Steve Keen highlighted a YouTube video on why the US manufacturing goose is cooked and will stay cooked. The points it makes are broader than the observation we have repeatedly made, that for the US to have any hope of resoring its industrial capacity, it will require way more than just tariffs but sustained industrial policy. But as we will explains, it also is romantically anchored in a past of manufacturing as a generator of many and good middle class jobs, when production is now highly automated and requires few if any workers.
How Superpowers Die: The 5 Stages of Industrial Collapse https://t.co/ZC0nL9Fzvm via @YouTube
— Dr. Steve Keen (@ProfSteveKeen) November 1, 2025
There are two obvious problems in the US with trying to implement industrial policy. The first is that the US is allergic to it and engages in it mainly on an a default basis, via subsidies and tax breaks to politically powerful sectors. See healthcare, the arms industry, banking, real estate, and higher education as some of many examples. Biden’s Inflation Reduction Act proved that rule, by trying to achieve a hodge-podge of objectives, none of them very well.1
The second reason is that the US (ex when on a World War II level war footing) is incapable of sustaining any economic policy over time. Effective rebuilding on a large-scale basis would take at least ten years, even assuming it could be done.
This video provides some useful high level history but is simplistic and at points, inaccurate:
While it makes some important points, such as the virtuous circle that results from manufacturing prowess and how it produces spillover benefits, for instance, to suppliers, it incorrectly implies that manufacturing still generates a significand number of high wage jobs. In fact, industrial kingpin China was reporting 21.3% reported youth unemployment when it suspend publishing the data in 2023 to review the methodology. Its revised, presumably more flattering methodology, showed a still eye-watering 18.9% in August and 17.7% in September.
The rise of highly automated factories, including dark factories that have no humans present during routine operations, has broken the connection between manufacturing and job growth. A summary from Engineerine:
1. What is a Dark Factory?
- A dark factory is a fully automated production facility that requires no human interventionduring normal operations.
- These factories run without lights, as robots and AI-powered machines do not need visual guidance.
- They leverage artificial intelligence, interconnected IoT systems, and robotics to manage everything from material handling to final product assembly.
2. How Do Dark Factories Work?
- AI-driven robotic systems manage production lines autonomously.
- IoT connectivity ensures seamless communication between machines, enabling predictive maintenance and self-regulation.
- Automated logistics handle inventory, supply chain management, and transportation of finished goods without human input.
3. Why Are Dark Factories Being Adopted?
- Increased production efficiency – Machines work 24/7 without breaks, reducing downtime.
- Lower operational costs – No wages for human workers and reduced energy consumption.
- Consistent quality control – AI-driven monitoring ensures precise manufacturing and defect-free products.
And a video showing one in operation:
Another video gave more technical detail but oddly would not embed properly.
Supposedly state of the art US factories are laggards. For instance, Hyundai opened a “factory of the future” in Georgia in 2025. It employed roughy 1,200 early on and expects that total to increase to 8,500 when it has ramped up production to 500,000 vehicles annually.
Consider how meager this level is by historical standards, Ford’s Rouge plant had 120,000 workers at it peak in the World War II. Admittedly, one reason for the large workforce was that Rouge was a fully-integrated facility, even making its own steel.
So even if the US could bring manufacturing back on a large scale basis, there is no there there in terms of job creation.
The Steve Keen video is also a bit simplistic as to the reasons for US decline. When I was in business school in the late 1970s, both the business press and Harvard Business School faculty criticized sclerotic US managements, particularly of automakers. They did concede that Germany and Japan had a perverse advantage, in that rebuilding after World War II meant they had new infrastructure, while the Big Three had huge investments in their installed base that they were reluctant to abandon or make less relevant by investing in entirely new (as in smaller) platforms. But this tendency was reinforce by the fact that all companies were headquartered in Detroit, where heavy, gas-guzzling cars were a plus in the snow, so it was too easy for the top brass to project, based on local conditions, that Americans would stay loyal to big cars. But even worse, the executives had their cars babied every day by company mechanics, so they had also set themselves up to be blissfully ignorant of product quality problems. But US exceptionalism and racism were also factors. Many manufacturing executives found it inconceivable that the Japanese could outdo them (the Germans, with their history of mathematics and engineering prowess, were more credible competitors) until they had decisively eaten their lunch.
