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New Industrial Age: America Should Once Again Become a Manufacturing Superpower

9 points by eternalban 4y ago

eternalban 4y ago
https://archive.is/54FCx https://archive.is/54FCx
deleted 4y ago
[deleted]
mikewarot 4y ago
China is about to collapse. Globalism is unwinding. The US will be doubling our manufacturing base in the next decade to take up the slack.
- krapp 4y ago
  What makes you think there will be slack to take up? We're heading into a recession-maybe-depression and collapse of the global ecosystem. We're going to lose generations of knowledge due to population decline and bit-rot. There probably won't be a "manufacturing superpower" after China because maintaining coherent societies at that scale, without the food, technology, education and infrastructure necessary to underpin it, will no longer be possible.
  - mikewarot 4y ago
    There will be things no longer available as China effectively vanishes from global trade. Apple will have to completely rebuild their production lines, for example. There are many things that have inelastic demand, and are required to keep the rest of the supply chains going, such as machine tool production, etc. My home state of Indiana is making more pig iron than ever before, helping to fill in the missing supplies that used to come from Russia, for example. Someone was on the ball and forecast things correctly, and started building this stuff a decade ago.
Iwan-Zotow 4y ago
And who is going to buy all those things?
jjk166 4y ago
The US is already a manufacturing superpower. People point to the US losing manufacturing jobs and China gaining manufacturing jobs within a few years of one another and claim the jobs moved from the US to China. They didn't. Sure its easy to see evidence of job loss in America - data shows overall employment in sectors like steel manufacturing plummeted. Plus there are tons of old steel mills that got shut down, destroying towns particularly in the rust belt. Surely those jobs had to go somewhere? Well no. Look at US productivity - despite much lower employment, we're making more stuff now than we ever were. US steelmaking capacity, for example, is the highest it's ever been, we have a huge number of active steel mills, and a record number are currently being built to further expand this. Likewise if you look at productivity in China, there were massive increases, but these increases happen years after the decrease in American employment. If production were simply moving overseas, that would imply years where nothing was being produced at all, which obviously was not the case. Further, the decreases in US employment do not correspond to increased imports. Indeed for many industrial goods, US imports actually dropped. In the particular case of steel, US imports have been falling for all countries except Brazil (which again is seeing the same employment trends as the US), and China isn't even a major source of steel. Further, the decrease in employment was not unique to the US. Similar decreases in employment are seen world wide at the same time, for example the steel industries of Brazil and South Africa. These facts are all easily reconciled when you consider that the methods we make things have changed. In the specific case of steel production, in 1921 it took 3 man hours to produce a ton of steel, in 2021 a single man hour of labor made 300 tons of steel. Further this steel is of higher quality, both in terms of better alloys and better consistency. Improved technology made production more efficient. But more than that, transportation became cheaper, populations moved to new areas, and people's consumption habits changed. Car production for example in the US is at an all time low, but we're not buying Chinese cars, we're just buying fewer cars. Those rust belt factories shut down and laid off their workforces, not so identical factories could be built in China, but so much more advanced factories could be built in the sun belt. What about the massive growth in employment in China? Simple. China grew. There are both a lot more people in China looking for work, but also there is a lot more money in China looking to be spent. China needed steel for its own booming industry, so it built steel plants. But being technologically behind and having a very different labor situation, these were not the super efficient ones like were being made in western nations, but the old and labor intensive ones. China has a manufacturing sector that looks like the one the US used to have because China is at the point where the US used to be. But what about the trade deficit? You can easily find tons of stuff in the US that was made in china - particularly cheap plastic knick knacks and consumer electronics. But the issue is these items were never made in the US to begin with. There was never a smart TV factory in the US that shut down and moved its operations to China, instead it was the unique situation of the extremely cheap but appropriately skilled labor that made these cheap consumer goods possible in the first place. Perhaps the argument could be made that under different circumstances those jobs would have arisen in the US instead, but how many Americans do you know are craving to work in consumer electronics production? And at the same time that we talk about reshoring jobs, who is going to work them? US unemployment is at an all time low - people are already working jobs. Oftentimes they're working 2 or 3. There's a pervasive belief that since people could make a good living in the US working manufacturing jobs 50 years ago, a return of manufacturing will make it the same today. And yeah, a machinist with 20 years experience would probably make good money, but the 40 year assistant manager at Target moonlighting as an uber driver isn't going to be starting their manufacturing career with 20 years experience, they're going to be starting at the entry level, which is probably a considerable step back in terms of salary and prestige. Further, as stated above, things have changed. The skills most people had which were useful in manufacturing 50 years ago are no longer widely taught, and manufacturing practices have changed such that new skillsets would be required anyways. As the article notes, the good manufacturing jobs 50 years ago were union jobs, whereas most service sector jobs today are not, but there's a reason those service sector jobs aren't unionized, and its the same reason