Related to my post here, Tim Worstall makes the observation more broadly:

One of the things that people worry about, complain about, is the so called decline of manufacturing in the industrially advanced countries. The feeling seems to be that we've somehow packed up all the jobs into boxes and sent them off to China. Thus a suspicion of globalisation and trade in general.

The only slight problem with this is that there hasn't in fact been a decline in manufacturing output. For the UK it's flatlined over the past three or four years, it is true, but in the US manufacturing continues to grow.What has indeed fallen is manufacturing employment as these charts show.

Further, those charts show the reason why output continues upwards while employment falls: we're getting better at making things. Thus productivity rises and we need the labour of fewer people to make those physical things which we desire. We then also get the extra production of those people who go and do something else other than manufacturing: whether they go off and dig ditches or write software doesn't matter, we get both that production and the manufactures. This is the process known as us becoming richer, we've got more stuff to share around.

I wish I'd written that last paragraph.

(P.S., for those thinking I should be writing something else, this burst of activity is due to the book manuscript being shipped to the publisher! Physical exhaustion to come in a few moments, hopefully preceded by a bottle of scotch that's been waiting...cigar will wait for warmer weather.)

Labels: economics