While the decline of American car producers was baked in, a big accelerant was the big rise in the value of the dollar in the early 1980s after Volcker relented on his super-high interest rate policies. Japanese car makers made great market share gains due to their cars becoming even bigger relative bargains in the following 24 months which they never gave up.
The Keen video similarly misleadingly depicts US labor costs as a key factor in the decline of the steel industry. Steel is a continuous manufacturing process, meaning that capital and raw materials costs far and away dominate total product costs. Labor is not a major input. But the percentage of uptime is critical to profits. It was widely reported in the business press, again in the 1970s, that US steel mills were old and not competitive, particularly (then) compared to mini-mills. It was outdated plant, and not labor costs, that was the death knell for the steel industry. The same pattern has played out in the paper industry, where the productive life of machines is very long (older ones can be profitably redeployed to smaller run, fussier and high profit paper grade), where mills that should have been world competitive for another generation are being downsized or shuttered due to paper industry executives and now private equity (!!!) uninvesting and even skrimping on regular maintenance.
The Keen video gives no reasons as to why the decline and inability to turn things around are inevitable; the assertion basically is that once a country has lost the innovation race, there is no reversing course.
But it is not hard to make a list of reasons why the US won’t come back.
1. Decline of public education and US relative performance. From 2024 in The Balance:
The United States isn’t investing as much in human capital as other developed countries, and its comparative advantage is falling behind as a result—particularly with respect to education rankings.
U.S. students’ math skills have remained fairly stagnant for decades, and the country is falling behind many others that have greatly improved, such as Japan, Poland, and Ireland. Additionally, U.S. test scores are below the global average. Here’s how they break down.
Key Takeaways
- The U.S. placed 16th out of 81 countries in science when testing was last administered in 2022.
- The top five math-scoring countries in 2022 were all in Asia.
- U.S. students’ math scores have remained steady since 2003. Their science scores have been about the same since 2006.
- The IMD World Competitiveness Center reports that the U.S. ranked 12th in its 2024 Competitiveness Report after ranking first in 2018.
This comparison may understate deterioration on the ground. For instance, I have had readers tell me that they have found that young candidates for retail jobs too often can’t count change. On a completely different front, IM Doc has recounted that elite med school students who went to his hospital on a summer program were hopelessly AI/search dependent and seemed to lack independent knowledge, let alone the beginnings of clinical judgement.
2. Limited to no career paths for young technical degree/engineering grads. This has operated for at least 20 years. I have been told the only field where engineering grads have good career prospects is petroleum engineering; otherwise, the cost of degree acquisition versus earnings makes no sense unless the student continues and gets a law degree so as to become a patent/intellectual property attorney.
3. Lower status attribute to manufacturing management roles and living in non-major city locations. Some may be shrewd enough, or like outdoor pursuits so as to appreciate a possible improved cost/lifestyle tradeoff of living in what some might regard as the boonies. But this common predisposition is an impediment to attracting “talent” to manufacturing.
4. Active destruction of what advantage the US possessed via the Trump war on elite universities. One ranking by QS put Western institutions on top:
Another ranking comes to somewhat similar conclusions….
:
…but notes:
Oxford retains the number one spot for the tenth consecutive year, driven by strong research environment score
Princeton rises to joint third place, and is the only US university to achieve its best-ever finish this year
China has five universities in top 40, up from three last year, but top universities remain steady
Hong Kong occupies a record six spots in the top 200 as a result of improvements in teaching metrics
India now has the second highest number of ranked universities for the first time, behind only the US
To put it another way, the continued Western leadership in top academic institutions makes its decline in practical application (and the US decline in life expectancy) even more striking.
5. The US is unlikely to be willing to accept the pollution cost of being a major manufacturer again. All of the whinging about rare earths conveniently obscures the fact that the US had rare earths production but effectively got out of that business because it was too nasty, particularly in terms of water pollution, and is now in the process of reopening some mines. But people have an aversion to living near industrial operations. For instance, paper making produces a noxious smell even when the output is safe because the human nose can detect sulphur down to 4 parts per billion. A more dramatic and harmful example are the chemical plants and oil operations in the lower Mississippi, which activists correctly point out exact a health cost on those living nearby.
