manufacturing employment

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Once the American Dream: Inner-Ring Suburbs of the Metropolitan United States by Bernadette Hanlon

big-box store, correlation coefficient, deindustrialization, desegregation, edge city, feminist movement, housing crisis, illegal immigration, informal economy, longitudinal study, low skilled workers, low-wage service sector, manufacturing employment, McMansion, New Urbanism, Silicon Valley, statistical model, The Chicago School, transit-oriented development, urban sprawl, white flight, working-age population, zero-sum game

Another two were located in the Northeast, one was in Pittsburgh, and the other was in Philadelphia. Many of these bluecollar suburbs saw manufacturing employment decline on a dramatic scale, including Dixmoor outside Chicago, Trainer outside Philadelphia, 4 There were twenty-four in total, but four of these suburbs had very small populations (fewer than two hundred residents in 1980), which exaggerated the poverty-rate changes from 1980 to 2000. Declining Inner-Ring Suburbs / 77 Versailles outside Pittsburgh, and Riverview outside St. Louis. In the case of Riverview, for instance, the poverty rate increased from 6 percent in 1980 to 17 percent in 2000. During the same period, manufacturing employment declined from 34 percent to 14 percent of total employment. Combined with this labor-market change, the suburb lost four out of every ten white residents, and the black population increased from 3 percent to 39 percent between 1980 and 2000.

Serverstal recently shutdown its Wheeling, West Virginia, plant, and, although there are no immediate plans to halt operations at Sparrows Point, the threat looms large. Unemployment in communities like Dundalk has been the downside of a more general decline in heavy industry. Dundalk has experienced dramatic declines in manufacturing employment, particularly since the 1970s. In 1970, about half of Dundalk’s workers were employed in manufacturing. By 2000, manufacturing employment had declined to just 16 percent of total employment. Unemployment rates were 6 percent for white males and more than 16 percent for African American males by 2000. As with many working-class inner-ring suburbs, Dundalk has experienced the effects of deindustrialization. With the loss of its industrial base, this suburb has experienced income declines and poverty increases.

Hammond was an integral part of Chicago’s industrial history and an important center for the manufacture of steel and petroleum products, chemicals, soaps, and machinery and transportation equipment. Beginning in the 1960s and 1970s, the industrial and commercial base of this suburb began to decline, particularly with the erosion of steel and subsidiary industries throughout the Midwest. Hammond, along with the central city of Gary immediately to the east, is described as a “classic deindustrializing center,” characterized by declining manufacturing employment and decreasing population (Negrey and Zickel 1994). From 1980 to 2000, the population of Hammond declined by more than 10,000 people, a loss of more than one in ten residents. Hammond contrasts with the outer suburb of Schaumburg, also in the Chicago metropolitan area. This suburb has been identified as a major employment center (McDonald and Prather 1994). Close to O’Hare International Airport, Schaumburg has a large manufacturing base.


pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

"Robert Solow", Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, business cycle, capital controls, complexity theory, computer age, computerized trading, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, financial deregulation, financial independence, floating exchange rates, future of work, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, James Watt: steam engine, job automation, job-hopping, John Markoff, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, Leonard Kleinrock, longitudinal study, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-industrial society, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Robert Gordon, Robert Metcalfe, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, zero-sum game

The story is a very different one in the 1970–90 period, when the process of economic restructuring and technological transformation which took place during these two decades led to a reduction of manufacturing employment in all countries (see tables 4.1–4.14 in Appendix A). However, while this trend was general, the shrinkage of manufacturing employment was uneven, clearly indicating the fundamental variety of social structures according to differences in economic policies and in firms’ strategies. Thus, while the United Kingdom, the United States, and Italy experienced rapid de-industrialization (reducing the share of their manufacturing employment in 1970–90 from 38.7 to 22.5 percent; from 25.9 to 17.5 percent; from 27.3 to 21.8 percent, respectively), Japan and Germany reduced their share of manufacturing labor force moderately: from 26.0 to 23.6 percent in the case of Japan, and from 38.6 percent to a still rather high level of 32.2 percent in 1987 in the case of Germany.

I have chosen to elaborate on the basis of the 1987 projection because, while being equally reliable, it is more detailed in its breakdown by industries and reaches out to 2005.17 The most significant feature of these projections is the slow decline of manufacturing employment in Japan in spite of the acceleration of the transformation of Japan into an informational society. In the 1987 statistical projection, manufacturing employment stood at 25.9 percent in 1985 and was projected to remain at 23.9 percent of total employment in 2005. As a reminder, in the US projection, manufacturing employment was expected to decline from 17.5 percent in 1990 to 14 percent in 2005, a much sharper decline from a substantially lower base. Japan achieves this relative stability of manufacturing jobs by compensating declines in the traditional sectors with actual increases in the newest sectors.

The major analytical distinction between the two periods stems from the fact that during the first period the societies under consideration became post-agricultural, while in the second period they became post-industrial. I understand obviously by such terms the massive decline of agricultural employment in the first case and the rapid decline of manufacturing employment in the second period. Indeed, all G-7 countries maintained or increased (in some cases substantially) the percentage of their employment in transformative activities and in manufacturing between 1920 and 1970. Thus, if we exclude construction and utilities in order to have a sharper view of the manufacturing labor force, England and Wales decreased only slightly the level of their manufacturing labor force from 36.8 percent in 1921 to 34.9 percent in 1971; the United States increased manufacturing employment from 24.5 percent in 1930 to 25.9 percent in 1970; Canada from 17.0 percent in 1921 to 22.0 percent in 1971; Japan saw a dramatic increase in manufacturing from 16.6 percent in 1920 to 26.0 percent in 1970; Germany (although with a different national territory) increased its manufacturing labor force from 33 to 40.2 percent; France, from 26.4 to 28.1 percent; and Italy, from 19.9 to 27.4 percent.


pages: 424 words: 119,679

It's Better Than It Looks: Reasons for Optimism in an Age of Fear by Gregg Easterbrook

affirmative action, Affordable Care Act / Obamacare, air freight, autonomous vehicles, basic income, Bernie Madoff, Bernie Sanders, Branko Milanovic, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, coronavirus, David Brooks, David Ricardo: comparative advantage, deindustrialization, Dissolution of the Soviet Union, Donald Trump, Elon Musk, Exxon Valdez, factory automation, failed state, full employment, Gini coefficient, Google Earth, Home mortgage interest deduction, hydraulic fracturing, Hyperloop, illegal immigration, impulse control, income inequality, Indoor air pollution, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, labor-force participation, liberal capitalism, longitudinal study, Lyft, mandatory minimum, manufacturing employment, Mikhail Gorbachev, minimum wage unemployment, obamacare, oil shale / tar sands, Paul Samuelson, peak oil, plutocrats, Plutocrats, Ponzi scheme, post scarcity, purchasing power parity, quantitative easing, reserve currency, rising living standards, Robert Gordon, Ronald Reagan, self-driving car, short selling, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, Steve Wozniak, Steven Pinker, supervolcano, The Chicago School, The Rise and Fall of American Growth, the scientific method, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transaction costs, uber lyft, universal basic income, War on Poverty, Washington Consensus, WikiLeaks, working poor, Works Progress Administration

These jobs cannot be found in China, or anywhere, because they no longer exist—automation and productivity improvements are larger influences than trade in manufacturing employment trends, in Asia as well as in the West. The rise of manufacturing employment in China probably is over— Chinese econometric data is unreliable—with a drop in Chinese factory jobs likely soon, if not already in progress. If China had American-style elections, candidates there would shake their fists about jobs “lost” to the United States. Like farmhand work a century ago, the “lost” jobs in manufacturing never will come back. The challenge is to educate workers to take the jobs of the future. Economist Michael Hicks of Ball State University calculates that about 13 percent of the decline of US manufacturing employment syncs to production overseas—the rest is caused by more-efficient production inside the United States, by product innovations, or by shifts in what consumers want.

By wiping out large numbers of field jobs, the 1944 invention of the cotton-picker caused millions of African Americans to move from rural parts of the old Confederacy to northern cities, seeking manufacturing employment. The changing sociology of Chicago’s South Side, which would produce wonderful blues music, awful gun crime, and America’s first black president, is recounted in one of the best books of the twentieth century, The Promised Land by Nicholas Lemann. As agricultural employment entered precipitous decline owing to mechanized harvesting, farm-country residents were viewed as without hope. Instead it turned out that manufacturing employment paid a lot better than farm work, while the new factory jobs opening up were closer to the educational institutions essential for modern self-advancement. The African American migration north for factory work helped spread the civil rights movement and reduce the black-white earnings gap.

Economists Martin Baily and Barry Bosworth of the center-left Brookings Institution calculate that most decline of US manufacturing employment as a share of GDP was already over by 2000, the year China joined the World Trade Organization, signaling the onset of full-bore globalization. Manufacturing jobs as a share of the American labor force peaked in 1953, when Japan was a bombed-out ruin and China was a closed-off provincial society, neither nation having any impact on goods, services, or employment in the United States. In 1960, manufacturing output was 11 percent of US GDP, while manufacturing jobs were 24 percent of the US economy. By 2013, manufacturing output was 12 percent of the US GDP—higher than in 1960—but manufacturing employment was down to 9 percent of the economy. As manufacturing jobs decline, demand rises for teachers, engineers, nurses, and the skilled trades (electricians, welders).


pages: 239 words: 62,311

The Next Factory of the World: How Chinese Investment Is Reshaping Africa by Irene Yuan Sun

barriers to entry, Bretton Woods, capital controls, clean water, Computer Numeric Control, deindustrialization, demographic dividend, Deng Xiaoping, Donald Trump, European colonialism, floating exchange rates, full employment, global supply chain, invisible hand, job automation, low skilled workers, M-Pesa, manufacturing employment, means of production, mobile money, post-industrial society, profit motive, purchasing power parity, race to the bottom, RAND corporation, Ronald Reagan, Shenzhen was a fishing village, Silicon Valley, Skype, special economic zone, structural adjustment programs, Triangle Shirtwaist Factory, union organizing, Washington Consensus, working-age population

If Africa becomes China’s successor as the next Factory of the World, it could completely eliminate unemployment. According to Justin Yifu Lin, the former chief economist of the World Bank, “Having itself been a ‘follower goose,’ China is on the verge of graduating from low-skilled manufacturing jobs and becoming a ‘leading dragon.’ That will free up nearly 100 million labor-intensive manufacturing jobs, enough to more than double manufacturing employment in low-income countries.”9 To put that further into perspective, when the United States reached its peak in manufacturing employment, in 1978, only 20 million Americans were working in factories.10 Now five times that number are about to come out of a single country: China. This flood of jobs coming out of China matches Africa’s current demographic moment. Ahmed and his brother Ishmael were representative of Africa’s population in general: young and underemployed.

Juliet Eilpirin and Katie Zezima, “Obama Announces More Investment in Africa by U.S. Firms During Leaders’ Summit,” Washington Post, August 5, 2014, https://www.washingtonpost.com/politics/obama-announces-more-investment-in-africa-by-us-firms/2014/08/05/bb3a9e98-1cd5-11e4-82f9-2cd6fa8da5c4_story.html. 34. Stephen Gordon, “A Little Context on the Decline of Manufacturing Employment in Canada,” Maclean’s, February 12, 2013, http://www.macleans.ca/economy/business/some-context-for-the-decline-in-canadian-manufacturing-employment/, based on data from the St. Louis Federal Reserve FRED database. 35. Dani Rodrik, “On Premature Deindustrialization,” Dani Rodrik’s weblog, October 11, 2013, http://rodrik.typepad.com/dani_rodriks_weblog/2013/10/on-premature-deindustrialization.html. 36. Robert Lawrence, interview by author, Cambridge, MA, October 7, 2015. 37.

By contrast, the $14 billion of US private sector investment in Africa announced by the Obama administration in August 2014 focuses primarily on banking, construction, and information technology.33 That is for good reason: after decades of relocating their factories to developing countries, the United States and other developed nations have very little manufacturing left to offshore. In Europe, Japan, and North America, the manufacturing share of employment has steadily declined from the 20–40 percent range in 1970 to half that figure in 2012.34 Other than China, most developing countries never had that much to begin with: Brazil’s peak in share of manufacturing employment was 16 percent in 1986; India hit its peak at just 13 percent, in 2002.35 Only China has enough of a manufacturing sector left to offshore, and much of that appears to be moving to Africa. … But how could this be? Why would manufacturing in Africa, an industry that by all measures died a generation ago, be attracting so much investment today? There are two answers to this question: a structural one, and an individual one.


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

"Robert Solow", Airbnb, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, centre right, collective bargaining, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, future of work, gig economy, Gini coefficient, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Martin Wolf, meta analysis, meta-analysis, mini-job, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

But should we really believe that if the West had refrained from letting poor countries benefit from connecting with its markets—that is to say, if the West had globalised less—it could have “reserved” more growth for itself as a result, and that any of the alleged additional growth would have particularly benefitted those now left behind? In this and the following chapters, I explain that the answer is no. It was not “others” who unraveled the social contract of Western countries; that was the result of technological forces at work everywhere, and of domestic policy mistakes that varied in nature and degree from one country to another. FIGURE 2.2. US manufacturing employment (seasonally adjusted monthly figures). Source: US Bureau of Labor Statistics, via https://fred.stlouisfed.org/graph/?g=pP4Y. The kernel of truth at the heart of these betrayal stories, however, is that factory jobs (and the related jobs I mentioned) have indeed been disappearing in the West. Figure 2.2 has been called the one picture that best explains why US voters are angry.7 It shows that the number of American factory jobs has been on a decades-long slide from its peak at the end of the 1970s.

But even if the 2008 crisis does not explain the emergence of national populism, earlier economic upheavals could have caused it. Far from weakening the economic explanation of these movements, a closer look at their history strengthens it. We tend to forget that the political reaction to the end of the postwar period of broad-based economic progress was immediate and fierce, at least in Europe. In the last chapter, I identified the beginning of the end of the economy of belonging with the secular turn in manufacturing employment in the West in the 1970s. And sure enough, the 1980s was when some of today’s strongest illiberal populist movements first came into their own. Parties like France’s National Front, the Freedom Party of Austria, and Norway’s Progress Party made their first big inroads into the mainstream parties’ earlier electoral dominance shortly after industrial employment began to decline. Consider the European Parliament, where the combined seat share of groups opposing European integration was as high in the 1980s as in the 2014–19 period.

In “flexible” labour markets, this is because they permit workers to be hired with little job security and no guarantee of minimum hours worked (or paid for), sometimes known as zero-hours contracts. In conjunction with the disappearance of union-regulated factory jobs, this has naturally made insecure work more prevalent. The level of insecurity can be measured by how much incomes typically fluctuate. The United States has seen two big jumps in the volatility of earnings, first from the 1970s to the 1980s—corresponding to the onset of manufacturing employment’s decline—and then during the 2008–9 Great Recession. In the United Kingdom today, large monthly pay fluctuations are shockingly common: three-quarters of people in regular jobs see their monthly pay fall by more than 5 per cent at least once a year. The average decrease in a month where pay falls is 290 pounds—more than the average UK household’s monthly grocery bill. Despite the widespread nature of erratic pay, social safety nets are still constructed around an idea of stable employment with stable wages.


pages: 295 words: 90,821

Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath

"Robert Solow", active measures, additive manufacturing, American Legislative Exchange Council, barriers to entry, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, creative destruction, Deng Xiaoping, endogenous growth, falling living standards, hiring and firing, income inequality, intangible asset, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, light touch regulation, low skilled workers, manufacturing employment, old age dependency ratio, patent troll, Peter Thiel, profit maximization, rising living standards, Robert Gordon, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, The Rise and Fall of American Growth, total factor productivity, women in the workforce, working-age population

The Contribution to the Growth Slowdown By pushing some workers out of the workforce, or making them unemployed, increased trade with China limited the growth of the human capital stock. The estimated effects from Autor, Dorn, and Hanson suggest that between 1990 and 2000, trade lowered manufacturing employment by 548,000, and between 2000 and 2007 by another 982,000. In total, we could attribute about 1.53 million lost manufacturing jobs to trade. For comparison, between 2000 and 2007 the total number of manufacturing jobs fell by around 3.5 million, so that trade could account for about 43% of that decline. Over the longer period from 1990 to 2007, Autor, Dorn, and Hanson calculate that trade accounted for about 21% of the decline in manufacturing employment. Over either period, trade with China had a significant effect on manufacturing employment. In addition, these direct losses also led to indirect losses of employment in these commuting zones. Across the United States, increased trade from 1990 to 2007 lowered the percentage of people in the labor force, regardless of industry, by about 1 percentage point.

If we take Autor, Dorn, and Hanson’s numbers seriously, let’s say that with a different trade policy we could have had 1.53 million extra manufacturing workers in 2015. In reality, there were about 12.3 million manufacturing workers that year, so our hypothetical trade policy would have raised manufacturing employment by about 12%. With more manufacturing workers, the production of manufactured goods would have been higher as well, accounting for a larger percentage of GDP. Ignoring the fact that simply raising manufacturing employment by 12% would not by itself raise production by 12%—remember those elasticities we talked about in chapter 4—let’s assume that manufacturing production does go up by 12% in response. This would mean that manufacturing’s value-added share of GDP would rise as well. How much it goes up depends on where those 1.53 million extra workers come from.

Autor, Dorn, and Hanson consider this as well, and find not only no effect of trade on employment, but in some cases positive effects of trade on employment (in particular with Mexico and other Central American nations). So if we were to incorporate the entire effect of trade, we’d most likely find that it had a positive but negligible effect on growth in human capital. Leaving aside the stock of human capital, the employment effects of trade with China could influence productivity through the allocation of workers between industries. What Autor, Dorn, and Hanson show is that China lowered manufacturing employment and, to a lesser extent, employment in other industries. The distinct effect on manufacturing means that China contributed to the decline in the share of employment in that industry and the share of manufacturing in total GDP. Recall from chapter 7 that manufacturing’s share of GDP fell from about 17.6% in 1990 to 12.2% by 2015, and relative to many other industries that expanded their share, manufacturing had relatively high productivity growth.


pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

affirmative action, Affordable Care Act / Obamacare, barriers to entry, basic income, business cycle, Celtic Tiger, centre right, clean water, collective bargaining, corporate governance, David Brooks, desegregation, Edward Glaeser, endogenous growth, full employment, Gini coefficient, hiring and firing, Home mortgage interest deduction, illegal immigration, income inequality, invisible hand, Kenneth Arrow, labor-force participation, manufacturing employment, market bubble, minimum wage unemployment, new economy, postindustrial economy, purchasing power parity, race to the bottom, rent-seeking, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, school choice, shareholder value, sharing economy, Skype, Steve Jobs, too big to fail, Tyler Cowen: Great Stagnation, union organizing, universal basic income, War on Poverty, working poor, zero day

Protecting existing manufacturing jobs, bringing back lost ones, and creating new ones is a perennial aim of the left. Is this a viable strategy? No, it isn’t. As figure 4.22 shows, since the 1970s, manufacturing employment has been shrinking steadily in all rich nations. As in agriculture, this employment decline is due partly to automation. It owes also to the availability of low-cost production in poorer nations. Neither is likely to abate. Two decades from now, manufacturing jobs will have shrunk to less than 10 percent of employment in most affluent countries. Here in the United States, they may well be less than 5 percent. FIGURE 4.22 Manufacturing employment Manufacturing employment as a share of total employment. The lines are loess curves. Data source: OECD, stats.oecd.org. Revitalize Unions? Labor unions ensure that employers pass some of their profits on to workers in the form of pay raises.

Some people from poor homes are further hampered by a lack of English language skills. Another disadvantage for the lower-income population is that in the 1970s and 1980s, the United States began incarcerating more young men, many for minor offenses. Having a criminal record makes it more difficult to get a stable job with decent pay.51 A number of developments, including technological advances, globalization, a loss of manufacturing employment, and the decline of unions, have reduced the number of jobs that require limited skills but pay a middle-class wage—the kind of jobs that once lifted poorer Americans into the middle class.52 Finally, changes in partner selection have widened the opportunity gap. Not only do those from better-off families tend to end up with more schooling and higher-paying jobs. They also increasingly marry (or cohabit with) others like themselves.53 Do we have conclusive evidence of rising inequality of opportunity in earnings and income?

“Decoupling of Wage Growth and Productivity Growth: Myth and Reality.” Commission on Living Standards. London: Resolution Foundation. Pew Research Center. 2011a. “The Generation Gap and the 2012 Election.” Washington, DC. Pew Research Center. 2011b. “Public Wants Changes in Entitlements, Not Changes in Benefits.” Washington, DC. Pierce, Justin R. and Peter K. Schott. 2012. “The Surprisingly Swift Decline of U.S. Manufacturing Employment.” Working Paper 18655. Cambridge, MA: National Bureau of Economic Research. Pierson, Paul. 1994. Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment. Cambridge, UK: Cambridge University Press. Piore, Michael J. and Charles F. Sabel. 1984. The Second Industrial Divide. New York: Basic Books. Polanyi, Karl. (1944) 1957. The Great Transformation. Boston: Beacon Press.


pages: 555 words: 80,635

Open: The Progressive Case for Free Trade, Immigration, and Global Capital by Kimberly Clausing

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active measures, Affordable Care Act / Obamacare, agricultural Revolution, battle of ideas, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, corporate social responsibility, creative destruction, currency manipulation / currency intervention, David Ricardo: comparative advantage, Donald Trump, floating exchange rates, full employment, gig economy, global supply chain, global value chain, guest worker program, illegal immigration, immigration reform, income inequality, index fund, investor state dispute settlement, knowledge worker, labor-force participation, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, offshore financial centre, open economy, Paul Samuelson, profit motive, purchasing power parity, race to the bottom, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transfer pricing, uber lyft, winner-take-all economy, working-age population, zero-sum game

A 1980s supercomputer (for example, the Cray supercomputer, costing over $20 million in today’s dollars) was room-sized and had speeds inferior to today’s iPhone.9 In the course of one generation, workplaces have been transformed almost beyond recognition; automation and computing have had dramatic effects on manufacturing jobs. As technology has spread and become less expensive, each manufacturing worker can produce a far larger quantity of goods. Since 1987, manufacturing output has increased by 83 percent, even as manufacturing employment has fallen by 29 percent. Figure 4.3: Manufacturing Output Increases as Manufacturing Employment Falls Numbers are indexed such that 2009 = 100. Data source: Federal Reserve. Studies suggest that one result of this technological change has been to dramatically reduce the number of workers required in manufacturing in the United States. Technological change has swamped the effects of international trade; according to one study, 88 percent of manufacturing job losses are due to technological change.10 More casual evidence also suggests that manufacturing in the United States is becoming increasingly automated.

Typically, manufacturing workers are both older and less educated than workers in other sectors, and this make job loss especially painful, since finding new jobs at similar wages is harder for older and less-educated workers. There is some evidence that workers in sectors with more import competition have both lower reemployment rates after job losses and greater earnings losses when they do find new jobs.3 However, since domestic competition and technological change can also reduce manufacturing employment, it is difficult to pin down the precise degree to which manufacturing job losses can be attributed to increased imports. Recently, a flurry of important studies have focused on quantifying the contribution of trade shocks to manufacturing job loss. For example, David Autor and his coauthors find that those commuting zones (clusters of counties that together constitute labor markets) where trade with China has increased most are the same zones in which job losses have been largest and wage growth has been most anemic.4 They conclude that the shock associated with Chinese trade is large.

Feenstra, Hong Ma, and Yuan Xu, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States: Comment,” UC Davis, 2017; David Autor, David Dorn, and Gordon H, Hanson, “Response to Robert Feenstra, Hong Ma, and Yuan Xu’s Comment on Autor, Dorn, and Hanson,” MIT, 2017. 3.  See similar arguments with Paul Krugman, “Trade and Jobs: A Note,” Blog, Opinion: New York Times, July 3, 2016. 4.  See Robert C. Feenstra, Hong Ma, and Yuan Xu, “US Exports and Employment,” UC Davis, 2017. 5.  See Ildiko Magyari, “Reorganization, Chinese Imports, and US Manufacturing Employment,” Columbia University Working Paper, January 2017. Recent research reveals that the response to Trump’s anti–Trade stance isn’t an anomaly.6 Well before his election, in the first decade of this century, areas of the United States that imported relatively high volumes of Chinese goods disproportionately voted moderate representatives out of office, in favor of ideologically extreme candidates of both parties.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

"Robert Solow", 3D printing, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, creative destruction, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, falling living standards, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, Gini coefficient, Hyperloop, income inequality, income per capita, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, labor-force participation, labour mobility, Loebner Prize, low skilled workers, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Norbert Wiener, oil shock, On the Economy of Machinery and Manufactures, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, social intelligence, speech recognition, spinning jenny, Stephen Hawking, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

The automobile industry, for instance, soon grew to eclipse the railroad as the leading employer of American workers. From being an industry so unimportant that it was not even reported separately in the 1900 census, automobiles became the largest manufacturing industry in 1940. Employment in automobiles grew 765 percent faster than total manufacturing employment over the first three decades after the industry emerged.82 To put this figure in perspective, employment in semiconductors grew 121 percent faster than the overall manufacturing employment in the three decades after its invention in 1958.83 Research by Alexopoulos and Cohen affirms the general perception that motor vehicles boosted employment more than other technologies.84 And their employment contributions extended far beyond the auto industry. They also fueled job creation in supplier industries, construction, transportation, tourism, car services, and road commerce.

Capital must not, after building up its great industrial organization shut down its mills. That way lies dry rot. We must ever go on, fearlessly scrapping old methods and old machines as fast as we find them obsolete.6 Hardly any serious commentator argued in favor of slowing down the pace of mechanization, despite the sense that manufacturing employment was beginning to wane. Two new sources of productivity data, published in May 1927 and suggesting that manufacturing employment had fallen between 1919 and 1925, had sparked the technological unemployment debates. During the 1927 December meetings of the American Economic Association, the newly compiled data naturally became a subject of intense debate. As the economist John D. Black remarked, “It is hard to believe that there was an actual decrease of 7 per cent in the number of workers in agriculture, manufacturing, mining, and railway transportation in this short period.”7 Most analysts had been assuming that the exodus from agriculture had primarily been absorbed in manufacturing.

And the elderly may prefer places with good health care and a pleasant climate. Agglomeration, in short, comes down to the desire to reduce the costs of moving goods, people, and ideas.28 Of course, the cost of transporting goods has become a much less important factor in where companies chose to locate, simply because shipping has become so much cheaper. One reason why industrial cities like Detroit began to decline before the age of automation, when manufacturing employment was still expanding, is that production began to move away from the Great Lakes to right-to-work states in the Sunbelt, where union security agreements between companies and labor unions are prohibited.29 Such locational freedom, however, may have reduced the desire to transport the smart people and ideas that have become so valuable in the higher-tech economy. And indeed, that is what has happened.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, British Empire, business cycle, business intelligence, business process, call centre, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, digital map, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, global village, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, pattern recognition, Paul Samuelson, payday loans, post-work, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen: Great Stagnation, Vernor Vinge, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

Michael Spence, in his brilliant book The Next Convergence, explains how the integration of global markets is leading to enormous dislocations, especially in labor markets.27 The factor price equalization story yields a testable prediction: American manufacturers would be expected to shift production overseas, where costs are lower. And indeed manufacturing employment in the United States has fallen over the past twenty years; economists David Autor, David Dorn, and Gordon Hanson estimate that competition from China can explain about a quarter of the decline in U.S. manufacturing employment.28 However, when one looks more closely at the data, the globalization story becomes much less compelling. Since 1996, manufacturing employment in China itself has actually fallen as well, coincidentally by an estimated 25 percent.29 That’s over thirty million fewer Chinese workers in that sector, even while output soared by 70 percent. It’s not that American workers are being replaced by Chinese workers.

