The Actual History
Deindustrialization—the systematic decline of industrial activity in a region or economy—transformed the landscape of developed nations throughout the late 20th century. What began as subtle shifts in the 1950s accelerated dramatically during the 1970s and 1980s, fundamentally altering the economic and social fabric of once-thriving industrial regions across North America and Western Europe.
The United States, which emerged from World War II as the world's dominant manufacturing power, began experiencing early signs of industrial decline by the late 1960s. Cities like Detroit, Pittsburgh, Cleveland, and Buffalo—once powerhouses of global manufacturing—started losing factories, jobs, and population. Between 1969 and 1976, the U.S. lost over 3.2 million manufacturing jobs. The decline intensified in the following decades, with the U.S. manufacturing sector shedding over 5 million jobs between 2000 and 2015 alone.
In the United Kingdom, employment in manufacturing fell from 8.9 million in 1966 to just 2.9 million by 2016, while similar patterns emerged across other European nations. Former industrial centers like Manchester, Sheffield, Glasgow, and the German Ruhr region experienced profound transformations as factories closed and production relocated elsewhere.
Several complex, interconnected factors drove this massive economic restructuring:
Technological Change: Automation and improved production techniques allowed companies to manufacture more goods with fewer workers, reducing labor needs even as output sometimes increased.
Globalization: The liberalization of international trade, reduced transportation costs, and the rise of containerized shipping made it economically viable to relocate production to regions with lower labor costs. China's economic reforms beginning in 1978 and its 2001 entry into the World Trade Organization accelerated this trend dramatically.
Economic Policy Shifts: In the late 1970s and 1980s, Western governments—notably the Reagan administration in the U.S. and Thatcher government in the UK—embraced free-market policies that prioritized controlling inflation over maintaining manufacturing employment. High interest rates, reduced trade protections, and deregulation accelerated industrial decline.
Labor Relations: Conflicts between industrial unions and management, sometimes resulting in work stoppages and increased labor costs, contributed to companies seeking production alternatives either through automation or relocation.
The social and political consequences of deindustrialization were profound. Once-prosperous manufacturing cities experienced population decline, crumbling infrastructure, reduced tax bases, and concentrated poverty. The "Rust Belt" in the American Midwest and Northeast became emblematic of post-industrial decline. Communities built around single industries struggled to reinvent themselves, leading to multigenerational unemployment, increased substance abuse, and deteriorating social cohesion.
Politically, deindustrialization contributed to rising economic inequality, weakened labor unions, and eventually fueled populist movements on both left and right. The 2016 elections in both the United States and United Kingdom reflected, in part, the lingering resentments and economic anxieties of regions hardest hit by manufacturing job losses.
By the early 21st century, manufacturing had largely transformed into a global production system, with complex supply chains spanning multiple countries. While some Western nations maintained significant manufacturing output through high-tech, high-value production, the era of mass industrial employment that had defined their economies for much of the 20th century had unquestionably ended.
The Point of Divergence
What if deindustrialization never occurred? In this alternate timeline, we explore a scenario where Western economies maintained their manufacturing dominance, preventing the massive industrial decline that reshaped cities and societies across North America and Europe.
The point of divergence in this timeline occurs in the early 1970s—a critical juncture when several key factors converged to accelerate industrial decline in our timeline. In this alternate world, different policy choices, technological developments, and geopolitical circumstances combined to preserve the industrial base of Western economies.
Several plausible mechanisms could have created this divergence:
Economic Policy Recalibration: In our timeline, the 1971 collapse of the Bretton Woods system and the 1973 oil crisis triggered stagflation and led to monetary policies that prioritized inflation control over employment. In this alternate timeline, Western governments instead implement coordinated industrial policies that more closely resemble the Japanese or German models, focusing on strategic protection of key industries, investment in workforce development, and gradual trade liberalization tied to labor and environmental standards.
Labor-Management Partnership: Rather than the confrontational relationship that developed between unions and companies in our timeline, this alternate world sees the emergence of German-style co-determination systems in the United States and United Kingdom. Beginning in 1973-1974, major corporations and labor unions, facing shared external threats, negotiate agreements that include worker representation on corporate boards, profit-sharing, and collaborative approaches to increasing productivity and competitiveness.
Altered Geopolitical Development: China's economic opening could have taken a significantly different path. Perhaps the post-Mao transition is more turbulent, delaying or moderating China's export-oriented industrialization. Alternatively, Western nations might have maintained more stringent trade barriers against imports that don't meet comparable labor and environmental standards, slowing the offshore migration of manufacturing.
Technological Innovation Focus: In this alternate timeline, the technological revolution of the 1970s and 1980s focuses more heavily on manufacturing innovation rather than primarily financial services and information technology. Government-funded research similar to DARPA is directed toward advanced manufacturing techniques, allowing Western factories to maintain competitive advantage through higher productivity rather than solely through labor cost arbitrage.
