Manufacturing Error

by Don Boudreaux on August 12, 2009

in Myths and Fallacies

If errors and economic misunderstanding were counted as output in GDP figures, Harold Meyerson would rank as one of the world’s largest economies.  Exhibit A: his column in today’s Washington Post — in reply to which I sent the following letter.

Dear Editor:

Harold Meyerson’s argument that America no longer “makes things” is specious.  It’s true, as Mr. Meyerson says, that “Since 1987, manufacturing as a share of our gross domestic product has declined 30 percent.”  But this fact is caused chiefly by substantial growth in services and construction and not, as Mr. Meyerson implies, by declining manufacturing output.

In fact, according to the 2009 Economic Report of the President, total manufacturing output in the U.S. – measured by an industrial-production index – hit an all-time high in 2007 (the latest full year for which data are available).*  In 2007, American manufacturing output was eight percent higher than it was in 2000, 69 percent higher than in 1990, 81 percent higher than in 1987, 184 percent higher than in 1980, and 213 percent higher than in 1967 – one of the years that Mr. Meyerson singles out as a glorious one when America “still made things.”

Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

* These data are available in table B-51 at
(and do note that these data are adjusted for inflation).

Tim Worstall joins in the fun in documenting that Meyerson’s “facts” are fiction.


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