(BEA) business: burdens and mandates on computer use in; see also information technology (IT) Moore’s Law in process changes in regulation of robot use in; see also automation see also manufacturing business cycles Busque, Leah Byrne, Donald California, University of, at Berkeley call centers Canada, immigrant entrepreneurship in Capek, Karel capital: bargaining power associated with intangible labor’s replacement by nonhuman capital, human see also superstars capital, organizational capitalism Card, David Carlsberg breweries Carnegie Mellon University Case, Steve Cato Institute Cavallo, Alberto Center for American Progress Chesky, Brian chess Chetty, Raj Chile, immigrant entrepreneurship in China: automation in capitalism in manufacturing employment in Chinn, Menzie choice modeling Christmas Carol, A (Dickens) Chunara, Rumi Churchill, Winston circuits, integrated Cisco Systems cities, plunder and conquest of Clark, John Bates Clarke, Arthur C. Cleveland Clinic Clifton, Jim Clinton, Bill cochlear implants Cohen, Jared Cohen, Peter Collegiate Learning Assessment (CLA) Columbus, Christopher Coming Apart (Murray) Coming Jobs War, The (Clifton) Commerce Department, U.S.

Topalov, Veselin TopCoder traffic congestion translation services, online transportation Trebek, Alex tribbles TripAdvisor Tufano, Peter TurboTax tweets Twitter United Airlines United Kingdom, immigrant entrepreneurship in United Nations United States: average workweek in college students in Earned Income Tax Credit in education in financial hardship in GDP growth in Great Recession’s effects on immigration reform in income distribution in income guarantee plans in infrastructure in intellectual property regime in life expectancy in living standard in manufacturing employment in mid-1990s productivity increase in patenting in political inequality in post-1970 productivity decline in post-2000 productivity growth in productivity improvement in social mobility in tax rates in tax system in traffic congestion in unemployment in workforce in Urban Dictionary uShip value-added tax (VAT) Varian, Hal Velodyne Venkatraman, Venkat Victorians, educational system of Vinge, Vernor visas, H1–B vision, computer-aided Voltaire Wadhwa, Vivek wages: decoupling of productivity from globalization and immigration’s effect on in manufacturing Power Law distributions in relative performance determinants of spread in; see also “winner-take-all” markets see also income Wagner, Kyle Waldfogel, Joel Wales, Jimmy Wall Street Journal Walmart Walton, Sam Watson Watson, Thomas, Sr.


The Origins of the Urban Crisis by Sugrue, Thomas J.

affirmative action, business climate, collective bargaining, correlation coefficient, creative destruction, Credit Default Swap, deindustrialization, desegregation, Detroit bankruptcy, Ford paid five dollars a day, George Gilder, ghettoisation, Gunnar Myrdal, hiring and firing, housing crisis, income inequality, indoor plumbing, informal economy, invisible hand, job automation, jobless men, Joseph Schumpeter, labor-force participation, low-wage service sector, manufacturing employment, mass incarceration, New Urbanism, oil shock, pink-collar, postindustrial economy, rent control, Richard Florida, Ronald Reagan, side project, Silicon Valley, strikebreaker, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, union organizing, upwardly mobile, urban planning, urban renewal, War on Poverty, white flight, working-age population, Works Progress Administration

. (© Detroit News) 8.2 Republican Mayor Albert Cobo inaugurated for his third term, January 1954 (© Detroit News) 8.3 Thomas Poindexter and members of the Greater Detroit Home Owners’ Association present Home Owners’ Rights Ordinance petitions to the city clerk, June 1964 (© Detroit News) 9.1 Handbill calling an emergency meeting to protest the purchase of a home by African Americans in the Courville area of Detroit’s Northeast Side, 1950 (courtesy of the Archives of Labor and Urban Affairs) 9.2 1920s-era bungalow on Tuller Street in the De Witt–Clinton neighborhood in the Wyoming Corridor (author’s photograph) 10.1 Looting on Twelfth Street on the first day of the Detroit uprising of 1967 (© Detroit News) Maps 1.1 Detroit, 1940 2.1 Detroit’s Black Neighborhoods, 1940 7.1 (a) Black Population in Detroit, 1940 7.1 (b) Black Population in Detroit, 1950 7.1 (c) Black Population in Detroit, 1960 7.1 (d) Black Population in Detroit, 1970 7.2 (a) Detroit’s Black Population by Median Income, 1950 7.2 (b) Detroit’s Black Population by Median Income, 1960 7.2 (c) Detroit’s Black Population by Median Income, 1970 9.1 Defended and Undefended Neighborhoods Tables 1.1 Detroit’s Population, 1910–1970 4.1 Black Workers in Detroit-Area Automobile Plants, 1960 4.2 Black Workers in Selected Detroit-Area Steel Plants, 1965 4.3 Black Enrollment in Apprenticeship Programs in Detroit, 1957–1966 5.1 Automation-Related Job Loss at Detroit-Area Ford Plants, 1951–1953 5.2 Decline in Manufacturing Employment in Detroit, 1947–1977 5.3 Percentage of Men between Ages 15 and 29 Not in Labor Force, Detroit, 1960 5.4 Building Permits Issued for Factories and Shops, Detroit, 1951–1963 5.5 Joblessness in Detroit, 1950–1980 7.1 Black Household Income in Census Tracts with More than 500 Blacks, Detroit, 1950 and 1960 9.1 Housing and Employment Characteristics, Defended and Undefended Neighborhoods, Detroit, 1940 and 1950 10.1 High-Poverty Tracts in Detroit, 1970 and 1980 10.2 Joblessness in Detroit’s High-Poverty Areas, 1970 and 1980 B.1 Black Male Occupational Distribution in Detroit, 1940–1970 B.2 Black Female Occupational Distribution in Detroit, 1940–1970 B.3 Index of Relative Concentration of Black Males in Detroit by Occupation, 1940–1970 B.4 Index of Relative Concentration of Black Females in Detroit by Occupation, 1940–1970 P.1 In the years leading up to Detroit’s bankruptcy, the city’s civic infrastructure collapsed because of inadequate city, state, and federal funding.

When Detroit sneezed, the adage went, other cities caught pneumonia. In addition, Detroit was home to a wide range of other industries, including chemicals, steel, pharmaceuticals, construction, and brewing, in which the dynamics of economic restructuring and race played out in ways that allow for comparisons with other cities.23 To view Detroit (or any place) as typical would be erroneous. Much about the city’s economy, most notably its dependence on manufacturing employment, distinguished it from other cities with more diverse economic bases. Detroit was not a global city like New York or Los Angeles, where in the 1970s and 1980s, a large, internationally linked information and service sector emerged to replace manufacturing jobs. And in some cities, most notably New York, Los Angeles, and Chicago, the presence of other minority groups, particularly Hispanics and Asians, complicated racial politics in ways that diverge from the experience of Detroit, which had a small Mexican-American population, a tiny Asian enclave, and hardly any Puerto Ricans, Dominicans, or Cubans.

A network of surface streets, laid out by nineteenth-century planners in an enormous checkerboard, proved tremendously convenient for the speedy transport of car parts, machine tools, and casts and dies from the small plants where they were built to the larger plants that put them to use in car production. Suppliers and machine tool companies, and other smaller operations, fanned out throughout the city, generally within short range of auto plants, but not confined to the riverside or to railroad rights-of-way.5 In the early 1940s, Detroit was at its industrial zenith, leading the nation in economic escape from the Great Depression. Between 1940 and 1947, manufacturing employment in Detroit increased by 40 percent, a rate surpassed only by Los Angeles, San Francisco, and Chicago. Demand for heavy industrial goods skyrocketed during World War II, and Detroit’s industrialists positioned themselves to take advantage of the defense boom. Detroit’s automobile manufacturers, led by Ford, quickly converted their assembly lines to the mass production of military hardware, airplanes, tanks, and other vehicles, making metropolitan Detroit one of the birthplaces of the military-industrial complex.


pages: 403 words: 87,035

The New Geography of Jobs by Enrico Moretti

assortative mating, Bill Gates: Altair 8800, business climate, call centre, cleantech, cloud computing, corporate raider, creative destruction, desegregation, Edward Glaeser, financial innovation, global village, hiring and firing, income inequality, industrial cluster, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, knowledge economy, labor-force participation, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, medical residency, Menlo Park, new economy, peer-to-peer lending, Peter Thiel, Productivity paradox, Richard Florida, Sand Hill Road, Silicon Valley, Skype, special economic zone, Startup school, Steve Jobs, Steve Wozniak, thinkpad, Tyler Cowen: Great Stagnation, Wall-E, Y Combinator, zero-sum game

After centuries of struggle with nature and scarcity, this new opulent society offered the average family an unprecedented level of material well-being. In the typical family, parents expected their children to be twice as well off as they were, just because they lived in America. In the fall of 1978, manufacturing employment reached its peak, with almost 20 million Americans working in factories. That year Jimmy Carter was president, Grease was the top-grossing movie, and the soap opera Dallas was transfixing TV viewers of all stripes. The economy did well that fall, logging a solid expansion in both gross domestic product (GDP) and jobs. Then suddenly the engine stopped. Manufacturing employment, the workhorse that had single-handedly pulled America from the uncertainties of the Great Depression to the stability of the postwar years, slowed down, then stopped, then began to move backward. In early 1979 oil prices skyrocketed following the Iranian revolution.

Recessions and economic expansions have always affected the number and kind of jobs available, and the years since 2008 have been particularly tough in this regard. But recessions and expansions are short-run phenomena. Their ups and downs have always occurred and always will. They are just a small part of the picture. Far more important—and interesting—are the longer-term trends that ultimately determine our standard of living. Lately we have seen some signs that the long decline in manufacturing employment might be slowing down. Wages in China have been creeping up, a predictable effect of increased prosperity. China’s move to revalue its currency, the yuan, has further increased labor costs from the perspective of American companies. General Electric has reopened an appliances factory in Kentucky after years overseas. Carbonite has brought a call center back to Boston from India. After twelve years in Mexico, Otis Elevators is moving its production from Nogales back to South Carolina.

All these signs have generated a growing perception among pundits and commentators that the U.S. manufacturing sector is about to turn a page and experience a renaissance. Yet while all of these examples make compelling media stories, they are not representative. They capture our attention precisely because they are exceptions that buck the trend.1 The perception of a forthcoming manufacturing comeback was further bolstered by unexpected gains in manufacturing employment in 2011, the first time in many years that production jobs grew in a significant way. But the reality is that the gains in 2011, while certainly welcome news, came after much worse than usual job losses during the recession years of 2008 and 2009. Looking forward, there is little to suggest that the long-run downward trajectory that we saw in Figure 1 is about to change in a permanent way.


pages: 301 words: 89,076

The Globotics Upheaval: Globalisation, Robotics and the Future of Work by Richard Baldwin

agricultural Revolution, Airbnb, AltaVista, Amazon Web Services, augmented reality, autonomous vehicles, basic income, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, commoditize, computer vision, Corn Laws, correlation does not imply causation, Credit Default Swap, David Ricardo: comparative advantage, declining real wages, deindustrialization, deskilling, Donald Trump, Douglas Hofstadter, Downton Abbey, Elon Musk, Erik Brynjolfsson, facts on the ground, future of journalism, future of work, George Gilder, Google Glasses, Google Hangouts, hiring and firing, impulse control, income inequality, industrial robot, intangible asset, Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, knowledge worker, laissez-faire capitalism, low skilled workers, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, Metcalfe’s law, new economy, optical character recognition, pattern recognition, Ponzi scheme, post-industrial society, post-work, profit motive, remote working, reshoring, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Reagan, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, social intelligence, sovereign wealth fund, standardized shipping container, statistical model, Stephen Hawking, Steve Jobs, supply-chain management, TaskRabbit, telepresence, telepresence robot, telerobotics, Thomas Malthus, trade liberalization, universal basic income

Factories became places where workers helped machines make things, not the other way around. The impact on factory employment was dramatic. The new technological impulse has been a massive and sustained push factor—pushing workers out of manufacturing in advanced economies. In all advanced economies, the share of jobs in manufacturing has been on a “mission to zero” since the 1970s, as Figure 3.1 shows. Manufacturing employment shares in the United States fell from 30 percent in the 1970s to something like 10 percent in the 2010s. The United Kingdom’s industrial sector, which used to absorb over a third of workers, now accounts for only one in ten jobs. The manufacturing share in Germany halved from 40 percent to 20 percent, and Japan’s declined from 27 percent to 17 percent. Figure 3.1 Share of Manufacturing Jobs in Advanced Economies, 1970–2010. source: Author’s elaboration of UNSTAT online data.

THE MISSING RESOLUTION AND THE NEXT TRANSFORMATION New Deal capitalism ushered in economic contentment and broad-based prosperity. Incomes soared on the back of technological progress and expanding trade—especially for the middle class. FDR’s “forgotten” men and women were forgotten no longer. They saw life-changing increases in living standards, financial security, and economic prospects. This happy position started to slip in the 1970s as the nature of technological progress changed. Manufacturing employment in the US peaked in 1979. Due to automation, it has trended downward ever since. And then came the new globalization around 1990. This tipped rich nations’ share of world manufacturing into a steep decline—one that continues today. The massive economic transformation that came with ICT-led automation and globalization—above all the deindustrialization and slow growth—produced a backlash and unfocused calls for shelter from the shocks.

He had high hopes and a high school degree in hand: “It was like a rainbow leading to this pot of gold,” he said.18 By twenty-one, he was homeless, having drifted through a sequence of low-paid, dead-end service-sector jobs. If Perry follows the average trajectory of US workers with his skill level, his future could hold some very dark moments. During the Services Transformation, automation and globalization eliminated good jobs for low education workers. It was the start of what might be called the “wretched ratchet.” Manufacturing employment jagged down with each recession and recovered with each recovery, but each time the recovery high was lower than the previous peak. Since 1979, the number of US manufacturing jobs has been on a bumpy, downward slide. Deindustrialization also raised the stakes in terms of education. Many of the children of the displaced factory workers got university educations to train for service-sector jobs.


pages: 395 words: 115,753

The Metropolitan Revolution: The Rise of Post-Urban America by Jon C. Teaford

anti-communist, big-box store, conceptual framework, desegregation, Detroit bankruptcy, East Village, edge city, estate planning, Golden Gate Park, Gunnar Myrdal, Haight Ashbury, housing crisis, illegal immigration, Jane Jacobs, Joan Didion, low skilled workers, manufacturing employment, Nelson Mandela, New Urbanism, plutocrats, Plutocrats, Potemkin village, rent control, Seaside, Florida, Silicon Valley, the built environment, The Death and Life of Great American Cities, upwardly mobile, urban planning, urban renewal, urban sprawl, Victor Gruen, War on Poverty, women in the workforce, young professional

Since the end of World War II, growing reliance on trucking had encouraged manufactures to relocate to suburban sites adjacent to superhighways where they could build sprawling single-story plants better suited to assembly-line production than the existing multistory factories in the inner city. In the 1960s and 1970s, however, the pace of abandonment quickened, leaving a gloomy assortment of empty mills, especially in the older cities of the Northeast and Midwest. Between 1947 and 1967, New York City lost 175,000 manufacturing jobs, but from 1967 to 1977 manufacturing employment dropped an additional 286,000. From 1950 to 1967, the number of manufacturing jobs in Boston fell 21 percent; between 1967 and 1977, the loss was 36 percent. Philadelphia lost 40 percent of its manufacturing employment between 1967 and 1977, and the rate of decline in New York City, Chicago, Baltimore, Pittsburgh, and Buffalo was between 30 and 36 percent.15 Shuttered factories were increasingly familiar sights in America’s urban hubs, testifying to the industrial decline of the central city. An increase in office employment compensated to some degree for the outflow of factory jobs.

Another factor encouraging gentrification was the increase in white-collar jobs in the central cities. Manufacturing employment continued to plummet as blue-collar jobs moved to the suburbs, to smaller communities in the South, or out of the country or simply yielded to automation. Between 1977 and 1987, New York City lost 232,000 manufacturing jobs. Yet New York’s overall private-sector employment rose 342,000, with the finance and business services category making up 70 percent of the increase. Employment doubled in the securities industry as Wall Street boomed while the city’s factories closed.8 In Boston between 1976 and 1985, the number of jobs in professional services rose 62 percent; in business services, 55 percent; and in the finance/insurance/real-estate sector, 32 percent. During the same period, manufacturing employment in New England’s hub city was down 21 percent.9 The number of young white-collar men and women employed in the central city was rising markedly, and the old blue-collar base was disappearing.

“It represents a massive reorganization of the urban community.”33 Another symptom of the massive reorganization under way was the growth of office employment in the suburbs. In the late 1950s and early 1960s, low-rise office buildings and landscaped office parks were appearing along the metropolitan fringe throughout the United States. From 1959 to 1965 the number of office jobs in Long Island’s Nassau County soared 41 percent, as compared with a 20 percent rise in manufacturing employment. In Southfield, Michigan, the home of Northland Shopping Center, corporate offices were also providing jobs for suburbanites. In 1955 Bendix Corporation built its general offices and research center in the Detroit suburb, and later in the 1950s Standard Oil and Reynolds Aluminum constructed low-rise regional headquarters. Eaton Yale and Town Corporation followed suit in the early 1960s, shifting its offices to South-field, and in 1963 the first building in the Northland Towers complex, next to Northland Shopping Center, welcomed its initial white-collar tenants (figure 3.3).


Not Working by Blanchflower, David G.

active measures, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, bank run, banking crisis, basic income, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, Boris Johnson, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clapham omnibus, collective bargaining, correlation does not imply causation, credit crunch, declining real wages, deindustrialization, Donald Trump, estate planning, Fall of the Berlin Wall, full employment, George Akerlof, gig economy, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, indoor plumbing, inflation targeting, job satisfaction, John Bercow, Kenneth Rogoff, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, mass incarceration, meta analysis, meta-analysis, moral hazard, Nate Silver, negative equity, new economy, Northern Rock, obamacare, oil shock, open borders, Own Your Own Home, p-value, Panamax, pension reform, plutocrats, Plutocrats, post-materialism, price stability, prisoner's dilemma, quantitative easing, rent control, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, selection bias, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Thorstein Veblen, trade liberalization, universal basic income, University of East Anglia, urban planning, working poor, working-age population, yield curve

Subsequently, the UK lost its AAA credit rating, and despite claims at the outset that the UK government would deliver a “march of the makers,” that didn’t happen, and manufacturing employment declined further. Public-sector pay freezes were imposed and public-sector employment fell sharply. Other governments around the world pursued tight fiscal policy, which meant that central banks were the only show in town. Low interest rates and many billions of asset purchases followed. House and equity prices rose but real wages fell. The number of workforce jobs in UK manufacturing was 2.57 million in June 2010 compared to 2.72 million in September 2018. As a share of all workforce jobs in the UK, it fell from 8.2 percent in June 2010 to 7.7 percent in the latest data. Chancellor Osborne didn’t keep his promises. There has been no march of the makers, just a march of the unemployed ex-makers. In the United States, manufacturing employment in January 2019 was 12.8 million, down from 14 million in January 2007.

Becker and his colleagues found that fundamental characteristics of the voting population were key drivers of the Vote Leave share, especially their age and education profiles, the historical importance of manufacturing employment, and low income and high unemployment. Migration was relevant only as it pertained to Eastern European countries, not older EU states or non-EU countries. The severity of fiscal cuts, which largely reflect weak fundamentals, they found, were also associated with Vote Leave. They also obtained similar findings at the much finer level of wards within cities. Importantly, Becker and coauthors found areas with a strong tradition of manufacturing employment were more likely to vote Leave, as well as areas with relatively low pay and high unemployment. They also found supporting evidence that the growth rate of migrants from the twelve EU accession countries that joined the EU in 2004 and 2007 is linked to the Vote Leave share.

One concern about the slowing of the flow of foreign migrants is that it makes the labor market function less well, because the housing market restricts mobility as the mobile foreigners leave. The characteristics of jobs have also changed with the march of technology, which has meant there has been a decline in manufacturing jobs in advanced countries. That isn’t to say that the Luddites were right; technology has created many jobs too. But they are generally high-skilled ones. Manufacturing employment in the United States peaked at fourteen million jobs in April 2006, fell to a low of eleven million in March 2010, and rose to 12.8 million in January 2019. In addition, construction employment fell from a high of 7.5 million jobs in January 2007 to a low of 5.4 million in January 2011. It had picked back up to 7.5 million in January 2019. These industries supplied well-paying jobs principally to prime-age men without college degrees.


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Boris Johnson, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, housing crisis, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, minimum wage unemployment, Mont Pelerin Society, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, post-work, postnationalism / post nation state, precariat, price stability, profit motive, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, the built environment, The Chicago School, The Future of Employment, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, We are the 99%, women in the workforce, working poor, working-age population

If previous periods of industrialisation at least had the benefit of providing enough factory jobs for the new proletariat, premature deindustrialisation threatens to eliminate this traditional pathway entirely. Technological and economic developments now enable countries to virtually leapfrog the industrialisation phase, which means that developing economies are now deindustrialising at much lower rates of per capita income and with much lower shares of manufacturing employment.106 China is a good example of this, with manufacturing employment in decline,107 labour struggles becoming more confident,108 real wages surging109 and demographic limits leading to a focus on ‘technological upgrading [and] productivity enhancements’ in order to maintain growth.110 The automation of factories is at the leading edge of this deindustrialisation trend, with China already the biggest purchaser of industrial robots, and expected to soon have more industrial robots in operation than either Europe or North America.111 The factory of the world is going robotic.

Technological and economic developments now enable countries to virtually leapfrog the industrialisation phase, which means that developing economies are now deindustrialising at much lower rates of per capita income and with much lower shares of manufacturing employment.106 China is a good example of this, with manufacturing employment in decline,107 labour struggles becoming more confident,108 real wages surging109 and demographic limits leading to a focus on ‘technological upgrading [and] productivity enhancements’ in order to maintain growth.110 The automation of factories is at the leading edge of this deindustrialisation trend, with China already the biggest purchaser of industrial robots, and expected to soon have more industrial robots in operation than either Europe or North America.111 The factory of the world is going robotic. Deindustrialisation can also be seen in ‘reshoring’, where manufacturing returns to developed economies in jobless, automated forms.112 These deindustrialisation trends are taking hold across the developing economies of Latin America, sub-Saharan Africa and most of Asia.113 Even in countries where manufacturing employment has increased in absolute terms, there have been significant decreases in the labour-intensity of the process.114 The result of all of this is not only an incomplete transition to a significant working class, but also the stymying of the expected employment path for the workforce. Premature deindustrialisation is leaving most of the world’s urban proletariat dispossessed of its agricultural livelihood and without the opportunity to be hired for manufacturing jobs.

Skilled workers became increasingly necessary in overseeing the new machines, carrying out expanding service work, and managing the increasingly large firms that were emerging.14 The need for skilled labour was further amplified in the early twentieth century by the rise of office technologies – typewriters, photocopiers, and so on – that required relatively well-educated operators. In other words, technology is not uniformly deskilling, and the increased demand for skilled labour over the past century testifies to that.15 Over this period, manufacturing employment continued to decline, due to its susceptibility to productivity-enhancing technology.16 The automation of mass-production manufacturing in the early twentieth century was eventually extended, with the automation of small-batch manufacturing.17 While the industrial sector employed 1,000 robots in 1970, today it uses over 1.6 million robots.18 In terms of employment, manufacturing has reached a global saturation point.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

activist fund / activist shareholder / activist investor, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, God and Mammon, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, plutocrats, Plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

According to this school of thought, advanced countries cannot live by services alone, not least because services have less export potential than manufactures. So a shrinking manufacturing base must be equated with national decline, as must the growing financialisation of the economy. No surprise, then, that the decline in manufacturing employment in the UK, from 31 per cent of the workforce in 1975 to 25 per cent in 1983 to 8 per cent today, causes much angst, as does the almost-as-severe percentage fall in the US, where manufacturing employment is down to 9 per cent. Unfavourable comparisons are made with Germany and Japan, where manufacturing constitutes a much bigger part of the economy and contributes consistently to large trade surpluses. This belief in the intrinsic merits of manufacturing is perhaps understandable, given that manufacturing was – and still is, in the developing world – responsible for raising the great mass of people out of poverty.

This belief in the intrinsic merits of manufacturing is perhaps understandable, given that manufacturing was – and still is, in the developing world – responsible for raising the great mass of people out of poverty. It is an overwhelmingly powerful truth that manufacturing secured the triumph of capitalism. Yet, as I will show, it is arguable that manufacturing employment ought to fall in a mature economy; and one of the safest predictions for the twenty-first century is that in the developed world it will continue to do so without causing a collapse in living standards. To make this case is admittedly quite a challenge, because the prejudice about the superiority of manufacturing over services has deep historical roots. Adam Smith, still hugely influential across the centuries, showed a bias in The Wealth of Nations against services, suggesting that while the labour of a manufacturer added value, the labour of a menial servant did not: There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect.

Without it, companies worldwide making everything from smartphones to oven controls would have to rethink their production methods. Yet despite its strong position, dealing with hundreds of companies in a global market, it employs all of seven people. Nor, incidentally, is the reduced capacity of manufacturing to generate jobs purely an advanced-country characteristic. Even in China, where the manufacturing sector contributes 33 per cent of GDP, manufacturing employment is now below its level in the late 1990s. Perhaps the biggest impetus behind the decline of manufacturing in the advanced economies is globalisation. In effect, developed countries have been outsourcing their manufacturing to China and other emerging markets that are now going through the rapid urbanisation and industrialisation that characterises the early stages of capitalist development, in which very low labour costs create comparative advantage.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

The picture is the same in higher-valued services, where technology is devised and refined, translating innovation into goods and services yielding productivity gains.28 The erosion is also reflected in manufacturing employment, which peaked at 19,426,000 in 1979 on the eve of President Reagan’s election. There was a 41 percent decline in manufacturing jobs thereafter, to fewer than 11,500,000 by early 2010, before turning up a bit with the recovery. Manufacturing employment was actually lower in 2009 than in 1941 prior to Pearl Harbor, or in any year in between. The thinning out of manufacturing employment was intense. Writing about the middle years (1984–1986) of the Reagan administration, Peter Peterson noted: “Over the past three years America’s import deluge has resulted in pink slips for one to two million domestic manufacturing workers each year.

That ended decades of uncertainty about prospective American taxes on imports from China for American firms eager to offshore high-wage jobs there. The impact of PNTR on offshoring was dramatic. Indeed, one study in December 2012 by Justin R. Pierce of the Federal Reserve System and Yale management professor Peter K. Schott attribute the loss of as many as 4 million US manufacturing jobs between 2000 and 2007 to the new certainty provided by PNTR. Utilizing census data, they concluded: “Absent the shift in US policy, US manufacturing employment would have risen nearly 10 percent between 2001 and 2007, versus an actual decline of more than 15 percent.”9 The second example is the North American Free Trade Agreement (NAFTA), enacted earlier in the Clinton administration (1993). A key provision forced Mexico to guarantee that foreign investors for the first time could actually own a majority controlling interest in domestic factories.