These changes, individually or in combination, create a world where manufacturing remains a cornerstone of Western economies. The divergence isn't a single dramatic moment but rather a series of critical decisions and developments in the early to mid-1970s that set industrialized nations on a fundamentally different economic trajectory.
Immediate Aftermath
Economic Performance (1970s-1980s)
The immediate economic consequences of preserved industrial capacity would have been significant and wide-ranging. In our timeline, the 1970s were characterized by "stagflation"—a combination of high unemployment and high inflation that conventional economic theory struggled to explain. In this alternate timeline, the preserved manufacturing base provides a crucial stabilizing force.
Moderating Inflation and Unemployment: The retained industrial capacity helps absorb the inflationary shocks of the 1970s oil crises. While inflation still rises, it doesn't reach the double-digit levels seen in our timeline. Unemployment stays consistently 2-3 percentage points lower throughout the decade, rarely exceeding 6% in the United States compared to peaks above 10% in our timeline's early 1980s.
Trade Balances: The United States doesn't develop the massive trade deficits that emerged in our timeline. By 1985, instead of a $121.9 billion trade deficit, the U.S. maintains a modest surplus or near-balance in trade. Without the "Plaza Accord" of 1985 (which deliberately devalued the dollar against the Japanese yen and German mark), currency relationships develop more organically.
Different Computing Revolution: The computer and information technology revolution still occurs, but with stronger ties to manufacturing. Computer-integrated manufacturing (CIM) develops earlier and more extensively. Silicon Valley emerges not just as a software and consumer electronics hub but as a center for advanced manufacturing technology, with stronger connections to traditional industrial regions.
Urban and Regional Development
The sustained industrial base profoundly affects the development trajectory of regions that experienced severe decline in our timeline:
Midwest and Northeast United States: Cities like Detroit, Cleveland, Pittsburgh, and Buffalo maintain stable populations throughout the 1970s and 1980s. Detroit's population, which declined from 1.5 million in 1970 to 1.2 million by 1980 in our timeline, instead remains above 1.4 million. Urban tax bases remain healthier, enabling better maintenance of infrastructure and public services.
Northern England and Scotland: Industrial cities like Manchester, Sheffield, Liverpool, and Glasgow avoid the severe unemployment and urban decay they experienced in our timeline. The coal industry undergoes a more gradual, managed transition rather than the abrupt closures that devastated mining communities during the Thatcher era.
Ruhr Valley and Northern France: These regions maintain their industrial character while gradually diversifying, avoiding the high structural unemployment they experienced in our timeline.
Political Developments
The political landscape evolves quite differently in a world where industrial jobs remain plentiful and industrial communities maintain their cohesion:
Labor Influence: Labor unions remain powerful political and economic forces, with membership rates declining only modestly rather than collapsing. In the United States, union membership remains above 25% of the workforce into the 1980s, compared to a decline to 16.8% by 1988 in our timeline.
Election Outcomes: The Reagan Revolution of 1980 either doesn't occur or takes a dramatically different form. With lower unemployment and more stable communities, the appeal of radical free-market policies is diminished. Reagan might still win in 1980 due to foreign policy concerns and inflation, but his mandate is weaker, and his administration pursues more moderate economic policies.
European Politics: Margaret Thatcher might still become Prime Minister in 1979, but without the deep recession of the early 1980s, her government doesn't pursue such aggressive deindustrialization policies. The coal miners' strike of 1984-85, a defining conflict of her tenure, either doesn't occur or ends differently.
Social Patterns
The social fabric of industrial communities develops along a markedly different trajectory:
Family Structures: The family destabilization that accompanied job loss in many industrial communities is mitigated. Marriage rates remain higher, and single-parent households increase more slowly.
Community Institutions: Churches, union halls, ethnic clubs, and other community institutions that declined with deindustrialization remain vital social centers, maintaining community cohesion and providing informal support networks.
Education and Training: With continued demand for skilled industrial workers, vocational education and apprenticeship programs remain prestigious paths. Community colleges develop even stronger connections with local industries, creating robust pipelines for technical careers.
Drug Epidemics: The devastating crack cocaine epidemic of the 1980s and the later opioid crisis that hit deindustrialized communities particularly hard are significantly less severe, as they're not fueled by the despair of economic abandonment.
By the late 1980s, this alternate timeline features Western economies with a markedly different structure—still evolving technologically but maintaining a much stronger and more diversified manufacturing base, with profound implications for communities, politics, and culture.
Long-term Impact
Economic Transformation (1990s-2010s)
Without the massive offshoring of manufacturing that characterized our timeline, Western economies develop along fundamentally different lines through the 1990s and into the 21st century.
