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Comment by ren_engineer | Hacker News Reader

"service economy" was always a meme being sold to the gullible masses, manufacturing capacity is the only thing that matters for an economy. Manufacturing has always printed the money

It amazes me how the US allowed itself to be nearly deindustrialized after manufacturing effectively won them WWII and global dominance. Now the US can't even make ventilators or face masks

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US Manufacturing is still going. In fact, we manufacture more than ever. Folks conflate manufacturing with manufacturing _jobs_. Our manufacturing is more efficient then ever which is why you constantly hear this false refrain that US manufacturing is down or gone.

people always point to this dumb metric, "we're producing more than ever" compared to ourselves, while ignoring that the number in comparison to the rest of the world has dropped massively. Our share of global manufacturing is tiny compared to what it used to be

I've worked for manufacturing companies my entire 30+ year career. It's not a dumb metric. It's usually pulled out in response to the silly complaint that "the US doesn't manufacture anything anymore."

Sure, our share of global manufacturing is smaller, but that's hardly surprising when many more countries up their manufacturing game. A more interesting metric would be US percentage of total worldwide manufacturing as a function of sophistication: I'd rather be building complex medical instruments than toasters.

>I'd rather be building complex medical instruments than toasters.

Why? In what way is it better to have a handful of elite workers creating a handful of units sold to a handful of consumers instead of having many ordinary workers producing many units for many consumers?

Because ordinary workers, producing many units, is a business with low margins.

And in modern developed economies, those margins are insufficient to support a decent salary.

So what happens when every economy becomes developed? What happens when we can't rely on the existence of low wage workers?

I have a sneaking suspicion that's fundamentally impossible, as some of the prerequisites for developed economies (in the modern, not-industrialization sense) seem to require predatory exploitation of developing economies. And the global inequality of capital ensures there's a power disparity sufficient to enforce it for the former, to the detriment of the latter.

But I guess it's really a question about post-scarcity economics, and whether they're possible?

I think your mistaking how it tends to be for how it must be.

I’m more optimistic. Not really sure I have much to base my optimism on, but oh well.

Edit: fixed a word

This always seems like a question with an agenda.

What happens? Well I suppose the economy collapses and the proletariat rise up and usurp power, or something fantastical.

What’ll more likely happen is we’ll further automate repetitive low skill tasks, and / or start making more durable goods, or otherwise ingenuity our way forward.

Post-industrialized countries make it impossible to for those countries arriving late to the party to advance any further, by way of global environmental agreements and glass bead "carbon credit" payments, thereby ensuring a permanent pool of slave labor.

All of the statistics on wage and per capita GDP growth contradict your claim..

> > > So what happens when...

> > Answer for what happens when

> That hasn't happened yet!1!!

Time isn't that complicated a concept.

Eventually it becomes more profitable to automate. See: Sony's automated PS4/5 factory. Formerly these would've been assembled in some Foxconn plant by tens of thousands of low wage workers.

It happens very gradually, and in aggregate we tend to end up working fewer and fewer hours per year.

Because there won't be "many ordinary workers" producing those toasters. Low margin products like that will have their manufacture automated to the n'th degree and they'll be built by "a handful of elite workers" supervising the automation.

Or, you know, they'll send it to the lowest-cost labor supplier they can find to build by hand and that won't be in the US!

I build complex medical instruments, I'd rather build toasters the way the chip shortage is nuking my BOMs right now.

Most toasters suck. I have to buy a new one every other year or so, for some stupid electrical or mechanical reason. Right now, for instance, the latch on our current toaster -- the one that latches on to the handle you press down to lower the bread and close the circuit to start the heating elements -- isn't latching any more. Fucking low-grade crap! I mean, I'm not asking for a self-lowering magically-correct-degree-of-toasting toaster like in the old TC video -- I just want a stupid mechanical latch in a product I bought a couple of years ago to keep stupidly mechanically latching for six or ten more years. That is not too much to ask.

So, stick to your complex medical instruments. Or, if you switch to toasters, please don't build the same shitty crap as everyone else.

