Author Topic: Manufacturing is Overrated (Read 1311 times)

FUNKED1 · « **on:** February 12, 2005, 09:55:18 AM »

It's going down the same road as agriculture. In 50 years a manufacturing based economy will be just as backwards as an agriculture based economy is now.

Most people continue to believe that when manufacturing jobs decline, the country's manufacturing base is threatened and has to be protected. They have great difficulty in accepting that, for the first time in history, society and economy are no longer dominated by manual work, and a country can feed, house and clothe itself with only a small minority of its population engaged in such work.

Mini D · « **Reply #1 on:** February 12, 2005, 10:41:08 AM »

Odd... I was just thinking about this subject this morning. <- not kidding

Capitalism without industry will be our downfall (the U.S.). You'd think the 90's would have made that abundantly clear. It seems, however, the buisness world is oblivious to that.

Airhead · « **Reply #2 on:** February 12, 2005, 11:59:37 AM »

Yup. Pretty soon employment will be obsolete.

indy007 · « **Reply #3 on:** February 12, 2005, 12:20:30 PM »

Quote

Originally posted by Mini D
Odd... I was just thinking about this subject this morning. <- not kidding

Capitalism without industry will be our downfall (the U.S.). You'd think the 90's would have made that abundantly clear. It seems, however, the buisness world is oblivious to that.

No true, we're transitioning from a manufacturing to a service based industry. The difference is, in the dot-com burst, all of the business that went under didn't provide a service that was popular enough to keep it alive.

I have a small business that moved 600k in inventory last year. I never saw, nor touched the inventory. I pushed papers, provided a service, and collected my fee. What exactly am I oblivious to?

Airhead · « **Reply #4 on:** February 12, 2005, 01:07:45 PM »

We can'l all be brokers Indy- someone has to make the product you sell...

indy007 · « **Reply #5 on:** February 12, 2005, 01:27:01 PM »

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Originally posted by Airhead
We can'l all be brokers Indy- someone has to make the product you sell...

That's correct. Somebody in China will do it for pennies. Americans won't. Our standard of living has become too high to permit it. Therefore we switch to a service basis for the economy, and do our damndest to stay ahead of places like India, or we continue to produce goods that are priced too high to be competative. Evolve or die. We really don't have the option.

Suave · « **Reply #6 on:** February 12, 2005, 01:57:07 PM »

Quote

Originally posted by indy007
That's correct. Somebody in China will do it for pennies. Americans won't. Our standard of living has become too high to permit it. Therefore we switch to a service basis for the economy, and do our damndest to stay ahead of places like India, or we continue to produce goods that are priced too high to be competative. Evolve or die. We really don't have the option.

Well we could start by the old fashioned tried and true method. Establishing a favorable balance of trade. Thereby making foriegn produced goods less economical like in the old days.

Nashwan · « **Reply #7 on:** February 12, 2005, 02:15:45 PM »

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That's correct. Somebody in China will do it for pennies.

The problem is you have to earn the pennies to pay the somebody in China.

At the moment the US isn't. It's using borrowed money to pay the somebody in China, to the tune of about 5% of GDP per year.

That's what your trade deficit is. It's more being imported than exported, and it's being paid for by little pieces of paper with IOU written on them (dollars)

There's nothing wrong with outsourcing manufacturing, provided you can replace it with some exporting industry to earn the money to buy the imports.

indy007 · « **Reply #8 on:** February 12, 2005, 02:28:27 PM »

Quote

Originally posted by Suave
Well we could start by the old fashioned tried and true method. Establishing a favorable balance of trade. Thereby making foriegn produced goods less economical like in the old days.

We won't establish a favorable balance of trade without lowering the production costs of our own goods. Unless, maybe, we imposed large tariffs on incoming goods to stop people from dumping into our market. What I'm saying is we need to build a more favorable balance of trade, not with goods that we can not produce for less, but instead with high demand services and foreign contracts for our skilled labor. It is a damn good incentive to improve our vocational training & post highschool education.

