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US Manufacturing Is Not Dead

fivethirtyeight.com

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Re: US Manufacturing Is Not Dead

#31

Post by ajb »

bokonist wrote: post #22
MikeCapone wrote: post #10

Earlier quoted context omitted.

Krugman: "He was driven mad by Lester Thurow and Robert Reich in particular, both of whom had written books touting a theory that he believed to be nonsense: that America was competing in a global marketplace with other countries in much the same way that corporations competed with one another. In fact, Krugman argued, in a series of contemptuous articles in Foreign Affairs and elsewhere, countries were not at all li…

Krugman is wrong. In many circumstances, countries are competing with each other. For instance, imagine Kuwait produces oil, and Japan produces automobiles. Kuwait trades oil to country America for automobiles. Now imagine Japan enters the market and makes automobiles that are much better and cheaper than America's. Kuwait will now start buying automobiles from Kuwait instead of America. America will find the price o…

Krugman's point is not that countries don't compete, but that global trade sums to zero, unlike the case for corporations. You can't tell if a country is 'winning' by looking at its balance of trade.

Re: US Manufacturing Is Not Dead

#32

Post by Enra2 »

jerf wrote: post #4

Secondary conclusion: As long as manufacturing productivity continues to improve, increasing our manufacturing may lead to American prosperity, but it won't save the economy, in that it won't produce jobs. Long-term, I've actually not been concerned about American manufacturing for a while now. Why is overseas manufacturing cheap? Primarily, cheap labor. When does that cease to be an advantage? When labor is no longe…

To me it is interesting to attempt to guess the winners in such a scenario (where robots for a lot of tasks are cheaper than asian unskilled workers). Could it be that countries like Dubai would become manufacturing centers? Some advantages for it as opposed to China/India would be: less corruption, no taxes, flexible and business friendly regulations in general and cheap energy.

Re: US Manufacturing Is Not Dead

#33

Post by _delirium »

I'm not sure this actually refutes a relationship between offshoring and manufacturing employment. It's possible it's purely a result of automation getting better, and would have happened identically with no major shifts of trade. But given that the increase in offshoring makes labor-intensive industries much cheaper to locate elsewhere, it's also possible that market forces have accelerated the U.S.'s shift to less-labor-intensive industries. That is, we haven't just automated existing industries as technology has gotten better, but have actively stopped manufacturing certain things that are hard to automate, even though there's still demand for them, because we can't compete with cheap labor. We then put our resources into manufacturing easier-to-automate things instead, which keeps total output high.

If you break down the total manufacturing data and look at labor-intensive sub-sectors, you don't see the same upward trend in output. US textile manufacturing, for example, has totally collapsed, not just in employment but also in output.

Re: US Manufacturing Is Not Dead

#34

Post by jerf »

ugh wrote: post #15
jerf wrote: post #4

Secondary conclusion: As long as manufacturing productivity continues to improve, increasing our manufacturing may lead to American prosperity, but it won't save the economy, in that it won't produce jobs. Long-term, I've actually not been concerned about American manufacturing for a while now. Why is overseas manufacturing cheap? Primarily, cheap labor. When does that cease to be an advantage? When labor is no longe…

We get richer as labour gets more automated and cheaper. So it’s not a bad thing. It shouldn’t be. The big problem is that we don’t have work for bigger and bigger parts of the population. They are poor not because society as a whole got poorer, they are poor because they don’t have anything the labour market wants because it can be had cheaper now. I think it’s about time we recognize that. We have to make it possib…

We gotta be really careful about how we do it. Were I single and not willingly in the scenario where I am going the extra mile to have and provide for a family (that best-case scenario for society), I might very well decide to just take your "basic income" and call it a day, but if society is going to have that "basic income" it's only going to happen if people like you and me and anybody else hanging around on HN don't rationally choose to take the option, if given. (I hate to pander to the audience, but the HN community really is set up around being a community of producers, so I'm not just trying to pander here.) And forcing me to work to provide for those others, the easiest obvious answer, would be slavery, full stop. There's enormous moral hazard in that idea. It also makes it very easy for a person born into a family who has chosen that option to not be around any person who can teach them the culture or the mental toolkit necessary to make the transition to producer, which would make "being poor" a one-way ticket for a family, on average. (Arguably a problem we already have in the inner cities, which in a way gets worse the more comfortable the "basic income" becomes.)

Mind you, I don't disagree. As a futurist looking out across the next thirty years I too see an increasing number of people who through essentially no fault of their own will basically have no marketable skills; they'll have skills, just not marketable ones. Somehow we've got to deal with it. But it's going to be enormously tricky; all the easy answers are wrong. All the politically acceptable answers both liberal and conservative are also wrong. I don't have a clue what the right answer is, either.

