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Last week's NYT article on free trade was pretty good: http://www.nytimes.com/2016/09/29/business/economy/more-wealth-more-jobs-but-not-for-everyone-what-fuels-

Last week's NYT article on free trade was pretty good: http://www.nytimes.com/2016/09/29/business/economy/more-wealth-more-jobs-but-not-for-everyone-what-fuels-the-backlash-on-trade.html http://www.nytimes.com/2016/09/29/business/economy/more-weal... This is the bottom line on American manufacturing: > From 2000 to 2010, the United States lost some 5.6 million manufacturing jobs, by the government’s calculation. Only 13 percent of those job losses can be explained by trade, according to an analysis by the Center for Business and Economic Research at Ball State University in Indiana. The rest were casualties of automation or the result of tweaks to factory operations that enabled more production with less labor. > American factories produced more goods last year than ever, by many indications. Yet they did so while employing about 12.3 million workers — roughly the same number as in 2009, when production was roughly three-fourths what it is today. Most of the jobs that left are never coming back. They didn't go to Mexico or China; they simply disappeared because automation and productivity increases rendered them unnecessary. If the US sheltered its manufacturing sector from foreign competition, a small number of jobs might come back, but the increased cost of manufacturing things in the US would strongly incentivize companies to automate those jobs away as quickly as possible. Manufacturing has a powerful political resonance, both in terms of the imagery of hardworking middle-class factory workers and national pride, e.g. "Why don't we make things in this country anymore?" However, I suspect that most politicians who talk about a manufacturing revival understand that it won't really happen.

Houshalter 10y ago
But there aren't a finite number of factories. If more factory work gets automated, then it will reduce the cost of building more factories and producing even more goods. Whereas service jobs seem more finite. There is only a finite demand for burgers or shelf stockers, unless you increase the population. I really don't understand how a mostly service based economy is sustainable. In any case, the service based jobs are just as vulnerable to automation. There are already a number of prototype burger making robots, for instance.
- moron4hire 10y ago
  there aren't a finite number of factories Please reconsider the absolutely absurdity of this statement.
- philipkglass 10y ago
  There's a finite demand for manufactured goods too. If anything, the price elasticity for manufactured goods seems likely to be lesser than that for restaurant meals; I'd eat out more often if it cost less, but I'm not going to buy additional dishwashers or dining tables for my house no matter how cheap they get. I'm not going to buy light bulbs or printers faster than they need replacement due to failure. With laser printers and LED bulbs, that can be several years between purchases.
  - akiselev 10y ago
    You're correct that manufacturing too has a finite demand but it still has an order of magnitude more potential than the service industry. The vast majority of service jobs are extremely local or tied to a language/region/jurisdiction so those jobs have very little to export. Meanwhile, the vast majority of the world is not yet affluent enough to afford most luxury manufactured goods so as the population gets wealthier, the market for manufactured goods expands. As long as the developing world follows western consumerism, and by all vounts it looks like it is, there is a lot of room to grow. Developed countries who have centuries of industrialization behind them and a knowledge economy stand a much greater chance of capturing that newly generated wealth because of scale and experience. As long as higher labor and regulatory costs can be offset by automation, the manufacturing can be grown with the world while services can only really grow with the national population.
    - philipkglass 10y ago
      I see a lot of growth potential for manufactured goods if you measure them in mass. I'm not sure there's great growth potential if you measure them in money. Every wave of industrial relocation so far has overtopped the previous one by lowering costs. China's steelmakers are exporting more tonnes of steel than US steelmakers did 50 years ago, but they're also commanding significantly less money per tonne. For that matter, if poor countries are going to get wealthier but buy manufactured goods from abroad, where is their new wealth coming from if not manufacturing or services?
pavedwalden 10y ago
>However, I suspect that most politicians who talk about a manufacturing revival understand that it won't really happen. The thought that maybe some of them don't understand that is what scares me the most.
- mywittyname 10y ago
  The worst aspect of politicians is you can never differentiate between what they pay lip service to and what they truly believe.
  - hrxn 10y ago
    So, just like everyone else, basically...
crdoconnor 10y ago
That study is bullshit. It's probably more the opposite - ~15% job losses caused by automation and 85% caused by trade policy. You only have to look at their opinions on "right to work" laws to see whose side they're batting for (not employees). Automation is simply being used as a scapegoat and a political justification for keeping trade policies that export jobs in place. >Manufacturing has a powerful political resonance, Manufacturing ecosystems take decades to fully destroy and decades to fully rebuild. The flow of goods on container ships can be halted overnight - which has happened before and will happen again. There's a country that begins with Z and a country that begins with V that enacted policies that deliberately sabotaged their local industrial and agricultural base and assumed they could always just import what they needed. Spoiler alert: it didn't end well for either of them.
- mywittyname 10y ago
  > That study is bullshit. It's probably more the opposite You need to back up statements like this. Contradicting actual evidence with figures pulled from your ass isn't going to fly here.