Of course it is, after WWII the rest of the world’s manufacturing capacity had more or less been bombed to smithereens.

The US is 4% of the world. All else being equal, we would eventually move towards manufacturing 4% of things.

> Our share of global manufacturing is tiny compared to what it used to be

You mean compared to a time when most developed countries' production capacity was significantly limited because they had been bombed out in WW2 and developing countries were a long way away from being competitive?

That's because the rest of the world is no longer a bombed-out postwar wasteland or its near-enslaved colonies as it was in 01945. "Producing more than ever" is what you needed last year when you couldn't get N95 masks or ventilators, not "producing more than the rest of the world". But something went wrong and the masks and ventilators were not forthcoming, something that looks an awful lot like an absolute decline in manufacturing abilities.

Other people said this above, but I will add my own anecdote I heard from a factory owner, that he had the ability to retool immediately back then to make medical masks, but between the uncertainty around whether people would keep buying them and at what cost, he was unsure it was worth the risk of switching away from a profitable business to something that would take less ability to make and less certain profits. I don’t know what he ended up choosing to do. But sounds like ‘not forthcoming’ is also possibly an indicator that skills, and the demand for them, is high—and not in decline.

Was this in the US? In both PRC and Taiwan the government guaranteed the profits of factories that retooled to make medical masks.

It seems to me that if you can make a product of a given quality very cheaply, that probably indicates that you're very good at making it.

The fact that I can't get competitive production quotes in the USA for most products, like electric motors, injection molded plastic parts, printed circuit boards, stamped metal parts, castings, etc, suggests that the US is also not particularly efficient at making those parts. There was a time when the cheapest place to go for such things in production volumes was actually the US.

Isn't the time right now?

The price quotes you are getting also include the opportunity costs of saying no to other people wanting to pay for that manufacturing capacity.

The people I know that are running manufacturing aren’t exactly hurting for business. Now is just not the time to lock in high quantities of low-cost stuff.

This article is about TSMC raising prices for what little capacity they have unallocated. We can all agree that they are probably the best in the world at what they do, yet there is no way you will get “competitive production quotes” from them for commodity chips. Jim Bob’s Plastic and Stuff out in Fort Wayne is no different. Now, Jim Bob is probably going to cut you a deal way sooner than TSMC is, but I know of a certain mega-big car company that shut down an engine plant for a week because Jim Bob said last years prices aren’t this years prices - and you probably aren’t as big as mega-big car company.

Oh?

https://qz.com/1269172/the-epic-mistake-about-manufacturing-...

tl;dr if you focus on Intel's monopoly money-printer years, multiply it by a hedonic adjustment due to Moore's law, and mix it in with the rest of manufacturing it's enough to hide de-industrialization in your statistics.

> But it turns out that Trump’s story of US manufacturing decline was much closer to being right than the story of technological progress being spun in Washington, New York, and Cambridge.

Claiming Trump was really right, is usually sign of a writer trying to get people to read a bunch of opinions that don't match reality presented as "bold independent" stance

> Worse than the Great Depression: America’s manufacturing jobs implosion

So they're straight up going to max bullshit mode?

And they say if we ignore one of the most productive manufacturing sectors (computing) the data looks worse, Is that at all surprising?

US is smart enough to retain the cream of the manufacturers. I think some smaller western countries are really in the danger of a complete de-industrialization.

It's not for lack of trying. It's hard to compete on the global stage and it takes more than wishful thinking to maintain a competitive edge in a world full of people trying to top you.

"Manufacturing has always printed the money"

Not really, it's usually the least profitable part of the supply chain.

That American businesses would gladly hand over their profits to poorer countries is irrational at face value.

TSMC is more than a manufacturer, they are a provider of very sophisticated in-demand tech for which the manufacturing process itself - is high tech, high stakes, high barriers to entry.

They are a little bit like Boeing in that the 'making' part is really hard. Less so like Flextronics.

Depending on how countries react to this, we could very well be in the opposite situation in 3 years, where we have a vast glut of chips and parts of every kind.