6. The increased importance of personal and family connections in economic and career success devaluing skill acquisition. Even as a young person, I was put off even when by the emphasis on networking, since it treats social contacts as assets to be mined for financial gain. Readers are encouraged to sanity check, but the greater importance of legacy admissions at Harvard and I assume other elite schools (recall that Larry Summers lost ginormous amounts of money to interest rate swaps speculation; my impression from a distance is that admissions took a more mercenary turn after that) points to a rise in clientelism/tribalism as income inequality rises and class mobility falls.
I am told (and seek input) that in the Middle East, young men don’t apply themselves to studying because all that matters is family connection. This is the dirty secret behind girls doing better in math than boys in that part of the world. Mathematical attainment is not valued among men, while it can help some women get ahead (think as teachers or in technical jobs, like nursing and in laboratories).
I am sure readers can add to this starter list of “Why we can’t get there from here” in terms of rebooting US manufacturing. Please pile on in comments.
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1 The title of the bill was already a big sign of hesitation to commit to robust government intervention in the economy, even though that happens on both an ad hoc basis and as a result of lobbying every day. From the White House website:
Two years ago, President Biden signed the Inflation Reduction Act, with Vice President Harris casting the tie-breaking vote in Congress. The Inflation Reduction Act is a key part of the Biden-Harris Administration’s Investing in America agenda, which has driven the fastest and most equitable recovery on record – creating good-paying jobs, expanding opportunity, and lowering costs in every corner of the country.
Already, the Inflation Reduction Act is transforming American lives by finally beating Big Pharma to negotiate lower prescription drug prices, making the largest investment in clean energy and climate action in history, creating hundreds of thousands good-paying jobs, lowering health care and energy costs, and making the tax code fairer. Visit the White House Savings Explorer to see how Americans are saving money on their annual expenses because of the Inflation Reduction Act and other Biden-Harris Administration actions.
“3. Lower status attribute to manufacturing management roles”
I’d extend that to all technical roles. Software engineers are portrayed as nerds, not helped that most seem to dress as scruffs. Young women playing a technical/scientific character in US made films are often/usually stereotyped to look unattractive, for example with ugly glasses
Obama told us that those jobs weren’t coming back. This year we hear that foreign and domestic companies are investing trillions in the US. Maybe Saint O was just talking his book, pace Keen.
We’re hearing that are we? What is the source?
That has been all over the news for months. Search engines are your friends.
“[I]n the Middle East, young men don’t apply themselves to studying because all that matters is family connection.”
It depends on what you include in the “Middle East.” If Turkey and Iran are in the picture, that doesn’t sound right. The Turkish side of my immediate family are engineers, and most of my undergraduate-day friends are engineers. They had to study hard, and have had proper engineering careers that had little if anything to do with nepotism.
A few of my friends are now engineering professors in Turkish engineering schools. I hear plenty of complaints about their students and their quality of preparation, but nothing about not studying because of family connections. And their complaints about Turkish students don’t seem all that different from my complaints about American students. (I teach physics at a US liberal arts university, so I get plenty of pre-engineers.)
With Arab countries, things might be different. I can’t speak with any deep knowledge about that, but my friends who have spent time in Arab countries on engineering projects have plenty of horror stories about dealing with technology work in an Arab environment. Mind you, Arab students I have had in the US have been decent enough.
Some articles about country in Middle East flouting norms:
https://www.bbc.com/news/world-asia-53182750
https://www.reuters.com/business/aerospace-defense/european-aviation-safety-agency-lifts-pakistan-airlines-ban-minister-says-2024-11-29/
Probably means the gulf states, and possibly Egypt/Lebanon.
Engineers (both sexes) are very highly respected in Iran and the quality of Iranian engineers is very high.
FWIW, I believe girls now out perform boys in mathematics in the US.
Another input is that companies are less vertically integrated.
After school, I went to Silicon Valley to work for a company.
Over 20+ years, I had jobs in manufacturing, marketing, design for manufacturing and product development.
And each of these jobs had multiple opportunities to learn about manufacturing and its constraints.
With the trend for “Designed in California, built in Asia”, I suspect few younger Americans get this experience, while Asian youth does.
Outsourcing to Asia took place over 40 years, it may take that long to bring a significant part back, particularly after the worship of finance continues.
