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Free Markets: Cheaper Goods, Greater Wealth, Better Jobs

Written by Gary North on September 12, 2014

What is the future of manufacturing?

To begin to assess the answer, let us look at a chart of manufacturing throughout the world. This is not just the United States; this is Western Europe, Japan, and the whole world. As you can see, the percentage contribution of manufacturing to total economic production has declined steadily over the last 40 years. If the chart went back another 40 years, the same kind of slope would persist. This is a worldwide phenomenon. This is an irreversible phenomenon. This has accompanied the extension of world economic growth to the third world, including especially Asia.

 

There are people who complain about the declining share of gross domestic product that is contributed by manufacturing in the United States. This is because they are completely unfamiliar with the worldwide phenomenon. They do not understand that economic growth accompanies a declining percentage of manufacturing to a national economy.

THE HEART OF MODERN WEALTH

The heart of wealth is not manufacturing; the heart of wealth is the knowledge applied to reduce the total percentage of manufacturing in the overall economy, and to increase the wealth of the masses through services. These services may be digital. They may be personal. But they are not based on manufacturing.

My friend Bill Myers has this phrase: “Sell electrons, not atoms.” It’s a great phrase. Don’t sell pieces of stuff; sell ideas, entertainment, efficiency, and anything that will reduce the cost of raw materials, the cost of capital, and the cost of output. Cut costs; cut prices; get rich.

This is why manufacturing will more and more be run by machines that are controlled by computer programs. This frees up mankind from the hard lifting of life.

(For the rest of my article, click the link.)

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5 thoughts on “Free Markets: Cheaper Goods, Greater Wealth, Better Jobs

  1. Bill Porter says:

    Okay, then why has the median income for the middle class-that entity defining America-been shrinking for 15 years, while that of the one percenters on the one hand, and that of the non-working, non-producing [except for babies] "entitlement class" have grown exponentially. That dumb chart proves nothing. JOBS are the conduit through which wealth is properly tranferred from one entity to another for the vast majority of participants in an economy; no manufacturing=no middleclass jobs. The only alternatives left will be membership in the techno-elite [which will perforce be limited to a tiny minority]; or a form of permanent servitude to some government entity.
    What a vapid prognosis, reminding one of the Planet Finance fantasies preceeding the Greater Depression of 2008.
    Go back to school.

  2. "Okay, then why has the median income for the middle class-that entity defining America-been shrinking for 15 years, while that of the one percenters on the one hand, and that of the non-working, non-producing [except for babies] "entitlement class" have grown exponentially."

    Because of government regulation, government borrowing, and government taxing.

    "Go back to school."

    Government schools are not the answer.

  3. Right, thats why so many people are out of work! Give our manufacturing of goods away to other countries so the big guys can get richer. They forget the consumers have to have income from a job in order to consume. Where it be personal, services, or whatever. Yes, by all means go back to school, but there are only so many sit on your backside jobs to be had. Even people with Master degrees have problems finding work these days. Just saying!

  4. Guys, there used to be almost full employment back when human beings were nomadic hunter-gatherers. Should we go back to foraging for food?

    The reality is that those manufacturing jobs in 3rd world countries will also eventually go away, as it becomes cheaper and cheaper to have robots and other automated machines handle the manufacturing. Keeping manufacturing jobs for people just so they have something to do is pointless. You might as well have them go dig ditches and fill them up again instead.

  5. Want to bet that if America passed this amendment that our raw material to finished manufactured value added goods would not double in five years? If we add in Nuclear power so we can have really cheap abundant energy to make steel, metal smelters, mining equipment, factory equipment, desalination plants powered by Nuclear electric, sell power sell water irrigate the dry 11 Western and 8 Southern States and America can control the worlds food supply.

    Just get outside the regulatory box of Washington think and we can restore our great economy.
    http://articlevprojecttorestoreliberty.com/the-28