new manufacturing jobs won't be. Any job that was being done for $2 per day by a guy in China is probably going to be a very undesirable job here in the US. Some people would certainly just like to make something (I'm one of those people) but the fact is American manufacturers are already struggling to find workers despite offering high wages. Finally, there's an argument to be made about national security - if your supply chain goes overseas, you are at the mercy of the people who make your stuff, right? Again, this is an over simplistic view. You have to consider what exactly people make. For example in the semiconductor industry a huge number of chips are made overseas whereas US chipmaking capacity is quite limited. However if you look at who makes the precision machines and their subcomponents necessary to make the chips, everything is made in the US, Japan, and western Europe. So too for the even more precise machines necessary to make those machines. Sure economically the amount of tax revenue coming from the sale of one such machine is a pittance compared to the billions of chips it may make, but in terms of geopolitical value it is immense. If China gets mad and stops trade, US supply lines are disrupted for months; if the US gets mad and stops trade, China's supply lines are disrupted for decades. None of this is to say that the status quo of the past 30 years will or should remain, quite the contrary change is both inevitable and generally desirable. It's just important to understand what change means - the nice union manufacturing job that let your dad with only a highschool education comfortably raise a family of 4 on a single income in a great lakes suburban home is not going to be available for you, and no protectionist policy is going to make it so. Economic woes in China will mostly mean fewer jobs globally. Goods made in China won't generally be made in the US, they'll just stop being made, or at least not at their current scale. What few jobs do was up on US shores will likely be located in the same places and look quite similar to current US manufacturing jobs. This may be good for those already in manufacturing, as they now have new potential employment opportunities, but old opportunities may go away as the decrease in cheap crap decreases the demand for the expensive crap that was consumed along with it. The US may have fallen to 2nd place in terms of industrial capacity, but it is still more than the 3rd, 4th, and 5th place countries combined - there's a lot more room for it to fall than to rise in any given disruption of the status quo.
082349872349872 4y ago
(a) Last time America was a Manufacturing Superpower, it was because all the competition had bombed itself to rubble, twice in the same century. I don't see internal volition recreating the external conditions forged during 1914-1945. (b) When the Plaza Accords were decided, they only needed G5 buy in to execute. To do something similar today (because the G5 is proportionally much smaller) would take buy in from nearly the entire G20. (and in the specific case of Germany: it is already reunited, so someone would have to come up with a new carrot) (c) China needs a Belt and Road, because it needs an alternative export path to ocean shipping lanes which the US Navy can choke at will. The US has a Navy (as well as sundry client oil states to supply its Navy's logistical tail); it might be interested in a Belt and Road but definitely does not need one in the same way.
- eternalban 4y ago
  A few comments: (a) America and Germany were both unmatched industrial powers from late 19th century. Two world wars later and US emerged as the sole industrial power. The article is arguing for US to rejoin the industrial powerhouse set. (b) V. V. Putin and "partners" have set into motion a sort of historic locomotive. So far the thing has arrived if not departed from the station of 'burning bridges for EU'. If you read the article, it notes that Germany had prudently applied a two pronged approach for dealing with globalization: retaining component level (parts) manufacturing, and comprehensively (re)training its workforce for a new economic regime. What the article doesn't mention (though hints at by recalling Angela M's "we still make things" remark to an apparently confused Tony Blair) is the third prong of what was actually a trident: an energy 'stream' that did not require the services (or good graces) of United States Navy and client friends. That prong is gone now, and higher energy costs coupled with "Plaza Accord" type of "negotiations" (a scene from Godfather comes to mind) they enable, should make for a responsive set of allies. That said, the article advised negotiations with the Chinese, which does not compute on my end (unless the author is privy to information not available to the general public). (c)above
  - 082349872349872 4y ago
    Fair enough, if I understand your position on (b) and (c) correctly it is that while there may not be much carrot in evidence, there remains plenty of stick? Just a note as to (a): my understanding is that had Germany avoided 1914 and its sequelae, it would've (purely by extrapolation of existing growth curves and ignoring the chances that the UK would've turned from benign opposition ["Made In Britain"] to malicious [the Royal Navy having been, pre-Suez, what the USN is now]) peacefully passed the Empire in manufacturing over the course of the XX. My parenthetical reservations apart, historians' consensus take on the why of 1914 boils down to "people are stupid". [Edit: my memory tells me that the US accounted for ~50% of global manufacturing in 1960 (down from some huge percentage in 1948!). This number is amazingly difficult to confirm (the unpaywalled net being very biased towards recent time series), but if one compares to the 2015 figures of Table 1 in https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/ https://www.brookings.edu/research/global-manufacturing-scor... , if the US wished to return to its golden age, it would have to somehow replace not only China (20%) but also all of either Japan (10%) or Germany+France (7+3%). Assuming the Chinese are unlikely to follow voluntarily in such a scenario, it would take total replacement of Japan+Germany+South Korea+India+France+Italy+UK for the US to, from its current 18%, hit 50%] Edit2: the previous Edit pretty much just recapitulates https://news.ycombinator.com/item?id=34254640 https://news.ycombinator.com/item?id=34254640