This kind of reminds me of around the time of "Mission Accomplished!" when rebuilding contracts were being handed to Halliburton & other companies. Other countries that didn't participate in the liberation wanted contracts too (Germany, France, etc). I say screw 'em (no offense Germans & French people, but money is money). Put that income into our own economy, do the jobs very well, and show off what American skilled labor can accomplish (when it's not being blown up).

oboe · « **Reply #9 on:** February 12, 2005, 05:25:26 PM »

Quote

Originally posted by indy007
That's correct. Somebody in China will do it for pennies. Americans won't. Our standard of living has become too high to permit it. Therefore we switch to a service basis for the economy, and do our damndest to stay ahead of places like India, or we continue to produce goods that are priced too high to be competative. Evolve or die. We really don't have the option.

We're already losing the service sector. In addition to call center jobs, IT jobs, there are many others that can be moved to India. I read somewhere that Radiologist who read XRays are being shifted to India, too. Even the guy who takes your order at a drive through fast foiod restaurant (the silliness of that example should give you pause, because I'm not making it up. It demonstrates how powerful the incentive to save on labor costs is - when it's profitable to offshore a job who barely make more than minimum wage, what's left?)

So what's the next base for an economy after agriculture, manufacturing, and service jobs? We'd better get started. Because the next shift is going to happen even faster than the first two.

Suave · « **Reply #10 on:** February 12, 2005, 05:44:12 PM »

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Originally posted by indy007
Unless, maybe, we imposed large tariffs on incoming goods to stop people from dumping into our market.

Of course, this worked for a long time. We're a country of 250 million consumers, that's an enormous amount of leverage.

Put the tarrifs back on imported goods and you'll see the manufacturing jobs coming back to the states.

oboe · « **Reply #11 on:** February 12, 2005, 07:30:06 PM »

Quote

Originally posted by Suave
Of course, this worked for a long time. We're a country of 250 million consumers, that's an enormous amount of leverage.

Put the tarrifs back on imported goods and you'll see the manufacturing jobs coming back to the states.

I think that is a great idea, but it is a political solution, and guess who controls both houses and the Presidency? They'll never go for it. Although Reagan wasn't afraid to slap tariffs on unfair competitors, so maybe I'd be surprised.

FUNKED1 · « **Reply #12 on:** February 12, 2005, 09:01:22 PM »

"The new protectionism is driven as much by nostalgia and deep-seated emotion as by economic self-interest and political power. Yet it will achieve nothing, because “protecting” ageing industries does not work. That is the clear lesson of 70 years of farm subsidies. The old crops—corn (maize), wheat, cotton—into which America has pumped countless billions since the 1930s—have all done poorly, whereas unprotected and unsubsidised new crops—such as soya beans—have flourished. The lesson is clear: policies that pay old industries to hold on to redundant people can only do harm. Whatever money is being spent should instead go on subsidising older laid-off workers, and retraining and redeploying younger ones."

Mini D · « **Reply #13 on:** February 12, 2005, 09:59:24 PM »

Quote

Originally posted by indy007
I have a small business that moved 600k in inventory last year. I never saw, nor touched the inventory. I pushed papers, provided a service, and collected my fee. What exactly am I oblivious to?

You're oblivious to the fact that you are not needed.

Whomever controls the manufacturing is who is needed. You can pretend that you can go anywhere else all you want. Eventually you'll face the reality that the "anywhere else" is growing smaller and smaller. Then you'll face the reality that you weren't really needed at all. Then you'll face the reality that ignorance was bliss.

FUNKED1 · « **Reply #14 on:** February 12, 2005, 10:17:06 PM »

Quote

Originally posted by Mini D
Odd... I was just thinking about this subject this morning. <- not kidding

Capitalism without industry will be our downfall (the U.S.). You'd think the 90's would have made that abundantly clear. It seems, however, the buisness world is oblivious to that.

I'm not sure I understand your post. Are you agreeing with me? The economic trends during 90's in the USA would most definitely not support an argument that manufacturing is a "special" sector that trumps service or knowledge based industries.
Everybody else missed the point of the article, don't be that guy.