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This scares me. While I have nothing against the wealth of Steve Jobs and his revolutionary products, what America needs to maintain the middle class throughout

This scares me. While I have nothing against the wealth of Steve Jobs and his revolutionary products, what America needs to maintain the middle class throughout the 21st century is to compete with China and its ilk: raw materials, cheap renewable energy, and basic manufacturing. Because the revolutionary products we sell to the rest of the world aren't even made here.

alex_c 16y ago
Why? Or, more specifically - how will racing China (and every other developing country) to the bottom in the manufacturing game be sufficient to maintain the middle class?
- jganetsk 16y ago
  Because of our balance of payments crisis. We need to stop our country's net outflow of dollars. Lauding Steve Jobs and trying to reproduce his success won't solve that problem. Suppose we all become designers of hit products that are manufactured abroad. How do we guarantee that the USA doesn't get cut out of the vertical stack? I have total faith that the other countries of the world will be able to innovate and support just as well as we can, if not already.
  - alex_c 16y ago
    I understand the economic benefit, but I have yet to see a good explanation of how it might happen. Americans aren't willing to work manufacturing jobs for $5 or even $10 an hour - and you can't support a middle class in the US on $5 or $10 an hour. All manufacturing requires is a decent infrastructure, reasonably stable political and legal system, and a workforce willing to work cheaply enough. Trying to compete against China - and the rest of the world - on those terms for today's market, rather than doing everything in its power to keep its lead and define tomorrow's markets, is the biggest mistake the US could make. Manufacturing is a relatively low skilled job - the expectation that manufacturing = middle class made sense 50 years ago, but not today. Edit: a lot of my thinking on this issue is colored by the book The World is Flat (http://en.wikipedia.org/wiki/The_World_Is_Flat http://en.wikipedia.org/wiki/The_World_Is_Flat). It's a complex issue, and I'm definitely open to new ways of looking at it.
    - J3L2404 16y ago
      Most manufacturing will be done by robots. It will be your job to build and maintain these robots.
    - TheBlack_knight 16y ago
      Manufacturing is not necessarily low skilled. Look to Germany for example, which is a heavy manufacture that uses very advanced factories, some even completely automated. I have no problem having China make goods for us. Manufacturing is usually a dirty process and the jobs can be relatively low paying.
      - dmazin 16y ago
        I'm not sure how your points connect. If factories are becoming automated, then how does that show that the replaced human workers are skilled?
        TheBlack_knight 16y ago
        The workers who designed and built the machines are skilled. Inefficient jobs are replaced with with new jobs not necessarily in the same industry.
        alex_c 16y ago
        >The workers who designed and built the machines are skilled. Then that's design and engineering, and not strictly manufacturing. Which is what I'm arguing for.
        dmazin 16y ago
        While this makes sense, I don't think the ratio is very high. Workers outnumber engineers by extreme amounts and so a replaced "unskilled" job will necessarily open up less jobs than it will close. No? And the question stands, what to do with those workers? Move them to the facility that builds the robots that displaced them, in a loop? That said, I do not oppose the replacement of workers with robots in any way, as that would be artificially trying to stop the progress of mankind. But what happens to the workers is a serious issue. What are all the people from the closed American car factories doing?
  - TheBlack_knight 16y ago
    The problem is not a BOP deficit, the problem is how we are financing the import of cheap goods from China, and that is in fact cheap money from China. We are currently caught in a sort of circular flow of cheap trade with China and even cheaper money to finance this. We can guarantee that we stay on top of the vertical stack by continuing to innovate by designing and commercializing new products. This is what Joseph A. Schumpeter called creative destruction. How can we stay ahead of other countries in this endeavor? I do not know. Economic theory tells us that national boarders and countries have no significance in economic growth. If we have open countries that allow trade and the movement of capital all countries and people should benefit from new innovation regardless of whether it is made in the USA or in Pakistan. This question was answered nearly 200 years ago by David Ricardo and others. Obviously countries are not completely open to trade, however the trend is toward higher levels of international openness. One need only look at the succes of Singapore. Others will follow slowly. The us vs. them mentality will not get us to the land of milk and honey.
