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> The "hollowing out" of American manufacturing was a result of globalization spurred by free trade. Putting aside the question of whether domestic manufacturi

> The "hollowing out" of American manufacturing was a result of globalization spurred by free trade. Putting aside the question of whether domestic manufacturing is more desirable than domestic production in other industries, this claim is not borne out by the data. Real manufacturing output is at an all-time high, passing the 2007 peak last year: https://fred.stlouisfed.org/series/OUTMS https://fred.stlouisfed.org/series/OUTMS Perhaps you mean manufacturing employment?

zaroth 7y ago
Doesn’t the fact that we’re just now catching up to 2007 levels support my point rather than refute it?
- rory096 7y ago
  When are you arguing globalization happened?
  - zaroth 7y ago
    The watershed moment would be China admission to the WTO in 2001. We’ve been going basically sideways since 2000. In the same period (2000-2018) that real manufacturing output increased 10%, US real GDP doubled.
    - rory096 7y ago
      What makes China's convergence different from those of postwar Europe, Japan, Korea, etc?
      - adventured 7y ago
        Scale, simply put. China went from an economy of $1 trillion (1999) to ~$14 trillion (2019) at warp speed. It's the largest economic expansion, in the shortest amount of time, that has ever occurred. South Korea has a good economy with a seemingly bright future, however it's still only a $1.5t economy today. That's sub 2% of global GDP. The US post civil war industral boom (~1890-1930) and Japan from 1970 to 1995 ($200b to $5.5t), would be the two closest, most recent comparable extreme booms. Japan of course topped out in 1995 and in real terms has never surpassed that economic output since. When you add $13 trillion in manufacturing-tilted economic output in 20 years, it's going to be very likely to dent the largest manufacturing economy at that point in time (the US). Considering the huge scale of that Chinese expansion, the US weathered it remarkably well and continued to expand its economy while retaining one of the highest GDP per capita output figures. I'd argue it harmed Europe far more than the US, suppressing their growth to a far greater degree than the US (the US economy has continued to grow over the last 15-20 years consistently, Europe has struggled to produce any net growth in the last ~12 years). Over those 20 years China rapidly built out a massive technology sector, with global giants, Europe has badly failed at keeping pace with the US and China on that front (one of the reasons Europe's growth has been so poor over recent decades).
  - Nadya 7y ago
    It began in 2001 and the effects become very obvious when you watch country GDP's. Watch the of countries, but especially China, in this animation of country GDP: https://gfycat.com/energeticrigidalbertosaurus https://gfycat.com/energeticrigidalbertosaurus
int_19h 7y ago
There's an article that claims that domestic manufacturing numbers are very misleading, because of stuff like this: "To make the output volume comparable from one year to the next, the statisticians aggregating the data adjust for price changes, as well as improvements in product quality. For example, let’s say statisticians want to figure out how much the sales of Intel processors grew in 2017 versus 2016. The problem is, the processor released in 2017 is superior to that sold in 2016 in many tangible ways. But how do you account for the fact that a 2017 processor provides users with more value? In general, statisticians assume the difference in value between the two models is just the difference in their prices. If, say, the 2017 processor costs twice as much as the 2016 one does, then selling one 2017 processor counts as selling two of the 2016 versions in the statisticians’ books." https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
- rory096 7y ago
  This critique doesn't make a lot of sense to me. Why wouldn't you count a processor that costs twice as much as twice the economic output? It's vaguely reminiscent of the claim that inflation data is understated because computers at the same price have gotten better... except opposite. There's no adjustment for quality in the sense that a quality improvement without a change in price is estimated & counted. It's only if the processor's actual price doubles — i.e. it brings in twice as much revenue! Is that even something we observe in computers to a significant extent? Even if it is, is it a bad thing? If homes increase in size by 50%, simultaneously increase in price by 50%, and an equal quantity of them are sold, is home production not up 50%? This feels like an argument that automation in manufacturing has only increased because the distribution of production has shifted towards the highly automated semiconductor industry, but it's couched in a bizarre claim that increases in monetary value of output for the computer industry just don't count.

zaroth 7y ago

Doesn’t the fact that we’re just now catching up to 2007 levels support my point rather than refute it?

rory096 7y ago
When are you arguing globalization happened?
- zaroth 7y ago
  The watershed moment would be China admission to the WTO in 2001. We’ve been going basically sideways since 2000. In the same period (2000-2018) that real manufacturing output increased 10%, US real GDP doubled.
  - rory096 7y ago
    What makes China's convergence different from those of postwar Europe, Japan, Korea, etc?
    - adventured 7y ago
      Scale, simply put. China went from an economy of $1 trillion (1999) to ~$14 trillion (2019) at warp speed. It's the largest economic expansion, in the shortest amount of time, that has ever occurred. South Korea has a good economy with a seemingly bright future, however it's still only a $1.5t economy today. That's sub 2% of global GDP. The US post civil war industral boom (~1890-1930) and Japan from 1970 to 1995 ($200b to $5.5t), would be the two closest, most recent comparable extreme booms. Japan of course topped out in 1995 and in real terms has never surpassed that economic output since. When you add $13 trillion in manufacturing-tilted economic output in 20 years, it's going to be very likely to dent the largest manufacturing economy at that point in time (the US). Considering the huge scale of that Chinese expansion, the US weathered it remarkably well and continued to expand its economy while retaining one of the highest GDP per capita output figures. I'd argue it harmed Europe far more than the US, suppressing their growth to a far greater degree than the US (the US economy has continued to grow over the last 15-20 years consistently, Europe has struggled to produce any net growth in the last ~12 years). Over those 20 years China rapidly built out a massive technology sector, with global giants, Europe has badly failed at keeping pace with the US and China on that front (one of the reasons Europe's growth has been so poor over recent decades).
- Nadya 7y ago
  It began in 2001 and the effects become very obvious when you watch country GDP's. Watch the of countries, but especially China, in this animation of country GDP: https://gfycat.com/energeticrigidalbertosaurus https://gfycat.com/energeticrigidalbertosaurus

int_19h 7y ago

There's an article that claims that domestic manufacturing numbers are very misleading, because of stuff like this: "To make the output volume comparable from one year to the next, the statisticians aggregating the data adjust for price changes, as well as improvements in product quality. For example, let’s say statisticians want to figure out how much the sales of Intel processors grew in 2017 versus 2016. The problem is, the processor released in 2017 is superior to that sold in 2016 in many tangible ways. But how do you account for the fact that a 2017 processor provides users with more value? In general, statisticians assume the difference in value between the two models is just the difference in their prices. If, say, the 2017 processor costs twice as much as the 2016 one does, then selling one 2017 processor counts as selling two of the 2016 versions in the statisticians’ books." https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...

rory096 7y ago
This critique doesn't make a lot of sense to me. Why wouldn't you count a processor that costs twice as much as twice the economic output? It's vaguely reminiscent of the claim that inflation data is understated because computers at the same price have gotten better... except opposite. There's no adjustment for quality in the sense that a quality improvement without a change in price is estimated & counted. It's only if the processor's actual price doubles — i.e. it brings in twice as much revenue! Is that even something we observe in computers to a significant extent? Even if it is, is it a bad thing? If homes increase in size by 50%, simultaneously increase in price by 50%, and an equal quantity of them are sold, is home production not up 50%? This feels like an argument that automation in manufacturing has only increased because the distribution of production has shifted towards the highly automated semiconductor industry, but it's couched in a bizarre claim that increases in monetary value of output for the computer industry just don't count.