Drawing on Yi Wen’s The Making of an Economic Superpower and Ha-Joon Chang’s Kicking Away the Ladder and Bad Samaritans, this essay argues that large-scale U.S. reshoring of low-end and much mid-end manufacturing is neither historically plausible nor structurally efficient. Both authors, through independent but convergent historical analyses, show that industrialization follows a largely one-way sequence shaped by factor endowments, market creation, and cumulatively built capabilities: economies move from labor-intensive light manufacturing toward capital-intensive, high-wage, innovation-led activities. Once a country reaches the upper rungs of this ladder, it does not successfully revert to earlier stages without enduring permanent inefficiency and fiscal strain. From Britain to the United States and, more recently, China, development has consistently pushed low-end manufacturing outward rather than back inward.
From this shared historical logic, it follows that while the United States can reshore certain forms of manufacturing, success will be limited to capital-intensive, strategic, and highly automated sectors rather than mass-employment industries. As Chang emphasizes, state intervention and protection can accelerate learning but cannot permanently defy cost structures, while Yi Wen demonstrates that industrial structures must align with labor availability, wages, and market scale. Together, their work suggests that contemporary U.S. reshoring, where viable, represents not a return to past industrialization models but a fundamentally different project focused on strategic capacity at the technological frontier rather than the recreation of earlier manufacturing stages.
I. The One-Way Logic of Industrial Development: A Chang–Yi Wen Framework
Across the historical experiences of Britain, the United States, Germany and Japan, followed later by Korea and China, industrialization has unfolded according to a remarkably consistent and directional sequence. Economies begin with abundant labor and low wages, which make labor-intensive light manufacturing profitable and scalable. This initial phase absorbs surplus labor, raises productivity, and generates widespread employment, laying the foundation for a large and integrated domestic market. Crucially, this market expansion is not a byproduct but a precondition for the next stage of industrial transformation.
As mass demand takes shape, economies can profitably transition into heavy industry, large-scale infrastructure, and the production of capital goods. These sectors require substantial fixed investment, long supply chains, and sustained demand—conditions that only emerge after earlier stages have matured. Over time, rising productivity and capital deepening push wages upward, shifting the economic center of gravity toward services, advanced manufacturing, and innovation-driven activities. At this point, the economy occupies the upper rungs of the industrial ladder, characterized by high income levels, sophisticated production, and technological leadership.
Yi Wen captures the structural essence of this process by emphasizing that industrial structure is governed by factor endowments and market size, not by policy preference alone. Ha-Joon Chang complements this view by demonstrating that while the state can accelerate learning, protect infant industries, and shape the speed of upgrading, it cannot indefinitely override underlying cost structures. Together, their arguments imply a critical constraint: once an economy reaches the later stages of industrial development, it cannot revert to earlier, labor-intensive forms of manufacturing at scale without incurring permanent inefficiency. Industrial development, in this sense, is not cyclical but sequential and largely irreversible—a one-way process shaped by history, structure, and accumulated capability rather than short-term policy ambition.
II. What History Actually Shows (Country Mapping)
1. Britain as the First Industrial Economy and the Irreversibility of Industrial Change
As the world’s first industrialized economy in the late eighteenth and nineteenth centuries, Britain initially dominated labor-intensive sectors such as textiles and other light manufactures. These industries formed the backbone of early industrial growth, drawing on abundant labor and low wages to achieve scale and international competitiveness. However, as industrialization progressed, productivity gains and urbanization steadily raised wages, altering Britain’s cost structure and eroding its advantage in labor-intensive production.
With the rise in wages, textile and other light manufacturing activities increasingly migrated to lower-cost regions in continental Europe and the United States. Rather than reversing this process, Britain adapted by shifting toward higher value-added activities, including finance, shipping, capital goods, and global commercial services. Notably, despite its technological leadership and imperial reach, Britain never succeeded in reshoring labor-intensive textile production once it had lost cost competitiveness. The British case thus illustrates a central lesson of industrial development: the first industrial mover does not regain labor-intensive sectors after wages rise, underscoring the largely irreversible nature of structural economic change.
