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> the tradability of manufactured goods means that there are no such automatic limits to manufacturing growth This statement seems at odds with the rest of the

> the tradability of manufactured goods means that there are no such automatic limits to manufacturing growth This statement seems at odds with the rest of the piece. The problem with manufacturing as a development strategy (and I agree with the opening - it's the only proven development strategy) is that not everyone can manufacture. You'd have too many goods! I've always disagreed with the economic belief that demand is infinite and only constrained by supply. As others in this thread have alluded to, our material progress (as opposed to digital progress) began to slow down in the 1970s. I think part of this is that to a large extent people's material needs in developed countries were met by things like plumbing and electrification. I use developed countries here both as an example of economic trends at the frontier, and as the most likely consumers of industrial goods given their wealth. Of course that leaves the needs of 90% of people in developing countries unmet, but as the article explains China supplied those needs after 1979. Manufacturing is efficient and one factory worker can meet the material needs of 1+N consumers. The whole world can't work in factories because there isn't enough demand for all those manufactured goods. Just look at the global steel industry. A lot of people are too poor to engage in global trade, and manufacturers of any extraction will not give away their wares. Development, unlike the global phenomenon observed from 1945-1975, seems more like taking turns being the workshop of the world. 1980-2020 was China's turn.

bruce343434 4y ago
> one factory worker can meet the material needs of 1+N consumers. Non native speaker here from the Netherlands. What meaning is implied in your usage of 1+N?
- jackcosgrove 4y ago
  N being a positive number, maybe fractional. So one factory worker assembling sinks can supply sinks for five households. Of course there's a team of workers assembling the sinks, but you get the idea. In this example N=4.
  - bruce343434 4y ago
    but why +1? Is this an obscure reference to the N+1 problem that ORMs face?
    - rbetts 4y ago
      The worker (1) + N more...
    - Michelangelo11 4y ago
      I think it's just supposed to mean "that one worker can provide stuff for more than one person," i.e. manufacturing scales.
rcme 4y ago
I think there is massive demand for goods (maybe not infinite), but demand is largely constrained by supply. I could think of hundreds of things I would love to own, but can't, due to the expense. If there was more supply, the prices would be lower, and I could consume more.
ummonk 4y ago
You're assuming that manufacturing growth has to be primarily export-led, as China's was. But that wasn't how many of the other industrialization success stories kicked off their manufacturing industry - they did so by starting out primarily producing for domestic markets. There, there is high latent demand that can be bootstrapped via industrialization.
- dirtyid 4y ago
  >that wasn't how many of the other industrialization success stories Within context of modern developement, i.e. post ww2, where development is rapid industrialization in a few generations, success stories are essentially the Asian Tigers who hammered export led growth to accumulate foreign reserve (usd) then spend to accumulate increasingly expensive capital to make modern goods, throw in some industrial policy to protect native industries without pissing off trade partners (almost benefactors) who can turn off the FX / even tech transfer tap. Very few developing countries have the resources to bootstrap without bringing in foreign cash to buy foreign capital to bootstrap industrialization. Otherwise they start at essentially square one, for which the products are uncompetitive enough relative to imports from sufficiently industrialized economies that there is little latent demand, unless you go NK autarky route. It's the difference between saving up for decades vs taking out a loan and starting right away.
- rramadass 4y ago
  +1. Also every developing country needs its own base manufacturing industry in somethings to give it some degree of autonomy in deciding its own future.
  - eru 4y ago
    Why? Australia did well on the back of exporting commodities. They seem to be able to decide their own future just fine. At least not worse than anyone else. (They had a bit of manufacturing, but it was mostly ill-fated. A substantial portion came from misguided attempts at industrial policy.)
    - 4y ago
zozbot234 4y ago
> not everyone can manufacture. You'd have too many goods! This is not a factor; even when there isn't any demand for more manufactured goods in an absolute sense, there's plenty of demand for increased product variety and differentiation, which requires extra labor and capital to supply.
dirtyid 4y ago
Also consider PRC manufacturing + secondary industry sectors roughly peaking at ~300M for both domestic and global demand. Past decades of global demand wasn't enough to lift 1.4B PRC into higher income like other Asian Tigers, and PRC industrial policy + automation means they intend to hold on to as much industries as possible. Going forward, there's going to be less manufacturing jobs to spread around. Some small/medium size countries can grab their workshop turn, but I think with return of big bloc industrial policy, especially for strategic sectors, very few will get chance to build up to high end manufacturing / high income.
rramadass 4y ago
Building a Manufacturing Industrial Base in at least some Goods is mandatory for every Developing country. The Services Industry will always be disrupted by emerging technologies and hence is not reliable to base an Economy on. It is also the case that only Manufacturing can absorb Unskilled Labour which is the main problem in developing countries. The Covid pandemic and Ukraine-Russia war has exposed the weaknesses inherent in the "Global Economy" where a single problem affects the entire World due to everything being interlinked together. This is further intensified by the self-interest/selfishness/hypocrisy of the developed Western countries since they have managed to engineer the system to their benefit while short shrifting the developing countries.