If the UK experience is anything to go by, once you lose manufacturing, design follows in 1-2 generations.
I suspect without serious disciplining of finance/private capital, it will be impossible to bring it back. Profit rates of Chinese companies are fairly low because they reinvest heavily. You cannot have high profits and innovative industry.
I’m very pessimistic about the future here in general, not just mfg but our steady decline, well, before trumps enthusiastic acceleration.
A periphery stat mentioned is high youth unemployment in China that dark factories can’t help. Imo they should shift to social services that encourage women to breed and workers to spend more and save less. I’ve heard there is powerful opposition, perhaps the export industry? Anyway, they’ve been able to overcome oppo to smart policies in the past, seems odd the ‘socialism with Chinese characteristics’ can’t be a bit more socialistic.
Forgive me for not mining our archives, but we have included in posts how Xi is fiercely opposed to social welfare programs.
Something not much discussed is why we would want the Glory Days of manufacturing to return in the US. Usually, when you strip away the rhetoric, the assumption by people across the political spectrum and class spectrum is that manufacturing jobs have practical advantages for the worker: better pay, better benefits, good retirement prospects, and strong union participation in the workforce. These things were certainly true in the World War II and a few decades beyond.
Of course, there are other ways to get these things. The US could have a program of paying people to dig holes in the ground and then fill them in, which offered good pay, good benefits and retirement prospects, and strong union participation. So manufacturing, per se, is not the only way to heal many of the wounds and indignities of the current US job environment.
Other reasons to have strong in country manufacturing are less frequently discussed but IMO more compelling. One is more compact logistics chains. Making things in country avoids frail and costly transport segments in the process of going from raw material to consumer.
Another is greater political control of one’s economy. As we are seeing now, heavy reliance on other countries for manufactured products puts your country in a weak position, subject to the whims and power grabs of overseas tyrants.
Another is fostering of an innovative environment. Manufacturing goes astonishingly hand in hand with other aspects of product development and if you can do everything in one place, you will find your country becoming a nexus of overall innovation in the product cycle and much faster cycles of innovation.
Another is efficiency: if everyone involved in making a product speaks the same language, and lives within a short drive of each other and in the same time zone, work will go much faster and more smoothly, and personal relationships will spring up that lead to new ideas and new companies.
Another is increased vertical integration. Instead of each company doing a tiny slice of the overall development process before shipping it off to someplace else to do the next tiny slice, companies and organizations can take on the entire process of making something from soup to nuts. This gives individual companies more expertise and more economic power in their domain.
I could easily go on adding to this list, but the point is there are excellent and powerful reasons to have a strong manufacturing climate in one’s own country. These may or may not have anything to do with the reasons we usually think of, but they are very compelling nonetheless. I don’t know if the people who are in a position to formulate industrial policy think about these things, or care about them, but it would be nice if they did!
great points. I recall Ian Welsh had a blog article with a similar perspective
having manufacturing leads to increased R&D, which leads to increased national economic power.
Manufacturing is worthwhile pursuing, even if the level of current and future manufacturing technology (“dark factories”, etc) potentially requires not many well-paid “good jobs” or jobs (of whatever job quality level).
Your comment: “the assumption by people across the political spectrum and class spectrum is that manufacturing jobs have practical advantages for the worker: better pay, better benefits, good retirement prospects, and strong union participation in the workforce. These things were certainly true in the World War II and a few decades beyond”
This is my whole issue with it, what makes people think these benefits will still be true even if it’s brought back. What is in place to ensure workers would not be receiving the same wages and limited protections as fast food workers get now? Even if it’s a bit more, I doubt they will pay a living wage.
Exactly right. Most likely even if lots of manufacturing jobs were brought back the oligarchs would use low wage illegal immigrants they could exploit even more than legal workers.
“Young people digging holes in the ground”. I assume you are disparaging the
WPA (and Roosevelt). That program actually did a lot of good, and accomplished
building a lot of useful infastructure. Blindness comes from within.
I think he’s riffing on Keynes’s illustration of paying people to bury money and then paying to dig it up.
I believe he was referring to statements made by Keynes in the Great Depression:
“The government should pay people to dig holes in the ground and then fill them up.”
