I don’t have to remind you of the recent wave of protectionist policies sweeping across the United States, nor that these policies mark a significant shift in America’s economic approach. With President Trump’s “Liberation Day” (groan), we’re witnessing what is shaping up to be the most dramatic restructuring of global trade relations in decades - at least, in the medium to long term. Ok, now, I’ll stop with the hyperbole.
I will try to keep my sardonic comments to myself for the most part. Also, I won’t be commenting on politics. I’m more interested in the weaving and fraying of macroeconomics and strategy. Specifically, I’d like to talk about means of production, innovation (what does it even mean?) and local growth.
One of the great ironies of liberal economic policy is what anthropologist David Graeber called “the iron law of liberalism”: any market reform or government initiative intended to reduce red tape and promote market forces will ultimately increase the total number of regulations, paperwork, and bureaucrats. Graeber presents plenty of examples from modern economic history to support his thesis - read the essay; it’s excellent.
TL;DR: The (often unchallenged) narrative suggests that markets emerged as autonomous domains of freedom, independent from and opposed to state authorities. However, the historical reality is quite different. Markets have typically been either a side effect of government operations (especially military ones) or were directly created by government policy. English liberalism, far from reducing state bureaucracy, led to “an endlessly ballooning array of legal clerks, registrars, inspectors, notaries, and police officials who made the liberal dream of a world of free contract between autonomous individuals possible”.
Now, relevantly to my argument here, Graeber went a step further by pointing out that (bureaucratic)
Universities aren’t the only ones at fault here. As Dr Max Gammon stated1, in
a bureaucratic system […] increase in expenditure will be matched by fall in production […] Such systems will act rather like ‘black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ‘emitted’ production.
In other words, the proliferation of bureaucracy is not simply the product of individual empire-building but is inherent in the system itself. Bureaucrats can convincingly defend almost every bureaucratic procedure as ‘essential to the working of the system’ (especially if we’re willing to ignore the tautology and conflict of interest in this sentence).
Yet attempts to modify or eliminate procedures typically add to the overall bureaucratic weight of the organisation - some sort of everyday, grotesque hydra where if you cut off one head, two will grow in its place.
Looping back to Graeber, this bureaucratic displacement has contributed to what he called “bullshit jobs” - forms of employment that even those holding the jobs feel should not exist.
By slapping (obscenely arbitrary) tariffs on imported machinery and components, the state effectively tells domestic firms that they can only play in their backyard. This amounts to a blunt but (potentially corrective) nudge back towards localised bricolage.
Instead of clicking “Buy Now” on a global supply-chain marketplace, designers, engineers, and tinkerers could be dusting off their machine shops, pooling resources, and lathes could be popping up in places that haven’t seen one since everything was deliberatively sent off to be built somewhere else (often in exploitative ways).
At first blush, this looks like classic mercantilism redux - state protectionism brazenly manoeuvring for balance-of-payments advantage. Yet, if you squint at the geopolitical map, you’ll see something subtler: an enforced hiatus on cheap imports creates a breathing space where local ecosystems can diversify their capabilities. Don’t get me wrong, if it walks like a duck and quacks like a duck, it’s probably a duck. But I choose to see the potential upside.
Recall Dr Gammon’s observation of the NHS: more bodies, diminishing returns. The same applies to the monolithic R&D behemoths that have swallowed up public funding and university spin-outs. Local (or even, dare I say, decentralised) growth, by contrast, empowers a fractal notion of production - one where success does not equate to (global) scale.
And, lest I sound like I’ve sketched out the blueprint for a gleaming new Detroit of decentralised fab labs without so much as checking the wiring, let me confess that this is very much a first draft of an idea. Well, not really, but this is the first time I made a public post about it.
I haven’t yet mapped the precise mechanics of how a network of local innovation ateliers might interlock - from governance models to tooling standards - any more than I’ve solved the fact that much of the world’s machine-tooling, let alone microchips, never lived on American or European soil. Even “Made in Britain” widgets routinely lean on components sourced from Shenzhen or Penang. I’m not proposing we hurl ourselves back into the protectionist dark ages and rebuild vacuum tubes from scratch; rather, the challenge is to rethink the horrendously skewed equilibrium - one where we selectively nurture place-based capacity without pretending we can flick a tariff switch and instantly reconstitute entire industrial value chains overnight.
Pipe dream? Perhaps. I’ve been thinking a lot about this for the last few years, going as far as spending some of my precious annual leave a couple of years back discussing these very notions with John Thackara and a cohort of brilliant thinkers during one of his Summer events. Do you have something to add to the conversation? Please get in touch, I’d love to chat.
Dr Gammon was a British physician who studied the NHS between 1965 and 1973, where he noted that even if ‘inputs’ (i.e., number of staff) went up by 51%, ‘outputs’ (i.e., number of daily occupied beds) only rose by 11%. ↩︎