# Can an Economic Recovery Occur Without a Robust Manufacturing Sector? **URL:** \ **Category:** Great Debates\ **Created:** [January 23, 2010, 11:58pm UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175 "2010-01-23T23:58:28Z")\ **Posts on this page:** 9\ **Page:** 3
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [January 28, 2010, 12:10am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/41 "2010-01-28T00:10:09Z")
> [@Dr.Love](#): > > IMO, the fears about American manufacturing come from (1) the fact that we hear about outsourcing on the news every so often (as you said) and (2) they see “Made in China” on so many things that they own. So they draw conclusions like “America doesn’t make anything anymore”, or **gonzomax** ’s “shipping our industry out ,lock, stock and intellectual property.” I just hope that as many people as possible know that this is completely wrong. But that isn’t entirely untrue, is it? I mean, there’s a reason we have a place called “The Rust Belt”. Dead manufacturing regions litter the US. I for one wish there was a way we could ramp up our manufacturing sector and stop importing so many cheap (often crappy, sometimes deadly) Chinese goods. I don’t think its much of a stretch to draw a conclusion that because 90% of everything sold in WalMart is Chinese (or insert other country) made crap that “America doesn’t make anything anymore”…which isn’t entirely true of course, but yet there are TONS of things that we truly do not make anymore. I don’t know what the root cause of the issue is (unions, corporate bottom lines, inability or unwillingness to work factory jobs, etc) but I would be willing to bet pink slips on my greased lightning car that if we found a way to re-engage our manufacturing sector, we would be a better off, healthier economy across the board, even if it meant that we consumers would pay more for our products. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 28, 2010, 12:34am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/42 "2010-01-28T00:34:49Z")
[QUOTE=FoieGrasIsEvil] I don’t think its much of a stretch to draw a conclusion that because 90% of everything sold in WalMart is Chinese (or insert other country) made crap that “America doesn’t make anything anymore”…which isn’t entirely true of course, but yet there are TONS of things that we truly do not make anymore. [/QUOTE] Here’s the thing…because YOU think the stuff is ‘Chinese (or insert other country) made crap’ is irrelevant, as long as people are willing to buy it. And they ARE. So, unless you want to tell people they can’t buy what they want, or limit what they can buy, then they are going to go right ahead and keep buying it. What one person things of cheap crap another obviously thinks of as necessary goods…otherwise no one would BUY the stuff, ehe? > [@](#): > > I don’t know what the root cause of the issue is (unions, corporate bottom lines, inability or unwillingness to work factory jobs, etc) but I would be willing to bet pink slips on my greased lightning car that if we found a way to re-engage our manufacturing sector, we would be a better off, healthier economy across the board, even if it meant that we consumers would pay more for our products. I’m sure you would get a better answer from one of the economically savvy 'dopers, but the short answer is that price is important, and people will buy the cheapest product that they can for certain things (and it varies between individuals what products or services they will pay a premium for and which ones they will instead buy the cheapest they can)…and in many of those kinds of products US manufacturers, for a variety of reasons, simply can’t (or don’t want too) compete with foreign manufacturers. I’m unsure how making people pay more for goods and services that are made and manufactured here in the US would significantly help the economy, especially when you factor in the higher costs for those goods and services…as well as several other factors I can think of off the top of my head (such as scaling up to meet current demand, competition or the lack there of for home grown manufacturers who would now not have to compete with anyone but possibly other home grown manufacturers of similar products, etc). -XT ---
**Author:** ![Dr.Love](https://avatars.discourse-cdn.com/v4/letter/d/e8c25b/32.png) [@Dr.Love](https://boards.straightdope.com/u/Dr.Love)\ **Post date:** [January 28, 2010, 1:11am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/43 "2010-01-28T01:11:48Z")
> [@FoieGrasIsEvil](#): > > I for one wish there was a way we could **ramp up our manufacturing sector** and stop importing so many cheap (often crappy, sometimes deadly) Chinese goods. > > I don’t know what the root cause of the issue is (unions, corporate bottom lines, inability or unwillingness to work factory jobs, etc) but I would be willing to bet pink slips on my greased lightning car that if we found a way to **re-engage our manufacturing sector** , we would be a better off, healthier economy across the board, even if it meant that we consumers would pay more for our products. [My bolding] Did you not read any other post I made? I’ve presented my evidence that our manufacturing sector has never disengaged. What do you have that points to the contrary? ---