People would reply. “that’s stupid, why not pay people to build roads and schools”
Keynes would respond saying “Fine, pay them to build schools. The point is it doesn’t matter what they do as long as the government is creating jobs”.
The US’ manufacturing capacity won WW2. National self defense is THE reason that a nation would want to maintain a high level manufacturing base.
Politicians today warmonger as if US manufacturing was still at WW2 capacity.
Yes, I think our leaders seriously underestimate what would actually be required to resurrect America’s industrial base, and the level of government policy and direct involvement required is not going to be allowed short of some sort of national emergency which empowers government.
I’m slowly coming to the conclusion that America’s industrial prowess peaked as a result of WW2 industrial policy and national necessity and it’s been running on waning inertia since then. That’s not to say that progress hasn’t been made,but the whole mindset that was part of that world is gone. (I would clumsily use the word patriotism as a means to say that not all business decisions were based solely on maximizing profit, but ending up in a nation where it’s impossible to make critical weapons systems without relying on foreign input was pretty much a no go even when I was in the USN thirty years ago.)
I think that additional factors are in play. Culturally the idealistic peace and love of Woodstock quickly morphed into the violent and hedonistic nihilism of Altamont by the dawn of the 1970’s.
Self-indulgent greed and competitive consumption led to looting and rent extraction as a business model. The civil rights and antiwar movements ginned-up pre-existing caste hatreds. Plus, as mentioned above mines, refineries, and factories make toxic neighbors impinging upon one’s quality of life.
The increase in global population simultaneously made labor arbitrage inevitable. The world population went from 2.4 billion in 1950 to 4 billon in 1975 to 6 billion in 1998 to 8 billion in 2022 — and 8.25 billion today. Meanwhile automation further reduced demand for labor.
The under-supply of party-houses in the Hamptons doesn’t line-up with the over-supply of labor. Americans would have to set aside their deeply ingrained caste hatreds to have an industrial renaissance that promotes a decent quality of life for their neighbors. Plan instead for an escalating cycle of resistance and repression.
To revive manufacturing proper in a rapid pace would take something like Stalin did during the 30s. Not something any American wants to go through, I’m sure, and, furthermore, that political economy would be utterly impossible in the US. Who believes in the American Dream anymore? Without some strong belief to endure such suffering, why would anyone bother? Nowadays the country simply feels like it’s rotting to the core.
LOL. Stalin certainly did revive industrial policy in Russia, but he did it in a very
flawed way. In order for no one region to dominate industry, he put factories
as far away as possible from each other, thus creating a lot of inefficiency.
Also, since the workers got paid regardless of the quality and quantity of their
output, it was a highly inefficient system. The same went for agriculture. For example, a tomato farm was paid
to harvest the fruit, put it on trucks, and drive the produce to the end of the zone
where they were responsible for maintaining the road. And there the trucks sat,
the farm having legally fulfilled its mandate under the latest five year plan.
Also, in order to pacify workers, Stalin made vodka and cigarettes dirt cheap,
resulting in a lot of early mortality, but also ensuring that the farm or factory workers
produced their goods in a heavily drunken state. Rotting to the core? You have no
idea what that phrase means with regards to America!
Heavy industry is dirty. Older industrial manufacturing plants are dirtier. Do you remember acid rain? The easiest and the way to make the most profit was to off-shore the dirt and with the bonus of cheaper labor overseas. Check out the latest news from Hunter’s Point, the former naval shipyard in San Francisco. Head out and take a tour for a dose of plutonium-239. Steel plants, glass plants, nuke plants, rending plants, etc. all dirty and messy.
You left out the impact of Slave Labor Programs like H1-B and OPT.
These have pushed down the incomes of tech workers to around half of what they were in 2000.
So, the most talented go into Finance or Law School.
Just to clarify on, “…They did concede that Germany and Japan had a perverse advantage, in that rebuilding after World War II meant they had new infrastructure, while the Big Three had huge investments in their installed base that they were reluctant to abandon or make less relevant by investing in entirely new (as in smaller) platforms….” Along with, “… in the 1970s, that US steel mills were old and not competitive…”
Japan and Germany didn’t have a perverse advantage in my opinion, they just were forced to make the investments because of the destruction of WWII. The problem the US had and still has is that once the big investments are made it’s all about sustaining and maximizing the rent extractions. Germany and Japan had all sorts of other infrastructure issues to repair and rebuild. The US could have been a century ahead of them if we had just continued to invest and replace our capital stock as technology advanced. Instead, we chose to milk it to death in order to maximize extractable rents. And when those factories were really worthless, we disposed of them and the workers.