2. The American Path to Industrial Power: Protection, Imitation, and Structural Upgrading
The rise of the United States as an industrial power in the nineteenth and early twentieth centuries stands in sharp contrast to the later myth that its success was the product of unfettered free markets. As Ha-Joon Chang emphasizes, American industrialization relied heavily on deliberate state intervention, especially during its formative stages. Far from embracing free trade, the United States maintained some of the highest tariffs in the world, often ranging between 30 and 50 percent on manufactured goods, for more than a century. Alexander Hamilton’s Report on Manufactures explicitly rejected laissez-faire doctrines, arguing instead for infant-industry protection and active government support. In practice, the United States was arguably the most protectionist major economy of the nineteenth century.
In parallel with trade protection, the United States adopted a permissive stance toward intellectual property that facilitated rapid technological catch-up. Until 1891, it refused to recognize foreign copyrights, allowing American publishers to reproduce British works freely and cheaply. Patent enforcement was weak by modern standards, and reverse engineering of European machinery and production processes was widely tolerated. These practices lowered the cost of knowledge acquisition and accelerated the diffusion of industrial techniques, reinforcing domestic manufacturing capabilities during a critical period of learning.
The U.S. also actively recruited skilled labor and technical knowledge from abroad, often in defiance of European restrictions. British laws sought to prevent the emigration of skilled workers and the export of machinery, yet American entrepreneurs routinely circumvented these barriers. Engineers, machinists, and artisans were recruited from Britain, and industrial designs were smuggled or memorized and reproduced domestically. The case of Samuel Slater, who reconstructed British textile machinery from memory in New England, became emblematic of this strategy of talent acquisition and technological imitation.
State-led industrial policy further reinforced these efforts. The federal and state governments supported railroad construction through land grants and subsidies, invested heavily in infrastructure, and used military procurement to stimulate industrial demand. In the twentieth century, especially after World War II, public funding accounted for an estimated 50 to 70 percent of national research and development, underpinning advances in aerospace, electronics, and other high-technology sectors. Together, these policies demonstrate that the American state played a central role in shaping industrial outcomes rather than merely setting market rules.
Yet the historical record also reveals clear limits to what protection and intervention can achieve. Even at the height of its industrial power, the United States did not succeed in reshoring low-end, labor-intensive manufacturing once wages had risen. Textile production migrated sequentially from New England to the American South and eventually to Asia, reflecting changing cost structures. Instead of reversing this process, the U.S. economy upgraded into higher value-added activities, including steel, machinery, chemicals, automobiles, and later research-intensive, defense-related, and advanced manufacturing sectors. The central lesson, consistent with Chang’s argument, is that protection can enable learning and upgrading, but it does not permit a durable return to earlier stages of industrial development.
3. China’s Industrial Transformation and the Repetition of Historical Development Paths
China’s industrial rise in the late twentieth and early twenty-first centuries closely mirrors the historical trajectories previously followed by Britain and the United States, as analyzed by Yi Wen. The process began with proto-industrialization rooted in rural, labor-intensive production. Township and Village Enterprises (TVEs) played a central role in absorbing vast reserves of surplus labor, raising productivity without triggering large-scale urban dislocation. This stage established the employment base and income growth necessary for sustained industrial expansion.
Building on this foundation, China experienced a rapid takeoff in light manufacturing, particularly in textiles, garments, and other simple consumer goods. Export-led growth in these sectors generated foreign exchange, which in turn financed large-scale imports of machinery and industrial inputs. At the same time, the state actively facilitated market creation through massive investments in infrastructure and logistics. Local governments functioned as coordinated “public merchants,” lowering transaction costs and integrating fragmented regional markets into a unified national economy capable of supporting mass production.
Once domestic and external demand reached sufficient scale, China transitioned into heavy industry and capital-intensive sectors. Steel, cement, power generation, shipbuilding, and high-speed rail expanded rapidly, marking a shift toward the production of capital goods. Industrial upgrading was later formalized under initiatives such as Made in China 2025, a multi-stage blueprint aimed at transforming China into a global manufacturing powerhouse. By 2024, China had become the world’s largest market for industrial robots, accounting for approximately 54 percent of global installations in 2024, underscoring its shift toward automation and high-productivity manufacturing.
