Saturday, September 10, 2011

Briefly about Manufacturing

Despite its goals for manufacturing, the administration lacks an explicit plan for achieving them. “The United States today is alone among industrial powers in not having a strategy or even a procedure for thinking through what must be done when it comes to manufacturing,” says Thomas A. Kochan, an industrial economist at the Massachusetts Institute of Technology.

Manufacturing's muscle helped make the United States a world power, but its contribution to national income is dwindling.(1)

Manufacturing as a share of GDP is declining in all developed countries, just more quickly in the United States. Wearing the Marxist hat, this is because the capitalist mode of production in the developed world is no longer capable of contributing as much productive growth to the world economy. The key contributor to the flattening decline of manufacturing as a % of GDP globally has been the introduction of China into the global marketplace. It is no surprise that living standards are rising most quickly in this area of the world, for it is here where the bulk of productive growth is occurring. Manufacturing is not just about nostalgia, it is closely associated with the rise of the capitalist mode of production and with it a dramatic, if bifurcated, initial rise in living standards. Marx wasn't exactly against capitalism in the sense liberals might portray. It is another mode of production in humanity's progression and will reach a point where it is no longer capable of driving a productive economy because the profits in those sectors just won't be there. Domestic wages will be 'too high' and domestic markets too saturated. Hence we get 'Wall Street' and the Great Casino.

1'Is Manufacturing Falling Off the Radar?' - NYT

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