High Finance and Sunk Costs: The Decline of the American Steel Industry

• In Event: 604 - Section on Marxist Sociology Paper Session. Crises and the Future of Capitalism

Abstract

This paper explores the factors and conditions that led to the decline of the American steel industry. Traditionally, high costs of labor and managerial complacency are cited as the causes of the decline of American steel. This paper argues that it also is necessary to consider how the nature of steel production and the constraints of geography also rendered America’s “big steel” firms uncompetitive in the long run. Next, by analyzing correlations between raw steel production and economic indicators, this paper shows how the decline of steel and the delinking of manufacturing from economic growth have begotten increased economic inequality and instability. The theoretical implication of this phenomenon is a more contextualized understanding of how crises of over-accumulation manifest themselves.

Author

• Dwight Neil Haase, University of Toledo