TSMC is not going to charge their customers 'prevailing market value' i.e. they could spot price at 5x their current prices, because it'd be gauging and the supply change would react long term to that 'bad behaviour' by TSMC. Big supply chain relationships are longer term so those things matter.

Because of the huge players involved with enough cash do influence (i.e. Auto, Apple, Samgsung) maybe we're in for a strategic alignment beyond just a fab shop in Texas.

One big caveat to all of this is that though manufacturing itself is low profit, a lot of things around that can become profitable. Making moulds, adjusting designs, managing supply chains, optimizing designs etc. - all of this becomes 'know how' that moves over to the manufacturing side and if they are smart about it, they'll leverage it.

Also, manufacturers can possibly develop some market power which they can try to flex as well.

Hopefully we see a shift to more high quality intelligent manufacturing in the Western world by leveraging tech, robots etc. and convincing consumers to pay higher prices for some things.

Service economy doesn't imply deindustrialization. The provision of a service can be highly capital-intensive.

>>Now the US can't even make ventilators or face masks

The US led the world in the speed of its vaccination rollout. As for manufacturing, its world-leading biopharmaceutical infrastructure allowed it to produce the most shots of the most effective covid19 vaccines, of any country in the world.

"Manufacturing economy" was a meme sold to gullible nostalgic masses

Work is work, money is money. There's nothing fundamentally more important about manufacturing then other types of jobs. The US still has tons of manufacturing but unsurprisingly its on the backs of much fewer jobs, many of which require more education and specialization then manufacturing economy of old used to supply

> There's nothing fundamentally more important about manufacturing then other types of jobs.

the idea that manufacturing is the only work that matters is especially bizarre on a social media website for tech workers.

microsoft or oracle or any number of other software products absolutely deliver value to customers just as much as a machine stamping out parts, those companies couldn't work without that software just like they can't work without an assembly line or a delivery truck or whatever.

Custom machine logic is a kind of manufacturing and the people doing the production are for the most part the engineers.

Manufacturing is lower on the hierarchy of needs, however when you are blocked from getting these basic needs your economy immediately crumbles.

You can get by without services, you can’t get by without manufacturing.

There are no tech workers without computers.

Luckily you can buy computers from other countries Same with food. It's not anything special. A way to earn a living/have an economy as a country is as good as any other.

99% of manufacturing is low paid, manual jobs which most countries can't be bothered to do and outsourced them because of the margins.

these lucrative manufacturers invested heavily into specialist machinery and are reaping the benefits.

Moldex masks are made in the US. Their unique construction also protects them somewhat from counterfeits since the 3M masks are the low hanging fruit everyone is copying.

We still manufacture our most important product; the American Dream.

Seriously though, 3M would like a word.

Not really man. NVIDIA buys chips from foundries and marks them up 5x or more.

Capitalism contains the seeds of its own destruction. The relentless drive to shave fractions of a cent off costs in the short term creates the conditions you describe in the long term. In other words, it's like being penny wise and pound foolish on a global scale.

Fake News... that is not capitalism, that is a by product of decades and decades of tex based incentives that push people in to market index funds, mutual funds and other institutional investment where it is all managed funds

These managed funds are driven by quarterly earnings people expect to see...

This intern drives public companies to focus on quarterly earnings

Privately held companies almost never look at quarterly earnings, they look at a 5 year picture... It is mainly public companies majority owned institutional investors (401k's, pensions, etc) that focus on quarterly earnings

So once again what people blame capitalism for, is in reality government putting their hands on the scales and tipping the market in ways that have unintended consequences

> "service economy" was always a meme being sold to the gullible masses, manufacturing capacity is the only thing that matters for an economy.

Service economies work great in places where food and housing are free, so money is only needed to buy luxury goods. They only work poorly in the US because capitalists have leverage over service workers.

Service economy is kinda fun when you really think about it. Rather few sectors really make sense. Food, you can't make living just by selling food to each other, the ingredients and hardware has to come from somewhere. Hospitality quite similar. Banking? Banking and finance is just extracting money from others, and actual goods produced is quite minimal... Same can be said from quite many other field like law. Some of the work does increase productivity, but you have to have some base line of it to increase...

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