  - philwelch 16y ago
    There's nothing magical about manufacturing, though--the US got cut out of (some) manufacturing because other countries are able to manufacture just as well as we can if not better. There are no guarantees and you have to compete. If you're going to have to pick your battles, pick one that's worth winning. If the US became a nation of engineers and designers and businessmen, that would do more to support a middle class and a high quality of life than if the US went back to being a nation of factory workers and coal miners. And it turns out the US has a lot of things--a vast, high-quality higher education system, a relatively free market, a culture amenable to entrepreneurship--that give us competitive advantages in these fields. What competitive advantage do we have in manufacturing? Maybe the one thing holding us back is a lack of appreciation for great design. Apple is truly an outlier in that respect.
  - ataggart 16y ago
    >Because of our balance of payments crisis. We need to stop our country's net outflow of dollars. I think you've been misinformed: http://www.ideasinactiontv.com/tcs_daily/2006/02/stop-worrying-about-the-trade-deficit.html http://www.ideasinactiontv.com/tcs_daily/2006/02/stop-worryi...
- known 16y ago
  Chinese capitalism = American capitalism - Human rights Indian capitalism = American capitalism + Wage slavery
dstein 16y ago
and basic manufacturing Everybody brings this up, but the reason manufacturing was sent overseas was because of technological progress. If you can't even convince Americans to pick their own peaches anymore, how are you going to convince them to make their own sneakers like they do in Indonesia? cheap renewable energy Coincidentally, the cheap labor overseas might make this a reality in the form of inexpensive thin-film solar panels.
- jganetsk 16y ago
  Manufacturing was sent overseas because of cheap labor and plenty of available raw materials in other countries. Am I wrong? Inexpensive thin-film solar panels made by cheap labor might be a net win, if we spend less on solar panels then we do on oil. We just need balance of payments, we don't need to make EVERYTHING here.
yummyfajitas 16y ago
We are keeping up in terms of manufacturing output. http://research.stlouisfed.org/fred2/series/INDPRO http://research.stlouisfed.org/fred2/series/INDPRO We just do it more efficiently, resulting in lower manufacturing employment. http://research.stlouisfed.org/fred2/series/USAPEFANA http://research.stlouisfed.org/fred2/series/USAPEFANA http://research.stlouisfed.org/fred2/series/OPHMFG http://research.stlouisfed.org/fred2/series/OPHMFG
- jganetsk 16y ago
  Our goal shouldn't be to keep up with China's output, but to keep up with our own input.
javert 16y ago
"Competing" with China is a recipie for disaster. A better strategy is to cooperate with China by allowing mutual free trade. Then, China and the US are one large market, and their success is Americans' success. what America needs to maintain the middle class throughout the 21st century 20th century notions of the "middle class" are probably already becoming obsolete; talking about "throughout" the 21st century is really premature. Going from 2000 to 2100 is like going from 1900 to 2000, but faster. It seems likely that we're moving into more of an "information age" where you will basically have a prosperous and successful "information class" (with a huge variation in income, but even those at the bottom will be living comfortably), and a "labor class" for which there is less and less labor over time. Fortunately, these "classes" are not fundamentally based on birth (as classes were originally envisioned). Also, I think it's perfectly feasible for the size of the "labor class" to shrink at a comfortable rate (i.e., people needing jobs will not outstrip available work to the degree that lots of people have to be living in extreme poverty). But for that to happen, it will be necessary to abandon strong welfare policies in countries with large segments of society that are "stuck" in the "labor class" (America in particular comes to mind). This is just off the cuff thinking... I may want to retract some of this later on.
alphaBetaGamma 16y ago
I don't think developed countries should focuse on being competitive in raw materials and basic manufacturing. Countries that have a substantial percentage of their population that is not very educated have a comparative advantage (in the technical sense [1]) in fields that require a lot of unskilled labor. E.g. raw materials & basic manufacturing. So the developed world will always have a hard time competing with them in these fields. [1] http://en.wikipedia.org/wiki/Comparative_advantage http://en.wikipedia.org/wiki/Comparative_advantage

alex_c 16y ago

Why? Or, more specifically - how will racing China (and every other developing country) to the bottom in the manufacturing game be sufficient to maintain the middle class?