Global Economic Integration
Balanced Globalization: Rather than the rapid, relatively unregulated globalization of our timeline, this alternate world sees a more managed approach to international economic integration. Trade agreements consistently include enforceable labor and environmental standards, creating more level competitive conditions.
Different China Relationship: China still industrializes but follows a more balanced development model with greater emphasis on internal consumption. By 2025, China's manufacturing output roughly equals that of the United States rather than substantially exceeding it. The U.S.-China trade relationship is more balanced, with two-way trade in advanced manufactured goods rather than the primarily one-way flow of goods from China to the U.S. seen in our timeline.
Emerging Markets Development: Countries like Mexico, Brazil, India, and Vietnam still industrialize, but often in complementary production relationships with Western manufacturers rather than primarily as low-cost alternatives. Production networks tend to be more regional (North American, European, East Asian) than truly global.
Income Distribution and Class Dynamics
Moderated Inequality: Without the collapse of industrial employment, income inequality increases more modestly. The income share of the top 1% in the United States reaches perhaps 15% by 2025, compared to over 20% in our timeline. The middle class contracts but remains substantially larger.
Different Corporate Structures: Major corporations maintain stronger ties to their home countries and communities. CEO compensation, while still rising, doesn't reach the astronomical levels seen in our timeline. By 2025, the CEO-to-worker pay ratio might be 100:1 rather than the 350:1 seen in our timeline's largest corporations.
Wealth Distribution: Home ownership rates remain higher, particularly in former industrial regions, allowing more middle-class families to build wealth. The racial wealth gap, while still substantial, doesn't widen as dramatically as in our timeline.
Technological Development
Manufacturing Innovation: Additive manufacturing (3D printing), advanced robotics, and smart factories develop earlier and more extensively. By 2025, Western manufacturing is highly automated but still employs a substantial workforce in programming, maintaining, and supervising advanced production systems.
Different Digital Economy: The digital revolution still occurs but develops in closer concert with physical production. Internet-enabled manufacturing coordination, industrial IoT, and digital twins of factories become central applications of information technology, alongside the consumer applications that dominated our timeline.
Transportation Technology: With manufacturing remaining more geographically distributed and less concentrated in East Asia, there's less expansion of container shipping. More investment flows to regional freight rail networks and advanced trucking technology. Supply chains are shorter, more regional, and more resilient.
Geopolitical Realignment
The different economic trajectories create a substantially altered geopolitical landscape by the 2020s:
United States Position
Industrial Heartland Influence: With the Midwest and Northeast maintaining their economic vitality, these regions retain greater political influence. The intense regionalization of American politics is moderated, with industrial states remaining genuine political battlegrounds rather than falling into the entrenched patterns seen in our timeline.
National Security Industrial Base: The United States maintains a more comprehensive domestic industrial base for defense production, reducing national security concerns about supply chain vulnerabilities. The defense industrial base is more distributed across the country rather than concentrated in a few regions.
Foreign Policy Orientation: U.S. foreign policy remains focused on maintaining the liberal international order but with greater emphasis on fair trade practices and less tolerance for mercantilism. Military interventions might be somewhat less frequent with greater attention to economic relationships.
European Development
European Union Evolution: The EU develops with a stronger industrial policy component. Germany's manufacturing dominance within Europe is less pronounced, with countries like France, Italy, and the UK maintaining more balanced industrial sectors. This creates a more even power distribution within European institutions.
Eastern Europe Integration: When the Soviet bloc collapses, Eastern European countries integrate into European supply chains in more balanced ways, developing as manufacturing partners rather than primarily as sources of low-cost labor.
Brexit Scenario: The conditions that led to Brexit in our timeline—including deindustrialization-driven economic distress in northern England and the Midlands—are much less severe. Brexit either doesn't occur or takes a significantly different, less disruptive form.
Asia-Pacific Dynamics
Japan's Trajectory: Without facing the same degree of manufacturing competition from China, Japan's economy doesn't experience the "lost decades" of stagnation to the same extent. Its manufacturing sector evolves toward higher-value production while maintaining greater diversity.
Korean Development: South Korea still emerges as a major industrial power but faces more competition from Western manufacturers in sectors like automobiles and electronics, potentially moderating its export-oriented model somewhat.
Southeast Asian Growth: Countries like Vietnam, Indonesia, and Malaysia develop more balanced economies rather than relying as heavily on export-oriented manufacturing for growth. Their industrialization still proceeds but through more gradual, sustainable patterns.
Social and Cultural Evolution
The preservation of industrial employment fundamentally alters social and cultural developments across Western societies:
Urban Development
Industrial Cities Revitalization: Rather than the collapse and partial recovery model seen in cities like Pittsburgh, Cleveland, and Manchester in our timeline, these cities undergo continuous evolution. They retain their industrial character while gradually diversifying and modernizing.