9 points by eternalban 4y ago

eternalban 4y ago

https://archive.is/54FCx https://archive.is/54FCx

deleted 4y ago

[deleted]

mikewarot 4y ago

China is about to collapse. Globalism is unwinding. The US will be doubling our manufacturing base in the next decade to take up the slack.

krapp 4y ago
What makes you think there will be slack to take up? We're heading into a recession-maybe-depression and collapse of the global ecosystem. We're going to lose generations of knowledge due to population decline and bit-rot. There probably won't be a "manufacturing superpower" after China because maintaining coherent societies at that scale, without the food, technology, education and infrastructure necessary to underpin it, will no longer be possible.
- mikewarot 4y ago
  There will be things no longer available as China effectively vanishes from global trade. Apple will have to completely rebuild their production lines, for example. There are many things that have inelastic demand, and are required to keep the rest of the supply chains going, such as machine tool production, etc. My home state of Indiana is making more pig iron than ever before, helping to fill in the missing supplies that used to come from Russia, for example. Someone was on the ball and forecast things correctly, and started building this stuff a decade ago.

Iwan-Zotow 4y ago

And who is going to buy all those things?

jjk166 4y ago

The US is already a manufacturing superpower. People point to the US losing manufacturing jobs and China gaining manufacturing jobs within a few years of one another and claim the jobs moved from the US to China. They didn't. Sure its easy to see evidence of job loss in America - data shows overall employment in sectors like steel manufacturing plummeted. Plus there are tons of old steel mills that got shut down, destroying towns particularly in the rust belt. Surely those jobs had to go somewhere? Well no. Look at US productivity - despite much lower employment, we're making more stuff now than we ever were. US steelmaking capacity, for example, is the highest it's ever been, we have a huge number of active steel mills, and a record number are currently being built to further expand this. Likewise if you look at productivity in China, there were massive increases, but these increases happen years after the decrease in American employment. If production were simply moving overseas, that would imply years where nothing was being produced at all, which obviously was not the case. Further, the decreases in US employment do not correspond to increased imports. Indeed for many industrial goods, US imports actually dropped. In the particular case of steel, US imports have been falling for all countries except Brazil (which again is seeing the same employment trends as the US), and China isn't even a major source of steel. Further, the decrease in employment was not unique to the US. Similar decreases in employment are seen world wide at the same time, for example the steel industries of Brazil and South Africa. These facts are all easily reconciled when you consider that the methods we make things have changed. In the specific case of steel production, in 1921 it took 3 man hours to produce a ton of steel, in 2021 a single man hour of labor made 300 tons of steel. Further this steel is of higher quality, both in terms of better alloys and better consistency. Improved technology made production more efficient. But more than that, transportation became cheaper, populations moved to new areas, and people's consumption habits changed. Car production for example in the US is at an all time low, but we're not buying Chinese cars, we're just buying fewer cars. Those rust belt factories shut down and laid off their workforces, not so identical factories could be built in China, but so much more advanced factories could be built in the sun belt. What about the massive growth in employment in China? Simple. China grew. There are both a lot more people in China looking for work, but also there is a lot more money in China looking to be spent. China needed steel for its own booming industry, so it built steel plants. But being technologically behind and having a very different labor situation, these were not the super efficient ones like were being made in western nations, but the old and labor intensive ones. China has a manufacturing sector that looks like the one the US used to have because China is at the point where the US used to