More than a third of them remain indefinitely out of work; more than half of the rest have taken pay cuts of 30 to 50 percent in new jobs that cannot make use of their experience.”29 In that same year, Paul Kennedy prophetically wrote: “In terms of commercial expertise, levels of training and education, efficiency of production, standards of income … the ‘number-one’ power of 1900 seemed to be losing its position, with dire implications for the country’s long-term strategic position.”30 Employment in manufacturing is cyclical, but each upturn in the macroeconomy during the Reagan decline has featured disproportionate job loss in the manufacturing sector. During the recent recession, manufacturing employment fell nearly 29 percent through October 2009, over five-fold faster than the pace of job loss across all sectors.31 Once such jobs are gone, as economist Nancy Folbre explained earlier, firms have mostly proven loathe to recreate high-value manufacturing jobs at home, and thus the losses become permanent. Any new jobs are low-wage ones in today’s two-tier manufacturing pay structure. Higher wages in China are encouraging some reshoring now, with Boston Consulting touting a survey a year or so ago that larger multinationals are reexamining domestic US manufacturing.


pages: 614 words: 174,226

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

"Robert Solow", airline deregulation, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, ending welfare as we know it, financial deregulation, financial innovation, fixed income, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Growth in a Time of Debt, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Long Term Capital Management, low cost airline, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, oil shock, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, price stability, profit motive, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Peltzman, Silicon Valley, Simon Kuznets, starchitect, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus

Pierce and Schott argued the decision to grant that status on a permanent basis in 2000 removed an important uncertainty, catalyzing increased capital and trade flows. See their “The Surprisingly Swift Decline of U.S. Manufacturing Employment,” American Economic Review 106, no. 7 (2016). 92. In the early 2000s, the Fed held down interest rates to stimulate economic growth, and the dollar declined against most foreign currencies. But this process of equilibration did not affect the dollar-yuan exchange rate, nor the dollar’s exchange rate with other Asian currencies effectively fixed against the dollar. 93. Other factors have of course contributed to the decline of manufacturing employment, including automation and globalization. But a 2012 study estimated that currency manipulation by twenty countries, China by far the largest, had cost the United States between 1 million and 5 million jobs.

The report, commissioned on the insistence of Japan, documented the success of active management in East Asia. A more recent caveat is of greater interest. The economist Dani Rodrik notes that automation is reducing the level of employment required even for basic manufacturing. Thus, nations that industrialized during the midcentury, like Taiwan, often saw manufacturing employment peak above 30 percent of the workforce. More recently, however, manufacturing employment peaked at just 16 percent in Brazil and at 20 percent in Mexico — and it may not reach even those levels in the next generation of industrial debutantes. “It is not implausible,” Rodrik wrote in a 2017 book, Straight Talk on Trade, “that the East Asian tiger economies will be the last countries to ever experience industrialization in the manner to which economic history has accustomed us.” 115.

By 1985, Kodak’s share of the U.S. market was down to 64 percent; Fuji’s was up to 11 percent.74 The rise of the dollar also reduced sales of American goods in other countries. Caterpillar, the Illinois company that dominated the global market for heavy construction vehicles in the decades after World War II, reported in 1983 that the dollar’s rise had cut its foreign sales in half. It fired twenty thousand workers and moved some jobs overseas. One million domestic mining and factory jobs were lost during Reagan’s first term. The decline of American manufacturing employment is a long-term trend caused mostly by automation rather than foreign trade. In the 1880s, factories and farms employed roughly three quarters of American workers. By the 1980s, those sectors employed roughly one quarter of American workers even as the output of factories and farms continued to rise. Increased productivity allowed workers to move into other jobs. But the appreciation of the dollar accelerated and distorted the evolution of the American economy.


pages: 436 words: 98,538

The Upside of Inequality by Edward Conard

affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, assortative mating, bank run, Berlin Wall, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Climatic Research Unit, cloud computing, corporate governance, creative destruction, Credit Default Swap, crony capitalism, disruptive innovation, diversified portfolio, Donald Trump, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, full employment, future of work, Gini coefficient, illegal immigration, immigration reform, income inequality, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invisible hand, Isaac Newton, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, Kodak vs Instagram, labor-force participation, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meta analysis, meta-analysis, new economy, offshore financial centre, paradox of thrift, Paul Samuelson, pushing on a string, quantitative easing, randomized controlled trial, risk-adjusted returns, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, selection bias, Silicon Valley, Simon Kuznets, Snapchat, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, total factor productivity, twin studies, Tyler Cowen: Great Stagnation, University of East Anglia, upwardly mobile, War on Poverty, winner-take-all economy, women in the workforce, working poor, working-age population, zero-sum game

These outcomes all displace workers, who must find employment elsewhere. The increased availability of capital, from both the shift from a capital-intensive economy to a knowledge-intensive economy in high-wage economies and the high saving rates in many low-wage economies, like China’s, accelerates investment offshore that reduces manufacturing employment in high-wage economies. Productivity gains from capital investment now hollow out manufacturing employment and drive unskilled workers to the harder-to-manage service sector, where productivity growth has been slower. Meanwhile, the baby boom, the increased participation of women in the workforce, immigration, and international trade greatly increased the supply of labor, especially lower-skilled labor. Displaced workers must depend on entrepreneurial risk-takers, properly trained talent, and investors to find and commercialize new sources of employment with productivity and wages comparable to their prior capital-intensive manufacturing jobs.

Instead their growth slowed. Advocates of income redistribution have been quick to blame the success of the 1 percent for this slowing wage growth. Their arguments, however—that success is unearned, technology hollows out the middle class, and poor-quality education unnecessarily holds back students—are suspect. More likely, trade, immigration, and manufacturing productivity gains, which have hollowed out manufacturing employment, have flooded the economy with a near-unlimited supply of lesser-skilled workers. This increased supply in combination with resources that constrain growth—namely, properly trained talent and the economy’s capacity and willingness to take risk—hold back wage growth. In an economy constrained only by labor, trade and immigration grow the economy without reducing wages—no different than population growth.

With automotive and other manufacturers pouring capital into Mexico, and with Mexico supplying an increasing share of North American production, it grows harder and harder to believe these Mexican autoworkers complement rather than compete head-to-head with American workers for jobs and investment capital.24 If offshore labor truly complemented American workers rather than merely displacing them, and if the supply of immigrant workers truly increased capital investment until their productivity matched domestic workers, we should see a frenzy of capital investment boosting the productivity of unskilled workers. We see the opposite. Low-skilled employment is not growing in highly productive capital-intensive sectors like manufacturing, for example. Instead, we see capital investment producing productivity gains that exceed the growth in the demand for manufactured products, which, in turn, hollows out manufacturing employment. Lower-skilled employment has subsequently grown in less productive service sectors like retail, restaurants, household employment, and healthcare.25 In turn, low-skilled immigrant labor has skewed toward employment in these sectors.26 Pro-trade and immigration theories assume that businesses will capitalize on the availability of lesser-skilled labor, and competition will force employers to invest capital to raise the productivity of new and displaced workers up to the rest of the workforce.


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The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Big bang: deregulation of the City of London, bilateral investment treaty, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, full employment, Gini coefficient, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, structural adjustment programs, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, very high income, Washington Consensus, Works Progress Administration, zero-coupon bond, zero-sum game

Franco, “Global Competition in the 1990s: American Renewal, Japanese Resilience, European Cross-Currents,” Business Horizons, May–June 2002, p. 25. 119 Ibid., Tables 1, 2. 120 Economic Report of the President 2002, Tables B-2 and B-51. 121 This data was supplied on request by the US Bureau of Labor Statistics. 122 The peak of US manufacturing employment had occurred in 1979; by 1999 the number of workers in US manufacturing was 2.5 million lower than in 1979, and below where it had been in 1966, even though overall US employment had doubled since then. Economic Report, Tables B-46 and B-51. The decline in manufacturing jobs affected virtually every advanced capitalist country. See André Bernard, “Trends in Manufacturing Employment’, Perspectives, February 2009, Statistics Canada. Available at statcan.gc.ca. 123 US Bureau of Labor Statistics. Available at ftp.bls.gov. 124 Science and Engineering Indicators 2010, Table 6-3. 125 Paul Langley, The Everyday Life of Global Finance: Saving and Borrowing in Anglo-America, Oxford: OUP, 2008, p. 164. 126 John Grahl, “Globalized Finance: The Challenge to the Euro,” New Left Review II/8 (March–April 2001), p. 44. 8.

The second transformation—the one most associated with the thesis of US decline—occurred in the core industries that had fueled American economic dynamism in the postwar era. The old labor-intensive sectors like shoes, textiles, food, and beverage had seen a sharp contraction well before the 1980s, but it was rising imports and the corresponding loss of jobs in steel, auto, and machinery that occasioned alarm about the state of American manufacturing. Employment in the automobile sector fell by a quarter of a million jobs between 1979 and 1983, and by the end of the 1980s foreign-based producers had captured almost half of the US car market (up from less than 20 percent before the first energy crisis, in 1973). Steel employment had also been falling through the 1970s, but between 1980 and 1984, amid bankruptcies, closures, and layoffs that often devastated entire communities, it was cut in half (a decrease of some 200,000 jobs), and continued to fall thereafter.

Japan and Germany ranked second and third, with shares of 21 percent and 6 percent respectively; the EU as a whole had a share of 24 percent, and China accounted for 3 percent.117 This also helps explain why “large American companies maintained or increased their world market shares in 12 of the 18 most important global industries” right through the 1990s.118 By the end of the century, of the top dozen global firms by sector, the US accounted for 77 percent of the world’s aerospace sales, 75 percent of all sales of computers and office equipment, 91 percent of computer software sales, and 62 percent of pharmaceuticals.119 Shored up by its high-tech sectors, during 1983–99 US manufacturing output grew faster (4.2 percent annually) than overall GDP (3.7 percent).120 The restructuring led to manufacturing productivity actually growing faster in these years (3.3 percent annually) than it had in the “golden” 1950s and 1960s (when it had averaged 2.4 percent).121 This enormous productivity growth was reflected in an increase in overall manufacturing volume of 90 percent over the same period, while manufacturing employment showed virtually no increase at all (of the 34.4 million private sector jobs created in the US in these years, 99.2 percent were outside manufacturing).122 The trajectory of the computer and peripheral equipment sector captures this well: it achieved an astonishing annual increase in real output of 29 percent throughout the 1990s; but with productivity growing at the even more extraordinary rate of 31 percent, there was no net job growth.123 The fourth structural transformation in the economy involved the growth of a diverse range of “professional and business services” that ranged across consulting, law, accounting, market research, engineering, computer software, and systems analysis.


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, money market fund, mortgage debt, New Urbanism, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

At the same time, industrywide collective bargains were watered down with so-called opening clauses that gave local union representatives the option to negotiate bespoke deals at the company level. By the end of the 1990s, most of the remaining German union members were working under these looser contracts. The unions’ priority was to preserve jobs at the cost of forgoing pay raises. They failed: between 1993 and 1997, German manufacturing employment fell by 15 percent. Unemployment in the West rose steadily from roughly 5 percent in 1991 to nearly 10 percent by the end of 1997. Across Germany, three million full-time jobs vanished while only one million part-time jobs were added. At the same time, most workers saw their real wages fall throughout the 1990s before plummeting in the 2000s. This was particularly painful for German men, who were disproportionately employed full-time and accounted for most of the lost jobs.

This would not have been a problem for Americans if U.S. manufacturers had been able to offset those losses by selling more abroad as exports. Unfortunately, while export revenues did rise, they did not grow nearly enough. Competition from abroad was not, by itself, the problem. American manufacturers had done relatively well in the 1990s because they were competing with imports at a time of strong domestic and foreign demand. A strong global market had also supported American manufacturing employment in the 1990s despite massive improvements in labor-saving technology. In the 2000s, however, demand was depressed in large parts of the world, including the United States. The result was that foreign imports displaced American productive output at the expense of American jobs and incomes. Making matters worse, U.S. manufacturers were starved of the profits they needed to commit to investments in research and development, which helps explain why productivity growth has been so weak since 2006.35 More than 80 percent of the decline in private-sector employment between 2000 and 2003 can be directly attributed to the manufacturing sector.

The share of working-age Americans with a job remains roughly where it was in 2007 and significantly below where it was in 2000. Fig. 6.6 The great slump (real household consumption spending per person, January 1947 = 100). Sources: Bureau of Economic Analysis; Matthew Klein’s calculations The impact on American producers has been even worse than in the 2000s: as of the end of 2018, manufacturing output and manufacturing capacity were both lower than at the previous peak in 2008. Manufacturing employment was still down about 10 percent from its levels in 2006. America’s trade deficit in manufactured goods (excluding refined petroleum products) was now worth more than 4 percent of GDP—its highest level since the nineteenth century. Worryingly, this deterioration in America’s manufacturing trade position is mostly attributable to stagnant exports of advanced capital goods combined with soaring imports of competing products from abroad.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

"Robert Solow", 3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, debt deflation, deskilling, disruptive innovation, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, knowledge worker, labor-force participation, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, Plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Rodney Brooks, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce

Within the Parkdale plant, “only infrequently does a person interrupt the automation, mainly because certain tasks are still cheaper if performed by hand—like moving half-finished yarn between machines on forklifts.”6 Completed yarn is conveyed automatically toward packing and shipping machines along pathways attached to the ceiling. Nonetheless, those 140 factory jobs represent at least a partial reversal of a decades-long decline in manufacturing employment. The US textile industry was decimated in the 1990s as production moved to low-wage countries, especially China, India, and Mexico. About 1.2 million jobs—more than three-quarters of domestic employment in the textile sector—vanished between 1990 and 2012. The last few years, however, have seen a dramatic rebound in production. Between 2009 and 2012, US textile and apparel exports rose by 37 percent to a total of nearly $23 billion.7 The turnaround is being driven by automation technology so efficient that it is competitive with even the lowest-wage offshore workers.

The total value of imports from China amounted to less than 3 percent of US consumer spending.50 It is undoubtedly true that, as Figure 2.8 shows, the fraction of American workers employed in manufacturing has fallen dramatically since the early 1950s. This trend began decades before enactment of the North American Free Trade Agreement (NAFTA) in the 1990s and the rise of China in the 2000s. In fact, the decline seems to have halted at the end of the Great Recession as manufacturing employment has actually outperformed the job market as a whole. Figure 2.8. Percentage of US Workers in Manufacturing SOURCE: US Bureau of Labor Statistics and Federal Reserve Bank of St. Louis (FRED).51 A potent force has been very consistently eliminating jobs in the manufacturing sector. That force is advancing technology. Even as the number of manufacturing jobs has been steadily declining as a percentage of total employment, the inflation-adjusted value of the goods manufactured in the United States has dramatically increased over time.

It’s often remarked that China faces the danger of growing old before it grows rich, but what I think is less generally acknowledged is that China is in a race not just with demographics but also with technology. As we saw in Chapter 1, Chinese factories are already moving aggressively to introduce robots and automation. Some factories are reshoring to advanced countries or moving to even lower-wage countries like Vietnam. A look back at Figure 2.8 in Chapter 2 shows clearly that advancing technology resulted in a relentless sixty-year collapse in American manufacturing employment. It’s inevitable that China must ultimately follow essentially the same path, and it’s quite possible that the decline in factory employment may turn out to be even more rapid than in the United States. While automation in American factories progressed only as fast as the new technology could be invented, China’s manufacturing sector can, in many cases, simply import leading-edge technology from abroad.


pages: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith

Affordable Care Act / Obamacare, Airbus A320, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business cycle, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, full employment, global supply chain, Gordon Gekko, guest worker program, hiring and firing, housing crisis, Howard Zinn, income inequality, index fund, industrial cluster, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost airline, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, MITM: man-in-the-middle, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Steve Jobs, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

Both GM’s CEO, Dan Akerson, and the United Auto Workers union scrapped their “us vs. them” rhetoric. The union agreed to keep wages steady. GM and Ford pledged to reopen plants in the United States and not to shift production to Mexico as they had planned. By early 2012, the Big Three carmakers planned to invest several billion dollars to retool multiple plants in the United States. More broadly, manufacturing employment edged up in both 2010 and 2011, adding more than three hundred thousand jobs, and U.S. manufacturing exports began to rise. And by 2012, the once irresistible cost advantages of China were looking less attractive to some U.S. employers. With labor unrest and wage inflation in China and stagnant or falling wages in America, a few companies such as General Electric, Otis Elevator, and Master Lock of Milwaukee have begun to bring jobs back from China to the United States—and smart government policies could foster that trend.

Grove’s answer, revealing for an American CEO, is that offshoring U.S. jobs is far too important an issue for our nation to be left to our multinational companies and their CEOs. Grove argues that it will take a new national strategy and a broad commitment in U.S. industry to regenerate America’s muscle in manufacturing. A few glimmers have begun to appear—a handful of plants coming back from China, a modest uptick in manufacturing employment, and business leaders such as Grove speaking out. But much more needs to be done, as you will see in the final section of this book. CHAPTER 16 HOLLOWING OUT HIGH-END JOBS IBM: SHIFTING THE KNOWLEDGE ECONOMY TO INDIA Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gain. —THOMAS JEFFERSON, letter, 1814 What we are trying to do is outline an entire strategy of becoming a Chinese company.

“Without an industrial base, an increase in consumer spending, which pulled the country out of past recessions, will not put Americans back to work,” McCormack argues. “Without an industrial base, the nation’s trade deficit will continue to grow…. Without an industrial base, the United States will be increasingly dependent on foreign manufacturers even for its key military technology.” Immelt, too, insists that technology-based manufacturing must be central to reviving the U.S. economy. His goal is to see manufacturing employment double, from 9 to 20 percent of the nation’s workforce—a target endorsed by the Horizon Project, a task force of former CEOs led by Leo Hindery, Jr., who used to run AT&T Broadband. “You cannot survive as a nation of such size and complexity with such a small manufacturing workforce as we have,” Hindery asserts. “If you have only 9 percent making things, the only way you can grow is to have credit bubbles.”


pages: 976 words: 235,576

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

"Robert Solow", 8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, carried interest, collateralized debt obligation, collective bargaining, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, full employment, future of work, gender pay gap, George Akerlof, Gini coefficient, glass ceiling, helicopter parent, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, Paul Samuelson, payday loans, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Steve Jobs, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, Winter of Discontent, women in the workforce, working poor, young professional, zero-sum game

in Europe and Asia: See International Federation of Robotics, World Robotics Report 2016, September 29, 2016, Figure 2.9, https://ifr.org/ifr-press-releases/news/world-robotics-report-2016, and James Carroll, “Industrial Robots in the United States on the Rise,” Vision Systems Design, September 6, 2016, www.vision-systems.com/articles/2016/12/industrial-robots-in-the-united-states-on-the-rise.html. since the late 1970s: Total manufacturing employment peaked in the late 1970s, when roughly 19.5 million Americans held manufacturing jobs. See, e.g., Martin Neil Baily and Barry P. Bosworth, “U.S. Manufacturing: Understanding Its Past and Its Potential Future,” Journal of Economic Perspectives 28, no. 1 (Winter 2004): 3–26, 12, Figure 2. Hereafter cited as Baily and Bosworth, “U.S. Manufacturing.” Since then, domestic manufacturing employment has fallen steadily. By 1992 the sector sustained only 16.5 million jobs, and by 2012, manufacturing employment had fallen to below 12 million, although it would subsequently recover to just over 12 million. See also Bureau of Labor Statistics, “Employment, Hours, and Earnings from the Current Employment Statistics Survey (National),” extracted June 22, 2017, https://data.bls.gov/timeseries/CES3000000001.

And to employ the same percentage of the American workforce in manufacturing today as worked in the sector in the mid-1960s, the economy would require perhaps twenty-five million more manufacturing jobs than it currently provides. At the same time, although less familiarly, the new technologies have created a new group of glossy jobs staffed by super-skilled industrial workers who design, program, and manage automated production processes. Even as overall domestic manufacturing employment fell by roughly a third between 1992 and 2012, the number of manufacturing jobs for workers with college degrees increased by 2.4 percent, and the number of manufacturing jobs for workers with graduate degrees increased by 44 percent. These super-skilled workers are more productive—much more productive—than the mid-skilled workers they replace, and their productivity has allowed manufacturing’s share of real gross domestic product to hold steady even as its share of employment declined.

See Bureau of Labor Statistics, The Employment Situation—May 2017, Summary Table A, https://www.bls.gov/news.release/archives/empsit_06022017.pdf. Twenty-five percent of 150 million is 37.5 million. On the other hand, total manufacturing today employs perhaps 12 million persons. See Baily and Bosworth, “U.S. Manufacturing,” 12, Figure 2. increased by 44 percent: This entails that more than 100 percent of the overall decline in manufacturing employment comes from the mid-skilled, non-college-educated segment of the industrial workforce. See Robert Shapiro, “Robotic Technologies Could Aggravate the U.S. Problem of Slow Jobs Growth,” Daily Beast, July 19, 2013, accessed November 18, 2018, www.thedailybeast.com/articles/2013/07/19/robotic-technologies-could-aggravate-the-u-s-problem-of-slow-jobs-growth.html. See also Manufacturing Institute, “Percent of Manufacturing Workforce by Education Level,” April 2014, www.themanufacturinginstitute.org/Research/Facts-About-Manufacturing/Workforce-and-Compensation/Workforce-by-Education/Workforce-by-Education.aspx, and Elka Torpey, “Got Skills?


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

"Robert Solow", 3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Charles Lindbergh, clean water, collective bargaining, computer age, creative destruction, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, full employment, George Akerlof, germ theory of disease, glass ceiling, high net worth, housing crisis, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the sewing machine, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, mass immigration, mass incarceration, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, pink-collar, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, undersea cable, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yellow journalism, yield management

In contrast, there was an 80 percent increase during 2011–13 in the compensation of Caterpillar’s CEO, whose quoted mantra is “we can never make enough money … we can never make enough profit.”23 Foreign companies such as Volkswagen continue to open plants in the nonunion right-to-work states. By lowering wages compared to wages in union-dominated northern states, these foreign transplant factories help keep overall U.S. manufacturing employment from declining further. But any progress in arresting the decades-long decline in manufacturing employment appears to be contingent on maintaining worker wages at about half the level that the automobile union had achieved for its workers before the bankruptcy of General Motors and Chrysler. In the 2009–2013 recovery, manufacturing regained only 600,000 of the 6 million jobs that had been lost since 2001, and most of those were contingent on hiring workers at wage rates that were substantially lower than were common in manufacturing as recently as 2001.24 INCREASED INEQUALITY AT THE TOP Table 18–2 focused on the gap between the growth rate of average real income since 1975 as contrasted either with income growth at the median (i.e., fiftieth percentile) of that distribution.

GDP increased from 5.4 percent in 1970 to 16.5 percent in 2014. Labor embodied in imports is a substitute for domestic labor. For this reason, the increase in the import share of GDP has contributed to the decline in the relative wages of unskilled and middle-skilled workers. In one particularly striking analysis, David Autor and co-authors calculated that imports from China between 1990 and 2007 accounted for about a quarter of the decline in manufacturing employment during that period and that they also lowered wages, reduced the labor force participation rate, and raised publicly financed transfer payments.10 The inroads of imports go beyond final goods, because both firms and countries increasingly specialize in different stages of production. For instance, increases of automobile parts more than doubled between 2001 and 2014, from $63 billion to $138 billion, and caused many U.S. parts manufacturers to close their domestic factories and in some cases to “offshore” parts production to foreign countries, particularly Mexico.11 Taken together, increased import penetration and outsourcing represent the combined effects of globalization on the levels of both employment and wages in the domestic economy.

The previous literature has noted the fact that among high school dropouts, wages of domestic and foreign-born workers were almost identical up to 1980, but by 2004, foreign-born workers earned 15–20 percent less.15 Downward pressure on wages in the bottom 90 percent would have occurred even if there had been no erosion of unionization nor a growth of imports or immigration. The steady pace of automation—the replacement of jobs by machines—would have contributed to a decline of the relative incomes of those in the bottom 90 percent. Relatively high-paying manufacturing jobs have eroded, as the share of manufacturing employment in the United States declined from 30 percent in 1953 to less than 10 percent currently. The automation effect overlaps with “skill-biased technical change” that results in the destruction of routine jobs that are close substitutes to software-driven computers, and these job losses have occurred not just in the assembly lines of manufacturing plants, but also in such routine office occupations as typist, bookkeeper, clerk, receptionist, and others.


pages: 238 words: 73,824

Makers by Chris Anderson

3D printing, Airbnb, Any sufficiently advanced technology is indistinguishable from magic, Apple II, autonomous vehicles, barriers to entry, Buckminster Fuller, Build a better mousetrap, business process, commoditize, Computer Numeric Control, crowdsourcing, dark matter, David Ricardo: comparative advantage, death of newspapers, dematerialisation, Elon Musk, factory automation, Firefox, future of work, global supply chain, global village, IKEA effect, industrial robot, interchangeable parts, Internet of things, inventory management, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, Kickstarter, Lean Startup, manufacturing employment, Mark Zuckerberg, means of production, Menlo Park, Network effects, private space industry, profit maximization, QR code, race to the bottom, Richard Feynman, Ronald Coase, Rubik’s Cube, self-driving car, side project, Silicon Valley, Silicon Valley startup, Skype, slashdot, South of Market, San Francisco, spinning jenny, Startup school, stem cell, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, supply-chain management, The Nature of the Firm, The Wealth of Nations by Adam Smith, transaction costs, trickle-down economics, Whole Earth Catalog, X Prize, Y Combinator

Our commercial lives reside mostly in the real world of bricks and mortar, of food and clothes, of cars and houses, and, until some sci-fi future arrives where we’re just disembodied brains in vats, that will continue to be the case. Bits are thrilling, but when it comes to the overall economy, it’s all about atoms. Yet the cost of labor has made it harder and harder to keep manufacturing industries going in the rich countries of the West. Driven by the exodus of factory jobs due largely to Asian cost advantages, manufacturing employment in the United States is at a century-long low, both in absolute numbers and as a percentage of total working population. What’s worse, those factories that are bucking the trend are having trouble finding qualified workers, as a generation has turned away from manufacturing as a career option. The industry that created the middle class in America is now seen to be in terminal decline (as we’ll see later, this isn’t the case, but without a reset, appearances risk becoming reality).

Add to that the increasing cost of transportation across the seas, the political risk of trade wars and tariffs and the hidden costs of delays and disruption in shipping along with the excess inventory needed to buffer that, and you can see why the Eastward migration of manufacturing may have peaked.38 Can Makers make jobs? But one thing we have not been making more of in recent years is manufacturing jobs. Even as output doubled over the past four decades, manufacturing employment fell by about 30 percent over that period. The increased output was a result of improved production efficiency (mostly automation) leading to greater productivity per employee, not more workers. Meanwhile, the biggest creators of jobs in the American economy are small and medium-sized business—exactly what manufacturing moved away from over the previous decades as companies searched for economies of scale to compete with low-cost labor overseas.


pages: 300 words: 76,638

The War on Normal People: The Truth About America's Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang

3D printing, Airbnb, assortative mating, augmented reality, autonomous vehicles, basic income, Ben Horowitz, Bernie Sanders, call centre, corporate governance, cryptocurrency, David Brooks, Donald Trump, Elon Musk, falling living standards, financial deregulation, full employment, future of work, global reserve currency, income inequality, Internet of things, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Khan Academy, labor-force participation, longitudinal study, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, megacity, Narrative Science, new economy, passive income, performance metric, post-work, quantitative easing, reserve currency, Richard Florida, ride hailing / ride sharing, risk tolerance, Ronald Reagan, Sam Altman, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, single-payer health, Stephen Hawking, Steve Ballmer, supercomputer in your pocket, technoutopianism, telemarketer, The Wealth of Nations by Adam Smith, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, unemployed young men, universal basic income, urban renewal, white flight, winner-take-all economy, Y Combinator

U.S. companies outsourced and offshored 14 million jobs by 2013, many of which would have previously been filled by domestic workers at higher wages. This resulted in lower prices, higher efficiencies, and some new opportunities but also increased pressures on American workers who now had to compete with a global labor pool. Automation started out on farms earlier in the century with tractors and then migrated to factories in the 1970s. Manufacturing employment began to slip around 1978 as wage growth began to fall. Median wages used to go up in lockstep with productivity and GDP growth before diverging sharply in the 1970s. Since 1973, productivity has skyrocketed relative to the hourly compensation of the average wage earner: How workers are compensated and how their companies perform stopped being aligned over the same period. Even as corporate profitability has soared to record highs, workers are earning less.

Hand-in-hand with the spike in suicides and addiction has been the incredible increase in applications to Social Security disability programs. Almost 9 million working-age Americans receive disability benefits. That’s more than the entire population of New Jersey or Virginia. The percentage of working-age Americans who received disability benefits was 5.2 percent in 2017, up from only 2.5 percent in 1980. Disability applications started surging in 2000, the same year that manufacturing employment started to plummet. The average benefit size in June 2017 was $1,172 per month, at a total cost of about $143 billion per year. The age of the disabled has gone down—in 2014, 15 percent of men and 16.2 percent of women in their 30s or early 40s were on disability, up from 6.6 percent and 6.4 percent in the 1960s. Rates of disability track areas of joblessness, forming “disability belts” in Appalachia, the Deep South, and other regions.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

banking crisis, big-box store, blue-collar work, business cycle, car-free, carbon footprint, collapse of Lehman Brothers, congestion charging, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial innovation, Ford paid five dollars a day, high net worth, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, low skilled workers, manufacturing employment, McMansion, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, Robert Shiller, secular stagnation, Silicon Valley, Silicon Valley startup, social intelligence, sovereign wealth fund, starchitect, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

During the First Reset, as the last chapter has shown, major industries such as railroads, petroleum, and steel were consolidated, new industries and new systems innovations took shape, and the way was paved for a period of remarkable industrial growth. By the turn of the twentieth century, the economic landscape was also transformed.3 Between 1870 and 1900, the populations of urban areas exploded. New York City’s population more than tripled, rising from 942,000 to 3.4 million people. Philadelphia expanded from 550,000 to 1.3 million people, and Chicago swelled from 300,000 to 1.3 million. Manufacturing employment in these three cities grew by 245 percent over the same period.4 The period also saw the rise of a new set of massive industrial cities. Pittsburgh grew from 86,000 people in 1870 to more than 320,000 in 1900; Detroit from 79,000 to 285,000; Cleveland from 92,000 to 382,000. Across the nation, the number of Americans living in urban areas surged by more than 20 million, as the share of the population counted as urban rose from 25 to 40 percent.

., David Gordon’s classic “Capitalist Development and the History of American Cities,” in Marxism and the Metropolis: New Perspectives on Urban Political Economy, William K. Tabb and Larry Sawers, eds. (New York: Oxford University Press, 1984), 21–53. 4. Population data for American cities are from Campbell Gibson, “Population of the 100 Largest Cities and Other Urban Places in the United States: 1790 to 1990,” U.S. Census, June 1998, retrieved from www.census.gov/population/www/documentation/twps0027/twps0027.html. Data on manufacturing employment are from Gordon, “Capitalist Development and the History of American Cities.” 5. Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities (New Haven, Conn.: Yale University Press, 1984). 6. Statistics on immigration and immigrants during the First Reset are from Campbell J. Gibson and Emily Lennon, “Historical Census Statistics on the Foreign-born Population of the United States: 1850–1990,” U.S.


pages: 319 words: 75,257

Trumpocalypse: Restoring American Democracy by David Frum

Affordable Care Act / Obamacare, anti-globalists, Bernie Sanders, centre right, coronavirus, currency manipulation / currency intervention, decarbonisation, Donald Trump, Edward Snowden, employer provided health coverage, illegal immigration, immigration reform, labor-force participation, manufacturing employment, mass immigration, Mikhail Gorbachev, Nate Silver, obamacare, offshore financial centre, Peter Thiel, plutocrats, Plutocrats, QAnon, rent-seeking, Ronald Reagan, Saturday Night Live, Silicon Valley

In December 2019, the Federal Reserve released the first close study of the impact of Trump’s economic policies on consumer welfare. The language of the study was delicate, but the conclusions were damning. “We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices.” And while some might argue that hurting consumers is an acceptable price to pay to revive US manufacturing, “our results suggest that the tariffs have not boosted manufacturing employment or output, even as they increased producer prices.”27 The Trump tax cuts were justified in great part as a means to entice US corporations to book their profits where the US government could tax them. The New York Times reported in December 2019 that this purpose had been stealthily defeated by deft lobbying of the Trump Treasury department.


pages: 537 words: 200,923

City: Urbanism and Its End by Douglas W. Rae

agricultural Revolution, barriers to entry, business climate, City Beautiful movement, complexity theory, creative destruction, desegregation, edge city, ghettoisation, Gunnar Myrdal, income per capita, informal economy, information asymmetry, interchangeable parts, invisible hand, James Watt: steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Kickstarter, manufacturing employment, New Economic Geography, new economy, New Urbanism, Peter Calthorpe, plutocrats, Plutocrats, Saturday Night Live, the built environment, The Death and Life of Great American Cities, the market place, urban planning, urban renewal, War on Poverty, white flight, Works Progress Administration

Westville. 87 U R B A N I S M households has an industrial worker as its head, and that such a head—directly or by delegation to another family member—spends 20 percent of the family’s income on food, and suppose, for simplicity, that he or she spends it all at one store. If each customer spends $10 (20 percent of $50) per month, the gross receipt per store is perhaps $650. With a 20 percent gross profit margin, that makes $130 per month per store. This perhaps translates to something like $60 per month in net profits—enough to make the grocery business stand up against most forms of manufacturing employment so long as business remains this good. If the store is family-operated—most were—it is quite possible that this income stream is combined with another job, perhaps a factory job. Of the 628, 97 were run under women’s names, and the number actually operated by women was probably higher. The labor of children and adolescents would be folded into such an operation on a daily basis, appearing nowhere in the formal accounts of the operation.

Established in 1870 at its permanent site just north and west of the Yale campus, this was a worldwide brand name with large markets in military and sporting weaponry. In 1916 it occupied 81 outdoor acres for production and another 23 acres for shipping and storage. Its steam boilers produced 7,650 horsepower, and its steam turbines added 11,175 more. It consumed 75,000 tons of coal, 3.4 billion cubic feet of combustible gas, 10,000 tons of steel, and 13,500 tons of lead, and occupied 3.25 million feet of interior plant floor.52 It was the largest manufacturing employer in New Haven and one of the largest in the world, reaching 12,000 workers by 1916 under the impetus of World War I. New Haven Clock Company, founded in the 1850s, built on the stamped-brass 108 F A B R I C O F E N T E R P R I S E technology of Chauncey Jerome’s clockworks to become a low-cost producer on a world scale. The plant occupied two city blocks along the rail spur that also served Sargent Hardware, Cowles, and National Paper Box.

But the largest plant of all, Winchester Repeating Arms, was desperately searching for customers and was now merely part of a corporate network within which Alton, Illinois, was every bit as important as New Haven. Manufacturing firms were not considering central New Haven as a site for new facilities. A sophisticated 1945 economic analysis commissioned by the New Haven Chamber of Commerce had shown that the 295 E N D O F U R B A N I S M rate of change in New Haven’s manufacturing employment base had slipped markedly below national rates during 1943 and 1944.18 It had even slipped behind many comparable cities, including Buffalo, Trenton, and nearby Bridgeport. The report, written by Roy Wenzleck of St. Louis, made unflattering comparisons between New Haven’s economy and those of boomtowns like San Diego, Fort Worth, and Houston. Population growth in the city had been far below the national average for fifteen years, and scarcely two thousand new citizens had appeared since 1930 (which itself ended a decade of slowing growth).


pages: 281 words: 86,657

The Great Inversion and the Future of the American City by Alan Ehrenhalt

anti-communist, big-box store, British Empire, crack epidemic, David Brooks, deindustrialization, Edward Glaeser, Frank Gehry, haute cuisine, Honoré de Balzac, housing crisis, illegal immigration, Jane Jacobs, manufacturing employment, mass immigration, McMansion, New Urbanism, Norman Mailer, Peter Calthorpe, postindustrial economy, Richard Florida, The Chicago School, The Death and Life of Great American Cities, too big to fail, transit-oriented development, upwardly mobile, urban decay, urban planning, urban renewal, walkable city, white flight, working poor, young professional

When the mayor spoke those words, the city had suffered through nearly a generation of economic and demographic decline and social disorder, to which no clear end was in sight. In fact, however, by 1989 many of Chicago’s problems were already beginning to ease up. The loss of factory jobs was indeed horrendous: four hundred thousand of them between 1969 and 1983 alone, or 32 percent of the city’s total manufacturing employment base. This was roughly comparable to what was happening in other Midwestern industrial cities, except in one respect: Virtually all the other cities—Detroit, Cleveland, St. Louis—were unable to come up with new kinds of jobs to replace them. Chicago did. In Chicago, the downtown Loop and lakefront corridor running north from it gradually became a magnet for service and professional work: banking, brokerage, insurance, architecture, and various forms of temporary office employment.

Even Pittsburgh, which suffered through the collapse of the steel industry, its economic lifeline, has close to an equal number. Philadelphia has a population of 1.4 million and a little more than six hundred thousand jobs. And the greatest effect of that imbalance has been felt in the old row-house neighborhoods that spread north and west from Center City. Philadelphia’s neighborhoods were not merely places to live; they were all-purpose communities wound tightly around manufacturing employment. They were lunch-pail neighborhoods. The breadwinners in those small homes walked to their factory jobs in the morning, carried their sustenance with them, and walked back home again later in the afternoon to open a beer and glance at the evening paper. The factories closed up in a period of just a few decades: In 1950, 45 percent of the city’s jobs were in manufacturing; by 1980, according to Pew’s Philadelphia Research Initiative, that figure was down to 20 percent.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

affirmative action, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, George Gilder, Gini coefficient, global reserve currency, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, Mexican peso crisis / tequila crisis, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the built environment, The Chicago School, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, Winter of Discontent

The former would have ‘two to fifty shareholders’ while the latter would have ‘more than fifty shareholders and could offer public issues’. A year later a far more extensive programme of corporatization was announced: all but the most important of the SOEs were to be converted into ‘share-based co-operatives’ in which all employees had the nominal right to purchase shares. Further waves of privatization/conversion of the SOEs occurred in the late 1990s so that, by 2002, SOEs accounted for only 14 per cent of total manufacturing employment relative to the 40 per cent share they had held in 1990. The most recent step has been to open both the TVEs and the SOEs to full foreign ownership.13 Foreign direct investment, for its part, met with very mixed results in the 1980s. It was initially channelled into four special economic zones in southern coastal regions. These zones ‘had the initial objective of producing goods for export to earn foreign exchange.

Korean electronics corporations now have substantial operations in China. In September 2003, for example, Samsung Electronics announced it was moving its entire PC-making business to China, having previously invested $2.5 billion there, ‘creating 10 sales subsidiaries and 26 production companies, employing a total of 42,000 people’.35 Japanese outsourcing of production to China contributed to the decline in Japanese manufacturing employment from 15.7 million in 1992 to 13.1 million in 2001. Japanese companies also began to withdraw from Malaysia, Thailand, and elsewhere in order to relocate in China. They are now so heavily invested in China that ‘more than half of China–Japan trade is conducted among Japanese companies’.36 As happened in the US, corporations can do very well while their home countries suffer. China has displaced more manufacturing jobs from Japan, South Korea, Mexico, and elsewhere than it has from the US.


pages: 365 words: 88,125

23 Things They Don't Tell You About Capitalism by Ha-Joon Chang

"Robert Solow", affirmative action, Asian financial crisis, bank run, banking crisis, basic income, Berlin Wall, Bernie Madoff, borderless world, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, deskilling, ending welfare as we know it, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, full employment, German hyperinflation, Gini coefficient, hiring and firing, Hyman Minsky, income inequality, income per capita, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market fundamentalism, means of production, Mexican peso crisis / tequila crisis, microcredit, Myron Scholes, North Sea oil, offshore financial centre, old-boy network, post-industrial society, price stability, profit maximization, profit motive, purchasing power parity, rent control, shareholder value, short selling, Skype, structural adjustment programs, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, Toyota Production System, trade liberalization, trickle-down economics, women in the workforce, working poor, zero-sum game

Having liberalized its trade completely around 1860, its relative position started declining from the 1880s, with countries such as the US and Germany rapidly catching up. It lost its leading position in the world’s industrial hierarchy by the time of the First World War, but the dominance of manufacturing in the British economy itself continued for a long time afterwards. Until the early 1970s, together with Germany, Britain had one of the world’s highest shares of manufacturing employment in total employment, at around 35 per cent. At the time, Britain was the quintessential manufacturing economy, exporting manufactured goods and importing food, fuel and raw materials. Its manufacturing trade surplus (manufacturing exports minus manufacturing imports) stayed consistently between 4 per cent and 6 per cent of GDP during the 1960s and 70s. Since the 1970s, however, the British manufacturing sector has shrunk rapidly in importance.

Even though there is no reliable estimate of its magnitude, experts agree that outsourcing has been a significant source of de-industrialization in the US and Britain, especially during the 1980s. In addition to the outsourcing effect, the extent of manufacturing contraction is exaggerated by what is called the ‘reclassification effect’.2 A UK government report estimates that up to 10 per cent of the fall in manufacturing employment between 1998 and 2006 in the UK may be accounted for by some manufacturing firms, seeing their service activities becoming predominant, applying to the government statistical agency to be reclassified as service firms, even when they are still engaged in some manufacturing activities. One cause of genuine de-industrialization has recently attracted a lot of attention. It is the rise of manufacturing imports from low-cost developing countries, especially China.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"Robert Solow", banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

Of course some decline in manufacturing was always inevitable while the process of de-industrialisation and the expansion of the service sector is in many ways a desirable hallmark of economic maturity. 94 Some industries in which Britain once had a comparative advantage such as steel, textiles and coalmining were in historic decline unable to compete with newly industrialising countries with cheaper labour. It is generally desirable for economies to adapt to changing global patterns by shifting low value production to areas which can produce the same goods more cheaply, replacing them with higher value production. Indeed, all industrial nations have experienced a fall in the role played by manufacturing. Between 1974 and 2001, manufacturing employment fell by a third across the nations which make up the Organisation for Economic Co-operation and Development. What is significant is that the falls in the UK and the US have been much steeper. 95 In Mrs Thatcher’s first term alone, as the number of bankruptcies exploded, manufacturing output fell by a third. It is no coincidence that in both these countries finance became an increasingly dominant force as the process of de-industrialisation accelerated.

William Benedetto, head of corporate finance for Dean Witter Reynolds—one of America’s largest stock brokerage and securities’ firms—called Ronald Reagan’s eight-year Presidency ‘an investment banker’s dream world.’96 But while Wall Street flourished, key industrial sectors from timber and steel to chemicals and high-technology, sweated. Between 1970 and 1990, American employment in manufacturing shrank from 27 to 17 per cent of the workforce. This was mostly the product of finance initiated industrial restructuring, including the shift of production centres abroad by American corporations.97 The fall in manufacturing employment continued after 1990, with the mild recession of 2000-2003 accelerating the long term trend.98 In the UK, globalisation, the abolition of international control over exchange rates and the pursuit of a strong pound all hastened the decline of manufacturing. For the City, the end of exchange controls (the rules that had restricted movements of money between nations since the Second World War), high real interest rates and the appreciating pound from 1979 produced what one commentator described in 1981 as ‘dream conditions for London’s financial apparatus.’ 99 Hot money flowed into London and bankers enjoyed, for the first time since 1939, complete freedom over where to invest these increased inflows.


pages: 470 words: 148,730

Good Economics for Hard Times: Better Answers to Our Biggest Problems by Abhijit V. Banerjee, Esther Duflo

"Robert Solow", 3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, basic income, Bernie Sanders, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, charter city, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, endowment effect, energy transition, Erik Brynjolfsson, experimental economics, experimental subject, facts on the ground, fear of failure, financial innovation, George Akerlof, high net worth, immigration reform, income inequality, Indoor air pollution, industrial cluster, industrial robot, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jean Tirole, Jeff Bezos, job automation, Joseph Schumpeter, labor-force participation, land reform, loss aversion, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, Network effects, new economy, New Urbanism, non-tariff barriers, obamacare, offshore financial centre, open economy, Paul Samuelson, place-making, price stability, profit maximization, purchasing power parity, race to the bottom, RAND corporation, randomized controlled trial, Richard Thaler, ride hailing / ride sharing, Robert Gordon, Ronald Reagan, school choice, Second Machine Age, secular stagnation, self-driving car, shareholder value, short selling, Silicon Valley, smart meter, social graph, spinning jenny, Steve Jobs, technology bubble, The Chicago School, The Future of Employment, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, trickle-down economics, universal basic income, urban sprawl, very high income, War on Poverty, women in the workforce, working-age population, Y2K

For example, since China’s growth in female nonathletic footwear was particularly rapid after China’s accession to the WTO, a commuting zone producing lots of footwear in 1990 would be more affected by the China shock than a commuting zone producing mostly coated fabrics, where China was not so present. So the China shock index measures the vulnerability of a region’s industrial mix to China’s strength by weighing each product type by China’s import to the EU. US commuting zones fared very differently depending on what they happened to produce. Those zones more affected by the China shock experienced substantially larger reductions in manufacturing employment. More strikingly, there was no reallocation of labor to new kinds of jobs. The total number of jobs lost was often larger than merely the number of jobs lost in the industries that were hit, and rarely less. This is presumably a consequence of the clustering effect we talked about. Those who lost their jobs tightened their belts, further reducing the economic activity in the area. Nonmanufacturing employment did not pick up the slack.

She wrote a piece about it in 1984, called, quite simply, “Why TVA Failed.”42 But it did not fail. Enrico Moretti and a colleague compared the TVA region with six other areas initially supposed to receive the same type of investment but where, for various political reasons, nothing happened. They found that between 1930 and 1960, the TVA counties generated gains both in agricultural and manufacturing employment relative to this comparison group. It is true that once outside funding for the program stopped in 1960, the gains in agriculture vanished, but the gains in manufacturing persisted and actually continued to intensify all the way until 2000, consistent with a widely held view that spillovers are more important in manufacturing than in agriculture. The effects are substantial; the authors estimate that over the long run the income gains as a result of TVA in the region will be $6.5 billion more than what it cost to set it up.43 Does this mean countries can create the conditions for permanently faster economic growth by promoting regional development, perhaps in multiple regions at the same time?

The result is that small artisanal farms are able to survive, and from them we get high-quality produce and pretty landscapes. This is something most Europeans probably think is worth preserving and certainly contributes to the quality of their lives and the sense of what it is to be a European. Would French GDP be higher if agricultural production were more concentrated and farmhouses were replaced by warehouses? Possibly. Would welfare be higher? Probably not. The analogy between protecting manufacturing employment in the United States and protecting nature in France may seem strange. But pretty countrysides attract tourists and keep young people around to take care of their aging parents. Similarly, the company town can ensure there is a high school, some sports teams, a main street with a few shops, and a sense of belonging somewhere. This is also the environment, something we all enjoy, and society should be ready to pay for it, just as it is willing to pay for trees.


pages: 294 words: 96,661

The Fourth Age: Smart Robots, Conscious Computers, and the Future of Humanity by Byron Reese

agricultural Revolution, AI winter, artificial general intelligence, basic income, Buckminster Fuller, business cycle, business process, Claude Shannon: information theory, clean water, cognitive bias, computer age, crowdsourcing, dark matter, Elon Musk, Eratosthenes, estate planning, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, full employment, Hans Rosling, income inequality, invention of agriculture, invention of movable type, invention of the printing press, invention of writing, Isaac Newton, Islamic Golden Age, James Hargreaves, job automation, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, lateral thinking, life extension, Louis Pasteur, low skilled workers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Mary Lou Jepsen, Moravec's paradox, On the Revolutions of the Heavenly Spheres, pattern recognition, profit motive, Ray Kurzweil, recommendation engine, Rodney Brooks, Sam Altman, self-driving car, Silicon Valley, Skype, spinning jenny, Stephen Hawking, Steve Wozniak, Steven Pinker, strong AI, technological singularity, telepresence, telepresence robot, The Future of Employment, the scientific method, Turing machine, Turing test, universal basic income, Von Neumann architecture, Wall-E, Watson beat the top human players on Jeopardy!, women in the workforce, working poor, Works Progress Administration, Y Combinator

But as Mark Muro and Scott Andes of the Brookings Institution write in the Harvard Business Review: [There is] . . . no visible relationship between the use of robots and the change in manufacturing employment. Despite the installation of far more robots between 1993 and 2007, Germany lost just 19% of its manufacturing jobs between 1996 and 2012 compared to a 33% drop in the U.S. They then go on to point out that other countries, such as Italy, South Korea, and France, lost a smaller percentage of manufacturing jobs than did the United States even though they deployed more robots than the United States did. On the other end of the spectrum, other countries including the United Kingdom and Australia invested less than the United States in robots and had even bigger declines in manufacturing employment. The idea that robots would create manufacturing jobs and not destroy them is not as surprising as it might seem.


pages: 322 words: 87,181

Straight Talk on Trade: Ideas for a Sane World Economy by Dani Rodrik

3D printing, airline deregulation, Asian financial crisis, bank run, barriers to entry, Berlin Wall, Bernie Sanders, blue-collar work, Bretton Woods, BRICs, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, central bank independence, centre right, collective bargaining, conceptual framework, continuous integration, corporate governance, corporate social responsibility, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Donald Trump, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, financial deregulation, financial innovation, financial intermediation, financial repression, floating exchange rates, full employment, future of work, George Akerlof, global value chain, income inequality, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Jean Tirole, Kenneth Rogoff, low skilled workers, manufacturing employment, market clearing, market fundamentalism, meta analysis, meta-analysis, moral hazard, Nelson Mandela, new economy, offshore financial centre, open borders, open economy, Pareto efficiency, postindustrial economy, price stability, pushing on a string, race to the bottom, randomized controlled trial, regulatory arbitrage, rent control, rent-seeking, Richard Thaler, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sam Peltzman, Silicon Valley, special economic zone, spectrum auction, Steven Pinker, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, total factor productivity, trade liberalization, transaction costs, unorthodox policies, Washington Consensus, World Values Survey, zero-sum game, éminence grise

This means that many (if not most) developing nations are becoming service economies without having had a proper experience of industrialization—a process I have called “premature deindustrialization.” While early industrializers managed to place 30 percent or more of their workforce in manufacturing, the most recent rounds of latecomers have rarely managed that feat. Brazil’s manufacturing employment peaked at 16 percent and Mexico’s at 20 percent. In India, manufacturing employment began to lose ground (in relative terms) after it reached 13 percent.3 Latin America appears to be the worst-hit region. But worryingly similar trends are very much evidenced in Sub-Saharan Africa too, where few countries had much industrialization to begin with. The only countries that seem to have escaped the curse of premature industrialization are a relatively small group of Asian countries and manufactures exporters.


pages: 279 words: 90,888

The Lost Decade: 2010–2020, and What Lies Ahead for Britain by Polly Toynbee, David Walker

banking crisis, battle of ideas, Boris Johnson, call centre, car-free, centre right, collective bargaining, congestion charging, corporate governance, crony capitalism, David Attenborough, Dominic Cummings, Donald Trump, Downton Abbey, energy transition, Etonian, first-past-the-post, G4S, gender pay gap, gig economy, Gini coefficient, global village, high net worth, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), James Dyson, manufacturing employment, mass immigration, moral panic, mortgage debt, North Sea oil, offshore financial centre, payday loans, pension reform, quantitative easing, Right to Buy, Saturday Night Live, selection bias, smart meter, Uber for X, urban renewal, working-age population

They accepted it, perhaps having no choice. Unions were weak or absent; employers cracked the whip; staff jumped or moved on, to be replaced by employees on the same or less money. Companies kept a larger slice of their revenue for directors and shareholders, and the share of GDP going to workers fell. All this linked with the loss of solid jobs in the public services and the long-running move away from skilled and better-paid manufacturing employment to (often unskilled and less well-paid) jobs in the service industries. The trend also helped explain why inflation didn’t rise: in services prices changed much less regularly than for goods. We don’t say that everything was bad; rather it’s the counterfactual, that things could have been so much better than they were. People got by; with the exception of the poorest, it wasn’t so much a desperate decade as an endurable period of little or no growth and relative stability.

Their strategies for transport, telecoms and infrastructure turned out to be wish lists, with little sense of how they fitted together and how they were to be paid for. George Osborne had promised ‘the march of the makers’; by 2020 the march had not prevented the closure of Honda in Swindon, British Steel in Scunthorpe or Ford at Bridgend, and the shutdowns continue. The GMB union calculated a drop of 600,000 in manufacturing employment, but manufacturing as a proportion of GDP nonetheless stabilised. Some thought conventional definitions failed to capture the new boundary between making things and making software and systems for making things. Theresa May promised a reinvigorated industrial strategy. What she meant was unclear; her weak government could not muster the effort to drive a coherent policy through different departments.


pages: 350 words: 103,988

Reinventing the Bazaar: A Natural History of Markets by John McMillan

"Robert Solow", accounting loophole / creative accounting, Albert Einstein, Alvin Roth, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, corporate raider, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, information asymmetry, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, Kenneth Arrow, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, ought to be enough for anybody, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management

“The free enterprise system is too important to this country to be left in the hands of private individuals,” a Mississippi congressman allegedly once remarked. Oxymoron as this may be, it contains an element of truth. For markets to work well enough to discipline firms, some state action is needed. Large firms are much more prevalent in affluent countries than in developing countries. In the United States, plants with fifty or more employees account for over 80 percent of total manufacturing employment. In Thailand they account for 30 percent of manufacturing employment, and in Indonesia and Ghana, 15 percent. In the United States, plants with less than ten employees account for a mere 4 percent of jobs, whereas in Thailand such tiny plants account for 60 percent, and in Indonesia and Ghana, about 80 percent.10 Richer countries have larger firms. Why does small-scale production go together with low national income? Where labor is cheap and capital is scarce, firms use simple equipment for which a small scale of production is economical.


pages: 112 words: 30,160

The Gated City (Kindle Single) by Ryan Avent

big-box store, carbon footprint, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, Silicon Valley, Thorstein Veblen, transit-oriented development, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

New York City became a logical location for the manufacturing of the raw goods that came into the harbor. Cotton, for instance, came into the port, made its way through New York factories, and exited the port as textiles destined for markets around the world. It was these manufacturing industries, and their near-limitless appetite for labor, that drove most of the city's phenomenal population growth (not least because manufacturing employment opportunities allowed the city to retain much of the immigrant population entering the city). As New York’s industrial economy grew, it supported the development of complementary sectors. Finance and insurance developed in tandem with shipping. Design grew hand-in-hand with textile production. Publishing sprouted alongside printing. In the 20th century, falling shipping costs made it profitable for factories to pack up and move to cheaper areas.


pages: 401 words: 109,892

The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon

airline deregulation, Amazon Mechanical Turk, Amazon Web Services, Andrei Shleifer, barriers to entry, bitcoin, blockchain, business cycle, business process, buy and hold, Carmen Reinhart, carried interest, central bank independence, commoditize, crack epidemic, cross-subsidies, disruptive innovation, Donald Trump, Erik Brynjolfsson, eurozone crisis, financial deregulation, financial innovation, financial intermediation, gig economy, income inequality, income per capita, index fund, intangible asset, inventory management, Jean Tirole, Jeff Bezos, Kenneth Rogoff, labor-force participation, law of one price, liquidity trap, low cost airline, manufacturing employment, Mark Zuckerberg, market bubble, minimum wage unemployment, money market fund, moral hazard, natural language processing, Network effects, new economy, offshore financial centre, Pareto efficiency, patent troll, Paul Samuelson, price discrimination, profit maximization, purchasing power parity, QWERTY keyboard, rent-seeking, ride hailing / ride sharing, risk-adjusted returns, Robert Bork, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, Silicon Valley, Snapchat, spinning jenny, statistical model, Steve Jobs, supply-chain management, Telecommunications Act of 1996, The Chicago School, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, Travis Kalanick, Vilfredo Pareto, zero-sum game

A prime example is what economists now refer to as the China shock. China became a member of the World Trade Organization on December 11, 2001. It marked the end of lengthy negotiations as well as a significant step toward the integration of China into the world economy. Daron Acemoglu and his co-authors (2016) estimate that import competition from China was a major force behind reductions in US manufacturing employment during the 2000s. Imports from China to the US had risen since the early 1990s and experienced a very rapid rise in the 2000s. This growth affected different US industries in different ways. One effect is particularly interesting for us. Before 2000, China was not considered to be a market economy. Under the Smoot-Hawley Tariff Act of 1930, nonmarket economies are subject to a relatively high tariff, known as a nonnormal trade relations (non-NTR) tariff.

American Economic Review 105(4), 1408–1438. Philippon, T., and A. Reshef (2012). Wages and human capital in the U.S. finance industry: 1909–2006. Quarterly Journal of Economics 127(4), 1551–1609. Philippon, T., and A. Reshef (2013). An international look at the growth of modern finance. Journal of Economic Perspectives 27(2), 73–96. Pierce, J. R., and P. K. Schott (2016). The surprisingly swift decline of US manufacturing employment. American Economic Review 106(7), 1632–1662. Pigou, A. C. (1932). The Economics of Welfare, 4th ed. London: Macmillan. Piketty, T., and E. Saez (2006). The evolution of top incomes: A historical and international perspective. American Economic Review 96(2), 200–205. Pinkham, R. (1999). European airline deregulation: The great missed opportunity? SAIS Europe Journal (1 April). Rajan, R.


pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

"Robert Solow", 3D printing, additive manufacturing, Albert Einstein, American ideology, barriers to entry, borderless world, carbon footprint, centre right, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, distributed generation, en.wikipedia.org, energy security, energy transition, global supply chain, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, Ronald Reagan, scientific worldview, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

Unlike many northern, industrial cities that have been declining since the auto age peaked in the 1980s, Bexar County, which encompasses the larger San Antonio metropolitan region, has significantly outpaced the US economy between 1980 and 2008, with a 58 percent faster growth rate.11 This is in part because of the strong financial and insurance sectors, which make up 20 percent of the employment.12 The only declining sector in Bexar County is manufacturing. While US manufacturing employment grew by 25 percent, San Antonio experienced a net loss of 40,000 manufacturing jobs.13 The city was banking on the prospect that the creation of a five-pillar Third Industrial Revolution infrastructure over the next twenty years would put thousands of people back to work—especially in the manufacturing sector and building trades—and provide new vocational opportunities for a fast-growing younger population.

In the period between 1982 and 2002, US steel production grew from 75 million tons to 102 million tons, while the number of steel workers declined from 289,000 to 74,000.7 This kind of dramatic productivity gain is reverberating across the manufacturing sector as intelligent technology replaces mass human labor on the factory floor. Even in the poorest countries, the cheapest workers are not as cheap or as efficient as the intelligent technology replacing them. If the current trend continues—and it’s likely only to accelerate with even more efficient technology displacement—global manufacturing employment is estimated to decrease from 163 million workers to just a few million workers by 2040, eliminating most factory jobs around the world.8 White-collar and service industries are experiencing similar dramatic gains in productivity and shedding record numbers of workers in the process. Secretaries, file clerks, bookkeepers, telephone operators, and bank tellers are among the scores of traditional white-collar jobs that have become virtually extinct with the introduction of intelligent technology.


Magical Urbanism: Latinos Reinvent the US City by Mike Davis

affirmative action, Berlin Wall, business cycle, clean water, collective bargaining, deindustrialization, desegregation, edge city, illegal immigration, immigration reform, Internet Archive, invisible hand, job automation, longitudinal study, manufacturing employment, market bubble, mass immigration, new economy, occupational segregation, postnationalism / post nation state, Ronald Reagan, Silicon Valley, strikebreaker, union organizing, upwardly mobile, urban renewal, War on Poverty, white flight, white picket fence, women in the workforce, working poor

Puerto Rican immigrants in the 1950s (like many African-American migrants from the South) were shunted into precisely those traditional urban manufacturing jobs that were massively automated, suburbanized or exported overseas after 1960. Boricuans were, so to speak, standing on the track bend at when Industrial Restructuring came around the 100 miles per hour. "The nine cities where the majority of US Puerto Ricans lived in 1980 lost almost one million manufac- turing jobs between 1963 and 1982, representing a 44 percent loss of manufacturing employment." Robert Suro summarizes a consensus of research on the recent economic history of New York City: When New York's industrial economy sank, the Puerto Ricans sank with it. During the 1970s, family income for Puerto Rican ers dropped by 18% and other To make matters worse for Puerto Hispanics experienced gains. Ricans, the losses in New York- in real terms, while whites, blacks, ...


Profit Over People: Neoliberalism and Global Order by Noam Chomsky

Bernie Sanders, Bretton Woods, declining real wages, deindustrialization, full employment, invisible hand, joint-stock company, land reform, liberal capitalism, manufacturing employment, means of production, Monroe Doctrine, Ronald Reagan, strikebreaker, structural adjustment programs, Telecommunications Act of 1996, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, Washington Consensus

So it is, along with repression of labor, lax enforcement of environmental restrictions, and the general orientation of social policy to the desires of the privileged minority. Such policies are naturally welcomed by the manufacturing and financial institutions that are extending their control over the global economy, with the assistance of mislabeled “free trade” agreements. NAFTA is expected to drive large numbers of farm workers off the land, contributing to rural misery and surplus labor. Manufacturing employment, which declined under the reforms, is expected to fall more sharply. A study by Mexico’s leading business journal, El Financiero, predicted that Mexico would lose almost a quarter of its manufacturing industry and 14 percent of its jobs in the first two years. “Economists predict that several million Mexicans will probably lose their jobs in the first five years after the accord takes effect,” Tim Golden reported in the New York Times.


pages: 477 words: 135,607

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson

"Robert Solow", air freight, anti-communist, barriers to entry, Bay Area Rapid Transit, British Empire, business cycle, call centre, collective bargaining, conceptual framework, David Ricardo: comparative advantage, deindustrialization, deskilling, Edward Glaeser, Erik Brynjolfsson, full employment, global supply chain, intermodal, Isaac Newton, job automation, Jones Act, knowledge economy, Malcom McLean invented shipping containers, manufacturing employment, Network effects, New Economic Geography, new economy, oil shock, Panamax, Port of Oakland, post-Panamax, Productivity paradox, refrigerator car, South China Sea, trade route, Works Progress Administration, Yom Kippur War, zero-sum game

There can be no definitive answer, as containerization was only one of many forces affecting manufacturers during the late 1960s and the first half of the 1970s. This period saw the completion of expressways that opened up suburban acreage to industrial development. New York’s high electricity costs pushed out some factories. The general shift of population to the South and West accelerated, leaving New York factories poorly situated to serve expanding markets. The economic downturn of the early 1970s contributed to a fall in manufacturing employment nationwide, and New York’s outmoded factories, often housed in antiquated buildings with little land on which to expand or rebuild, bore the brunt of this shrinkage. There can be no doubt, however, that containerization eliminated one of the key reasons for operating a factory in New York City: ease of shipment. A New York City location had long offered trans port-cost advantages for factories serving foreign or distant domes tic markets, as local plants could get their goods loaded on ships with much less handling than could factories inland.

The majority of the metal boxes moving around the world hold not televisions and dresses, but industrial products such as synthetic resins, engine parts, wastepaper, screws, and, yes, Barbie’s hair.6 In international production-sharing arrangements of this sort, the manufacturer or retailer at the top of the chain will find the most economical place for each part of the process. This used to be impossible: high transportation costs acted as a trade barrier, very similar in effect to high tariffs on imports, sheltering the jobs of production workers from foreign competition but imposing higher prices on consumers. As the container made international transportation cheaper and more dependable, it lowered that barrier, decimating manufacturing employment in North America, Western Europe, and Japan, by making it much easier for manufacturers to go overseas in search of low-cost inputs. The labor-intensive assembly will be done in a low-wage country—but there are many low-wage countries. The various components and raw materials will come from whichever location can supply them most cheaply—but costs in different locations often are quite similar.


pages: 170 words: 49,193

The People vs Tech: How the Internet Is Killing Democracy (And How We Save It) by Jamie Bartlett

Ada Lovelace, Airbnb, Amazon Mechanical Turk, Andrew Keen, autonomous vehicles, barriers to entry, basic income, Bernie Sanders, bitcoin, blockchain, Boris Johnson, central bank independence, Chelsea Manning, cloud computing, computer vision, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, Dominic Cummings, Donald Trump, Edward Snowden, Elon Musk, Filter Bubble, future of work, gig economy, global village, Google bus, hive mind, Howard Rheingold, information retrieval, Internet of things, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Julian Assange, manufacturing employment, Mark Zuckerberg, Marshall McLuhan, Menlo Park, meta analysis, meta-analysis, mittelstand, move fast and break things, move fast and break things, Network effects, Nicholas Carr, off grid, Panopticon Jeremy Bentham, payday loans, Peter Thiel, prediction markets, QR code, ransomware, Ray Kurzweil, recommendation engine, Renaissance Technologies, ride hailing / ride sharing, Robert Mercer, Ross Ulbricht, Sam Altman, Satoshi Nakamoto, Second Machine Age, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, smart cities, smart contracts, smart meter, Snapchat, Stanford prison experiment, Steve Jobs, Steven Levy, strong AI, TaskRabbit, technological singularity, technoutopianism, Ted Kaczynski, the medium is the message, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, ultimatum game, universal basic income, WikiLeaks, World Values Survey, Y Combinator

Adam Smith spotted this in the eighteenth century. In The Wealth of Nations he predicted that machines would allow ‘one man to do the work of many’ and that would drive up productivity and profits. This, in turn, would stimulate the demand for more labour, because it allowed owners to hire more people and build more factories. Research from Georg Graetz and Guy Michaels has found that, while manufacturing employment has fallen in most developed countries between 1996 and 2012, it has fallen less sharply where investment in robotics has been greatest. 4 ‘Automation and anxiety’, The Economist, 25 June 2016. 5 According to Martin Ford, futurist and author of the award winning book Rise of the Robots it won’t happen immediately but within a decade or so. 6 Stick Shift: Autonomous Vehicles, Driving Jobs, and the Future of Work, March 2017, Centre for Global Policy Solutions. 7 Mark Fahey, ‘Driverless cars will kill the most jobs in select US states’, www.cnbc.com, 2 September 2016. 8 ‘Real wages have been falling for longest period for at least 50 years, ONS says’, Guardian, 31 January 2014.


pages: 172 words: 54,066

The End of Loser Liberalism: Making Markets Progressive by Dean Baker

Asian financial crisis, banking crisis, Bernie Sanders, business cycle, collateralized debt obligation, collective bargaining, corporate governance, currency manipulation / currency intervention, Doha Development Round, financial innovation, full employment, Home mortgage interest deduction, income inequality, inflation targeting, invisible hand, manufacturing employment, market clearing, market fundamentalism, medical residency, patent troll, pets.com, pirate software, price stability, quantitative easing, regulatory arbitrage, rent-seeking, Robert Shiller, Robert Shiller, Silicon Valley, too big to fail, transaction costs

Polls generally show that the public opposes NAFTA-type trade deals and sees them as a threat to jobs.[73] These campaigns have had some success in slowing the Clinton-Bush-Obama trade agenda. Most of the bilateral trade deals have been delayed for years, and the Doha round of the World Trade Organization has now been delayed for more than a decade. To make trade deals more palatable to the U.S. public, negotiators have sought to include labor rights and other provisions that might reduce the negative impact that the deals would have on manufacturing employment in the United States and improve conditions for workers in our trading partners. However, labor rights and worker protection provisions would have at best a marginal effect on reversing the extent to which trade policy redistributes income upward. As a result of current trade policy, U.S. manufacturers already have access to a vast pool of relatively low-paid workers in China, India, and elsewhere in the developing world.


The New Class War: Saving Democracy From the Metropolitan Elite by Michael Lind

affirmative action, anti-communist, basic income, Bernie Sanders, Boris Johnson, Bretton Woods, business cycle, capital controls, Cass Sunstein, central bank independence, centre right, collective bargaining, commoditize, corporate governance, crony capitalism, deindustrialization, Doha Development Round, Donald Trump, Edward Snowden, future of work, global supply chain, guest worker program, Haight Ashbury, illegal immigration, immigration reform, invisible hand, knowledge economy, liberal world order, low skilled workers, low-wage service sector, manufacturing employment, Mark Zuckerberg, mass immigration, means of production, moral panic, Nate Silver, new economy, offshore financial centre, oil shock, open borders, plutocrats, Plutocrats, Ponzi scheme, purchasing power parity, Ralph Nader, regulatory arbitrage, rent-seeking, Richard Florida, Ronald Reagan, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, union organizing, universal basic income, upwardly mobile, WikiLeaks, Wolfgang Streeck, working poor

The global profits of many Western managers and investors depend in large part on the labor of poor women in foreign sweatshops, as Delia Aquilar observes: “From the maquiladoras in Mexico . . . to assembly plants and export processing zones [EPZs] in Central America, the Caribbean, and the Pacific Rim, to subcontractors and garment sweatshops in global cities and in nations of the periphery, it is women’s labor that allows and guarantees maximum profitability for the corporate elite, a tiny minority of the world’s inhabitants.”15 The economist David Autor and several coauthors have shown that “the China shock”—the flood of Chinese imports into the US following China’s entry into the WTO—did far more damage to US manufacturing employment than the previous consensus had held, destroying 2 million to 2.4 million net jobs in manufacturing and manufacturing-related industries between 1999 and 2011 and contributing to the “employment sag” in the US in that period.16 A study in 2013 by Michael W. L. Elsby, Bart Hobijn, and Aysegul Sahin concluded that “increases in the import exposure of US businesses can account for 3.3 percentage points of the 3.9 percentage point decline in the US payroll share over the past quarter century.”17 * * * — AMONG MULTINATIONAL FIRMS, Apple in particular has mastered the arts of tax, regulatory, and labor arbitrage.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Berlin Wall, Bonfire of the Vanities, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, corporate governance, corporate raider, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, fixed income, full employment, George Gilder, germ theory of disease, global supply chain, hiring and firing, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, Louis Pasteur, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, means of production, Menlo Park, Mexican peso crisis / tequila crisis, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, plutocrats, Plutocrats, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Sand Hill Road, savings glut, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

China’s growth was a mixed blessing: even as China provided American consumers with a cornucopia of cheap consumer goods, it deprived many American workers of their jobs. David Autor, David Dorn, and Gordon Hanson have calculated that imports from China explained 21 percent of the decline in manufacturing employment during the years 1990 to 2007—or the loss of 1.5 million jobs. In particular, America’s decision to establish normal trade relations with China in 2001 was followed, in short order, by both a surge in imports from China and an unusually large fall in manufacturing employment. These job losses were concentrated among low-skilled workers who had little chance of getting equally well-paid jobs in the future: for example, the clothing industry lost about half a million jobs in the years 1995 to 2005.2 China’s challenge was existential as well as just commercial.


pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Charles Lindbergh, Corn Laws, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, industrial cluster, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

Exchequer Bond”). ICI adopted a version of Alfred Sloan’s multidivisional structure (see chapter 6), employed an army of professional managers, developed close links with the country’s universities, and began to take the battle to Du Pont. By 1935, it had around fifty thousand workers, the same number as Guest Keen & Nettlefold, an emerging metals and engineering giant. Yet, Britain’s biggest manufacturing employer, with sixty thousand workers, was Unilever. Lever Brothers remained firmly under the thumb of William Lever until his death in 1925. Lever’s road to greatness allegedly began in the 1880s, when he heard a customer ask whether the shop had any more of his “stinking soap”: Sunlight soap built the firm, not to mention Port Sunlight. Lever decimated his domestic rivals by doing such ungentlemanly things as advertising his products.


pages: 205 words: 58,054

Private Government: How Employers Rule Our Lives (And Why We Don't Talk About It) by Elizabeth S. Anderson

Affordable Care Act / Obamacare, barriers to entry, call centre, collective bargaining, corporate governance, correlation does not imply causation, declining real wages, deskilling, feminist movement, Frederick Winslow Taylor, full employment, invisible hand, manufacturing employment, means of production, Panopticon Jeremy Bentham, principal–agent problem, profit motive, Ronald Coase, shareholder value, Socratic dialogue, spinning jenny, The Nature of the Firm, The Wealth of Nations by Adam Smith, trickle-down economics

Finally, in the United States through the early years of the nineteenth century, skilled journeymen enjoyed a reasonable expectation of being able to set up shop for themselves after a few years of wage labor, in the manner Lincoln thought was the norm. With such a short, easy bridge from one rank to the next, it was relatively easy for workers to reconcile the hierarchy that did exist with egalitarian republican values.96 The Industrial Revolution dramatically widened the gulf between employers and employees in manufacturing. Employers no longer did the same kind of work as employees, if they worked at all. Mental labor was separated from manual labor, which was radically deskilled. Ranks within the firm multiplied. Leading executives might not even work in the same building. This facilitated a severe degradation of working conditions. Workers were subject to the relentless, grueling discipline of the clock and the machine.


pages: 215 words: 59,188

Seriously Curious: The Facts and Figures That Turn Our World Upside Down by Tom Standage

agricultural Revolution, augmented reality, autonomous vehicles, blood diamonds, corporate governance, Deng Xiaoping, Donald Trump, Elon Musk, failed state, financial independence, gender pay gap, gig economy, Gini coefficient, high net worth, income inequality, index fund, industrial robot, Internet of things, invisible hand, job-hopping, Julian Assange, life extension, Lyft, M-Pesa, Mahatma Gandhi, manufacturing employment, mega-rich, megacity, Minecraft, mobile money, natural language processing, Nelson Mandela, plutocrats, Plutocrats, price mechanism, purchasing power parity, ransomware, reshoring, ride hailing / ride sharing, Ronald Coase, self-driving car, Silicon Valley, Snapchat, South China Sea, speech recognition, stem cell, supply-chain management, transaction costs, Uber and Lyft, uber lyft, undersea cable, US Airways Flight 1549, WikiLeaks

As a result, the decline in manufacturing jobs looks bigger than it really is. These trends seem set to continue. Many aspects of R&D, product design and technical testing are now looked after by separate companies, along with lots of accounting, logistics, cleaning, personnel management and IT services. A study published in 2015 by the Brookings Institution, an American think-tank, reckoned that the 11.5m American jobs counted as manufacturing employment in 2010 were outnumbered almost two to one by jobs in manufacturing-related services: added, the total would be 32.9m. In future, service providers will penetrate even deeper into manufacturers’ turf, even as manufacturers come to see themselves increasingly as sellers of services. Industrial machines and the goods they turn out are increasingly packed with internet-connected sensors. Manufacturers are thus able to gather data on how their machines perform out in the world.


pages: 219 words: 61,720

American Made: Why Making Things Will Return Us to Greatness by Dan Dimicco

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, American energy revolution, American Society of Civil Engineers: Report Card, Bakken shale, barriers to entry, Bernie Madoff, carbon footprint, clean water, crony capitalism, currency manipulation / currency intervention, David Ricardo: comparative advantage, decarbonisation, fear of failure, full employment, Google Glasses, hydraulic fracturing, invisible hand, job automation, knowledge economy, laissez-faire capitalism, Loma Prieta earthquake, low earth orbit, manufacturing employment, oil shale / tar sands, Ponzi scheme, profit motive, Report Card for America’s Infrastructure, Ronald Reagan, Silicon Valley, smart grid, smart meter, sovereign wealth fund, The Wealth of Nations by Adam Smith, too big to fail, uranium enrichment, Washington Consensus, Works Progress Administration

None of those jobs require a college degree, but the bigger problem is that very few of them pay well. We really shouldn’t be aching for more service-sector work. In practice, it means a North Carolina textile worker who a few years ago made $15 an hour sewing blankets at a mill is now making $10 an hour as a cook at a county jail. We see stories like that all the time. I mention textiles in particular because as recently as a decade ago it was one of the largest manufacturing employers in the state. But North Carolina apparel makers have been destroyed by cheap foreign imports. The United States has lost nearly a million textile jobs since 1999. Why do we put up with this? Construction and manufacturing are the sectors where the economy is bleeding jobs and where we have the greatest need. Problem Solving 101 says if we want to turn this crisis around, we need to figure out what is preventing those sectors from growing and then address those factors.


pages: 204 words: 67,922

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

assortative mating, call centre, clean water, commoditize, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, Joan Didion, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, mass immigration, McMansion, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War

Robinson, and Melissa A. Milkie, Changing Rhythms of American Family Life (New York: Russell Sage Foundation, 2007). See also, Anne H. Gauthier, Timothy M. Smeeding, and Frank F. Fursten berg, Jr., “Are Parents Investing Less Time in Children? Trends in Selected Industrialized Countries,” Population and Development Review 30, no. 4 (December 2004): 647-71. 2. David Brauer, “What Accounts for the Decline in Manufacturing Employment?” figure 3. U.S. Congressional Budget Office, February 2004. See also, U.S. Department of State’s Bureau of International Information Programs, “A Service Economy,” U.S.A. Economy in Brief at http://usinfo.state.gov/products/pubs/economy-in-brief/pag e3.html. 3. “Income Inequality Measures,” in Luxembourg Income Study, May 27, 2003, at http://www.lisproject.org/keyfigures/ineqtable.htm. 4.


pages: 244 words: 66,977

Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It by Tien Tzuo, Gabe Weisert

3D printing, Airbnb, airport security, Amazon Web Services, augmented reality, autonomous vehicles, blockchain, Build a better mousetrap, business cycle, business intelligence, business process, call centre, cloud computing, cognitive dissonance, connected car, death of newspapers, digital twin, double entry bookkeeping, Elon Musk, factory automation, fiat currency, Internet of things, inventory management, iterative process, Jeff Bezos, Kevin Kelly, Lean Startup, Lyft, manufacturing employment, minimum viable product, natural language processing, Network effects, Nicholas Carr, nuclear winter, pets.com, profit maximization, race to the bottom, ride hailing / ride sharing, Sand Hill Road, shareholder value, Silicon Valley, skunkworks, smart meter, social graph, software as a service, spice trade, Steve Ballmer, Steve Jobs, subscription business, Tim Cook: Apple, transport as a service, Uber and Lyft, uber lyft, Y2K, Zipcar

THE BIGGEST TRANSFORMATION OF ALL If the context of this book is the sweeping shift from products to services in retail, transportation, media, and technology, as well as the changes in business mindsets that this shift requires, then the industry that stands to benefit the most from that transformation is manufacturing. That may sound surprising. We’ve all been told that the global economy is shifting away from hard goods. Manufacturing as a percentage of the US GDP peaked in the 1950s, and manufacturing employment has been in steady decline since the late nineties. According to the Bureau of Labor Statistics, today overall employment in manufacturing in the United States is at the same level as it was before the country entered the Second World War. Almost a third of the workforce was building things in factories in the early fifties—today it’s a little under 9 percent. Around the world, the picture isn’t much better.


