The Manufactured ‘Decline’ of Manufacturing

Plus the death of Navalny, and why "You're not allowed to give up."

Gosh, it’s a shame we’re not making washing machines, instead.

I have a new article up at Discourse that I will discuss first, but below that I’ll address some breaking news about the death—or I should say murder—of Russian dissident Alexei Navalny, as well as the antics of Vladimir Putin’s new court jester, Tucker Carlson.

But first the new article, in which I address in some detail the persistent hysteria over the “decline” of US manufacturing. For as long as I can remember, such claims have been a staple for advocates of government central planning (under the guise of “industrial policy”) on both the left and the right.

The problem? US industrial output is not in decline.

Manufacturing output in the United States is somewhere around $2.5 trillion per year, bouncing back to approach its all-time (inflation-adjusted) high in 2007 after recovering from the shocks of the financial crisis and the COVID pandemic. This follows decades of steady increases in output, even during the years people were singing songs about “closing all the factories down” and moaning about the Rust Belt. The term “Rust Belt” itself dates, by some accounts, to then-presidential candidate Walter Mondale complaining about the declining state of the economy—in 1984, during the middle of the Reagan boom.

Just like other sectors of the economy, manufacturing has suffered temporary declines during recessions. But it has always bounced back to new heights. A recent must-read analysis by the Cato Institute’s Colin Grabow sums it up: “In 2021, [the U.S.] ranked second in the share of global manufacturing output at 15.92 percent—greater than Japan, Germany, and South Korea combined—and the sector by itself would constitute the world’s eighth‐​largest economy.”

I make several references to Colin Grabow’s Cato Institute report. I had been planning to write this piece for a while, but that report was a tremendous help in gathering together some of the data I needed and confirming my own analysis, so check it out.

And yes, I also address the idea that China has “taken away” manufacturing from the US, pointing out that while China’s manufacturing industry is larger than ours, they have more than four times the population. “On a per capita basis, we have more than twice their industrial output. China sounds less impressive when you put it that way, doesn’t it?” China has mostly dominated low-end, low-skill manufacturing, which explains why China is still a very poor country compared to the United States.

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So why the narrative of a manufacturing “decline”? What has actually been declining is not output but employment—and even then, not so much in absolute numbers

Once you see this pattern, you won’t be able to unsee it. Look at everything people are saying about the “decline” of manufacturing, and they never talk about manufacturing output, the value of what we’re actually making. Even when they talk about manufacturing employment, they tend not to talk about absolute numbers but about percentages, about what proportion of the workforce is in manufacturing.

When you think about it, this is a crazy way to measure the state of an industry or an economy. Suppose we applied this to agriculture. If you asked someone about the state of agriculture in the United States, they could tell you that in 1800, almost three-quarters of the population worked on farms, while today it is less than 2%. Agriculture has collapsed, you would conclude, and therefore we all must be starving. But agricultural output has continually increased, nearly tripling just between 1948 and 2015. The cost of food has gone down, and Americans rather conspicuously struggle with obesity, not starvation.

I attribute the false narrative of decline to conservatism in its most elemental form: a desire to cling to the past instead of to pursue the future.

People are not upset because something like manufacturing employment is actually shrinking or has become impossible to get or to do. They are upset because it is no longer dominant; it is no longer the norm….

We want our neighborhood, our jobs, and our social roles to remain as we remember them in whatever era is locked into our brains as the norm: maybe when we were kids, or when we were in our prime working years. Or worse, we want the world to be the way we imagine it used to be.

But clinging to the past is the surest way to achieve actual decline.

Read the whole thing.

The Manufactured ‘Decline’ of Manufacturing

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The Court Jester

The news broke this morning of the death in prison of Soviet dissident—excuse me, Russian dissident Alexei Navalny. But to provide a stark, almost literary contrast to Navalny’s story, we were presented for days ahead of time with the spectacle of a very different kind of man.