be. But what about the trade deficit? You can easily find tons of stuff in the US that was made in china - particularly cheap plastic knick knacks and consumer electronics. But the issue is these items were never made in the US to begin with. There was never a smart TV factory in the US that shut down and moved its operations to China, instead it was the unique situation of the extremely cheap but appropriately skilled labor that made these cheap consumer goods possible in the first place. Perhaps the argument could be made that under different circumstances those jobs would have arisen in the US instead, but how many Americans do you know are craving to work in consumer electronics production? And at the same time that we talk about reshoring jobs, who is going to work them? US unemployment is at an all time low - people are already working jobs. Oftentimes they're working 2 or 3. There's a pervasive belief that since people could make a good living in the US working manufacturing jobs 50 years ago, a return of manufacturing will make it the same today. And yeah, a machinist with 20 years experience would probably make good money, but the 40 year assistant manager at Target moonlighting as an uber driver isn't going to be starting their manufacturing career with 20 years experience, they're going to be starting at the entry level, which is probably a considerable step back in terms of salary and prestige. Further, as stated above, things have changed. The skills most people had which were useful in manufacturing 50 years ago are no longer widely taught, and manufacturing practices have changed such that new skillsets would be required anyways. As the article notes, the good manufacturing jobs 50 years ago were union jobs, whereas most service sector jobs today are not, but there's a reason those service sector jobs aren't unionized, and its the same reason new manufacturing jobs won't be. Any job that was being done for $2 per day by a guy in China is probably going to be a very undesirable job here in the US. Some people would certainly just like to make something (I'm one of those people) but the fact is American manufacturers are already struggling to find workers despite offering high wages. Finally, there's an argument to be made about national security - if your supply chain goes overseas, you are at the mercy of the people who make your stuff, right? Again, this is an over simplistic view. You have to consider what exactly people make. For example in the semiconductor industry a huge number of chips are made overseas whereas US chipmaking capacity is quite limited. However if you look at who makes the precision machines and their subcomponents necessary to make the chips, everything is made in the US, Japan, and western Europe. So too for the even more precise machines necessary to make those machines. Sure economically the amount of tax revenue coming from the sale of one such machine is a pittance compared to the billions of chips it may make, but in terms of geopolitical value it is immense. If China gets mad and stops trade, US supply lines are disrupted for months; if the US gets mad and stops trade, China's supply lines are disrupted for decades. None of this is to say that the status quo of the past 30 years will or should remain, quite the contrary change is both inevitable and generally desirable. It's just important to understand what change means - the nice union manufacturing job that let your dad with only a highschool education comfortably raise a family of 4 on a single income in a great lakes suburban home is not going to be available for you, and no protectionist policy is going to make it so. Economic woes in China will mostly mean fewer jobs globally. Goods made in China won't generally be made in the US, they'll just stop being made, or at least not at their current scale. What few jobs do was up on US shores will likely be located in the same places and look quite similar to current US manufacturing jobs. This may be good for those already in manufacturing, as they now have new potential employment opportunities, but old opportunities may go away as the decrease in cheap crap decreases the demand for the expensive crap that was consumed along with it. The US may have fallen to 2nd place in terms of industrial capacity, but it is still more than the 3rd, 4th, and 5th place countries combined - there's a lot more room for it to fall than to rise in any given disruption of the status quo.