Houshalter 10y ago

But there aren't a finite number of factories. If more factory work gets automated, then it will reduce the cost of building more factories and producing even more goods. Whereas service jobs seem more finite. There is only a finite demand for burgers or shelf stockers, unless you increase the population. I really don't understand how a mostly service based economy is sustainable. In any case, the service based jobs are just as vulnerable to automation. There are already a number of prototype burger making robots, for instance.

moron4hire 10y ago
there aren't a finite number of factories Please reconsider the absolutely absurdity of this statement.
philipkglass 10y ago
There's a finite demand for manufactured goods too. If anything, the price elasticity for manufactured goods seems likely to be lesser than that for restaurant meals; I'd eat out more often if it cost less, but I'm not going to buy additional dishwashers or dining tables for my house no matter how cheap they get. I'm not going to buy light bulbs or printers faster than they need replacement due to failure. With laser printers and LED bulbs, that can be several years between purchases.
- akiselev 10y ago
  You're correct that manufacturing too has a finite demand but it still has an order of magnitude more potential than the service industry. The vast majority of service jobs are extremely local or tied to a language/region/jurisdiction so those jobs have very little to export. Meanwhile, the vast majority of the world is not yet affluent enough to afford most luxury manufactured goods so as the population gets wealthier, the market for manufactured goods expands. As long as the developing world follows western consumerism, and by all vounts it looks like it is, there is a lot of room to grow. Developed countries who have centuries of industrialization behind them and a knowledge economy stand a much greater chance of capturing that newly generated wealth because of scale and experience. As long as higher labor and regulatory costs can be offset by automation, the manufacturing can be grown with the world while services can only really grow with the national population.
  - philipkglass 10y ago
    I see a lot of growth potential for manufactured goods if you measure them in mass. I'm not sure there's great growth potential if you measure them in money. Every wave of industrial relocation so far has overtopped the previous one by lowering costs. China's steelmakers are exporting more tonnes of steel than US steelmakers did 50 years ago, but they're also commanding significantly less money per tonne. For that matter, if poor countries are going to get wealthier but buy manufactured goods from abroad, where is their new wealth coming from if not manufacturing or services?

pavedwalden 10y ago

>However, I suspect that most politicians who talk about a manufacturing revival understand that it won't really happen. The thought that maybe some of them don't understand that is what scares me the most.

mywittyname 10y ago
The worst aspect of politicians is you can never differentiate between what they pay lip service to and what they truly believe.
- hrxn 10y ago
  So, just like everyone else, basically...

crdoconnor 10y ago

That study is bullshit. It's probably more the opposite - ~15% job losses caused by automation and 85% caused by trade policy. You only have to look at their opinions on "right to work" laws to see whose side they're batting for (not employees). Automation is simply being used as a scapegoat and a political justification for keeping trade policies that export jobs in place. >Manufacturing has a powerful political resonance, Manufacturing ecosystems take decades to fully destroy and decades to fully rebuild. The flow of goods on container ships can be halted overnight - which has happened before and will happen again. There's a country that begins with Z and a country that begins with V that enacted policies that deliberately sabotaged their local industrial and agricultural base and assumed they could always just import what they needed. Spoiler alert: it didn't end well for either of them.

mywittyname 10y ago
> That study is bullshit. It's probably more the opposite You need to back up statements like this. Contradicting actual evidence with figures pulled from your ass isn't going to fly here.