**Author:** ![Ruminator](https://avatars.discourse-cdn.com/v4/letter/r/b9bd4f/32.png) [@Ruminator](https://boards.straightdope.com/u/Ruminator)\ **Post date:** [January 28, 2010, 1:34am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/44 "2010-01-28T01:34:31Z")
> [@Dr.Love](#): > > [My bolding] Did you not read any other post I made? I’ve presented my evidence that our manufacturing sector has never disengaged. Usually, what people are lamenting is the loss of high-paying jobs that high-school graduates can do. The fact that economists’ insistence that overall manufacturing output is higher is not relevant to their concerns. If American laborers are more productive today through technology or automation, that’s actually bad, not good, because less workers required means Johnny can’t count on a lifetime blue-collar job to pursue the American Dream. The total sum of USA manufacturing output is a meaningless academic number to the person that simply wants a low-skilled-but-high-paying job. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 28, 2010, 2:10am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/45 "2010-01-28T02:10:01Z")
> [@FoieGrasIsEvil](#): > > But that isn’t entirely untrue, is it? I mean, there’s a reason we have a place called “The Rust Belt”. Dead manufacturing regions litter the US. And manufacturing has sprung up in other places in the US. The railroads caused farmers to move from places like New England and Pennsylvania to better lands in the Midwest. (Thanks to railroads, their crops could reach the customers in the East.) Entire towns in the East simply vanished, were consumed by the forests, the farmers that supported them long gone. Was that a bad things for the USA, overall? I’m sure it sucked pretty bad for the last guy to leave Lonelytown, New Hampshire, but would the US have been better off if the farmers hadn’t gone to Indiana and Kansas? > [@](#): > > I don’t think its much of a stretch to draw a conclusion that because 90% of everything sold in WalMart is Chinese (or insert other country) made crap that “America doesn’t make anything anymore”…which isn’t entirely true of course, but yet there are TONS of things that we truly do not make anymore. So what? Look, it’d take whole books to explain the benefits of international trade, but to use an old saw, the U.S. certainly does make cheap toys and T-shirts; it’s just that instead of making them in factories in Syracuse, you grow them in Iowa. International trade brings a lot of benefits to the common man. ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [January 28, 2010, 2:15am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/46 "2010-01-28T02:15:12Z")
“Can an Economic Recovery Occur Without a Robot Manufacturing Sector?” Sure, the capital outlay is excessive and they aren’t a good way of lifting employment. What? Oh, robust … oops, sorry. :d&r: ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [January 28, 2010, 3:01am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/47 "2010-01-28T03:01:40Z")
> [@Dr.Love](#): > > [My bolding] Did you not read any other post I made? I’ve presented my evidence that our manufacturing sector has never disengaged. What do you have that points to the contrary? Of course I read them, however, I am naive in many respects and am willing to admit it. How can you say that though? Isn’t it a foregone conclusion that we have outsourced many, many manufacturing jobs (factories) to other countries in the name of the Almighty Bottom Line For Shareholders? Isn’t that true? If not, where am I wrong? I am not **so** naive as to believe that we no longer have a manufacturing proportion of our economy. We do. But it isn’t what it once was, is it? We manufacture a lot of things…but is there a correlation between the supposed decline in our manufacturing output, our existence as a net importer of goods, the loss of manufacturing jobs outside the obvious automation of factories and the aforementioned outsourcing of jobs to countries where labor is cheap? Please enlighten this idiot. I am of a mind that we have become a country that thinks its shit doesn’t stink, and that too many people are no longer willing to work menial jobs (reliably) to make the wheels of industry churn. Edit: labor is the single biggest cost for any business. If the ability to send it outside the USA exists, then why would any shareholder/board member of a corporation quail at the idea of sending it overseas if the drop in quality was palatable? ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 28, 2010, 2:40pm UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/48 "2010-01-28T14:40:47Z")