jganetsk 16y ago
Because of our balance of payments crisis. We need to stop our country's net outflow of dollars. Lauding Steve Jobs and trying to reproduce his success won't solve that problem. Suppose we all become designers of hit products that are manufactured abroad. How do we guarantee that the USA doesn't get cut out of the vertical stack? I have total faith that the other countries of the world will be able to innovate and support just as well as we can, if not already.
- alex_c 16y ago
  I understand the economic benefit, but I have yet to see a good explanation of how it might happen. Americans aren't willing to work manufacturing jobs for $5 or even $10 an hour - and you can't support a middle class in the US on $5 or $10 an hour. All manufacturing requires is a decent infrastructure, reasonably stable political and legal system, and a workforce willing to work cheaply enough. Trying to compete against China - and the rest of the world - on those terms for today's market, rather than doing everything in its power to keep its lead and define tomorrow's markets, is the biggest mistake the US could make. Manufacturing is a relatively low skilled job - the expectation that manufacturing = middle class made sense 50 years ago, but not today. Edit: a lot of my thinking on this issue is colored by the book The World is Flat (http://en.wikipedia.org/wiki/The_World_Is_Flat http://en.wikipedia.org/wiki/The_World_Is_Flat). It's a complex issue, and I'm definitely open to new ways of looking at it.
  - J3L2404 16y ago
    Most manufacturing will be done by robots. It will be your job to build and maintain these robots.
  - TheBlack_knight 16y ago
    Manufacturing is not necessarily low skilled. Look to Germany for example, which is a heavy manufacture that uses very advanced factories, some even completely automated. I have no problem having China make goods for us. Manufacturing is usually a dirty process and the jobs can be relatively low paying.
    - dmazin 16y ago
      I'm not sure how your points connect. If factories are becoming automated, then how does that show that the replaced human workers are skilled?
      - TheBlack_knight 16y ago
        The workers who designed and built the machines are skilled. Inefficient jobs are replaced with with new jobs not necessarily in the same industry.
        alex_c 16y ago
        >The workers who designed and built the machines are skilled. Then that's design and engineering, and not strictly manufacturing. Which is what I'm arguing for.
        dmazin 16y ago
        While this makes sense, I don't think the ratio is very high. Workers outnumber engineers by extreme amounts and so a replaced "unskilled" job will necessarily open up less jobs than it will close. No? And the question stands, what to do with those workers? Move them to the facility that builds the robots that displaced them, in a loop? That said, I do not oppose the replacement of workers with robots in any way, as that would be artificially trying to stop the progress of mankind. But what happens to the workers is a serious issue. What are all the people from the closed American car factories doing?
- TheBlack_knight 16y ago
  The problem is not a BOP deficit, the problem is how we are financing the import of cheap goods from China, and that is in fact cheap money from China. We are currently caught in a sort of circular flow of cheap trade with China and even cheaper money to finance this. We can guarantee that we stay on top of the vertical stack by continuing to innovate by designing and commercializing new products. This is what Joseph A. Schumpeter called creative destruction. How can we stay ahead of other countries in this endeavor? I do not know. Economic theory tells us that national boarders and countries have no significance in economic growth. If we have open countries that allow trade and the movement of capital all countries and people should benefit from new innovation regardless of whether it is made in the USA or in Pakistan. This question was answered nearly 200 years ago by David Ricardo and others. Obviously countries are not completely open to trade, however the trend is toward higher levels of international openness. One need only look at the succes of Singapore. Others will follow slowly. The us vs. them mentality will not get us to the land of milk and honey.
- philwelch 16y ago
  There's nothing magical about manufacturing, though--the US got cut out of (some) manufacturing because other countries are able to manufacture just as well as we can if not better. There are no guarantees and you have to compete. If you're going to have to pick your battles, pick one that's worth winning. If the US became a nation of engineers and designers and businessmen, that would do more to support a middle class and a high quality of life than if the US went back to being a nation of factory workers and coal miners. And it turns out the US has a lot of things--a vast, high-quality higher education system, a relatively free market, a culture amenable to entrepreneurship--that give us competitive advantages in these fields. What competitive advantage do we have in manufacturing? Maybe the one thing holding us back is a lack of appreciation for great design. Apple is truly an outlier in that respect.
- ataggart 16y ago
  >Because of our balance of payments crisis. We need to stop our country's net outflow of dollars. I think you've been misinformed: http://www.ideasinactiontv.com/tcs_daily/2006/02/stop-worrying-about-the-trade-deficit.html http://www.ideasinactiontv.com/tcs_daily/2006/02/stop-worryi...
known 16y ago
Chinese capitalism = American capitalism - Human rights Indian capitalism = American capitalism + Wage slavery