At the same time, China is already experiencing the outward movement of labor-intensive industries that characterized earlier industrial leaders. Garments, footwear, and assembly operations are increasingly relocating to lower-wage economies such as Vietnam, Bangladesh, and India. This pattern is not an anomaly but a structural outcome of rising wages, technological upgrading, and changing comparative advantage. In this sense, China is repeating the same developmental sequence previously observed in Britain and the United States, confirming that industrial transformation follows a largely universal and irreversible path rather than a uniquely Chinese model.
III. Applying the Developmental Logic to the Contemporary United States
When the historical logic of industrial development outlined by Yi Wen and Ha-Joon Chang is applied to the modern United States, the structural constraints facing large-scale manufacturing reshoring become immediately apparent. Yi Wen’s framework emphasizes that industrial structures must align with a country’s factor endowments and market conditions. In this respect, the United States is characterized by very high labor costs, an aging and relatively scarce industrial workforce, and a large but mature domestic market in which demand exists but margins are thin. At the same time, capital is abundant, pushing production toward automation rather than labor absorption. These conditions fundamentally disadvantage labor-intensive manufacturing and render mass employment reshoring economically unviable.
From this perspective, the United States is not merely choosing not to reshore low-end manufacturing; it is structurally ill-suited to do so. High wages and limited labor availability prevent the large-scale absorption of factory workers that historically underpinned early industrialization in Britain, the United States itself, and later China. While the U.S. state retains substantial capacity to intervene, this capacity is necessarily selective and cannot overturn the basic cost relationships that shape industrial location and organization. The result is a persistent mismatch between the requirements of labor-intensive manufacturing and the realities of the contemporary American economy.
Ha-Joon Chang’s analysis reinforces this conclusion while adding a cautionary note about policy ambition. Chang rejects the idea that free markets alone can or should determine industrial outcomes, yet he also stresses the limits of protection and subsidy. Infant-industry policies succeed only when protected sectors can eventually achieve cost competitiveness; in the U.S. case, labor costs are unlikely to converge downward to global lows. Sustaining low-end manufacturing would therefore require permanent tariffs, continuous subsidies, and political tolerance for higher consumer prices. History suggests that no advanced economy has maintained such arrangements indefinitely without incurring significant inefficiencies. Taken together, Chang’s and Yi Wen’s frameworks imply that reshoring in the United States, where feasible, must be narrow, capital-intensive, and strategic rather than a broad return to labor-intensive manufacturing.
IV. Structural Barriers to Reviving Mid-Range Manufacturing
Even beyond low-end production, the reshoring of mid-end manufacturing—such as automobiles, machinery, and household appliances—faces substantial structural obstacles. These industries are now dominated by countries including China, Germany, Japan, and South Korea, each of which has developed dense and highly coordinated supplier ecosystems over several decades. Their advantages extend beyond cost alone, encompassing deep pools of skilled yet comparatively inexpensive labor, finely tuned logistics networks, and cumulative process knowledge that is difficult to replicate. This form of path dependence means that competitiveness is rooted not in individual firms, but in entire industrial systems built over time.
Ha-Joon Chang underscores that industrial capabilities are historically accumulated rather than easily reconstructed. In the United States, many of the supplier networks and intermediate manufacturing layers that once supported mid-end production were hollowed out during prolonged periods of offshoring. While rebuilding these ecosystems is not impossible, it is necessarily slow, capital-intensive, and uneven across sectors and regions. Any such revival would therefore be partial and selective rather than comprehensive, and its employment effects would remain limited. The difficulty of reshoring mid-end manufacturing thus reflects not a lack of policy effort, but the enduring weight of historical specialization and accumulated industrial advantage.
