One thing about US manufacturing:
http://shopfloor.org/2011/03/u-s-manufacturing-remains-worlds-largest/18756
Now, whether the US is or isn't the world's largest manufacturer (or what that even means?), it would seem fair to say, though, that manufacturing in America is hardly extinct.
Thanks, Jegbook, for your post, and I was surprised that with all the losses of manufacturing jobs the U.S. is at least one of the two largest manufacturing countries in the world, and I acknowledge that makes it a long way from extinction. Nonetheless, the disappearance of American manufacturing jobs since the high-water mark reached in the post-war years has been dramatic, accelerating most dramatically since 2000. Between that year and 2007, 3.5 million U.S. manufacturing jobs were lost. These are jobs averaging $22 an hour, far greater than those arising in the services industries. In 1950 34% of all non-farm workers were in manufacturing jobs; in 2009 that figure dropped to just 9%. In many cases these jobs were lost by older workers unlikely to qualify for jobs in other fields paying a comparable wage, causing family tragedies. Certainly many of these jobs were lost to productivity gains--the implementation of automation, computerization, and other technologies that make manufacturing less labor intensive. Just as certainly, though, there are millions of jobs that were once performed by Americans that are now being performed by workers in countries with lower labor costs, lower standards of living, fewer worker safety requirements, and less stringent controls on environmental degradation.
The loss of these jobs is devastating to the displaced workers and their families, but I have an even greater concern for today's graduating high school students who are not interested in academics and who have little aptitude or inclination for jobs in medicine, engineering, software design, or most of the other careers that we hear are going to characterize the American workforce of the future. Certainly there are good and respectable careers to be had as electricians, plumbers, plasterers, butchers, and mechanics, but there are not nearly enough of these jobs to employ all those who would want them. In a flat world, Americans can't expect to find unskilled and semi-skilled manufacturing jobs that pay enough to support the middle-class lifestyle their parents' generation may have enjoyed.
One poster, living in Germany I think, mentioned the European model where labor has a seat at the table, and where the need to maintain employment for current workers is an important criterion when the company is deciding where to site its manufacturing. I'm not sure most American businesspeople are comfortable with the local inefficiency that such a model is likely to produce. If the same product can be produced with the same quality in Madagascar where the hourly cost of labor is $0.18 instead of in the U.S. at $22, and if that product must compete on the shelves of Walmart with those of other companies, it may be that agreeing to employ American labor is a suicide pact for all of the company's workers and shareholders, and not just for the threatened workers on the line.
An often-mentioned solution is to impose high enough import tariffs so that foreign-made goods end up selling for just as much as the American-made product. I wish I understood all I know about international trade agreements, tariffs, Smoot-Hawley, and the politics that are said to have brought about tariffs that do little for domestic laborers but which did a great deal for the profits of protected corporations. It is said that these corporations made generous contributions to influence those with the power to set tariff policy. Our recent Supreme Court decision would seem to remove at least one of the safeguards against that sort of tempting corruption.
I've spent a lot of time in Europe and it's hard not to admire the social safety nets they've managed to weave, and even if some European countries are having difficulty getting through the end of the month, others, like many of the Scandinavian countries, seem to be financially sound and thriving despite what many Americans would regard as impossibly high tax rates. i can't pretend to know how they manage it, or if, in fact, they will be able to continue to.
I like free enterprise, and I believe in capitalism's power to provide incentives to succeed. I love the way our system rewards clever people who have something to contribute, even if it is to dream up a product that few others have any faith in. I am wary of managed economies: I don't want some commissar telling Henry Ford he just needs to make a faster horse. At the same time our system can be cruel, consigning the elderly, the socially unpopular, the injured, and the unneeded to lives of abject poverty. It can foster a callous disregard of the long-term effects of an obsession with short-term profits; it can create managers willing to destroy the environment, to despoil reserves, and to mislead shareholders and lenders. We need to find a way to ameliorate the worst side effects of free enterprise without either bankrupting our society or hobbling its economic engines. The best solution I can think of is to institute a wise and prudent government that is charged with ensuring the greatest good for the greatest number.
And I sure hope somebody else has a better idea than that.
