Deindustrialisation by country
refers to the process of social and economic change caused by the removal or reduction of industrial activity and employment in a country or region, especially heavy industry or manufacturing industry. Deindustrialisation is common to all mature Western economies, as international trade, social changes, and urbanisation have changed the financial demographics after World War II. Phenomena such as the mechanisation of labour render industrial societies obsolete, and lead to the de-establishment of industrial communities.
Background
Theories that predict or explain deindustrialisation have a long intellectual lineage. Karl Marx's theory of declining profit argues that technological innovation enables more efficient means of production, resulting in increased physical productivity, i.e., a greater output of use value per unit of capital invested. In parallel, however, technological innovations replace people with machinery, and the organic composition of capital increases. Assuming only labour can produce new additional value, this greater physical output embodies a smaller value and surplus value. The average rate of industrial profit therefore declines in the longer term.George Reisman identified inflation as a contributor to deindustrialisation. In his analysis, the process of fiat money inflation distorts the economic calculations necessary to operate capital-intensive manufacturing enterprises, and makes the investments necessary for sustaining the operations of such enterprises unprofitable.
The term deindustrialisation crisis has been used to describe the decline of labour-intensive industry in a number of countries and the flight of jobs away from cities. One example is labour-intensive manufacturing. After free-trade agreements were instituted with less developed nations in the 1980s and 1990s, labour-intensive manufacturers relocated production facilities to Third World countries with much lower wages and lower standards. In addition, technological inventions that required less manual labour, such as industrial robots, eliminated many manufacturing jobs.
Australia
In 2008, four companies mass-produced cars in Australia. Mitsubishi ceased production in March 2008, followed by Ford in 2016, and Holden and Toyota in 2017.Holden bodyworks were manufactured at Elizabeth, South Australia and engines were produced at the Fishermens Bend plant in Port Melbourne, Victoria. In 2006, Holden's export revenue was just under 1.3 billion. In March 2012, Holden was given a $270 million lifeline by the Australian government. In return, Holden planned to inject over $1 billion into car manufacturing in Australia. They estimated the new investment package would return around $4 billion to the Australian economy and see GM Holden continue making cars in Australia until at least 2022. However, Holden announced on 11 December 2013 that Holden cars would no longer be manufactured in Australia from the end of 2017.
Ford had two main factories, both in Victoria: located in the Geelong suburb of Norlane and the northern Melbourne suburb of Broadmeadows. Both plants were closed down in October 2016.
Until 2006, Toyota had factories in Port Melbourne and Altona, Victoria. After that all manufacturing had taken place at Altona. In 2008, Toyota exported 101,668 vehicles worth $1,900 million. In 2011 the figures were "59,949 units worth $1,004 million". On 10 February 2014 it was announced that by the end of 2017 Toyota would cease manufacturing vehicles and engines in Australia.
Until trade liberalisation in the mid-1980s, Australia had a large textile industry. This decline continued through the first decade of the 21st century. Since the 1980s, tariffs have steadily been reduced; in early 2010, the tariffs were reduced from 17.5 per cent to 10 per cent on clothing, and 7.5–10% to 5% for footwear and other textiles.
As of 2010, most textile manufacturing, even by Australian companies, is performed in Asia.
Brazil
Canada
Much of the academic literature pertaining to Canada hints at deindustrialisation as a problem in the older manufacturing areas of Ontario and the east. Nationwide, over the past fifty years, according to 2008 OECD data, industrial production and overall employment have been steadily increasing. Industrial production levelled off a bit between 2004 and 2007, but its production levels are the highest that they have ever been. The perception of deindustrialisation that the literature refers to deals with the fact that although employment and economic production have risen, the economy has shifted drastically from manufacturing jobs to service sector jobs. Only 13% of the current Canadian population has a job in the industrial sector. Technological advancements in industry over the past fifty years have allowed for industrial production to keep rising during the Canadian economic shift to the service sector. 69% of the GDP of Canada comes from the service sector.France
The Trente Glorieuses ended around 1975. After the first oil price crisis, François Mitterrand was elected president of France in May 1981. His party, the Socialist Party, won the French legislative election in June 1981. Mitterrand and the Mauroy government, tried a left-wing economic policy. Unemployment continued to grow, and the franc was devalued three times. After two years, Mitterrand made some U-turns, but continued the expensive social policy. He was re-elected in May 1988. Between 1995 and 2015, France lost nearly half of its factories and a third of its industrial jobs. Many industrial towns and regions depopulated.In 2023, Nicolas Dufourcq published La désindustrialisation de la France: 1995-2015. He wrote that it was the whole of French society that turned away from industry. He expressed optimism that France has started anew with "new guns" and that it is possible to revive many industrial sites because technology has progressed, because emerging countries have lost competitiveness because the French themselves have changed and are demanding a low-carbon and circular industry.
Germany
In occupied Germany after World War II the Morgenthau Plan was implemented, although not in its most extreme version. The plan was present in the U.S. occupation directive JCS 1067 and in the Allied "industrial disarmament" plans. On February 2, 1946, a dispatch from Berlin reported:Some progress has been made in converting Germany to an agricultural and light industry economy, said Brigadier General William H. Draper, Jr., chief of the American Economics Division, who emphasised that there was general agreement on that plan. He explained that Germany's future industrial and economic pattern was being drawn for a population of 66,500,000. On that basis, he said, the nation will need large imports of food and raw materials to maintain a minimum standard of living. General agreement, he continued, had been reached on the types of German exports — coal, coke, electrical equipment, leather goods, beer, wines, spirits, toys, musical instruments, textiles and apparel — to take the place of the heavy industrial products that formed most of Germany's pre-war exports.
According to some historians, the U.S. government abandoned the Morgenthau plan as policy in September 1946 with Secretary of State James F. Byrnes' speech "Restatement of Policy on Germany".
Others have argued that credit should be given to former U.S. President Herbert Hoover, who in one of his reports from Germany, dated March 18, 1947, argued for a change in occupation policy, amongst other things stating, "There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state'. It cannot be done unless we exterminate or move 25,000,000 people out of it."
Worries about the sluggish recovery of the European economy, which before the war had depended on the German industrial base, and growing Soviet influence amongst a German population subject to food shortages and economic misery, caused the Joint Chiefs of Staff, and Generals Clay and Marshall to start lobbying the Truman administration for a change of policy.
In July 1947, President Harry S. Truman rescinded on "national security grounds" the punitive occupation directive JCS 1067, which had directed the U.S. forces of occupation in Germany to "take no steps looking toward the economic rehabilitation of Germany designed to maintain or strengthen the German economy". It was replaced by JCS 1779, which instead noted that "n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."
It had taken over two months for General Clay to overcome continued resistance to the new directive JCS 1779, but on July 10, 1947, it was finally approved at a meeting of the SWNCC. The final version of the document "was purged of the most important elements of the Morgenthau plan."
Dismantling of German industry ended in 1951, but "industrial disarmament" lingered in restrictions on actual German steel production, and production capacity, as well as in restrictions on key industries. All remaining restrictions were finally rescinded on May 5, 1955. "The last act of the Morgenthau drama occurred on that date or when the Saar was returned to Germany."
Vladimir Petrov concluded: "The victorious Allies … delayed by several years the economic reconstruction of the war torn continent, a reconstruction which subsequently cost the US billions of dollars."