> [@FoieGrasIsEvil](#): > > Of course I read them, however, I am naive in many respects and am willing to admit it. How can you say that though? Isn’t it a foregone conclusion that we have outsourced many, many manufacturing jobs (factories) to other countries in the name of the Almighty Bottom Line For Shareholders? Isn’t that true? If not, where am I wrong? No, you’re right. It’s just that “we’ve outsourced jobs” is, in and of itself, meaningless. It’s like looking at a tire and saying “That’s can’t fly” while ignoring the fact that it’s attached to a 767. Of course the U.S. has outsourced jobs. It always has. Americans in 1957 weren’t drinking American-grown coffee, and they weren’t eating American-grown bananas. Every industrlaized economy outsourced jobs, and in turn also accepts jobs from overseas companies as well. Might I [strongly suggest some reading.](http://www.harpercollins.ca/books/9781554683956/Filthy_Lucre/index.aspx) Great section in this book explaining international trade. I’d also suggest going from there and reading up in detail on some of the concepts he’s using (Heath keeps it pretty straightforward, but not all these concepts are easily grasped.) In particular, spend a lot of time reading and learning the concept of [comparative advantage.](http://en.wikipedia.org/wiki/Comparative_advantage) The thing about comparative advantage is that it makes perfect sense but it’s a bit counterintuitive and is hard to wrap your mind around at first. I cannot emphasize this enough; \*\*if you don’t understand comparative advantage, you cannot understand international trade. \*\* If you’re honestly saying “Geez, help me get this” that’s actually quite cool, but it’s not really something that can be done within the confines of a message board. People who’ve written books on the subject are way better at it than the SDMB, and a lot of books out there are highly accessible. ---
**Author:** ![sleeping](https://avatars.discourse-cdn.com/v4/letter/s/839c29/32.png) [@sleeping](https://boards.straightdope.com/u/sleeping)\ **Post date:** [January 31, 2010, 2:09am UTC](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175/49 "2010-01-31T02:09:57Z")
> [@xtisme](#): > > However, most developing nations are starting off at such a sever disadvantage that they almost HAVE to play to their strengths, one of which is that their labor is simply cheaper and that they have less environmental regulations (or they selectively chose not to enforce those they do have, like in China) if they want to jump start their industries and draw in the venture capital necessary to build the infrastructure and bring in the manufacturing. Um, you’re assuming that LDCs are primarily poor because they’re undeveloped. I think the fact that they have to repay billions to DCs has more to do with it. India and China have developed, but many of the poor in these countries have only gotten poorer. > [@](#): > > Well, I know the answer to this, but let me turn it around. What’s the problem? Why AREN’T nations like China, who surly have access to this type of technology, building all their new infrastructure using such technologies? Why aren’t other emerging nations going all out to build using these kinds of technologies? Hell, for that matter, why don’t companies in first world nations scrap all their old tech and build all new? What’s the problem, as you say? I don’t about how modern Western countries’ industrial technologies could be (vs. what they are). I was merely implying that maybe these technologies could be shared with LDCs, without charging them too much. > [@](#): > > Horseshit. If that’s the case, then why do so many people in, say, China, flock to the cities and the manufacturing jobs instead of staying in the country and eeking out a living on the farm? Are they being forced to move to work those jobs at gun point? And those in India? In the Pacific Rim? In Central and South America? This isn’t to say that the rich and the corporations AREN’T gaining huge benefits too, but it’s irrational to think that ONLY they derive benefits from these kinds of jobs. Hell, as exploited as the people of Haiti have been, they STILL are deriving tangible benefits from US companies who have built manufacturing facilities there. Yeah, the people will go where they can make money. But the problem with saying “Look, they wouldn’t work there if they didn’t want to, or didn’t benefit from the work” elides the larger issue of there being other possibilities for organizing their economy. That is, they can participate in the global economy without diving head first and losing their economic independence and self-sustainability. > [@](#): > > Why would you build a fully automated facility to produce goods and services in the US or Europe in some logistical backwater? You aren’t making sense. You build manufacturing facilities in developing countries to take advantage of cheaper labor. If you are going to directly compete by building automated facilities, you do it in countries with the logistics and infrastructure to take advantage of the huge investment you are putting out to BUILD such a facility. Well, first of all, there are other factors in play. If the company doesn’t have to worry about cleaning up its refuse, that cost could be greater than the cost of transporting the goods…thus the net benefit goes to Western country and the LDC is effectively a dump site. But that’s beside the point. Companies can pay these a workers more–but still less than they would pay in Western countries–in order to ensure their ability to afford the basic necessities of life. As for higher prices on consumer goods…yeah, that’ll