V. The Limited but Viable Scope of Manufacturing Reshoring
Both Yi Wen and Ha-Joon Chang converge on the view that while broad-based reshoring of manufacturing is constrained, certain forms of reshoring are historically consistent and economically defensible. These are sectors in which production is capital-intensive, technologically sophisticated, and closely tied to national strategic interests rather than low labor costs. Defense manufacturing, aerospace, semiconductors, and critical medical supplies fall squarely into this category, as they rely more on advanced capital, engineering expertise, and state coordination than on large pools of inexpensive labor.
Recent U.S. industrial policy illustrates this logic in practice. The Inflation Reduction Act and the CHIPS and Science Act of 2022 have catalyzed a new wave of domestic investment in semiconductors, electronics, and green-transition industries. These policies are not aimed at recreating labor-intensive manufacturing ecosystems but at securing supply chains, technological leadership, and production resilience in strategically vital sectors. Automation plays a central role, allowing production to take place despite high wages and limited labor availability.
Historically, this pattern resembles the structure of post–World War II American industry rather than the textile mills of the nineteenth century. The emphasis is on productivity, capital deepening, and strategic capacity, not mass employment. In this sense, reshoring where it can succeed is best understood as strategic reshoring: selective, state-supported, and technologically intensive. It strengthens national capabilities and resilience but does not—and cannot—serve as a vehicle for restoring large-scale manufacturing employment.
VI. The Reversal of the Ladder: A Historical Irony in U.S. Reshoring Ambitions
Ha-Joon Chang’s concept of “kicking away the ladder” was originally formulated as a critique of advanced economies, particularly the United States, for denying developing countries the very policy tools—protection, imitation, and active state intervention—that they themselves had used to industrialize. Historically, the United States rose by deliberately pulling manufacturing inward, using tariffs, weak intellectual property enforcement, and state power to nurture domestic industry until it reached global competitiveness. Only after securing industrial dominance did it advocate free trade and strict market rules for others.
The contemporary irony lies in the reversal of this logic. Having previously pushed labor-intensive manufacturing outward as wages rose, the United States now seeks to reconstruct earlier rungs of the industrial ladder within its own economy. Yet the historical record suggests that development ladders do not function in reverse. They move upward through successive stages of upgrading, and outward across countries as comparative advantages shift, rather than backward within the same economy. Attempting to reshore low-end manufacturing under today’s conditions is therefore analogous to Britain attempting to reclaim textile dominance from the United States in the mid-nineteenth century—an effort that would have conflicted with Britain’s own evolved cost structure and industrial position.
This reversal highlights a deeper structural constraint embedded in Chang’s framework. While policy can shape the speed and direction of upgrading, it cannot undo the fundamental transformations produced by rising wages, accumulated capabilities, and global industrial reallocation. The irony is not merely political but economic: the same historical logic that once justified protection and imitation now explains why a return to earlier manufacturing stages is neither feasible nor sustainable for a mature industrial economy.
VII. Summary & Implications
Taken together, the historical analyses of Ha-Joon Chang and Yi Wen point to a clear and differentiated verdict on U.S. manufacturing reshoring. The large-scale return of low-end, labor-intensive manufacturing is historically implausible, economically inefficient, and politically costly, while mid-end manufacturing can be reshored only in limited and highly selective cases, requiring sustained state coordination and yielding modest employment gains at best. By contrast, high-end and strategic manufacturing—capital-intensive, technologically advanced, and often tied to national security or critical supply chains—is both historically consistent and economically defensible, and is already taking shape through contemporary industrial policy.
The broader implication is that the United States cannot recreate its past industrial ladder, because that ladder has been passed on to other economies at earlier stages of development. What it can do, and is increasingly attempting to do, is construct a new ladder at the top of the global industrial hierarchy by leveraging capital abundance, technological leadership, and state capacity. This project is real and consequential, but it does not represent a return to mass manufacturing employment; rather, history strongly suggests that it marks a transition toward a narrower, more strategic form of industrial renewal.
References
- Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. By Ha-Joon Chang, 2007
- Kicking Away the Ladder: An Unofficial History of Capitalism, Especially in Britain and the United States. By Ha-Joon Chang, 2002
- The Making of an Economic Superpower: Unlocking China’s Secret of Rapid Industrialization. Yi Wen, World Scientific. 2016