinalli.