Losing manufacturing is a bad idea
February 10th, 2009 | Published in Current Events | 4 Comments
In this current recession, we seem to be shedding mostly manufacturing jobs in Canada and the United States. The politicians seem to be saying that we need to refocus our economy on service jobs because the manufacturing jobs are going to disappear in the long run anyway.
While this may make sense in the short run because jobs in industries like advanced health care and banking pay well, I think we need to be careful. Health care and banking are luxuries. In tough times, what people need is food, clothing, and shelter. I think we should be maintaining our ability to provide these things for ourselves in case major problems develop in the future.
While the current economic downturn is unpleasant, the basic functioning of the economy is intact. The problems of global warming, depletion of fossil fuel resources, and fresh water shortages will require actual changes to how things are produced. If we give up manufacturing, we will be counting on other countries to figure out how to solve these problems. If only partial solutions are available, you can be sure that they will meet the needs of their own people first.
I think we should keep the ability to grow food, make clothing, and build warm, functional housing. We shouldn’t allow the manufacturing sector to wither and die.
February 16th, 2009 at 2:51 pm (#)
What are your thoughts on this in terms of globalization and free trade? This posting seems to suggest that every country should be self-sufficient, at least in certain areas. If that’s true, what areas do you think countries should be self-sufficient in? And what is the cost to efficiency to do this?
Eric
February 20th, 2009 at 10:06 am (#)
People need food, clothing, and shelter. Countries should do what they can to make sure that their citizens can reliably obtain these things. While trade has many benefits, it is risky. If your next meal is going to be shipped in from another country, you are in big trouble if the other country decides that it needs to keep its food. When rice was in short supply a few months ago, some rice producing countries limited exports to ensure that the local supply was sufficient. It seems to me that if there are serious crop failures in the future, it isn’t going to be the producing countries that go hungry.
Since international trade has risks, a prudent country would maintain the ability to meet its own needs. It should either meet its own needs directly or have clear plans for how to do so. The best way to be prepared is to maintain significant capacity in essential sectors of the economy so that skills can be maintained. Production of essentials can then be ramped up quickly if imports aren’t available. While this may seem extreme, it won’t seem so if there is a major shock to the supply of food, clothing, or shelter.
The question you should ask yourself is “Would you bet your life on the current system of international trade?”
February 21st, 2009 at 1:39 pm (#)
There is considerable counter-evidence to suggest that trade can also reduce risks of a loss in capacity to produce the basics. Follow through the logic: if every country should be self-sufficient in basic needs, then every region should also be self-sufficient in basic needs, then every city should be, then every house should be. Etc.
Historically, there have been times when self-sufficiency existed for smaller groups. Even today, there are isolated groups that have very limited contact with others. But this is a much higher risk and challenging existence than a world with trade.
The thing that I find frustrating about most conventional analysis of trade is that it uses the nation-state as the basic unit. We’re one humanity on one planet. Why do we begrudge payment to others for things we decide (maybe even rationally decide) we want or need?
I wish we could look at trade outside the confines of nations. Trade works quite nicely, thank you, when we limit it to those with whom we share some artificial boundary.
Cheerio,
- Thomas
February 23rd, 2009 at 9:06 am (#)
Thomas
I agree that we need trade. We aren’t like cows that can find all they need to eat simply wandering around in a field. My concern is about the weaknesses of trade, especially between countries.
If there were an effective world government that could step in to address shortcomings of the economic system, I would be much more comfortable. While trade helps us deal with local shortages, I am not confident that it will do well if there is a shortage of an important commodity worldwide.