082349872349872 4y ago

(a) Last time America was a Manufacturing Superpower, it was because all the competition had bombed itself to rubble, twice in the same century. I don't see internal volition recreating the external conditions forged during 1914-1945. (b) When the Plaza Accords were decided, they only needed G5 buy in to execute. To do something similar today (because the G5 is proportionally much smaller) would take buy in from nearly the entire G20. (and in the specific case of Germany: it is already reunited, so someone would have to come up with a new carrot) (c) China needs a Belt and Road, because it needs an alternative export path to ocean shipping lanes which the US Navy can choke at will. The US has a Navy (as well as sundry client oil states to supply its Navy's logistical tail); it might be interested in a Belt and Road but definitely does not need one in the same way.

eternalban 4y ago
A few comments: (a) America and Germany were both unmatched industrial powers from late 19th century. Two world wars later and US emerged as the sole industrial power. The article is arguing for US to rejoin the industrial powerhouse set. (b) V. V. Putin and "partners" have set into motion a sort of historic locomotive. So far the thing has arrived if not departed from the station of 'burning bridges for EU'. If you read the article, it notes that Germany had prudently applied a two pronged approach for dealing with globalization: retaining component level (parts) manufacturing, and comprehensively (re)training its workforce for a new economic regime. What the article doesn't mention (though hints at by recalling Angela M's "we still make things" remark to an apparently confused Tony Blair) is the third prong of what was actually a trident: an energy 'stream' that did not require the services (or good graces) of United States Navy and client friends. That prong is gone now, and higher energy costs coupled with "Plaza Accord" type of "negotiations" (a scene from Godfather comes to mind) they enable, should make for a responsive set of allies. That said, the article advised negotiations with the Chinese, which does not compute on my end (unless the author is privy to information not available to the general public). (c)above
- 082349872349872 4y ago
  Fair enough, if I understand your position on (b) and (c) correctly it is that while there may not be much carrot in evidence, there remains plenty of stick? Just a note as to (a): my understanding is that had Germany avoided 1914 and its sequelae, it would've (purely by extrapolation of existing growth curves and ignoring the chances that the UK would've turned from benign opposition ["Made In Britain"] to malicious [the Royal Navy having been, pre-Suez, what the USN is now]) peacefully passed the Empire in manufacturing over the course of the XX. My parenthetical reservations apart, historians' consensus take on the why of 1914 boils down to "people are stupid". [Edit: my memory tells me that the US accounted for ~50% of global manufacturing in 1960 (down from some huge percentage in 1948!). This number is amazingly difficult to confirm (the unpaywalled net being very biased towards recent time series), but if one compares to the 2015 figures of Table 1 in https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/ https://www.brookings.edu/research/global-manufacturing-scor... , if the US wished to return to its golden age, it would have to somehow replace not only China (20%) but also all of either Japan (10%) or Germany+France (7+3%). Assuming the Chinese are unlikely to follow voluntarily in such a scenario, it would take total replacement of Japan+Germany+South Korea+India+France+Italy+UK for the US to, from its current 18%, hit 50%] Edit2: the previous Edit pretty much just recapitulates https://news.ycombinator.com/item?id=34254640 https://news.ycombinator.com/item?id=34254640