Deindustrialization, whether viewed through the melancholy lens of a Richard Russo novel or the political economy lens of David Koistinen's monograph, is a reminder that adjustments to a change in demand or in relative factor prices involve a longer-term process than economic principles suggest. It is a reminder that social institutions create indivisibilities that are slow to change—family, friends, community, and region. It emphasizes the elements of the story that do not (or cannot) adjust, with only a passing nod to those that do. A short review cannot do justice to the wealth of information and breadth of research Koistinen marshals in this case study. There are many lessons to be learned, but it seems inevitable this history will be repeated. In fact, as Koistinen's story unfolds, it already has.

The initial deindustrialization of New England, the waning of the first industrial revolution, began at the end of the nineteenth century as cotton textile mills, often owned by New England companies, began to expand in the lower-wage, relatively union-free South. Over time, mills in New England began to close. Koistinen's chapter 1 presents the facts. To simplify the exposition, he focuses on Massachusetts' textile industry in the post-World War I years when steps to arrest the decline were first taken. The process would persist throughout the twentieth century. From the late 1960s into the 1970s, plant closings began to appear in the electronics industry, which had helped reindustrialize the region. Koistinen divides the response to deindustrialization into three policy approaches: retrenchment, federal assistance, and economic development. The initial policy proposals within each approach are the subjects of chapters 2 through 4. All three involve the interaction of management, labor, and government. Koistinen occasionally adds a fourth actor, “the private sector,” to differentiate between declining and non-declining industries and to highlight the ofttimes muddled distinction between the “private” and “public” sectors.

Koistinen's first two approaches involve a good deal of rent-seeking on the part of management and labor, respectively. Retrenchment involves an attempt to reduce taxes, spending, rules, and regulations, all of which are seen as increasing costs. Although management was more successful in the 1970s and 80s than earlier, Koistinen argues (with a brief wave to locational economics) such measures constitute too small a portion of total cost to be effective antidotes to the lower Southern wage rate. Federal assistance took the form of attempts either to obtain federal aid for declining industries and areas or to achieve strict national regulation of labor standards. New Deal measures such as the NIRA and FLSA proved less stringent than labor desired. In addition, they were too late to arrest the decline. There was discussion of a law that would equate nominal wage rates between North and South, but the consequences of the resulting differences in real wages were not discussed.

Economic development proved a far less politically controversial and somewhat more effective approach than either of the other two. For the most part, it took the form of job-creating and job-attracting endeavors. Early on, the jobs push came from the private sector, particularly the New England Council, but over time, especially post-World War II, the public sector became more involved. Predictably, many of their efforts proved to be dead ends, but high-tech spinoffs in the electronics industry proved profitable.

Chapters 5 and 6 focus on finance. The former looks at the monies available for small New England manufacturers in the 1920s and 1930s when the first venture capitalists emerged. The latter discusses the monies available for the emerging high-tech firms (“Route 128”) in the 1940s and 1950s. The area's bankers, including the Federal Reserve Bank of Boston, supplied the leadership and the funds for the economic development approach.

Chapter 7 uses the framework developed in earlier chapters to examine more recent deindustrialization episodes in New England, while Chapter 8, the concluding chapter, shows that the same framework can be used to discuss responses to deindustrialization elsewhere in the United States and in other developed economies. There is something satisfying about the conclusion that rent-seeking options have not addressed this problem successfully. Economic development has proven to be the preferred approach, but, at best, it has been partially successful at replacing lost jobs—and usually not with lost jobholders.

In the end, regional concern over deindustrialization becomes a partial equilibrium response to a general equilibrium problem in a global economy. At first, New England jobs were lost to the American South. When Koistinen's tale ends in the 1980s, textile production is leaving Japan and moving to the emerging economies of Southeast Asia and Central America. The primary lesson to be learned is to honestly appraise one's comparative advantage and try to attract new firms specializing in those activities; however, it is human nature to try to maintain one's status quo.