Reports of American manufacturing’s death, however, are greatly exaggerated. While it is undeniably true that certain manufacturing industries—particularly labor‐intensive, low‐tech ones—are no longer primarily located in the United States, many other, more advanced ones have flourished. Thus, factories producing consumer staples such as textiles and furniture, for example, have made way for facilities that produce products less often found in retail stores, such as chemicals and machinery. At the same time, productivity gains unleashed by automation and other technologies have enabled manufacturing output to remain near record highs even as direct manufacturing employment has declined. Many other Americans, meanwhile, still work in manufacturing or are involved in the manufacturing process through the design of new products, even if their employers don’t operate actual factories.
In short, manufacturing in the United States has not disappeared but has been transformed and very much remains a vital part of the country’s economic fabric.
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Before delving into the state of U.S. manufacturing, it is worth examining what the industry entails. Although the term may conjure images of glowing hot steel or new automobiles rolling off the assembly line, manufacturing runs a wide gamut of activities. According to the Bureau of Labor Statistics, manufacturers are “… establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.” These include not only the production of heavy machinery and sophisticated devices but also other items, such as fruit and vegetable preserves, stationary, and beverages. By this definition, Coca‐Cola is every bit the manufacturer as Boeing, General Motors, or U.S. Steel.
But the dividing line can sometimes be ambiguous. U.S.-headquartered Nike, for example, engages in the design and marketing—key parts of the manufacturing process—of footwear, apparel, and sports equipment. The actual production of these items, however, is outsourced to independent contractors. Global semiconductor leader Nvidia follows much the same approach. Should these “factoryless goods producers” be considered manufacturers? So far, the government’s answer is no. Nevertheless, such firms are key contributors to the manufacturing process and generate considerable value, jobs, and innovations.
Regardless of how one defines manufacturing, the United States is clearly one of its heavy hitters. In 2021, it ranked second in the share of global manufacturing output at 15.92 percent—greater than Japan, Germany, and South Korea combined—and the sector by itself would constitute the world’s eighth‐largest economy. The United States was the world’s fourth‐largest steel producer in 2020, second‐largest automaker in 2021, and largest aerospace exporter in 2021.
That the United States has achieved these rankings with a relatively small industrial workforce is a testament to its world‐beating productivity: the country ranks number one in real manufacturing value‐added per worker by a large margin. With value‐added of over $141,000 per worker in 2019, the United States bested second‐ranked South Korea by over $44,000. The gap with China was over $120,000 per worker.
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Beyond wages, there are also other reasons to discount the premium that is sometimes placed on manufacturing jobs. Research released by the International Monetary Fund in 2018, for example, found that manufacturing does not play a unique role in productivity growth and that “some service industries [exhibit] productivity growth rates as high as the top‐performing manufacturing industries.”
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Don’t engage in industrial policy: Politicians and myriad other commentators regularly call for new measures designed to promote the fortunes of selected industries, but such proposals should be greeted with extreme skepticism. Despite professed clairvoyance by some observers about which industries are destined to become key drivers of future growth, the future is often hazy, and such public‐sector‐backed bets rarely pay off. Businesses and investors, guided by price signals and market feedback—as well as incentivized by the profit motive—are far better positioned to assess and identify opportunities for growth than politicians and bureaucrats beholden to political pressures.
George Will explains that progressivism’s embrace of “antiracism” is an embrace of the mindset of the majority opinion in the justly infamous 1896 case Plessy v. Ferguson. Here’s his conclusion:
As Yascha Mounk explains in “The Identity Trap: A Story of Ideas and Power in Our Time,” this century’s most momentous development in political thought is progressivism’s rejection of universalism. This great repudiation sweeps away governance focused on individual rights, which can be protected only by the universalist premise that, in Mounk’s words, “for political purposes, all human beings are born equal.”
Rejection of this precedes the belief that the world should be seen “through the prism of group identities,” such as race. People who say that also say this: Universal values and neutral rules (e.g., free speech) are actually ruses concocted by the dominant group to prevent government from treating people justly, meaning according to their identity groups.
So, antiracists of Kendi’s stripe have a stake in making social peace permanently impossible. Discord is lucrative. Hence the return to 1896.
In April, Mr. Hughes was invited to give a TED talk about colorblindness—the topic of his forthcoming book. The talk’s theme, as he explained recently in a podcast interview with Glenn Loury, was that colorblindness shouldn’t be a “dirty word,” which it has become on the political left. The concept “was at the core of the antislavery movement, the core of the civil-rights movement, and was later abandoned,” Mr. Hughes said. “We should reinvestigate the wisdom of it as a principle. The idea of colorblindness is that no one ever gets penalized for their racial identity. And there’s a logic to that for governing a racially diverse society in the long run.”
That’s common sense. But we live in an age when common sense is not only uncommon, it’s controversial. It’s controversial to argue that children fare better in two-parent families. It’s controversial to argue that someone who swam on the boys team last year shouldn’t be allowed to swim on the girls team this year. It’s controversial to condemn unequivocally Hamas’s massacre of unarmed Israeli civilians on Oct. 7. And yes, it’s controversial to argue that race-neutral policies are preferable to polices that promote racial favoritism.
The day after Mr. Hughes’s talk, he received a call from Mr. Anderson, who said that black employees at TED were upset by his remarks. Mr. Anderson asked Mr. Hughes to meet with them. Mr. Hughes agreed, but the employees backed out without an explanation. Two weeks later, Mr. Hughes received an email from Mr. Anderson explaining that he was under pressure to not post the talk online. The email cited an unnamed social-scientist friend of Mr. Anderson, who said Mr. Hughes’s argument for colorblind public policies was “directly contradicted by an extensive body of rigorous research.”
Mr. Hughes was confused. “I’m thinking,” he told Mr. Loury, “are they preparing the grounds to censor my talk using fact-checking as a pretense?” The talk had passed TED’s own fact-checking process: “Every word of a TED talk is fact-checked before it gets spoken. And you don’t deviate from the script at all. And I didn’t.”
David Henderson remembers the economist Anita Summers.
Mike Munger describes capitalism as “a DDoLL.”
GMU Econ alum Dominic Pino reports:
“When federal money is involved, local officials often make odd decisions because they are not really accountable for the spending,” writes Mike Nichols, president of the Badger Institute, a Wisconsin-based free-market think tank. A great example of that phenomenon is taking place right now in Milwaukee.
John Stossel talks with Sen. Rand Paul about Fauci. A slice:
Remember when Sen. Rand Paul (R–Ky.) accused then–White House COVID-19 adviser Anthony Fauci of funding China’s Wuhan virus lab?
Fauci replied, “Senator Paul, you do not know what you’re talking about.”
The media loved it. Vanity Fair smirked, “Fauci Once Again Forced to Basically Call Rand Paul a Sniveling Moron.”
But now the magazine has changed its tune, admitting, “In Major Shift, NIH Admits Funding Risky Virus Research in Wuhan” and “Paul might have been onto something.”