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"Robert Solow", accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, zero-sum game

In the 1980s, the Reagan administration talked free trade and yet persuaded Japan to impose "voluntary" export restraints on cars and computer chips. And in 2002, the Bush administration imposed heavy duties on imports of foreign steel. The US. has too much sovereignty for the rest of the world's good. None of this is intended to deny that plant relocations to Mexico and outsourcing contracts in China have put a sharp squeeze on U.S. manufacturing employment and earnings, or that the threat of those things has gready reduced the bargaining power of U.S. workers. But how much has this contributed to downward mobihty and increasing stress? The econo-metricians say that trade explains, at most, about 20-25% of the decHne in the U.S. real hourly wage during the 1970s and 1980s.While not insignificant, that still leaves 75—80% to be explained, and the main culprits there are mainly of domestic origin.


pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor, zero-sum game

As Americans start to read the market signals and retrain to enter new exciting areas of the economy, they will regain a competitive advantage over Chinese or Indian workers. We heard this view from Thomas Friedman in our earlier discussion, given a belief that there are no limits to the number of idea-generating jobs that could be created to compensate for those lost to Asia, even if there are limits to the expansion of manufacturing employment. But where are these new jobs? They depend on an article of faith rather than hard evidence. It was difficult to find much support for a significant, let alone exponential, increase in demand for high-skill workers in new innovative fields even when the American economy was booming. Although the Bureau of Labor Statistics’ estimate that most of the jobs with the fastest growth rate will require a bachelor’s degree, most people will continue to work in occupations that require low levels of education and training.


pages: 291 words: 81,703

Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen

Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, business cycle, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, computerized trading, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, income inequality, industrial robot, informal economy, Isaac Newton, Johannes Kepler, John Markoff, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Myron Scholes, Narrative Science, Netflix Prize, Nicholas Carr, P = NP, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra

That doesn’t prove a causal connection, but it would be surprising if those were two completely unrelated numbers. More systematically, a recent study by David H. Autor, David Dorn, and Gordon H. Hanson supports the notion that outsourcing has had a negative impact on US wages. From 1991 to 2007, US imports from China rose from $26 billion to about $330 billion. They find that greater exposure of a region to Chinese imports predicts weak performance in manufacturing employment, weak wage performance, and, in those same regions, a growing demand for transfer payments (“handouts”) from the government. Another recent study, by Runjuan Liu and Daniel Trefler, finds further evidence of job market problems from outsourcing. They found that “downward occupational switching,” meaning people took lower-paid jobs in less lucrative sectors, went up by 17 percent among affected groups, transitions to unemployment increased by 0.9 percentage points, and the earnings of affected “occupational stayers” fell by 2.3 percent.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, obamacare, offshore financial centre, oil shock, plutocrats, Plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Ronald Reagan, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

New York Times, April 29. Philippon, Thomas, and Ariell Reshef. 2012. “Wages and Human Capital in the U.S. Finance Industry: 1909–2006.” Quarterly Journal of Economics 127 (November): 1551–1609. Phillips-Fein, Kim. 2009. Invisible Hands: The Businessmen’s Crusade Against the New Deal. New York: Norton. Pierce, Justin R., and Peter K. Schott. 2016. “The Surprisingly Swift Decline of US Manufacturing Employment.” American Economic Review 106 (7) (July): 1632–1662. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press. Pinto, Nick. 2015. “The Bail Trap.” New York Times, August 13. Piore, Michael J., and Sean Stafford. 2006. “Changing Regimes of Workplace Governance, Shifting Axes of Social Mobilization and the Challenge to Industrial Relations Theory.”


pages: 290 words: 82,871

The Hidden Half: How the World Conceals Its Secrets by Michael Blastland

air freight, Alfred Russel Wallace, banking crisis, Bayesian statistics, Berlin Wall, central bank independence, cognitive bias, complexity theory, Deng Xiaoping, Diane Coyle, Donald Trump, epigenetics, experimental subject, full employment, George Santayana, hindsight bias, income inequality, manufacturing employment, mass incarceration, meta analysis, meta-analysis, minimum wage unemployment, nudge unit, oil shock, p-value, personalized medicine, phenotype, Ralph Waldo Emerson, random walk, randomized controlled trial, replication crisis, Richard Thaler, selection bias, the map is not the territory, the scientific method, The Wisdom of Crowds, twin studies

Available at: https://www.bennettinstitute.cam.ac.uk/publications. 16 Sarah O’Connor, ‘The Best Economist is One with Dirty Shoes’, Financial Times, 19 July 2016. 17 The discussion of trade in this chapter is based on the work of David Autor, David Dorn and Gordon Hanson, to whom I am indebted. See especially their article ‘The China Shock: Learning from Labour Market Adjustment to Large Changes in Trade’, Annual Review of Economics, vol. 8, 2016, pp. 205–240. See also Justin Pierce and Peter Schott, ‘The Surprisingly Swift Decline of US Manufacturing Employment’, American Economic Review, vol. 106, no. 7, 2016, pp. 1632–1662. 18 Note: shares of manufacturing exports, not overall manufacturing totals. 19 China became a member of the World Trade Organization in 2001, which seems to have reassured overseas investors that its intentions to trade were long term. 20 See especially Jonathan Rothwell, ‘Cutting the Losses: Reassessing the Costs of Import Competition to Workers and Communities’, 19 October 2017, Available at SSRN: https://ssrn.com/abstract=2920188.


pages: 309 words: 91,581

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

assortative mating, autonomous vehicles, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, collective bargaining, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, Gunnar Myrdal, income inequality, industrial robot, invisible hand, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Paradoxically, though, economists experienced initial difficulty applying Stolper-Samuelson to the Great Divergence. Adrian Wood, a British economist, argued a decade and a half after the Great Divergence began that trade with low-wage countries was lowering wages for unskilled workers in developed countries. “There is a clear inverse association,” Wood wrote in a 1995 paper. “Countries with larger increases in import penetration experienced larger falls in manufacturing employment.” But in the United States, Wood had to concede, imports of manufactured goods from low-wage countries still totaled less than 3 percent of gross domestic product. By itself, that wasn’t enough to displace many workers. Wood answered by arguing that the effects were subtle and indirect. For example, he wrote that imports from low-wage countries required more labor than other goods, and therefore displaced more U.S. workers than did imports from high-wage countries.6 Most leading economists in the United States didn’t buy it.


pages: 353 words: 91,211

The Shock of the Old: Technology and Global History Since 1900 by David Edgerton

agricultural Revolution, anti-communist, British Empire, Computer Numeric Control, conceptual framework, creative destruction, deglobalization, dematerialisation, desegregation, deskilling, endogenous growth, global village, Haber-Bosch Process, interchangeable parts, knowledge economy, Mahatma Gandhi, manufacturing employment, means of production, megacity, microcredit, new economy, post-industrial society, Productivity paradox, Ronald Reagan, Silicon Valley, spinning jenny, Upton Sinclair, urban planning

Massive economies of scale are exploited as never before on a global level to produce cheap mass-produced goods of great complexity. Think of cheap PCs, mobile phones and IKEA furniture. Mass production is now so common it is invisible. At the beginning of the twenty-first century Wal-Mart is the largest corporation in the world, by annual sales ($300bn in 2005/6) and by employee numbers. With nearly 2 million workers it is vastly larger not only than the biggest firms of 1900, but also than the very largest manufacturing employers of the 1960s. But it is a retailer, not a manufacturer. Indeed it indirectly employs many more millions, largely in China, mass producing all sorts of stuff for the American consumer. IKEA, again principally a retailer and designer, controls the mass manufacture of furniture, indirectly employing an estimated 1 million workers. Indeed IKEA provides a wonderful example of the arguments of this book.


pages: 323 words: 95,492

The Rise of the Outsiders: How Mainstream Politics Lost Its Way by Steve Richards

Affordable Care Act / Obamacare, Airbnb, banking crisis, battle of ideas, Bernie Sanders, Boris Johnson, call centre, centre right, collapse of Lehman Brothers, David Brooks, Dominic Cummings, Donald Trump, Etonian, eurozone crisis, falling living standards, full employment, housing crisis, low skilled workers, manufacturing employment, Martin Wolf, mass immigration, Neil Kinnock, obamacare, Occupy movement, Ronald Reagan, Silicon Valley

In Spain, youth unemployment peaked at more than 50 per cent. In Greece, unemployment was the highest in the European Union and rose at some low points to more than 30 per cent of the adult population. In much of the democratic world there has been an accelerating increase in service-sector employment, both in low-skilled customer-service work and in high-skilled knowledge occupations, and a corresponding drop in manufacturing employment. This has contributed to a polarization of the workforce in many countries, with more high-skilled and low-skilled jobs, but fewer requiring mid-level skills. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time permanent contracts has shrunk. Labour markets have been fundamentally transformed as digital technology has destroyed a wide range of routine jobs, while creating new employment opportunities for highly skilled workers.


The Making of a World City: London 1991 to 2021 by Greg Clark

Basel III, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, British Empire, business climate, business cycle, capital controls, carbon footprint, congestion charging, corporate governance, cross-subsidies, deindustrialization, Dissolution of the Soviet Union, East Village, Fall of the Berlin Wall, financial innovation, financial intermediation, global value chain, haute cuisine, housing crisis, industrial cluster, intangible asset, Kickstarter, knowledge economy, knowledge worker, labour market flexibility, low skilled workers, manufacturing employment, Masdar, mass immigration, megacity, New Urbanism, offshore financial centre, Pearl River Delta, place-making, rent control, Robert Gordon, Silicon Valley, smart cities, sovereign wealth fund, trickle-down economics, urban planning, urban renewal, working poor

London will also need deeper global economic networks, with more diverse locations than in the past quarter century. 2 London prior to 1991: The back story The year 1966 is most famous in England for the national team’s first (and only) victory in the football World Cup. But two other, much less publicised, events took place in that year that set the stage for a profound quarter-century of adjustment for Britain, and in particular London. The first, only retrospectively perceptible, development that occurred in 1966 was that Britain reached its peak of industrial employment (Townsend, 1997: 82). Manufacturing employment reached a historic high of 8.7 million, comprising 34.9 per cent of employment, a proportion exceeded only by West Germany among the major world economies. Over the following 20 years, the country was to experience one of the largest and most rapid proportional declines in industrial employment of any industrialised country. The industrial share of total national employment nearly halved from 35 per cent to 18 per cent.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

"Robert Solow", 3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, BRICs, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, disruptive innovation, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, post-work, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, uber lyft, very high income, working-age population

It seems to have also, as a side effect, accelerated deindustrialization. Readers in rich economies will be well aware of the phenomenon – the loss of manufacturing work to other locations – that hollowed out once-great cities like Detroit. Britain, the first industrializer, was the first to face this particular ill, quite early in the twentieth century. Over time, the bug affected more industries in more corners of the rich world: in America, for instance, manufacturing employment peaked as a share of total employment in the early 1940s and declined at a remarkably steady rate thereafter; but there have been particularly nasty spells of employment loss along the way – in the early 1980s, for instance (when Reagan and Thatcher earned the ire of many blue-collar workers) and then in the 2000s. Remarkably, manufacturing now accounts for less than 10 per cent of American employment.


pages: 325 words: 89,374

Municipal Dreams: The Rise and Fall of Council Housing by John Boughton

British Empire, deindustrialization, full employment, garden city movement, ghettoisation, housing crisis, Jane Jacobs, laissez-faire capitalism, manufacturing employment, negative equity, Neil Kinnock, neoliberal agenda, new economy, New Urbanism, profit motive, rent control, Right to Buy, rising living standards, starchitect, The Death and Life of Great American Cities, the market place, upwardly mobile, urban decay, urban planning, urban renewal, young professional

City Challenge emphasised ‘partnership’ – strengthened links between local councils and local businesses and close collaboration with education and training providers. Of course, all this was to fit the local community to the new economy; predominantly lower-paid, less regular and non-unionised service industries. This all implicitly acknowledged that there would be no return to the traditional manufacturing employment that had been the mainstay of many ‘respectable’ working-class communities in the past. The process itself was also, in Conservative terms, businesslike. Initially, fifteen local authorities were invited to apply for funds in a competitive public bidding process (two more participated uninvited). Eleven – whose bids most closely matched the government’s criteria – were selected to receive £37.5 million each over a five-year period.


The Rise and Fall of the British Nation: A Twentieth-Century History by David Edgerton

active measures, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, British Empire, business cycle, call centre, centre right, collective bargaining, colonial exploitation, Corn Laws, corporate governance, deglobalization, deindustrialization, dematerialisation, deskilling, Donald Davies, double helix, endogenous growth, Etonian, European colonialism, feminist movement, first-past-the-post, full employment, imperial preference, James Dyson, knowledge economy, labour mobility, land reform, land value tax, manufacturing employment, means of production, Mikhail Gorbachev, Neil Kinnock, new economy, non-tariff barriers, North Sea oil, offshore financial centre, old-boy network, packet switching, Philip Mirowski, Piper Alpha, plutocrats, Plutocrats, post-industrial society, rising living standards, road to serfdom, Ronald Reagan, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, trade liberalization, union organizing, very high income, wages for housework, wealth creators, Winter of Discontent, women in the workforce, working poor

Between 1948 and the early 1970s, output doubled. Between then and 2000, it increased only by about 10 per cent (see figure 19.4). Manufacturing became less visible not because it produced less, but because it employed many fewer people, and because it was a smaller part of the economy. There was nothing uniquely British about this development. Nearly all rich countries saw increases in manufacturing output, falls in manufacturing employment and falls in manufacturing as a proportion of GDP. However, in the 1950s and 1960s the United Kingdom was clearly a nation with an especially heavy bias towards manufacturing (comparable only to Germany). By the 1990s it was a nation with a comparatively weak manufacturing sector. It was not like Germany and Japan; it was now clearly much more like the USA or France. History is not destiny.

Across government, and industry, with the exception at first of the military, research budgets were cut back. Far from releasing the innovative energies of the private sector, what happened was that companies no longer felt obliged to do research for national reasons, and national champions and their R&D programmes went by the board. She may have been a nationalist, and a scientist, but she presided over the end of significant British techno-nationalism. As well as falling manufacturing employment the other obvious change has been that the United Kingdom became a net importer of manufactures. This was a shocking development for the former workshop of the world, but more especially for those brought up on the notion that a net positive manufacturing balance was needed to then import food and raw materials. But although the net balance went strongly negative, British manufacturing exports increased, though imports increased very much more.


pages: 809 words: 237,921

The Narrow Corridor: States, Societies, and the Fate of Liberty by Daron Acemoglu, James A. Robinson

Affordable Care Act / Obamacare, agricultural Revolution, AltaVista, Andrei Shleifer, bank run, Berlin Wall, British Empire, California gold rush, central bank independence, centre right, collateralized debt obligation, collective bargaining, colonial rule, Computer Numeric Control, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Dava Sobel, David Ricardo: comparative advantage, Deng Xiaoping, discovery of the americas, double entry bookkeeping, Edward Snowden, en.wikipedia.org, equal pay for equal work, European colonialism, Ferguson, Missouri, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, income inequality, income per capita, industrial robot, information asymmetry, interest rate swap, invention of movable type, Isaac Newton, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Kula ring, labor-force participation, land reform, Mahatma Gandhi, manufacturing employment, mass incarceration, Maui Hawaii, means of production, megacity, Mikhail Gorbachev, Nelson Mandela, obamacare, openstreetmap, out of africa, PageRank, pattern recognition, road to serfdom, Ronald Reagan, Skype, spinning jenny, Steven Pinker, the market place, transcontinental railway, War on Poverty, WikiLeaks

One such aspect is trade unions themselves, which are often viewed with great suspicion, because one of their main objectives is to push for higher wages for their members even if this makes it harder for non-members to find jobs. Indeed, we have seen that even in the Swedish context, trade unions have at times pushed for excessively high wages. This suspicious attitude is more than shared by many policy makers in the United States, who have sought to undermine the power of unions. Partly as a result of these policy attitudes (and partly because of the decline of manufacturing employment), today union membership is much lower in the U.S. economy, especially in the private sector, than it was in the heyday of labor unions in midcentury, after the rights of workers to organize in unions, engage in collective bargaining, and go on strike were recognized with the National Labor Relations (Wagner) Act of 1935. Similar declines in the power of labor unions have been ongoing in other advanced economies.

For example, while the (inflation-adjusted) earnings of men with postgraduate education increased by almost 60 percent since 1980, those of men with high school education or less declined by more than 20 percent. In the course of the last three and a half decades, the real take-home pay of less skilled workers has fallen precipitously. The same period has also witnessed declining job creation in the American economy. U.S. manufacturing employment fell by about 25 percent from the mid-1990s, while the overall employment-to-population ratio has declined significantly since 2000. Similar trends are visible in several other advanced economies, even if the staggering decline in the real earnings of less educated workers is unique to the U.S. labor market. There is general agreement that both automation and globalization have been major contributors to these trends.


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

China plans to raise the retirement age in stages from 2017, which will add millions to the world’s labour force. Meanwhile, in India, hundreds of millions of people will move from its backward rural economy and informal urban economy into the global wage-labour market. There is little prospect of a global labour shortage pushing up wages in rich countries for many years to come. China’s industrialisation surge has accompanied a sharp decline in manufacturing employment in industrialised countries, particularly since the financial crash. Between 2008 and 2015, the USA lost over 6 million manufacturing jobs. But now over half of China’s output is attributable to services, including financial services. It and Southeast Asian countries such as Malaysia and Singapore have become rentier economies, with the means to invest in rich countries and buy up companies and other assets.


pages: 359 words: 97,415

Vanishing Frontiers: The Forces Driving Mexico and the United States Together by Andrew Selee

Berlin Wall, call centre, Capital in the Twenty-First Century by Thomas Piketty, Donald Trump, energy security, Gini coefficient, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, informal economy, job automation, low skilled workers, manufacturing employment, oil shale / tar sands, open economy, payday loans, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Silicon Valley startup, Steve Wozniak, Y Combinator

The American car industry, for example, has expanded its production by a quarter since 1990, largely by taking advantage of North American integration, but it has also reduced employment slightly, from 1.05 million to 940,000 jobs, as manufacturing operations have become leaner and more automated. One study estimates that 85 percent of the job losses in manufacturing stem from automation, with another 13 percent tied to trade and offshoring of production. Other studies see slightly higher losses from trade and offshoring, but they point out that trade with Mexico, unlike with other countries, has a negligible—and very likely a positive—effect on American manufacturing employment because of the integration effects. Yet there are elements of a NAFTA renegotiation that could strengthen the job-creating effects of integration and mitigate the job-loss effects. One of these would be to ensure that the Mexican government enforces its own labor laws by allowing industrial workers to form independent unions. Currently most foreign investors in Mexico find it easy to avoid unionization or to strike sweetheart deals with complacent, pro-government unions.


Gaming the Vote: Why Elections Aren't Fair (And What We Can Do About It) by William Poundstone

affirmative action, Albert Einstein, business cycle, Debian, desegregation, Donald Trump, en.wikipedia.org, Everything should be made as simple as possible, global village, guest worker program, hiring and firing, illegal immigration, invisible hand, jimmy wales, John Nash: game theory, John von Neumann, Kenneth Arrow, manufacturing employment, Nash equilibrium, Paul Samuelson, Pierre-Simon Laplace, prisoner's dilemma, Ralph Nader, RAND corporation, Ronald Reagan, Silicon Valley, slashdot, the map is not the territory, Thomas Bayes, transcontinental railway, Unsafe at Any Speed, Y2K

I say, '[O]kay, that's fine, do what you want to do.' Then he calls me at night and says, 'Let me read this to you.' I say, 'Buddy, I don't give a shit.' He says, 'No, I want to get it right.' So he reads the whole fucking thing. And then he says he may want to change a few phrases.") As David Duke became a national celebrity, the questions got tougher. On Meet the Press, Tim Russert asked, "Me. Duke, can you name the top three manufacturing employers in Louisiana?" Duke couldn't. After an uncomfortable silence, he said, "We have a number of employers in our state. I couldn't give you the names right off." The next question was how many people in Louisiana lived below the poverty line. Duke didn't know that, either. "I don't carry around an almanac with me." In a televised debate for Louisiana Public Television, Edwards held up a map that had appeared in the newsletter of Duke's National Association for the Advancement of White People.


pages: 320 words: 96,006

The End of Men: And the Rise of Women by Hanna Rosin

affirmative action, call centre, cognitive dissonance, David Brooks, delayed gratification, edge city, facts on the ground, financial independence, hiring and firing, housing crisis, income inequality, informal economy, job satisfaction, low skilled workers, manufacturing employment, meta analysis, meta-analysis, new economy, New Urbanism, Norman Mailer, Northern Rock, post-work, postindustrial economy, purchasing power parity, Results Only Work Environment, Silicon Valley, social intelligence, Stanford prison experiment, Steven Pinker, union organizing, upwardly mobile, white picket fence, women in the workforce, young professional

., “Effect of Marriage on Duration of Chest Pain Associated with Acute Myocardial Infarction before Seeking Care,” Canadian Medical Association Journal 183, no. 13 (2011): 1482–1491. Statisticians Bernard Cohen and I-Sing Lee: Bernard Cohen and I-Sing Lee, “A Catalog of Risks,” Health Physics 36, no. 6 (1979): 707–722. THE NEW AMERICAN MATRIARCHY THE MIDDLE CLASS GETS A SEX CHANGE Since 2000, the manufacturing economy: Total manufacturing employment in the United States was 17.3 million in January 2000, and hit a low of fewer than 11.5 million in January 2010, according to the Bureau of Labor Statistics. In 2011, the number of manufacturing jobs grew by 1.2 percent, the industry’s first increase since 1997. The housing bubble masked this new reality: Lawrence Katz, “Long-Term Unemployment in the Great Recession,” Testimony for the Joint Economic Committee, US Congress, April 29, 2010. http://www.employmentpolicy.org/topic/10/research/long-term-unemployment-great-recession-0.


The Power Surge: Energy, Opportunity, and the Battle for America's Future by Michael Levi

addicted to oil, American energy revolution, Berlin Wall, British Empire, business cycle, Carmen Reinhart, crony capitalism, deglobalization, energy security, Exxon Valdez, fixed income, full employment, global supply chain, hiring and firing, hydraulic fracturing, Induced demand, Intergovernmental Panel on Climate Change (IPCC), Kenneth Rogoff, manufacturing employment, oil shale / tar sands, oil shock, peak oil, RAND corporation, Ronald Reagan, Silicon Valley, South China Sea

Moreover, as the cost of clean energy falls, including as a result of government support, the possibility grows that the benefits of shifting toward it will outweigh the associated costs. Making the case that clean energy delivers benefits in excess of its costs, though, requires a careful look at the benefits that clean energy can deliver. Exhibit A, for many enthusiasts, has been jobs. m m m Manufacturing employment has been in a free fall for decades. Brackenridge, Pennsylvania, just outside of Pittsburgh, is no exception. During the first ten years of the twenty-first century, nearly a third of all manufacturing jobs in the area vanished, tracking the trend in the country at large.52 When FLABEG, a large German maker of automotive mirrors (look for their stamp on your rearview mirror the next time you drive), announced in November 2011 that it would be closing its Brackenridge plant, the news wasn’t surprising.53 Ten miles down the road in Clinton, though, the same company is writing a different story.


pages: 355 words: 63

The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

"Robert Solow", Andrei Shleifer, business climate, business cycle, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, creative destruction, endogenous growth, financial repression, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, large denomination, manufacturing employment, Network effects, New Urbanism, open economy, Productivity paradox, purchasing power parity, rent-seeking, Ronald Reagan, selection bias, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

The authors say ”jobless growth”happenswhenever the rate of employment growth is not as high as the rate of output growth, which leads to ”very low incomes” for millions of workers. The 1993 Human Development Report expressed the same concern about this ”problem” of jobless growth, which wasespecially severe in developing countries between 1960 and 1973: ”GDP growth rates were fairly high, but employment growth rates were less than half this.”ll Similarly, a study of Vietnam in 2000 lamented the slow growth of manufacturing employment relative to manufacturing output.12 The authors of all these reports forgot that having GDP rise faster than employment is called growth of income per worker, which happens to be the only way that workers’ “very low incomes” can increase.13 Transitions Increases in machinery per worker could not be asource of long-run growth, but they could be a source of growth in the transition to the long-run path.


pages: 376 words: 109,092

Paper Promises by Philip Coggan

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, balance sheet recession, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, Bretton Woods, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, John Meriwether, joint-stock company, Kenneth Rogoff, Kickstarter, labour market flexibility, light touch regulation, Long Term Capital Management, manufacturing employment, market bubble, market clearing, Martin Wolf, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Myron Scholes, negative equity, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, plutocrats, Plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce, zero-sum game

For a decade, there has been much debate about who was responsible for this imbalance. Was it profligate Americans, spending more than they earn? Or was it sinister Chinese, manipulating their currency? Chinese labour costs were so low that, once the country joined the global trading system, it quickly grabbed market share in low-cost manufactured goods. Americans routinely complain that everything they buy seems to be made in China. Manufacturing employment in China surged. The result was one of the biggest migrations in history as rural workers moved to the big cities. Much of the rest of the world may have abandoned the Bretton Woods approach but China did not. The Chinese Communist party had no intention of letting their interest or exchange rates be controlled by the markets; they opted for capital controls and a managed currency, pegged to the dollar.


pages: 431 words: 107,868

The Great Race: The Global Quest for the Car of the Future by Levi Tillemann

Affordable Care Act / Obamacare, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, banking crisis, car-free, carbon footprint, cleantech, creative destruction, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, Elon Musk, en.wikipedia.org, energy security, factory automation, global value chain, hydrogen economy, index card, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Joseph Schumpeter, Kickstarter, manufacturing employment, market design, megacity, Nixon shock, obamacare, oil shock, Ralph Nader, RFID, rolodex, Ronald Reagan, Rubik’s Cube, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, smart cities, sovereign wealth fund, special economic zone, Steve Jobs, Tesla Model S, too big to fail, Unsafe at Any Speed, zero-sum game, Zipcar

It is about how a Japanese nuclear engineer, a former Audi executive, a South African visionary, and a Dutch chemist rocked the industrial landscape of the twenty-first century. Today automotive manufacturing accounts for almost $3 trillion of economic output—more than the economy of Brazil. And the automobile’s importance to growth, trade, innovation, military technology, and the environment is, for practical purposes, immeasurable. The industry is a point of national pride, a center for manufacturing employment, and an instrument of state power for the world’s most technologically advanced economies—much more so than most people realize. Now, just as in Ford’s time, the ether is tinged with implacable change. The question is not if, but who and how soon? Empires—both corporate and political—are in a Great Race to build the car of the future. Victory will be found in patents, assembly lines, laboratories, boardrooms, and battery plants.


pages: 385 words: 101,761

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire by Bruce Nussbaum

3D printing, Airbnb, Albert Einstein, Berlin Wall, Black Swan, Chuck Templeton: OpenTable:, clean water, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Danny Hillis, declining real wages, demographic dividend, disruptive innovation, Elon Musk, en.wikipedia.org, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, follow your passion, game design, housing crisis, Hyman Minsky, industrial robot, invisible hand, James Dyson, Jane Jacobs, Jeff Bezos, jimmy wales, John Gruber, John Markoff, Joseph Schumpeter, Kickstarter, lone genius, longitudinal study, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, new economy, Paul Graham, Peter Thiel, QR code, race to the bottom, reshoring, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, Tesla Model S, The Chicago School, The Design of Experiments, the High Line, The Myth of the Rational Market, thinkpad, Tim Cook: Apple, too big to fail, tulip mania, We are the 99%, Y Combinator, young professional, Zipcar

There’s been little innovation in transportation and we haven’t seen any new breakthroughs in energy, with alternatives to hydrocarbons making up just a fraction of all energy production. We have all been feeling the ripple effects of the innovation shortfall. In 1999, the Bureau of Labor Statistics forecast that 2.8 million new jobs would be created over the next decade in “leading edge” industries such as IT, aerospace, telecom, pharmaceuticals, and semiconductor and electronic component manufacturing. Employment in this space would grow at 3.4 percent, twice as fast as the rest of the private economy. It never happened. In fact, leading edge industries lost 68,000 jobs over that decade. Even those of us who have jobs have not seen significant enough wage increases. As a consequence of the failure of innovation, Thiel points to the fact that real median wages have, at best, risen by 10 percent since 1973 according to government data.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

These outsourced services are still the same activities. But they are now counted as part of service output, rather than of manufacturing output. In addition, seeing the share of manufacturing in their output falling, some manufacturing firms have applied to be reclassified as service firms, even though they still conduct some manufacturing. A UK government report estimates that up to 10 per cent of the fall in manufacturing employment between 1998 and 2006 in the UK may be due to this ‘reclassification effect’.7 Making things still matters The view that the world has now entered a new era of the ‘knowledge economy’, in which making things does not confer much value, is based upon a fundamental misreading of history. We have always lived in a knowledge economy. It has always been the quality of knowledge involved, rather than the physical nature of the things produced (that is, whether they are physical goods or intangible services), that has made the more industrialized countries richer.


pages: 338 words: 104,684

The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy by Stephanie Kelton

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, Bernie Madoff, Bernie Sanders, blockchain, Bretton Woods, business cycle, capital controls, central bank independence, collective bargaining, COVID-19, Covid-19, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, decarbonisation, deindustrialization, discrete time, Donald Trump, eurozone crisis, fiat currency, floating exchange rates, Food sovereignty, full employment, Gini coefficient, global reserve currency, global supply chain, Hyman Minsky, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, Jeff Bezos, liquidity trap, Mahatma Gandhi, manufacturing employment, market bubble, Mason jar, mortgage debt, Naomi Klein, new economy, New Urbanism, Nixon shock, obamacare, open economy, Paul Samuelson, Ponzi scheme, price anchoring, price stability, pushing on a string, quantitative easing, race to the bottom, reserve currency, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, trade liberalization, urban planning, working-age population, Works Progress Administration, yield curve, zero-sum game

He could get a job in the natural gas fields of western Pennsylvania for about half the pay he made at GM. Or he could use his seniority to try to transfer to a GM plant elsewhere. But he and his wife are loath to take either option, as it would mean giving up the extensive network of support—at school, through local services—they’ve painstakingly built up for their daughter.2 Marsh’s story is a common one. America’s manufacturing employment remains well below the levels seen before NAFTA, the WTO agreement, and the other corporation-friendly trade deals that kicked the legs out from under Marsh’s industry and so many others. The financial crisis didn’t help either. Americans lost 212,000 telecommunications jobs and 122,000 manufacturing jobs in the eight years following 2008. Jobs in the public sector—work that has generally provided living wages as well as good benefits—have also declined.