Re: US Manufacturing Is Not Dead

#35

Post by ugh »

jerf wrote: post #34
ugh wrote: post #15

Earlier quoted context omitted.

We get richer as labour gets more automated and cheaper. So it’s not a bad thing. It shouldn’t be. The big problem is that we don’t have work for bigger and bigger parts of the population. They are poor not because society as a whole got poorer, they are poor because they don’t have anything the labour market wants because it can be had cheaper now. I think it’s about time we recognize that. We have to make it possib…

We gotta be really careful about how we do it. Were I single and not willingly in the scenario where I am going the extra mile to have and provide for a family (that best-case scenario for society), I might very well decide to just take your "basic income" and call it a day, but if society is going to have that "basic income" it's only going to happen if people like you and me and anybody else hanging around on HN do…

You would take, say, $1200 (a very high estimate) and call it a day? You can live, it doesn’t even have to be a bad life, but it’s not really all that much. I doubt many would find that to be enough. I wouldn’t. And I’m not even all that ambitious.

I think a basic income can create very strong incentives to make at least some additional money compared to traditional social security. There is no need to find a job that pays at least $1300 in order to make it worthwhile, for one (you get to keep your basic income no matter how much you make – minus taxes, so this is in a way not always true).

I would even think that something like a basic income is especially nice if you want to become self-employed.

(There would be higher taxes, probably much higher in the US, a little higher in Europe, but I – being one of those liberal Europeans – have no problem with that.)

I’m still kind of on the fence when it comes to basic income, though. I think finding the right way to do it (how to pay for it, how to organize it, what kinds of social security systems to slim down or abolish, etc. etc.) would be very hard indeed.

Re: US Manufacturing Is Not Dead

#36

Post by ugh »

yummyfajitas wrote: post #28
ugh wrote: post #15

Earlier quoted context omitted.

We get richer as labour gets more automated and cheaper. So it’s not a bad thing. It shouldn’t be. The big problem is that we don’t have work for bigger and bigger parts of the population. They are poor not because society as a whole got poorer, they are poor because they don’t have anything the labour market wants because it can be had cheaper now. I think it’s about time we recognize that. We have to make it possib…

We have to make it possible for everyone to live ok lives, even without having a job. We are rich enough. We didn’t get any poorer as a whole. We should be able to afford that. It already is possible. The poor in the USA right now have a standard of living greater than the middle class of 1970, but tend to work less than 800 hours/family/year. http://www.heritage.org/research/welfare/bg1713.cfm

(My comment was written from a German vantage point where the unemployed have to jump through tons of degrading hoops and everything is set up in a way which expects them to pick up work again sooner or later. I don’t know much about social security in the US, so I won’t comment on that.)

Re: US Manufacturing Is Not Dead

#37

Post by jerf »

ugh wrote: post #35
jerf wrote: post #34

Earlier quoted context omitted.

We gotta be really careful about how we do it. Were I single and not willingly in the scenario where I am going the extra mile to have and provide for a family (that best-case scenario for society), I might very well decide to just take your "basic income" and call it a day, but if society is going to have that "basic income" it's only going to happen if people like you and me and anybody else hanging around on HN do…

You would take, say, $1200 (a very high estimate) and call it a day? You can live, it doesn’t even have to be a bad life, but it’s not really all that much. I doubt many would find that to be enough. I wouldn’t. And I’m not even all that ambitious. I think a basic income can create very strong incentives to make at least some additional money compared to traditional social security. There is no need to find a job tha…

"You would take, say, $1200 (a very high estimate) and call it a day?"

$1200 what? You're missing a time element there. I assume "per month". I've lived on less than that before, with some comfort, and I was working, too! If I get to assume health care (not unreasonable in the world we're hypothesizing) and don't forget that I'm not working and I'm not worrying about working either, then yeah, that sounds like a pretty good deal for a single guy with no family.

And by the time we kick this into gear, society may well be able to afford more than that. We're not talking today's society (which already has unsustainable levels of social obligation), we're talking a 20-30 year minimum future society. Or at least I am, since I'm actually talking about the real possibility, not a hypothetical parallel universe where it exists today.

Re: US Manufacturing Is Not Dead

#38

Post by aaronwall »

jdminhbg wrote: post #18
teeja wrote: post #12

Earlier quoted context omitted.

Winners like Goldman and Enron? The government can help by protecting productive concerns from the thieves and pirates. Those "winners" can go to hell.

I'm not sure how you saw this sentence: "Washington likes to take money away from the winners and give it to the incumbent losers that bribe lawmakers." and thought that Goldman was an example of the former rather than the latter.

"and thought that Goldman was an example of the former"

Clearly you didn't see where the AIG bailout money went to at the time, courtesy of then U.S. Treasury secretary Hank Paulson, former CEO of Goldman Sachs.

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