dstein 16y ago

and basic manufacturing Everybody brings this up, but the reason manufacturing was sent overseas was because of technological progress. If you can't even convince Americans to pick their own peaches anymore, how are you going to convince them to make their own sneakers like they do in Indonesia? cheap renewable energy Coincidentally, the cheap labor overseas might make this a reality in the form of inexpensive thin-film solar panels.

jganetsk 16y ago
Manufacturing was sent overseas because of cheap labor and plenty of available raw materials in other countries. Am I wrong? Inexpensive thin-film solar panels made by cheap labor might be a net win, if we spend less on solar panels then we do on oil. We just need balance of payments, we don't need to make EVERYTHING here.

yummyfajitas 16y ago

We are keeping up in terms of manufacturing output. http://research.stlouisfed.org/fred2/series/INDPRO http://research.stlouisfed.org/fred2/series/INDPRO We just do it more efficiently, resulting in lower manufacturing employment. http://research.stlouisfed.org/fred2/series/USAPEFANA http://research.stlouisfed.org/fred2/series/USAPEFANA http://research.stlouisfed.org/fred2/series/OPHMFG http://research.stlouisfed.org/fred2/series/OPHMFG

jganetsk 16y ago
Our goal shouldn't be to keep up with China's output, but to keep up with our own input.

javert 16y ago

"Competing" with China is a recipie for disaster. A better strategy is to cooperate with China by allowing mutual free trade. Then, China and the US are one large market, and their success is Americans' success. what America needs to maintain the middle class throughout the 21st century 20th century notions of the "middle class" are probably already becoming obsolete; talking about "throughout" the 21st century is really premature. Going from 2000 to 2100 is like going from 1900 to 2000, but faster. It seems likely that we're moving into more of an "information age" where you will basically have a prosperous and successful "information class" (with a huge variation in income, but even those at the bottom will be living comfortably), and a "labor class" for which there is less and less labor over time. Fortunately, these "classes" are not fundamentally based on birth (as classes were originally envisioned). Also, I think it's perfectly feasible for the size of the "labor class" to shrink at a comfortable rate (i.e., people needing jobs will not outstrip available work to the degree that lots of people have to be living in extreme poverty). But for that to happen, it will be necessary to abandon strong welfare policies in countries with large segments of society that are "stuck" in the "labor class" (America in particular comes to mind). This is just off the cuff thinking... I may want to retract some of this later on.

alphaBetaGamma 16y ago

I don't think developed countries should focuse on being competitive in raw materials and basic manufacturing. Countries that have a substantial percentage of their population that is not very educated have a comparative advantage (in the technical sense [1]) in fields that require a lot of unskilled labor. E.g. raw materials & basic manufacturing. So the developed world will always have a hard time competing with them in these fields. [1] http://en.wikipedia.org/wiki/Comparative_advantage http://en.wikipedia.org/wiki/Comparative_advantage