pages: 399 words: 116,828

When Work Disappears: The World of the New Urban Poor by William Julius Wilson

affirmative action, business cycle, citizen journalism, collective bargaining, conceptual framework, declining real wages, deindustrialization, deliberate practice, desegregation, Donald Trump, edge city, ending welfare as we know it, fixed income, full employment, George Gilder, ghettoisation, glass ceiling, Gunnar Myrdal, income inequality, informal economy, jobless men, labor-force participation, longitudinal study, low skilled workers, low-wage service sector, manufacturing employment, mass immigration, new economy, New Urbanism, pink-collar, race to the bottom, RAND corporation, school choice, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, upwardly mobile, urban decay, urban renewal, War on Poverty, working poor, working-age population, Works Progress Administration

Fifty-seven percent of Chicago’s employed inner-city black fathers (aged 15 and over and without undergraduate degrees) who were born between 1950 and 1955 worked in manufacturing and construction industries in 1974. By 1987, industrial employment in this group had fallen to 31 percent. Of those born between 1956 and 1960, 52 percent worked in these industries as late as 1978. But again, by 1987 industrial employment in this group fell to 28 percent. No other male ethnic group in the inner city experienced such an overall precipitous drop in manufacturing employment (see Appendix C). These employment changes have accompanied the loss of traditional manufacturing and other blue-collar jobs in Chicago. As a result, young black males have turned increasingly to the low-wage service sector and unskilled laboring jobs for employment, or have gone jobless. The strongly held U.S. cultural and economic belief that the son will do at least as well as the father in the labor market does not apply to many young inner-city males.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, income inequality, income per capita, indoor plumbing, informal economy, intermodal, invisible hand, Kenneth Rogoff, knowledge economy, late capitalism, linear programming, manufacturing employment, new economy, Nixon shock, North Sea oil, oil shock, Paul Samuelson, pension reform, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

As one of its most zealous advocates, Madsen Pirie, the head of a free-market think tank, declaimed in 1988, “The privatization programme in Britain probably marked the largest transfer of power and property since the dissolution of the monasteries under Henry VIII.” Some 650,000 workers were forcibly moved from state employment into the private economy as the role of state-owned enterprises faded away. The industrial sector, deprived of taxpayer subsidies, shrank quickly as marquee names closed unprofitable operations. Manufacturing employment, 30 percent of the workforce in 1979, fell to 22 percent under Thatcher as the United Kingdom shifted decisively to a service economy. Well beyond the mineworkers, the trades union movement lost power, weakened not only by changes in labor law, but also by the rapid erosion of the industries that had formed its base for more than a century. In 1979, 54 percent of British workers were union members.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low-wage service sector, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

The ‘winners’ are those who work in the industries that are expanding because a country is specializing in that sector and exporting from it. As US imports of manufactured goods have increased, mid-skilled jobs in that sector have been disappearing. After growing from 13 million jobs in 1950 to peak at nearly 20 million in 1980, 2010 saw a drop to a historic low of about 11.5 million. A rebound since the recession has taken manufacturing employment up to around 12.3 million, although this is still lower than in 1950. It’s a similar pattern in the UK. Around 2.6 million people work in manufacturing, a figure that has halved since the late 1970s. Manufacturing accounts for 8 per cent of all jobs, down from a quarter in 1978. This combination of factors has resulted in a lack of improvement in living standards for many Americans in the middle of the income distribution, and it’s a big part of the dissatisfaction with the status quo expressed in the last election.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

The ‘winners’ are those who work in the industries that are expanding because a country is specializing in that sector and exporting from it. As US imports of manufactured goods have increased, mid-skilled jobs in that sector have been disappearing. After growing from 13 million jobs in 1950 to peak at nearly 20 million in 1980, 2010 saw a drop to a historic low of about 11.5 million. A rebound since the recession has taken manufacturing employment up to around 12.3 million, although this is still lower than in 1950. It’s a similar pattern in the UK. Around 2.6 million people work in manufacturing, a figure that has halved since the late 1970s. Manufacturing accounts for 8 per cent of all jobs, down from a quarter in 1978. This combination of factors has resulted in a lack of improvement in living standards for many Americans in the middle of the income distribution, and it’s a big part of the dissatisfaction with the status quo expressed in the last election.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, starchitect, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

In the debate about the causes of growing income inequality, American economists have tended to opt for technology as the driving force. But, drawing on detailed data from local labor markets in the United States, the authors of “The China Syndrome” argue that globalization, and in particular trade with the mighty Middle Kingdom, are today also having a huge impact on American blue-collar workers: “Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment.” The deleterious effects go beyond those workers who lose their jobs. In communities hit by the China Syndrome, wages fall—particularly, it turns out, outside the manufacturing sector—and some people stop looking for work. The result is “a steep drop in the average earnings of households.” Uncle Sam gets hit, too, especially in the form of increased disability payments. Messrs. Autor, Dorn, and Hanson are no protectionists.


pages: 459 words: 123,220

Our Kids: The American Dream in Crisis by Robert D. Putnam

assortative mating, business cycle, correlation does not imply causation, deindustrialization, demographic transition, desegregation, ending welfare as we know it, epigenetics, full employment, George Akerlof, helicopter parent, impulse control, income inequality, index card, jobless men, longitudinal study, low skilled workers, manufacturing employment, mass incarceration, meta analysis, meta-analysis, mortgage tax deduction, new economy, Occupy movement, Ralph Waldo Emerson, randomized controlled trial, school choice, selection bias, Socratic dialogue, The Bell Curve by Richard Herrnstein and Charles Murray, the built environment, upwardly mobile, Walter Mischel, white flight, working poor

The big Standard Products factory at the east end of town had provided nearly 1,000 steady, well-paying blue-collar jobs in the 1950s, but in the 1970s the payroll was trimmed to less than half that, and after more than two decades of layoffs and givebacks, the plant gates on Maple Street finally closed in 1993. Twenty years later, only the hulking ruins of the plant remain, with EPA signs on the barbed wire fence warning of environmental hazard. But the closing of the Standard Products factory, the Army base, and the gypsum mines were merely the most visible symbols of the town’s pervasive economic collapse. Manufacturing employment in Ottawa County, of which Port Clinton is by far the largest town, plummeted from 55 percent of all jobs in 1965 to 25 percent in 1995 and kept falling.14 Unemployment rose and fell with the national economic tides, but the local booms were never as good as the national booms, and the local hard times were much worse. As late as the 1970s, real wages locally were slightly above the national average, but during the next four decades they fell further and further behind, bottoming out at 25 percent below the national average.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

Its economy remains unbalanced; China’s consumption as a percentage of GDP has increased somewhat over the past decade but growth still reflects high levels of investments in the economy and the careless efforts to support investment through sudden and unpredictable stop–go monetary and fiscal operations. China needs to rebalance its economy through increased consumption, but expansion of domestic consumption in China cannot make up for the drop in economic growth that will follow from continued reductions in investment growth.7 The sums simply do not add up. Productivity growth has decelerated for several years. Manufacturing employment has reached levels where it is difficult to grow by adding more labor to the economy, and the service economy remains ossified. The dependency ratio between the retired and the working population has climbed after decades of a one-child policy that skewed the country’s demographics. The rural–urban labor transfer is largely an exhausted force for rapid growth. And, importantly, there is strong resistance from vested interests to the root-and-branch reforms essential for China’s growth to remain at decent levels.


pages: 456 words: 123,534

The Dawn of Innovation: The First American Industrial Revolution by Charles R. Morris

air freight, American ideology, British Empire, business process, California gold rush, clean water, colonial exploitation, computer age, Dava Sobel, en.wikipedia.org, glass ceiling, hiring and firing, if you build it, they will come, interchangeable parts, Isaac Newton, Jacquard loom, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, lone genius, manufacturing employment, new economy, New Urbanism, old age dependency ratio, On the Economy of Machinery and Manufactures, purchasing power parity, QWERTY keyboard, refrigerator car, Robert Gordon, spinning jenny, Stephen Hawking, The Wealth of Nations by Adam Smith, trade route, transcontinental railway, traveling salesman, undersea cable

For inscribing cuts like the one shown, up to a dozen cutters might be driven off a single pattern guide. By 1860, the Midwest was a major manufacturing center in its own right, mostly centered around the big Ohio River cities like Cincinnati and Louisville. Chicago was gaining rapidly in population—110,000 to Cincinnati’s 161,000—but Cincinnati still had a nearly six-to-one edge in manufacturing employment. Food processing and its by-products were the largest single industry, but the Midwest was developing a large transport sector: steam engines, steam boats, and, increasingly, rails and rail cars. In the first few decades of the Midwest’s rise as a manufacturing power, the east-west transportation barrier acted like a protective tariff. Trade between the eastern states and the Midwest was dominated by easy-to-transport goods: the West sold packed meat and lard products and bought shoes, clocks, and textiles.


pages: 409 words: 125,611

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"Robert Solow", accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Asian financial crisis, banking crisis, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, clean water, collapse of Lehman Brothers, collective bargaining, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, Plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Ronald Reagan, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

Our legal framework and the way we enforce it has provided more scope here for abuses by the financial sector; for perverse compensation for chief executives; for monopolies’ ability to take unjust advantage of their concentrated power. Yes, the market values some skills more highly than others, and those who have those skills will do well. Yes, globalization and technological advances have led to the loss of good manufacturing jobs, which are not likely ever to come back. Global manufacturing employment is shrinking, simply because of enormous increases in productivity, and America is likely to get a shrinking share of the shrinking number of new jobs. If we do succeed in “saving” these jobs, it may be only by converting higher-paid jobs to lower-paid ones—hardly a long-term strategy. Globalization, and the unbalanced way it has been pursued, has shifted bargaining power away from workers: firms can threaten to move elsewhere, especially when tax laws treat such overseas investments so favorably.


pages: 497 words: 123,778

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

affirmative action, Affordable Care Act / Obamacare, Andrew Keen, basic income, battle of ideas, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, clean water, cognitive bias, conceptual framework, David Brooks, deindustrialization, demographic transition, desegregation, Donald Trump, en.wikipedia.org, Francis Fukuyama: the end of history, German hyperinflation, gig economy, Gini coefficient, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, Plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, secular stagnation, sharing economy, Thomas L Friedman, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

Bessen, “How Computer Automation Affects Occupations: Technology, Jobs, and Skills,” Law and Economics Research Paper no. 15–49, Boston University School of Law, October 3, 2016, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2690435. For a consideration of a swath of potential policy responses, see Yvonne A. Stevens and Gary E. Marchant, “Policy Solutions to Technological Unemployment,” in Surviving the Machine Age, ed. Kevin LaGrandeur and James J. Hughes (Cham, Switzerland: Palgrave MacMillan, 2017). 11. See Justin R. Pierce and Peter K. Schott, “The Surprisingly Swift Decline of US Manufacturing Employment,” American Economic Review 106, no. 7 (2016): 1632–1662; Thomas Kemeny, David Rigby, and Abigail Cooke, “Cheap Imports and the Loss of US Manufacturing Jobs,” World Economy 38, no. 10 (2015): 1555–1573; and William J. Carrington and Bruce Fallick, “Why Do Earnings Fall with Job Displacement?” Federal Reserve Bank of Cleveland Working Paper no. 14–05, June 19, 2014, https://papers.ssrn.com/sol3/papers.cfm?


Autonomous Driving: How the Driverless Revolution Will Change the World by Andreas Herrmann, Walter Brenner, Rupert Stadler

Airbnb, Airbus A320, augmented reality, autonomous vehicles, blockchain, call centre, carbon footprint, cleantech, computer vision, conceptual framework, connected car, crowdsourcing, cyber-physical system, DARPA: Urban Challenge, data acquisition, demand response, digital map, disruptive innovation, Elon Musk, fault tolerance, fear of failure, global supply chain, industrial cluster, intermodal, Internet of things, Jeff Bezos, Lyft, manufacturing employment, market fundamentalism, Mars Rover, Masdar, megacity, Pearl River Delta, peer-to-peer rental, precision agriculture, QWERTY keyboard, RAND corporation, ride hailing / ride sharing, self-driving car, sensor fusion, sharing economy, Silicon Valley, smart cities, smart grid, smart meter, Steve Jobs, Tesla Model S, Tim Cook: Apple, uber lyft, upwardly mobile, urban planning, Zipcar

About 90 million vehicles were sold worldwide in 2015 66 mil- lion passenger cars and 24 million commercial vehicles. Of the resulting $2.1 trillion in sales revenue (about 2.8 per cent of global gross domestic product of $73.5 trillion), $481 billion was generated in public revenue. More than 9 million people are employed by vehicle manufacturers, representing more than 6 per cent of the world’s total manufacturing employment. As each direct job gives rise to five more indirect jobs, this industry employs about 60 million people. To continue with the development, production and marketing of vehicles, automotive manufacturers invested a total of about $94 billion in 2015. Despite the innovative power of this industry and its ability to shape its own future, there are many signs that there is a disruption ahead.


pages: 402 words: 126,835

The Job: The Future of Work in the Modern Era by Ellen Ruppel Shell

3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, Amazon Mechanical Turk, basic income, Baxter: Rethink Robotics, big-box store, blue-collar work, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer vision, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, deskilling, disruptive innovation, Donald Trump, Downton Abbey, Elon Musk, Erik Brynjolfsson, factory automation, follow your passion, Frederick Winslow Taylor, future of work, game design, glass ceiling, hiring and firing, immigration reform, income inequality, industrial robot, invisible hand, Jeff Bezos, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, low skilled workers, Lyft, manufacturing employment, Marc Andreessen, Mark Zuckerberg, means of production, move fast and break things, move fast and break things, new economy, Norbert Wiener, obamacare, offshore financial centre, Paul Samuelson, precariat, Ralph Waldo Emerson, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, Steve Jobs, The Chicago School, Thomas L Friedman, Thorstein Veblen, Tim Cook: Apple, Uber and Lyft, uber lyft, universal basic income, urban renewal, white picket fence, working poor, Y Combinator, young professional, zero-sum game

This applies to Airbus: the precision parts are made in Germany, often by small firms linked to the global production chain through union efforts. Before opening the Alabama assembly plant, Airbus outsourced final assembly of the A320 to Chinese factories. It seems that Alabama was competing not with Germany for the high-wage, high-value jobs, but with China for the relatively low-wage, low-value jobs. In March 2010, manufacturing employment in the United States bottomed out at roughly 11.45 million jobs—down from a high of 19.6 million in 1979. Five years later, 900,000 new factory positions had been created, most of them in southern states. In addition to the aircraft assembly jobs, Alabama’s burgeoning auto parts industry employed 26,000 workers in 2017. Georgia and Mississippi have seen similar job growth in the auto parts sector.


pages: 412 words: 128,042

Extreme Economies: Survival, Failure, Future – Lessons From the World’s Limits by Richard Davies

agricultural Revolution, air freight, Anton Chekhov, artificial general intelligence, autonomous vehicles, barriers to entry, big-box store, cashless society, clean water, complexity theory, deindustrialization, eurozone crisis, failed state, financial innovation, illegal immigration, income inequality, informal economy, James Hargreaves, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, large denomination, Livingstone, I presume, Malacca Straits, mandatory minimum, manufacturing employment, means of production, megacity, meta analysis, meta-analysis, new economy, off grid, oil shale / tar sands, pension reform, profit motive, randomized controlled trial, school choice, school vouchers, Scramble for Africa, side project, Silicon Valley, Simon Kuznets, Skype, spinning jenny, The Chicago School, the payments system, trade route, Travis Kalanick, uranium enrichment, urban planning, wealth creators, white picket fence, working-age population, Y Combinator, young professional

The Swing Riots The classic account of British agricultural labourers’ reaction to the mechanization of farm work is Captain Swing by Hobsbawm and Rudé (1968); for a more recent account of the use of violence in this period, see Griffin (2010). The Industrial Revolution On the role of the Spinning Jenny in the Industrial Revolution, see Allen (2007). For a history of cotton innovation and the UK in the context of Indian and Chinese cotton production, see Riello (2013). The decline of manufacturing employment Changes in employment for the US are from the Bureau of Labor Statistics; for a 100-year view of the US, see Ghanbari and McCall (2016). Arthur Samuel, and the origins of AI On the origins and early development of artificial intelligence, see Nilsson (2009). The original paper by Arthur Samuel on machine learning and the game of checkers is Samuel (1959); for a short survey of Samuel’s contribution, see McCarthy and Feigenbaum (1990).


pages: 481 words: 121,300

Why geography matters: three challenges facing America : climate change, the rise of China, and global terrorism by Harm J. De Blij

agricultural Revolution, airport security, Anton Chekhov, Ayatollah Khomeini, Berlin Wall, British Empire, colonial exploitation, complexity theory, computer age, crony capitalism, demographic transition, Deng Xiaoping, Eratosthenes, European colonialism, F. W. de Klerk, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global village, illegal immigration, Internet Archive, John Snow's cholera map, Khyber Pass, manufacturing employment, megacity, Mercator projection, MITM: man-in-the-middle, Nelson Mandela, out of africa, RAND corporation, risk tolerance, Ronald Reagan, South China Sea, special economic zone, Thomas Malthus, trade route, transatlantic slave trade, UNCLOS, UNCLOS

I have colleagues whose work focuses on Amazonian deforestation. West African desertification, Asian economic integration, Indonesian transmigration. Others take a more specific look at such American phenomena as professional football and the sources and team destinations of players, the changing patterns of church membership and evangelism, the rise of the wine industry in this period of global warming, and the impact of NAFTA on manufacturing employment in the Midwest. I'm always fascinated to read in our professional journals what they're discovering, and as I used to tell my students, the Age of Discovery may be over, but the era of geographic discovery never will be. THE SPATIAL SPECIALIZERS The stirring story of geography's early emergence, its Greek and Roman expansion, its European diversification, and its global dissemination is a saga of pioneering observation, heroic exploration, inventive mapmaking, and ever-improving interpretation, discussed in fascinating detail by the discipline's leading historian (Martin, 2005).


To the Ends of the Earth: Scotland's Global Diaspora, 1750-2010 by T M Devine

agricultural Revolution, British Empire, deindustrialization, deskilling, full employment, ghettoisation, housing crisis, invention of the telegraph, invisible hand, joint-stock company, Khartoum Gordon, land tenure, manufacturing employment, mass immigration, new economy, New Urbanism, oil shale / tar sands, railway mania, Red Clydeside, rising living standards, Robert Gordon, Scramble for Africa, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, transcontinental railway, women in the workforce

The unemployed farm worker, who inevitably had lost his home, had no choice but to move to seek a job. Thirdly, Scottish urbanization was notable for its speed and scale. The proportion of Scots living in settlements of over 5,000 rose from 31 per cent in 1831 to almost 60 per cent in 1911. The vast majority of the new urban populations were from the farms, villages and small towns of the Lowland countryside. Fourthly, the first phase of industrialization down to c.1830 had extended manufacturing employment, especially in textiles, in rural areas. During the coal, iron and steel industrialization phase, production concentrated more intensively in the central Lowlands, the Border woollen towns, Dundee, Fife and Midlothian. Indeed, one of the most striking features of Scottish industrial capitalism was its extraordinary concentration. This process ensured a rapid shedding of population from areas of crumbling employment to the regions of rapid growth in the Forth–Clyde valley.


pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

"Robert Solow", 1960s counterculture, activist lawyer, affirmative action, airline deregulation, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business cycle, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, Gunnar Myrdal, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, liberal capitalism, Long Term Capital Management, manufacturing employment, market bubble, Martin Wolf, new economy, oil shale / tar sands, oil shock, open economy, Paul Samuelson, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Ronald Reagan, Simon Kuznets, strikebreaker, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

The War on Poverty targeted youth and offered training to those whose culture or skills made them unemployable despite the buoyant economy. Especially after the urban riots, money went disproportionately to blacks in cities that had experienced riots. The original intellectual framework persisted. The programs targeted young people, not adults, and offered cultural training, not jobs. The formulation ignored the structural changes that reduced manufacturing employment in the cities. The Labor Department’s Moynihan report of 1965 concluded that jobs were needed, but this point was overwhelmed by the controversy over the report’s unproven contention that the black family structure was pathological. Whatever the theory, the Democratic Party sponsored programs that increased resources—food, health, education—for African Americans. The War on Poverty and the Model Cities program, mostly centered in black areas, encouraged black businesses and fostered black employment.


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game

The batteries come from a GE plant in Schenectady, New York—a Rust Belt city that was once seen as a relic of an earlier industrial age but that now houses a new GE factory on the site of a former turbine plan, which churns out the batteries twenty-four hours a day. Schenectady, the home of GE’s first research facility in 1900, is once again a growing R&D hub for the company. This has huge implications for the local economy of Schenectady as well as for other such communities around the country. The official figure for US manufacturing employment, 9 percent, belies the true importance of the sector. Manufacturing represents a whopping 69 percent of private-sector R&D spending as well as 30 percent of the country’s productivity growth.49 And, according to US government figures, every $1 of manufacturing activity returns $1.37 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and coauthor of Producing Prosperity: Why America Needs a Manufacturing Renaissance.


Making Globalization Work by Joseph E. Stiglitz

affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Gini coefficient, global reserve currency, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Jones Act, Kenneth Arrow, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, new economy, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus, zero-sum game

Growth in per capita real income fluctuated between 3.5 percent of the 1960s, 3.2 percent of the 1970s, and 2.7 percent of the 1950s. 5.From Instituto Nacional Estadística Geografía e Informática, cited in William C. Gruben, “Was Nafta Behind Mexico’s High Maquiladora Growth?,” Economic and Financial Review (Third Quarter, 2001), pp. 11–21. 6.Overall, employment in the domestic manufacturing sector declined in the decade after NAFTA. Export manufacturing employment increased slightly, but these gains were largely overset by losses of jobs in agriculture, and it was not clear how permanent the jobs created would be: by the end of the first decade, 30 percent of the jobs created in the maquiladora in the early 1990s had disappeared. See Sandra Polaski, “Mexican Employment, Productivity, and Income a Decade after NAFTA,” Carnegie Endowment for International Peace, brief submitted to the Canadian Standing Senate Committee on Foreign Affairs, February 25, 2004. 7.See Gruben, “Was Nafta Behind Mexico’s High Maquiladora Growth?


pages: 464 words: 139,088

The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

"Robert Solow", Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial innovation, financial intermediation, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Hyman Minsky, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

He later wrote, ‘What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalisation of Western liberal democracy as the final form of human government.’ (Fukuyama, 1992). 17 US Bureau of Labor Statistics website: Workforce Statistics on manufacturing employment; Eurostat website: employment and unemployment database, tables on employment by sex, age and economic activity. 18 World Trade Organisation website: Statistics Database. 19 The policy was relaxed at the end of 2013, and became a two-child policy in October 2015. 20 Bernanke (2005). 21 The fundamental drivers of high saving and weak investment that led to falling real interest rates are a matter for continuing research – see Rachel and Smith (2015). 22 Since the 1980s, it has been possible to measure real interest rates quite accurately by looking at how much governments have to pay to borrow in the form of securities (bonds) on which the returns are indexed to inflation.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

bank run, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

And similarly for many other so-called structural reforms.14 REFORMS THAT WOULD HAVE MATTERED In each of the crisis countries, there are reforms that might have led to a stronger economy, both in the short run and the long. INDUSTRIAL POLICIES Most advanced countries are in need of a structural transformation of their economy, from the sectors (mostly manufacturing) that were dominant in the past to those that will define the 21st century. Because the pace of productivity increase in manufacturing is greater than that of demand, global manufacturing employment will be decreasing, and because of globalization, the share of this global employment that will be captured by the advanced countries, including those in Europe, will be diminishing. A few countries, like Germany, may be able to maintain a niche, at least for a while, especially if they can manage to have an undervalued currency. Germany has benefited from being wedded to the “weaker” countries of the eurozone, for the net effect is that the euro, the currency today, is weaker than say the German mark would have been.


pages: 495 words: 138,188

The Great Transformation: The Political and Economic Origins of Our Time by Karl Polanyi

agricultural Revolution, Berlin Wall, borderless world, business cycle, central bank independence, Corn Laws, currency manipulation / currency intervention, David Ricardo: comparative advantage, Fall of the Berlin Wall, full employment, inflation targeting, joint-stock company, Kula ring, land reform, land tenure, liberal capitalism, manufacturing employment, new economy, Panopticon Jeremy Bentham, price mechanism, profit motive, Republic of Letters, road to serfdom, Ronald Reagan, the market place, The Wealth of Nations by Adam Smith, trade liberalization, trade route, trickle-down economics, Washington Consensus, Wolfgang Streeck, working poor, Works Progress Administration

The industrial regions of that age resembled a new country, like another America, attracting immigrants by the thousand. Migration is usually accompanied by a very considerable remigration. That such a reflux toward the village must have taken place seems to find support also in the fact that no absolute decrease of the rural population was noted. Thus a cumulative unsettling of the population was proceeding as different groups were drawn for varying periods into the sphere of commercial and manufactural employment, and then left to drift back to their original rural habitat. Much of the social damage done to England’s countryside sprang at first from the dislocating effects of trade directly upon the countryside itself. The Revolution in Agriculture definitely antedated the Industrial Revolution. Both enclosures of the common and consolidations into compact holdings, which accompanied the new great advance in agricultural methods, had a powerfully unsettling effect.


