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A quarter of a century ago Eamonn Fingleton, an Irish writer then based in Tokyo, wrote a polemic entitled In Praise of Hard Industries. This argued that governments and investors in the west were foolish to focus obsessively on intangible services such as tech and law — manufacturing mattered too.
It was a countercultural message back then. But when the dotcom bubble burst, the argument won (a bit) more applause. And today his mantra once again packs an unexpectedly powerful punch. For as the Iran conflict grinds on, two lessons have become clear — even amid the fog of war and US President Donald Trump’s contradictory messages.
First, the interconnections that stitched the world together in recent decades are no longer contributing to peace, as we used to think. Instead, rivals are weaponising vulnerabilities and dependencies, or “chokepoints”, to cite the writer Edward Fishman’s popular coinage.
China has done this with rare earth minerals, America with dollar finance. And now Iran is weaponising the Strait of Hormuz, which carries a fifth of all liquid national gas and a third of global seaborne fertiliser. This hurts.
The second lesson is that we are in an age when those “hard industries” matter. Yes, Big Tech stocks have soared in recent years amid excitement about AI. But the Iran war shows that countries are very vulnerable if they lack industrial processes, however old-fashioned. “The old economy begins to take its revenge,” Jeff Currie, analyst at the US private capital group Carlyle, recently noted. “You can’t print molecules,” even with AI.
Iran understands this. Indeed, Mohammad Bagher Ghalibaf, the Iranian parliamentary speaker, has even borrowed Carlyle’s meme to troll Trump. “Let’s see if they can turn (US jawboning) into ‘actual fuel’ at the pump — or maybe even print gas molecules!” he said in a social media post this week.
Countries such as Japan and South Korea have long loved industry. So does China, which has built a dazzling industrial base with financial subsidies and an educational pipeline that produces 1.4mn engineering students each year. Many Chinese politicians have backgrounds in science or engineering, too.
However, the west is different. At times over the past few decades, there have been years when investors favoured “old economy” or “asset-heavy” sectors over capital-light services. That happened after the dotcom bubble burst in 2000. So, too, in the 1970s, when an oil shock hit, and investors spurned brand names like Coca-Cola or early tech (like IBM) in favour of energy entities such as Exxon.
But most of the time there has been a subtle — and sometimes not-so-subtle — cultural bias against “hard” industries. Policymakers and economists have tended to assume it is the service sector that will drive future growth, not least because in countries like the UK four-fifths of people are employed in it.
The best graduates in the Anglosphere have generally competed furiously to work in finance, consulting and tech. Indeed, the US only produces 141,000 new engineers a year. Half of the members of Congress have backgrounds in law, while there are relatively few engineers or scientists.
Maverick economists such as Peter Navarro were often mocked in the past when they decried how the west was outsourcing cheap manufacturing to China. Metal-bashing seemed old-fashioned. So did industrial self-sufficiency. But now the cultural pendulum is swinging. Navarro is a key adviser to Trump, who shares his obsession with manufacturing. Meanwhile western graduates are starting to fear that AI will destroy many service sector jobs.
And now the Iran war has shown politicians why industrial self-sufficiency matters. In financial markets, so-called Halo trades (heavy-asset, low-obsolescence businesses that require significant tangible capital expenditure) are on a tear. “The landscape is reshaping the balance between physical assets and human or digital capital models,” says one Goldman Sachs note, pointing out that capital-intensive stocks have produced 35 per cent higher returns than capital-light ones since 2025. “Physical asset businesses have outperformed sharply, while software and other capital-light models have lagged.”
There is one crucial caveat here, which Currie notes. Today’s AI sector cannot function without physical, capex-heavy businesses backing it. Just think of those data centres. That means that “hard” industries are now blending with services to a degree that was not as obvious when Fingleton wrote his book in 1999. Even AI obsessives know that molecules matter.
So the big question that now hangs over the west is this: will the cultural attitudes towards “hard” industries also shift? Will elite students now fight for manufacturing jobs? Might industrial engineering command higher status than banking?
It is hard to imagine today. But if global wars continue, don’t rule anything out. Molecules — and engineers — matter.
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