bruce343434 4y ago

> one factory worker can meet the material needs of 1+N consumers. Non native speaker here from the Netherlands. What meaning is implied in your usage of 1+N?

jackcosgrove 4y ago
N being a positive number, maybe fractional. So one factory worker assembling sinks can supply sinks for five households. Of course there's a team of workers assembling the sinks, but you get the idea. In this example N=4.
- bruce343434 4y ago
  but why +1? Is this an obscure reference to the N+1 problem that ORMs face?
  - rbetts 4y ago
    The worker (1) + N more...
  - Michelangelo11 4y ago
    I think it's just supposed to mean "that one worker can provide stuff for more than one person," i.e. manufacturing scales.

rcme 4y ago

I think there is massive demand for goods (maybe not infinite), but demand is largely constrained by supply. I could think of hundreds of things I would love to own, but can't, due to the expense. If there was more supply, the prices would be lower, and I could consume more.

ummonk 4y ago

You're assuming that manufacturing growth has to be primarily export-led, as China's was. But that wasn't how many of the other industrialization success stories kicked off their manufacturing industry - they did so by starting out primarily producing for domestic markets. There, there is high latent demand that can be bootstrapped via industrialization.

dirtyid 4y ago
>that wasn't how many of the other industrialization success stories Within context of modern developement, i.e. post ww2, where development is rapid industrialization in a few generations, success stories are essentially the Asian Tigers who hammered export led growth to accumulate foreign reserve (usd) then spend to accumulate increasingly expensive capital to make modern goods, throw in some industrial policy to protect native industries without pissing off trade partners (almost benefactors) who can turn off the FX / even tech transfer tap. Very few developing countries have the resources to bootstrap without bringing in foreign cash to buy foreign capital to bootstrap industrialization. Otherwise they start at essentially square one, for which the products are uncompetitive enough relative to imports from sufficiently industrialized economies that there is little latent demand, unless you go NK autarky route. It's the difference between saving up for decades vs taking out a loan and starting right away.
rramadass 4y ago
+1. Also every developing country needs its own base manufacturing industry in somethings to give it some degree of autonomy in deciding its own future.
- eru 4y ago
  Why? Australia did well on the back of exporting commodities. They seem to be able to decide their own future just fine. At least not worse than anyone else. (They had a bit of manufacturing, but it was mostly ill-fated. A substantial portion came from misguided attempts at industrial policy.)
  - 4y ago

zozbot234 4y ago

> not everyone can manufacture. You'd have too many goods! This is not a factor; even when there isn't any demand for more manufactured goods in an absolute sense, there's plenty of demand for increased product variety and differentiation, which requires extra labor and capital to supply.

dirtyid 4y ago

Also consider PRC manufacturing + secondary industry sectors roughly peaking at ~300M for both domestic and global demand. Past decades of global demand wasn't enough to lift 1.4B PRC into higher income like other Asian Tigers, and PRC industrial policy + automation means they intend to hold on to as much industries as possible. Going forward, there's going to be less manufacturing jobs to spread around. Some small/medium size countries can grab their workshop turn, but I think with return of big bloc industrial policy, especially for strategic sectors, very few will get chance to build up to high end manufacturing / high income.

rramadass 4y ago

Building a Manufacturing Industrial Base in at least some Goods is mandatory for every Developing country. The Services Industry will always be disrupted by emerging technologies and hence is not reliable to base an Economy on. It is also the case that only Manufacturing can absorb Unskilled Labour which is the main problem in developing countries. The Covid pandemic and Ukraine-Russia war has exposed the weaknesses inherent in the "Global Economy" where a single problem affects the entire World due to everything being interlinked together. This is further intensified by the self-interest/selfishness/hypocrisy of the developed Western countries since they have managed to engineer the system to their benefit while short shrifting the developing countries.