Apocalypse Never: Why Environmental Alarmism Hurts Us All by Michael Shellenberger

Albert Einstein, Asperger Syndrome, Bernie Sanders, Bob Geldof, carbon footprint, Cesare Marchetti: Marchetti’s constant, clean water, Corn Laws, coronavirus, corporate social responsibility, correlation does not imply causation, cuban missile crisis, decarbonisation, deindustrialization, Dissolution of the Soviet Union, Donald Trump, Elon Musk, energy transition, failed state, Gary Taubes, global value chain, Google Earth, hydraulic fracturing, index fund, Indoor air pollution, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, land tenure, Live Aid, LNG terminal, long peace, manufacturing employment, mass immigration, meta analysis, meta-analysis, off grid, oil shale / tar sands, Potemkin village, purchasing power parity, Ralph Nader, renewable energy transition, Steven Pinker, supervolcano, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade route, union organizing, WikiLeaks, Y2K

“To be successful, industrialization has to come from the very top,” Hinh Dinh, a former World Bank economist who advised the Ethiopian government, told me. For over two decades Dinh has researched and written on how poor nations can attract manufacturing. “Ethiopia got good results because of the now-deceased prime minister [Meles Zenawi] who went to China to get garment and shoe factories.”83 I asked Dinh if he shared Rodrik’s view that poor nations might need to find a path to development other than manufacturing. “In the U.S., manufacturing employment peaked at twenty million people in 1978,” said Dinh, “and since then, it has shed its low-end industries to focus on higher, more specialized manufacturing. That’s different from Nigeria de-industrializing at 7 or 8 percent (share of manufacturing in GDP) before its manufacturing reached the maturity stage.” Dinh added, “In a lot of developing countries, the de-industrialization is due to poor policy, bad governance, or neglect, not because of some natural peak as the case of the U.S. or Europe.”


pages: 434 words: 150,773

When the Iron Lady Ruled Britain by Robert Chesshyre

Berlin Wall, Big bang: deregulation of the City of London, British Empire, corporate raider, deskilling, Etonian, Fall of the Berlin Wall, financial deregulation, full employment, housing crisis, manufacturing employment, mass immigration, means of production, Neil Kinnock, North Sea oil, oil rush, plutocrats, Plutocrats, Right to Buy, Ronald Reagan, school choice, Silicon Valley, the market place, trickle-down economics, union organizing, wealth creators, young professional

The four leaders I met were anxious to convince me that Skem’s reputation for bolshy workers was a slander on the town. They handed me a report – ‘Skem: The Broken Promise’ – to which David Sheppard, the Bishop of Liverpool, had written a sombre introduction: Once claiming to offer its people a new and better way of life, [Skelmersdale] now embodies the human results of the collapse of manufacturing employment, the regional and local concentration of economic decline, and the wholesale redundancy of manual and unskilled workers … Skelmersdale is special in being in the travel-to-work area with the highest unemployment rate in the north-west and in having its own story of promises broken and hopes dashed. The report refuted a national press claim in the seventies that ‘the town’s troubles were the result of militant trade unionism … and the mud of that campaign has apparently stuck’.


pages: 565 words: 151,129

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism by Jeremy Rifkin

"Robert Solow", 3D printing, active measures, additive manufacturing, Airbnb, autonomous vehicles, back-to-the-land, big-box store, bioinformatics, bitcoin, business process, Chris Urmson, clean water, cleantech, cloud computing, collaborative consumption, collaborative economy, Community Supported Agriculture, Computer Numeric Control, computer vision, crowdsourcing, demographic transition, distributed generation, en.wikipedia.org, Frederick Winslow Taylor, global supply chain, global village, Hacker Ethic, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Julian Assange, Kickstarter, knowledge worker, longitudinal study, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, market design, mass immigration, means of production, meta analysis, meta-analysis, natural language processing, new economy, New Urbanism, nuclear winter, Occupy movement, off grid, oil shale / tar sands, pattern recognition, peer-to-peer, peer-to-peer lending, personalized medicine, phenotype, planetary scale, price discrimination, profit motive, QR code, RAND corporation, randomized controlled trial, Ray Kurzweil, RFID, Richard Stallman, risk/return, Ronald Coase, search inside the book, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, smart grid, smart meter, social web, software as a service, spectrum auction, Steve Jobs, Stewart Brand, the built environment, The Nature of the Firm, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transaction costs, urban planning, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog, Whole Earth Review, WikiLeaks, working poor, zero-sum game, Zipcar

“Global Employment Trends 2013,” International Labor Organization, 2013, 10, http://www .ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_20 2326.pdf (accessed July 7, 2013). 5. “Difference Engine: Luddite Legacy,” Economist, November 4, 2011, http://www.economist .com/blogs/babbage/2011/11/artificial-intelligence (accessed July 9, 2013). 6. Ibid. 7. Michaela D. Platzer and Glennon J. Harrison, “The U.S. Automotive Industry: National and State Trends in Manufacturing Employment,” Cornell University ILR School, August 2009, 8, http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1671&context=key_work place (accessed July 7, 2013). 8. James Sherk,”Technology Explains Drop in Manufacturing Jobs,” Heritage Foundation, October 12, 2010, http://www.heritage.org/research/reports/2010/10/technology-explains-drop-in -manufacturing-jobs (accessed August 10, 2013). 9.


pages: 525 words: 153,356

The People: The Rise and Fall of the Working Class, 1910-2010 by Selina Todd

call centre, collective bargaining, conceptual framework, credit crunch, deindustrialization, deskilling, different worldview, Downton Abbey, financial independence, full employment, income inequality, longitudinal study, manufacturing employment, Neil Kinnock, New Urbanism, Red Clydeside, rent control, Right to Buy, rising living standards, sexual politics, strikebreaker, The Spirit Level, unemployed young men, union organizing, upwardly mobile, urban renewal, Winter of Discontent, women in the workforce, young professional

‘There was nothing then … my mother was desperately poor, and in those days, it was usual to do as you were told.’30 Although the number of domestic servants actually increased between 1921 and 1931, men and women in the towns and cities were increasingly able to find factory work. After a slow post-war start, manufacturing began to expand. Older industries like steel had relied on smaller numbers of skilled workers, but the new manufacturing employers chose to concentrate on consumer goods – tinned foods, fashionable clothes and electrical appliances – produced cheaply and uniformly by using as much mechanization as possible. They didn’t need workers who had served a lengthy apprenticeship, but they did need large numbers of employees to staff their production lines, and young wage-earners, who were cheaper to employ than adults, were suddenly in demand.


pages: 482 words: 149,351

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

activist fund / activist shareholder / activist investor, Airbnb, airline deregulation, anti-communist, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, British Empire, business climate, business cycle, capital controls, carried interest, Cass Sunstein, Celtic Tiger, central bank independence, centre right, Clayton Christensen, cloud computing, corporate governance, corporate raider, creative destruction, Credit Default Swap, cross-subsidies, David Ricardo: comparative advantage, demographic dividend, Deng Xiaoping, desegregation, Donald Trump, Etonian, failed state, falling living standards, family office, financial deregulation, financial innovation, forensic accounting, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global supply chain, high net worth, income inequality, index fund, invisible hand, Jeff Bezos, Kickstarter, land value tax, late capitalism, light touch regulation, London Whale, Long Term Capital Management, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mont Pelerin Society, moral hazard, neoliberal agenda, Network effects, new economy, Northern Rock, offshore financial centre, old-boy network, out of africa, Paul Samuelson, plutocrats, Plutocrats, Ponzi scheme, price mechanism, purchasing power parity, pushing on a string, race to the bottom, regulatory arbitrage, rent-seeking, road to serfdom, Robert Bork, Ronald Coase, Ronald Reagan, shareholder value, sharing economy, Silicon Valley, Skype, smart grid, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, special economic zone, Steve Ballmer, Steve Jobs, The Chicago School, Thorstein Veblen, too big to fail, transfer pricing, wealth creators, white picket fence, women in the workforce, zero-sum game

For instance, when sterling fell by 20 per cent after being ejected from the European Exchange Rate Mechanism in 1992, this was followed by four years of manufacturing growth – within a long-term pattern of decline. Then in 1996 and 1997, amid a great City financial boom, sterling rose by 25 per cent and stayed there for over a decade, and suddenly the manufacturing sector started shedding jobs again. Sterling fell after the global financial crisis, which may help explain why manufacturing employment did not fall at a faster pace in the ensuing recession. On this, see Tony Dolphin, ‘Don’t bank on it: the financialisation of the UK economy’, Institute for Public Policy Research, 2012, especially p.36. 7. See, for instance, ‘Time for Change: a New Vision for the British Economy’, Institute for Public Policy Research, August 2017. It notes on p.47 that manufacturing as a share of the European economy has fallen from 19 to 17 per cent since the mid-1990s, but has fallen from 17 to just over 10 per cent in Britain.


Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs, Arthur A. Ekirch, Jr.

Alistair Cooke, American ideology, business cycle, clean water, collective bargaining, creative destruction, credit crunch, declining real wages, endowment effect, fiat currency, fixed income, full employment, hiring and firing, income per capita, Jones Act, Joseph Schumpeter, laissez-faire capitalism, manufacturing employment, means of production, minimum wage unemployment, plutocrats, Plutocrats, post-industrial society, price discrimination, profit motive, rent control, rent-seeking, Richard Thaler, road to serfdom, Ronald Reagan, Sam Peltzman, Simon Kuznets, strikebreaker, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, transcontinental railway, union organizing, Upton Sinclair, War on Poverty, Works Progress Administration

In 1870 just 26 percent of Americans lived in incorporated places with populations of more than 2,500; by 1890, 80 History 35 percent did. During the interval the number of cities with populations exceeding 100,000 increased from fourteen to twenty-eight. The labor force shifted among sectors. While agricultural employment grew slowly, employment in construction, trade, and transportation surged ahead. Manufacturing employment held at 19 percent of the labor force, but rapid productivity gains raised manufacturing output from 33 percent of all commodity output in 1869 to 53 percent in 1894. 6 The urban-industrial transformation of the socioeconomic structure left few people unaffected. Under these dynamic conditions, to adopt new ways of life and new kinds of production was the road to wealth-or, for the less fortunate, at least an avenue of survival.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"Robert Solow", 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, disruptive innovation, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low cost carrier, low earth orbit, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, plutocrats, Plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

To the contrary, in 2015 IBM began to license server and software technology to the Beijing-based Teamsun, a company bent on using IBM’s innovations to build indigenous equivalents. Soon Western companies will seek to be part of Chinese supply chains rather than the reverse. China has enough land, labor, capital, technology, and knowledge to make almost anything and everything. Despite rising wages and growing competition, its manufacturing employment and output continue to grow, while the import share of the components going into its exports is rapidly declining. In other words, it is becoming a more self-reliant manufacturer of higher-value goods. The only way to retain competitive advantage is to make complex products nobody else can (yet). Germany, Switzerland, Finland, Japan, and Singapore rank atop the economic complexity index.


India's Long Road by Vijay Joshi

Affordable Care Act / Obamacare, barriers to entry, Basel III, basic income, blue-collar work, Bretton Woods, business climate, capital controls, central bank independence, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, congestion charging, corporate governance, creative destruction, crony capitalism, decarbonisation, deindustrialization, demographic dividend, demographic transition, Doha Development Round, eurozone crisis, facts on the ground, failed state, financial intermediation, financial repression, first-past-the-post, floating exchange rates, full employment, germ theory of disease, Gini coefficient, global supply chain, global value chain, hiring and firing, income inequality, Indoor air pollution, Induced demand, inflation targeting, invisible hand, land reform, Mahatma Gandhi, manufacturing employment, Martin Wolf, means of production, microcredit, moral hazard, obamacare, Pareto efficiency, price mechanism, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, race to the bottom, randomized controlled trial, rent-seeking, reserve currency, rising living standards, school choice, school vouchers, secular stagnation, Silicon Valley, smart cities, South China Sea, special drawing rights, The Future of Employment, The Market for Lemons, too big to fail, total factor productivity, trade liberalization, transaction costs, universal basic income, urban sprawl, working-age population

The small firms (49 or fewer workers) employed 84 per cent of all workers in manufacturing; only 5.5 per cent were employed in medium-​sized firms (50–​199 workers), and only 10.5 per cent in large firms (200+ workers).16 This extraordinary size-​ distribution of firms with a ‘missing middle’ is very different from what is found in East Asia (see Table 5.3), where the distribution is much more evenly spread (or increases with firm-​size as in China).17 The same story is repeated in services. In 2005, there were somewhat more than 100 million workers in services, employed in 16.5 million firms, of which 99.96 per cent were small (49 or fewer workers). The concentration of employment in small firms was even greater than in manufacturing: 96 per cent of workers were employed in small enterprises. Table 5.3 SHARES OF MANUFACTURING EMPLOYMENT BY FIRM-​S IZE IN INDIA AND SELECTED EAST ASIAN ECONOMIES, 2005 (PER CENT) Micro + Small Medium Large (1–​49 workers) (50–​199 workers) (200+ workers) India 84.0 5.5 10.5 South Korea 46.5 23.9 29.6 Taiwan 38.9 21.3 39.8 Malaysia 27.5 19.7 52.8 China 24.8 23.3 51.8 Source: Asian Development Bank (2009). G r o w t h a n d t h e Em p l oy m e n t P r o b l e m  [ 71 ] 72 The ultra-​skewed distribution of firm size is significant because there is a close positive relation between firm size, labour productivity, and wages.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

Since then, German unemployment has been well below the European average, although that may be down to the country’s success in exporting capital goods to China and the emerging markets, rather than the reforms themselves.11 Attempts to make the labour market flexible led to a long argument about whether it was better to reduce unemployment, even if the only jobs available had lower wages and reduced rights. In the US, such jobs were found in the fast-food sector or in call centres. The problem was tied up with the general decline in manufacturing employment (see Chapter 7), which meant that most new jobs were created in the service sector. One significant component of economic growth in this period was the addition of women to the workforce. In 1948, just over 30% of American adult women worked, but by 2000, the proportion was 60%. (It has dropped back a little, along with male participation, since then.) There was an upward trend in other developed countries as well.


The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff

"Robert Solow", affirmative action, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, George Gilder, Gunnar Myrdal, immigration reform, income inequality, income per capita, invisible hand, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, Paul Samuelson, peak oil, pensions crisis, profit motive, Ralph Waldo Emerson, road to serfdom, Ronald Reagan, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trickle-down economics, urban planning, urban sprawl, wage slave, War on Poverty, white flight, zero-sum game

One can research this committee in Records of the Social Science Research Council, RAC, Accession 1, Series 1, Committee Projects, Subseries 19, Miscellaneous Projects “P”, Box 191, Folder “Committee on Population Reports, 1924–1942.” 142. See Carter Goodrich’s comments in “Population Redistribution: Round Table, Friday Afternoon, May 3, 1935, Conference on Population Studies in Relation to Social Planning,” PAA Records, Box 7, Folder “Annual Meeting May 2, 1935.” 143. On business location, see Daniel B. Creamer, Is Industry Decentralizing? A Statistical Analysis of Locational Changes in Manufacturing Employment, 1899– 1933 (Philadelphia: University of Pennsylvania Press, 1935). Creamer revealed that American industry was moving from city centers to the surrounding towns but was not, on the whole, fundamentally redrawing the economic map of the nation (even as, for example, northern textile firms migrated toward cheaper labor markets in the South). 144. T. J. Woofter Jr. and Ellen Winston, Seven Lean Years (Chapel Hill: University of North Carolina Press, 1939), estimated that “farm families have proportionally almost twice as many children as city families” (35). 145.


pages: 615 words: 168,775

Troublemakers: Silicon Valley's Coming of Age by Leslie Berlin

AltaVista, Apple II, Asilomar, Asilomar Conference on Recombinant DNA, beat the dealer, Bill Gates: Altair 8800, Bob Noyce, Byte Shop, Clayton Christensen, cloud computing, computer age, discovery of DNA, don't be evil, Donald Knuth, double helix, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Thorp, El Camino Real, fear of failure, Fellow of the Royal Society, financial independence, game design, Haight Ashbury, hiring and firing, industrial robot, informal economy, Internet of things, inventory management, John Markoff, Kickstarter, Kitchen Debate, Leonard Kleinrock, manufacturing employment, Mark Zuckerberg, Menlo Park, Minecraft, Mother of all demos, packet switching, Ralph Nader, Robert Metcalfe, rolodex, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Snapchat, software as a service, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, Ted Nelson, union organizing, upwardly mobile, William Shockley: the traitorous eight, women in the workforce

Radicati Group, Email Statistics Report, 2015–2019 (Executive Summary), http://www.radicati.com/wp/wp-content/uploads/2015/02/Email-Statistics-Report-2015-2019-Executive-Summary.pdf. 14. “Total domestic US revenues generated by biotech in 2012 reached at least $324 billion.” Robert Carlson, “Estimating the Biotech Sector’s Contribution to the US Economy,” Nature Biotechnology 34 (2016): 247–355. 15. Manufacturing employment as a share of the total US economy has undergone a steady decline in the past fifty years, dropping from 25 percent in 1960 to under 10 percent in 2010. Martin Neil Baily and Barry P. Bosworth, “US Manufacturing: Understanding Its Past and Its Potential Future,” Journal of Economic Perspectives 28, no. 1 (Winter 2014): 3–26, Fig. 1. 16. Center for Responsive Politics, https://www.opensecrets.org/lobby/top.php?


pages: 596 words: 163,682

The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan

activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, airline deregulation, Albert Einstein, Andrei Shleifer, banking crisis, barriers to entry, basic income, battle of ideas, Bernie Sanders, blockchain, borderless world, Bretton Woods, British Empire, Build a better mousetrap, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, computer vision, conceptual framework, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, data acquisition, David Brooks, Deng Xiaoping, desegregation, deskilling, disruptive innovation, Donald Trump, Edward Glaeser, facts on the ground, financial innovation, financial repression, full employment, future of work, global supply chain, high net worth, housing crisis, illegal immigration, income inequality, industrial cluster, intangible asset, invention of the steam engine, invisible hand, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, labor-force participation, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, means of production, moral hazard, Network effects, new economy, Nicholas Carr, obamacare, Productivity paradox, profit maximization, race to the bottom, Richard Thaler, Robert Bork, Robert Gordon, Ronald Reagan, Sam Peltzman, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South China Sea, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, superstar cities, The Future of Employment, The Wealth of Nations by Adam Smith, trade liberalization, trade route, transaction costs, transfer pricing, Travis Kalanick, Tyler Cowen: Great Stagnation, universal basic income, Upton Sinclair, Walter Mischel, War on Poverty, women in the workforce, working-age population, World Values Survey, Yom Kippur War, zero-sum game

Guy Chazan, “Germany’s Economic Engine Fails to Power Struggling Rural Regions,” Financial Times, February 27, 2018, https://www.ft.com/content/c6edf308-1875-11e8-9376-4a6390addb44. 37. “European Populism: Trends, Threats and Future Prospects,” Institute for Global Change (website), accessed August 6, 2018, https://institute.global/insight/renewing-centre/european-populism-trends-threats-and-future-prospects. 38. Kerwin Kofi Charles, Erik Hurst, and Matthew J. Notowidigdo, “The Masking of the Decline in Manufacturing Employment by the Housing Bubble,” The Journal of Economic Perspectives 30, no. 2 (Spring 2016): 179–200. 39. Raghuram G. Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy (Princeton, NJ: Princeton University Press, 2010). 40. Tito Boeri, Prachi Mishra, Chris Papageorgiou, and Antonio Spilimbergo, “A Dialogue between a Populist and an Economist,” CEPR Discussion Paper No.


pages: 585 words: 165,304

Trust: The Social Virtue and the Creation of Prosperity by Francis Fukuyama

barriers to entry, Berlin Wall, blue-collar work, business climate, business cycle, capital controls, collective bargaining, corporate governance, corporate raider, creative destruction, deindustrialization, Deng Xiaoping, deskilling, double entry bookkeeping, equal pay for equal work, European colonialism, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global village, Gunnar Myrdal, hiring and firing, industrial robot, Jane Jacobs, job satisfaction, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, land reform, liberal capitalism, liberation theology, low skilled workers, manufacturing employment, mittelstand, price mechanism, profit maximization, RAND corporation, rent-seeking, Ronald Coase, Silicon Valley, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, transfer pricing, traveling salesman, union organizing

Many people believed that these small, traditional firms would disappear with progressing industrialization, as they did in India. But by and large, they did not. Traditional independent weavers, for example, expanded market share more rapidly than large textile firms in the 1930s.6 Between 1954 and 1971, the number of manufacturing firms in Japan doubled, while increasing by only twenty-two percent over the same period in the United States.7 In 1967, sixteen percent of manufacturing employment in Japan was in firms with fewer than ten workers, whereas the corresponding figure for the United States was only three percent.8 David Friedman has gone so far as to argue that dynamic small businesses, and not the well-known giant corporations, are the essence of the Japanese “miracle.”9 In this respect, Japanese industrial structure would appear to bear many similarities to those of Chinese societies, with their myriad small family businesses.


Order Without Design: How Markets Shape Cities by Alain Bertaud

autonomous vehicles, call centre, colonial rule, congestion charging, creative destruction, cross-subsidies, Deng Xiaoping, discounted cash flows, Donald Trump, Edward Glaeser, en.wikipedia.org, extreme commuting, garden city movement, Google Earth, Jane Jacobs, job satisfaction, Joseph Schumpeter, land tenure, manufacturing employment, market design, market fragmentation, megacity, new economy, New Urbanism, openstreetmap, Pearl River Delta, price mechanism, rent control, Right to Buy, Ronald Coase, self-driving car, Silicon Valley, special economic zone, the built environment, trade route, transaction costs, transit-oriented development, trickle-down economics, urban planning, urban sprawl, zero-sum game

By 2010, manufacturing had fallen to 1.8 percent of GDP, and employment in manufacturing had been reduced to 3.4 percent of total employment. This drastic change in the share of the manufacturing sector over 20 years required an equally drastic change in land use and job location. Manufacturing jobs in Hong Kong were largely replaced by new jobs in the service sector. But the location and land requirements of the service sector are completely different from those of the manufacturing sector. The replacement of manufacturing employment by service employment could not be done simply by replacing factories with office buildings. Instead, because Hong Kong planners were often the lessors of office space (and therefore exposed directly to market pricing), they were able to understand market demands to completely reallocate land use and modify urban transport to adapt to a new spatial pattern of job concentration. These changes in Hong Kong’s economy were not the result of deliberate plans made by Hong Kong planners but were imposed from the outside by geopolitical changes, such as the opening of mainland China’s economy.


pages: 782 words: 187,875

Big Debt Crises by Ray Dalio

Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, break the buck, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, declining real wages, European colonialism, fiat currency, financial innovation, German hyperinflation, housing crisis, implied volatility, intangible asset, Kickstarter, large denomination, manufacturing employment, margin call, market bubble, market fundamentalism, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Northern Rock, Ponzi scheme, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, refrigerator car, reserve currency, short selling, sovereign wealth fund, too big to fail, transaction costs, universal basic income, value at risk, yield curve

That prompted Paulson to get President Bush’s support in the fall of 2006 to begin working on legislation with Barney Frank (then the ranking minority member of the House Financial Services Committee) to reform those entities, though that push didn’t lead to progress until the crisis came to a head in the summer of 2008.5 The Emerging Broader-Based Bubble The broader economy also showed signs of a bubble. Savings rates declined from low to lower and the US aggressively sucked in capital from abroad. US manufacturing employment fell and the US was rapidly losing global export market share to emerging countries, especially China. However, the increase in housing-related activity camouflaged this; for instance, construction employment in support of building houses increasingly financed by debt rose by around 50 percent compared to 1995. In addition, a lot of money to fund consumption was also borrowed via mortgages and other types of debt instruments.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

"Robert Solow", Alvin Roth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, do-ocracy, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, Kenneth Arrow, Kenneth Rogoff, Kickstarter, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

GDP 4.2 Index of world equity prices, Great Depression and current crisis 4.3 Index volume of world trade, Great Depression and current crisis 4.4 Google Trends search term: “toxic assets” 4.5 Fed projection misses the mark 4.6 American bank mergers, 1995–2009 4.7 The “Flash Crash” of May 6, 2010 5.1 Proportions of U.S. mortgages originated by various financial entities, 1953–2007 6.1 European ETS prices, 2011 6.2 European public and private debt, 2000 and 2010 6.3 U.S. public and private debt, 1920–2011 6.4 Total Over-the-Counter Outstanding Derivatives 6.5 Google Trends for search term “financial innovation” 1 One More Red Nightmare: The Crisis That Didn’t Change Much of Anything Conjure, if you will, a primal sequence encountered in B-grade horror films, where the celluloid protagonist suffers a terrifying encounter with doom, yet on the cusp of disaster abruptly wakes to a different world, which initially seems normal, but eventually is revealed to be a second nightmare more ghastly than the first.1 Something like that has become manifest in real life since the onset of the crisis which started in 2007. From the crash onward, it was bad enough to endure house prices sinking under water, dangling defaults and foreclosures, the collapse of what remained of manufacturing employment, the reduction of whole neighborhoods to bombed-out shells, the evaporation of pensions and savings accounts, the dismay of witnessing the hope of a better life for our children shrivel up, neighbors stocking up on firearms and people confusing bankruptcy with the Rapture. It was an unnerving interlude, with Nietzschean Eternal Return reduced to an Excel graph with statistics from the Great Depression of the 1930s.


Migrant City: A New History of London by Panikos Panayi

Big bang: deregulation of the City of London, British Empire, Brixton riot, call centre, discovery of the americas, en.wikipedia.org, financial intermediation, ghettoisation, gig economy, glass ceiling, haute cuisine, immigration reform, income inequality, Mahatma Gandhi, manufacturing employment, mass immigration, multicultural london english, New Urbanism, offshore financial centre, plutocrats, Plutocrats, transatlantic slave trade, upwardly mobile, urban sprawl, white flight

In this situation clothing production could continue despite the international competition from imported goods which decimated much of London’s manufacturing industry.127 Bangladeshi men also worked in this trade so that by the 1970s they provided the largest percentage of males in the clothing industry and also accounted for 20 per cent of jobs in Tower Hamlets where Bangladeshis were concentrated.128 While women have unquestionably faced exploitation in the London rag trade, they often chose to work at home rather than in a factory environment for a variety of reasons: these included, for Bangladeshis, the Islamic need to separate men from women; the lack of command of the English language; and, perhaps most importantly, working at home allowed women to earn a living as well as carrying out their domestic responsibilities of child rearing, cooking and cleaning.129 While a significant percentage of Bangladeshi women chose to work at home in the rag trade, this offers just one example of South Asian manufacturing employment in London. Some Sikhs also laboured in the East End clothing industry but others, centred on Southall, worked in light manufacturing industries in both the food and other sectors, as well as finding a wide range of jobs at Heathrow Airport.130 One South Asian woman, Raksha, born in India in 1951, started working in Heathrow in 1969 on ‘tray-set, you know the meals on flights. I was not used to standing all day, so I found that hard.


pages: 518 words: 170,126

City for Sale: The Transformation of San Francisco by Chester W. Hartman, Sarah Carnochan

affirmative action, Albert Einstein, Bay Area Rapid Transit, big-box store, business climate, Golden Gate Park, Haight Ashbury, housing crisis, illegal immigration, John Markoff, Loma Prieta earthquake, manufacturing employment, new economy, New Urbanism, profit motive, Ralph Nader, rent control, Ronald Reagan, Silicon Valley, South of Market, San Francisco, strikebreaker, union organizing, urban planning, urban renewal, very high income, young professional

Albert Schlesinger of the Convention & Visitors Bureau, along with Herman and one of the Swigs, talked with each of the supervisors individually. According to Schlesinger, the plan went through the board “like shooting fish.” Some opposition voices made themselves heard during the hearings. Labor representatives, as noted above, were upset over the lack of industrial reuse in the area and the loss of blue-collar jobs. Official data would later show that between 1960 and 1970 manufacturing employment in San Francisco decreased by 19 percent.6 Herman promised at least 25 percent of the land in the YBC area would be devoted to industry.7 Social workers, ministers, and representatives of the City’s Human Rights Commission appeared, carrying petitions with several hundred names, to register protest over the lack of relocation housing. The agency conveniently sidestepped the controversial issue of how to relocate four thousand low-income persons.


The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward E. Baptist

banks create money, barriers to entry, British Empire, California gold rush, Cass Sunstein, colonial rule, creative destruction, desegregation, double helix, financial innovation, Joseph Schumpeter, manufacturing employment, Monroe Doctrine, moral hazard, mortgage debt, new economy, Ralph Waldo Emerson, Scientific racism, Silicon Valley, South Sea Bubble, Thomas Malthus, trade route, transatlantic slave trade, transcontinental railway, Works Progress Administration

Palfrey were increasingly likely to think—from their new vantage point where they stood on those people’s backs—that their business endeavors did not need slavery. As early as the 1830s, Americans in the non-slave states were using cotton-generated wealth to develop a more diversified industrial sector that owed less to trade with the South. For instance, in 1832, the Collins Axe Works, one of the first large-scale manufacturing employers in Connecticut, accounted for almost a quarter of all non-textile manufacturing investment and employment in the state. But by 1845, when Robert Walker, Polk’s secretary of the treasury, commissioned another survey of manufacturing, Connecticut contained about twenty-five different axe manufacturers. Axes themselves were now only a fraction of the state’s industrial production. New brass foundries, firearms manufacturers, and factories for hardware, clocks, hats, and carpet now employed thousands of Connecticut residents.


pages: 828 words: 232,188

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamonds, British Empire, centre right, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, crony capitalism, deindustrialization, Deng Xiaoping, disruptive innovation, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Hernando de Soto, Home mortgage interest deduction, income inequality, information asymmetry, invention of the printing press, iterative process, Kickstarter, knowledge worker, labour management system, land reform, land tenure, life extension, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, Nelson Mandela, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, World Values Survey, zero-sum game

Rather than starting a business, a young entrepreneur is much more likely to enrich himself by ente