Reduced Spatial Inequality: The extreme divergence between "superstar cities" and declining regions that characterized our timeline is moderated. Housing costs in major coastal cities rise more slowly as economic opportunity remains more distributed geographically.
Different Gentrification Patterns: The wholesale transformation of former industrial areas into residential and entertainment districts occurs more selectively. Many areas maintain mixed-use characteristics with modern, clean manufacturing alongside residential and commercial uses.
Class and Cultural Dynamics
Working Class Identity: Blue-collar identity remains a viable and respected social category rather than becoming marginalized or nostalgic. Industrial work evolves to include more technical components but maintains connections to traditional working-class values and communities.
Educational Pathways: The overwhelming emphasis on four-year college degrees as the primary path to economic security doesn't develop as strongly. Vocational education, apprenticeships, and technical training maintain greater prestige and clear connections to well-paying careers.
Cultural Polarization: The cultural divide between "cosmopolitan" and "traditional" values doesn't widen as dramatically. With economic opportunity more evenly distributed geographically, cultural divisions are less reinforced by economic circumstances.
Political Developments
Political Realignment: The populist movements that gained strength in deindustrialized regions in our timeline—from Trump's base in the American Rust Belt to Brexit supporters in northern England—have substantially less appeal. Mainstream political parties maintain stronger connections to working-class voters.
Labor Movement Evolution: Rather than declining to marginal status, labor unions evolve to represent workers in increasingly automated and technical industrial environments. Union membership in the private sector might be 15-20% in the United States by 2025, compared to 6.1% in our timeline.
Political Economy Consensus: The neoliberal consensus that dominated Western economic policy from the 1980s through the 2000s in our timeline never becomes as hegemonic. Economic policy maintains a stronger focus on maintaining broad-based prosperity rather than primarily maximizing efficiency and growth.
By 2025, this alternate timeline features societies that are certainly changed from their mid-20th century industrial peak but have evolved along more continuous, less disruptive paths. The extreme divergence between "winners" and "losers" of globalization is moderated, creating more cohesive societies with greater economic security for working and middle-class citizens despite the inevitable technological changes of the digital age.
Expert Opinions
Dr. Rachel Mendoza, Professor of Economic History at the University of Michigan, offers this perspective: "The deindustrialization we witnessed from the 1970s onward was never inevitable. It resulted from specific policy choices, corporate strategies, and geopolitical developments that could have unfolded differently. In an alternate timeline where Western nations had implemented strategic industrial policies similar to those in Germany or Japan, we would likely see more economically balanced societies today. The extreme hollowing out of manufacturing regions—and the subsequent political backlash—might have been largely avoided through policies that facilitated industrial evolution rather than abandonment. The trade-off, however, might have been somewhat slower GDP growth and higher consumer prices, as the efficiencies of global supply chains would be partially sacrificed for greater economic resilience and stability."
Thomas Chen, Senior Fellow at the Global Economic Institute and former manufacturing executive, provides a contrasting analysis: "While it's tempting to imagine a world where Western nations maintained their industrial dominance, technological change and global economic convergence would have made some degree of manufacturing redistribution inevitable. In an alternate timeline where Western countries preserved more of their industrial base, we would likely see much more highly automated factories employing far fewer workers than in the mid-20th century. The real divergence would be in how societies managed this transition—whether through gradual adaptation with robust safety nets and retraining programs, or through the abrupt abandonment we often saw in our timeline. I suspect this alternate world would feature a smaller but more technically advanced manufacturing sector in Western nations, with production more evenly distributed globally but still evolving toward greater automation."
Dr. Marika Kowalski, Director of the Center for Labor Studies at Cornell University, emphasizes the social implications: "The deindustrialization that occurred in our timeline destroyed not just jobs but entire social ecosystems built around industrial work. Union halls, working-class taverns, neighborhood churches, and intergenerational transmission of skills all declined together. In an alternate world where industrial employment evolved rather than collapsed, we'd likely see working-class communities that maintained their cohesion and cultural vitality while gradually adapting to technological change. The extreme social problems that have plagued former industrial regions—from family breakdown to the opioid epidemic—would likely be significantly mitigated. Perhaps most importantly, the sense of abandonment and betrayal that fueled populist movements across Western democracies would have less resonance, potentially preserving greater democratic stability and preventing the rise of authoritarian-leaning leaders who exploited economic grievances."
Further Reading
- The End of the Line: Lost Jobs, New Lives in Postindustrial America by Kathryn Marie Dudley
- Manufacturing Consent: The Political Economy of the Mass Media by Edward S. Herman and Noam Chomsky
- The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War by Robert J. Gordon
- When Work Disappears: The World of the New Urban Poor by William Julius Wilson
- The New Geography of Jobs by Enrico Moretti
- American Amnesia: How the War on Government Led Us to Forget What Made America Prosper by Jacob S. Hacker and Paul Pierson