….Erm, does the name “Jack Welsh” mean anything to you? Shareholder value
over reinvestment in factories, research, etc? Greed conquers all.
Some John Robb speculation (see his Oct. 31, 2025 report on his Substack) on AIs and possible future manufacturing growth.
He argues that the incremental arrival of social AIs (as agents and companions) that have potentially solved problems like hallucination will become more and more integrated into our economy as virtual workers, co-bots and companions.
Then he speculates that AIs could begin to incorporate as individuals and groups and, once incorporated, become corporate persons that can own property, enter into contract, and sue/be sued as well as gain free speech rights.
If such a dynamic were to occur, hundreds of millions, and possibly billions, of new economic participants would enter the economy as consumers and workers.
Corporate personhood would then allow AIs to earn and spend money, making them full participants in the economy.
John Robb, not for the first time, should put the crack pipe down.
The X link is not to a Steve Keen own produced video but an outsourced general introduction that covers the basics of transitioning to a post-industial economy and standard model of de-industrialisation.
It certainly is simplistic, makes some highly questionable generalisations, and I’m not sure why he would choose to recommend it. Very curious.
His own Youtubes are badged differently to the one linked, are more analytic, usually with talking heads, and real supporting data.
However, he has definitely critiqued the mainstream view that deindustrialisation is a natural stage of economic growth and just to be accepted.
He is in favour of an industrial policy, is against further de-industrialisation. and is in favour of innovation driven through linked production, with acccompanying per capita gains.
(Though he is very sarcastic about the 47 regime’s approach).
He definitely takes the view that health across the whole economy actually does require a productive sector, and has endorsed the main benefits as outlined in XXYY’s post above in his own Substack.
The YouTube channel that video comes from, Financial History Lessons, is new in the last three weeks, churns out a video like this pretty much every day, has extremely small audience (half have fewer than 100 views and only two over 1000), and doesn’t identify its creators. So I agree it is curious Keen would boost that video. Tbh I got a bit of an AI vibe from the video (script, images, voice) and from the channel.
For the present moment diesel fuel remains available although the price fluctuates. I do not believe that will continue to be true in the not so distant future … perhaps within my own lifetime. Localism makes a nice slogan but it will become a practical necessity as the availability of diesel diminishes. Manufacturing is the basis of most of the material goods our Civilization is built upon. Whether the Empire can regain manufacturing prowess in the world will prove of less importance than whether manufacturing can be revived or kept alive in the ruins of the Empire. Jobs, profits, worship of the rudiments of capitalism may prove of present concern. But we must adapt or become a footnote in some future history of failures like those sketched in Diamond’s “Guns, Germs, and Steel”. [Yes, though a pessimist at heart, I do believe Humankind will survive the coming crucible … though finding a new form and a new covenant with the other life on this world on coming out.]
The automated factories in China and Japan are truly wonders, but they rely on energy the future does not promise. Factories of the future will need more human physical power to run them and better automation designs to make use of that power [fifty bicyclists running an electric generator is not what I envision]. Early factories used clever but simple ways to improve production, things like standardized parts, and the specializations of their workers. They came up with other ways to make the same things or to make things that served the same purpose but did so better in some way. Consider building nails and their transformation from specialty products of a blacksmith’s forging to a modification of wire. I believe the invention of screws followed. Instead of rebuilding the manufacturing base of the Empire, something I see no serious intention to accomplish, the Empire should make efforts to restore the old sense of Yankee ingenuity that once served the nascent u.s. in its rise. AND it must be emphasized that the ingenuity is not Yankee ingenuity but HUMAN ingenuity. Before Empire, the u.s. was an Empire that allowed, even encouraged [or at least tolerated and provided fertile ground to grow from ingenuity] and enabled significant creativity and ingenuity from its people. Freedom is the basis of human adaptivity and invention. Preserving Freedom is not optional if we do not desire to join other relics of the grand project of evolution. We can and must evolve to the next stage.
