Friday, August 6, 2010
The Steep Decline in Manufacturing Portends Deep Trouble for U.S. Imperialism
U.S. manufacturing production as a share of global GDP has collapsed over the last decade. The country's economy and its stock market have not yet shaken the ending of the 1990's computer technology and dot-com boom. Unless U.S. capitalism finds a driver of private investment - for private is what it insists on - and is able to increase domestic productive capacity with that investment, the future of its working class (separate of radical action) - and ultimately the country and the imperial position of its elite is in deep trouble. Production is the heart of an economy, and historically other sectors have geographically followed production. There are smart people everywhere and, given a chance, factory workers' kids can learn Calculus (tm) just as well as the children of the elite. Any group of people can do design with training and access (which geographic proximity brings), they can certainly can do marketing. And from production comes the economies of culture, and finance - and lastly, political shifts. American culture is predominant around the world because the U.S. held 50 % of world productive output following World War 2. No manufacturing, then no Hollywood, no McBurgers, and the like. No manufacturing, then ultimately no Wall Street, which would not have become the center of global finance if the U.S. had not been the world leader in manufacturing starting about 1890 , a position it will shortly give up to China.
Notes: The ISM manufacturing increases seen in the current 'recovery' come from a smaller base than even 2008, considering the auto bankruptcies. So they will probably not represent any kind of cumulative increase absolutely and especially against the world.
While there were many speculative aspects to the 90's boom, it did also produce tangible benefits at all levels of the economy. Hence, the avoidance of the term bubble in association with it. It wasn't all about a 'granite countertop' mania, as the housing bubble was.
Source: UN National Accounts