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Donald trump tries on a gold hard hat presented to him by construction workers at Trump Palace in New York
AP Photo/Mark Lennihan
The constructor-in-chief.
SHAKY FOUNDATION

Donald Trump’s zero-sum worldview is explained by a deep flaw in the industry he knows best

By Dan Kopf

Since the late 1960s, when Donald Trump got his start in real estate, construction output per worker has fallen in the US. Now that he has the power to reshape the country’s economy as president, it matters that his worldview is informed by one of America’s least dynamic industries.

A recent report (pdf) by McKinsey highlighted the global stagnation of construction productivity. In the US since World War II, per hour productivity growth in agriculture, manufacturing, and retail have all grown by more than 3% per year. In contrast, construction productivity grew by just 0.1% over the same period, and has actually fallen since 1968.

McKinsey’s survey of construction experts reveals an industry that is often stifled, myopic, and corrupt. Construction is unusually dependent on public sector demand, McKinsey notes, so a large share of resources go to meeting rigid government standards, rather than innovation. Low profit margins and volatile cycles also leads to underinvestment in technologies that might raise productivity. Widespread inexperience among industry participants results in poorly written contracts and corruption.

Trump’s experience in this stagnant, deal-based industry might explain his zero-sum approach to economic policy. The way to “win” in Trump’s mind—as detailed in his books and public statements—is by outmaneuvering your partners and opponents in negotiations, not by improving technology or developing new services. This makes sense in an industry with no productivity growth.

For something completely different, consider labor productivity in the computer and electronics industry, which is soaring; output per hour has expanded at 10% per year since the late 1980s. If a business leader from this industry became president—say, a certain CEO of a large social networking site—the tone at the top might change in a big way.