One reason manufacturers in the US have difficulty competing with manufacturing from other countries is they have to help to carry the massive cost of the US military and security sector. This is both direct taxes and indirect costs.
Bright young people interested in making things can either choose a precarious career working for a company making things people want and competing with other companies around the world, or they can choose a cushy career working for Lockheed building F35s paid for by taxpayers.
Jobs is the stupidest reason for wanting manufacturing. The idiots who have run the west for the last half century despised manufacturing and have pursued policies that have let their economies to be industrially hollowed out and therefore increasingly technologically less capable and innovative compared to their non western rivals (principally China), since technological innovation and industry have always worked together. But hey, the dominant ideology was always about suppressing workers bargaining power while profiting off rent seeking ownership of IP, and here we are….
I think the jobs part of this is overstated. Yes dark factories are a thing, but they are only appropriate for certain segments of manufacturing, where the cost of investment is justified. For all kinds of industrial processes (shorter runs, greater variation), the ROI isn’t there, machines still can’t do certain parts of the process, or you still need humans (often highly skilled) to adjust the process. The numbers are a lot lower than they were 60 years ago, but humans are still needed.
Secondly, there are a lot of jobs (many of them good jobs, often seen as white collar and even service jobs) that will disappear without an industrial base. R&D (as the UK has demonstrated) and design jobs tend to follow factories, as there are significant proximity advantages, and also you need knowledge of how things are made in order to be any good in those roles. There are also jobs in automation and manufacturing/maintaining the factories/machines, which also follow production.
I do not think the US can bring back manufacturing, but for different reasons than the ones outlined here. Manufacturing requires high levels of investment in order to remain competitive, and the US (much like Britain before it) is simply not willing to do that any more. Manufacturing is risky, and less ‘profitable’ than things like finance, real estate and the general US scam economy. We’re seeing the US (again following the UK’s lead) lose out in areas which it had research advantages, because US investors (including the much vaunted VC world) are simply not willing to provide the capital needed for these technologies to become viable, and existing companies would prefer to use their money for things like buybacks.
If the US really wants to bring back manufacturing then it needs to discipline the capitalist class – and this seems highly unlikely.
Perhaps AI will make humans irrelevant in manufacturing, but in that case humans will soon become irrelevant for everything….(?).
Barring that, you’re spot on, there are many jobs, and highly paid jobs still in manufacturing, just many of them are not on the factory floor like it used to be, though plenty of highly trained technicians and service staff are needed to oversee and tend those machines.
Manufacturing’s importance lies in the innovative basis it provides a modern economy, and that economy’s ability to adapt. The neoliberal model is epitomised by present day UK, with flat or falling productivity and wages, exploding inequality and where everything is built around blowing asset bubbles that benefit an ever shrinking proportion of the population and foments financial instability this brings to the lives of individuals, communities and the state itself; this is Thatcher’s true legacy.
….Or at least overhaul the lesson learned from our leading Business schools:
“Greed is Good”.
Came a cross a short video a while ago called ‘American vlogger realizes America no longer has a manufacturing base’ so bookmarked it as being illuminating. All the talk is about big industries and big jobs but here is how things look like in the weeds-
https://www.bitchute.com/video/0GG8RzZoAyiQ (2:51 mins)
Special guest appearance by Tim Cook dropping some truth bombs.
Yves, there is something wrong with one of the ranking systems that you cite: https://www.timeshighereducation.com/world-university-rankings/latest/world-ranking
In the case of India, not a single one of the world renowned top 5 IITs (Indian Institute of Technology) in Bombay, Delhi, Chennai, Kanpur and Kharagpur is listed. These are the ones that produced literally hundreds of CEOs, VCs, tech execs and academics, who are now in the US. Instead it lists second, third tier and fourth tier Institutes and Universities, some of which are probably worse than any institution of higher learning in the US. It boggles ones mind that India has more Unis in that list than China! Or, am I missing something in the rankings on their website?
Also, while I agree with each and every one of your points regarding the state of higher ed in the US, may I say, that as a graduate of institutions from the first world, the second world (when that existed!), and the third world, that apart from the China challenge, I would say the state of US higher ed is unassailable for some decades…..primarily, because it is so far ahead.