happen, but it doesn’t mean that the net overall benefits wouldn’t compensate for the disadvantages. Let’s face it, there’s a market for all kinds of crap, but ensuring that employment is as high as it can be creates a stronger country and a better society. > [@](#): > > But none of the serious one’s support the kinds of trade protectionism that, again, you seem to be advocating. Certainly there is real, meaningful debate about the causes and potential solutions to the current recession in the US, and economic policy and progress world wide but I don’t know of any expert who is seriously contemplating such a stance. Well, there are plenty of professional economists who do _not_ accept the free-market doctrine. The idea that 19th century-style free market fundamentalism is the only game in economic theory is simply false. > [@](#): > > Well, a degree helps, to be sure. But when I say ‘expert’ I mean someone who has an in-depth understanding of the subject…something I don’t claim to have, btw. Okay. Here’s a sample from Michael Hudson, a former Wall street analyst who now teaches international economics and monetary theory at the University of Missouri: > [@](#): > > Nowhere is the sterility of this equilibrium preconception more apparent than in Mr. Samuelson’s famous factor-price equalization theorem, which states that the natural tendency of the international economy is for wages and profits among nations to converge over time. As an empirical historical generality this obviously is invalid. International wage levels and living standards are diverging, not converging, so that the rich creditor nations are becoming richer while poor debtor countries are becoming poorer – at an accelerating pace, to boot. Capital transfers (international investment and “aid”) have, if anything, aggravated the problem, largely because they have tended to buttress the structural defects that impede progress in the poorer countries: obsolete systems of land tenure, inadequate educational and labor-training institutions, pre-capitalist aristocratic social structures, and so forth. Unfortunately, it is just such political-economic factors that have been overlooked by Mr. Samuelson’s theorizing (as they have been overlooked by the mainstream of academic economists since political economy gave way to “economics” a century ago). > > [http://www.ufppc.org/book-notes-mainmenu-36/9236-commentary-michael-hudsons-critique-of-paul-samuelsons-economics.html](http://www.ufppc.org/book-notes-mainmenu-36/9236-commentary-michael-hudsons-critique-of-paul-samuelsons-economics.html) > [@](#): > > As for Tonelson, I don’t know him from adam, and I will fess up and say I haven’t really read through your cite (I’m writing this from a bar, to be honest), and am basing my own comments on what you’ve written in this thread. I’ll say that if this guy IS advocating trade protectionism, it’s not a matter of his being in a ‘different school of thought’ from me, it’s more along the lines of him being ignorant of the basics, and not really part of any serious debate on this subject. I might be being overly harsh, and perhaps trade protectionism has become a serious ‘school’ in economics and international trade circles when I wasn’t watching, but if so I’m unaware of the radical shift in thinking.. Dude, I’m no economist either, but you are badly mistaken. In both academics and actual international trade, the idea that more free markets are always better is just not accepted and hasn’t been for some time. By the way, here is an excellent article in The American Prospect that happened to come out during the time I was away from the boards: > [@](#): > > So what did the United States do? It would have made sense for our leaders to realize that we were no longer in the cozy womb of 1950s industrial supremacy. We might have initiated a new round of trade talks intended to clarify which policies of industrial aid, applied research-and-development assistance, wage subsidies, regional policies, domestic content requirements, and other forms of mercantilism are legitimate tools of economic development and which ones are predatory. We might have created robust tribunals to identify and punish illicit behavior. We might have used our still-substantial economic leverage to deny market privileges to flagrant and chronic violators. We might have devised an industrial policy of our own. > > But we did none of these. Instead, we doubled down on a fantasy of ever purer free trade that nobody else really bought. But if we were willing to play by the rules of an imagined free trade while others practiced state-led growth, our trading partners were more than happy to indulge our delusion. > > Why did America behave this way? The reason for this seemingly irrational trade diplomacy was one part military goals crowding out industrial ones, one part ideology, and one part the increasing influence of Wall Street. > > [http://www.prospect.org/cs/articles?article=playing\_ourselves\_for\_fools](http://www.prospect.org/cs/articles?article=playing_ourselves_for_fools) [Previous page](https://boards.straightdope.com/t/can-an-economic-recovery-occur-without-a-robust-manufacturing-sector/526175.md?page=2)