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After Manufacturing
The End of Economic Development?
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  • Andrew Allison

    Politicians flat-out mendacious? Surely not! As an aside, robots may very well cause an industrial renaissance in developed economies, it will just be a jobless one.The potential to reduce manufacturing costs in developed economies to the levels of those in developing ones is a huge threat to the latter.

  • Dhako

    On the contrary, Walter, For in China many factories are already experimenting with the fourth industrial revolution in their assembly line on a massive scale. And indeed the various government (from province to the central state) are already “incentivizing” companies with cheap finance and tax-break to move wholeheartedly their production-line into a complete robot-base manufacturing platform, with only small skeletal staff to monitor and programmed the assembly line, retained within the factory.

    Consequently, it seems in China what they are doing is to keep up with the cutting edge technology while at the same time keeping it’s old fashion industries for the rural hinterland and those who are yet to come in from the country side.

    Moreover in China you will have a “three-phase-economy” existing in parallel to each other. And this means: Firstly, you will have heavy industries with their old fashion assembly line in which minimally educated former rural citizens will work on (in both shift of night and day basis). And these labor-intensive factories will be based in the less developed regions.

    Secondly you will have a highly developed robotics-based manufacturing factories in the coastal regions (who are the developed regions) that will in effect employ the latest gizmos (such as IoT and the fourth industrial revolution paradigm) as well as minimum staff with first degrees in Engineering and Science.

    And, thirdly, you will have a consumer-based sector, that will employ the bulk of the urban cities citizens. And these will be amalgamation of highly educated as well as those minimumly educated folks, who are in turn working in the service sector.

    Of course, on top of these three ring differentiation of the national economy will be the high-tech sector’s companies and their workers, such as e-commerce, bio-engineering sector, Nano-technology sector, which will be as cutting edge as any you could find in the developed western world.

    So, China in a nutshell, will have 20th century industrial economy working side by side with 21th century high-tech economy (heavily consisting off start-up tech companies). And underneath both of those two will be consumer-led sector that is larger than both of them combine, but at the same time will act as the demand-side of the whole continental-size internal economy.

    • Tom

      Keep telling yourself that, Dhako. Your tech is almost all derivative, and your basic necessities are running out. Have fun when your party loses the Mandate of Heaven.

  • Jacksonian_Libertarian

    What’s with all the Luddites popping out of the woodwork. Don’t you understand that machines have been replacing labor for millennia? Robots are just another form of machine that relieves mankind of onerous boring repetitive labor. People are expensive, when labor gets replaced by machines the products they produce improve in Quality, Service, and Price, this makes everyone richer. The employment problem isn’t because of the machines, but rather because of the burden of the Government Monopoly. Look at any country in the world, the “real” unemployment level is directly proportional to the Burden of the Government Monopoly on the country’s private sector. Free markets are super efficient, and would provide full employment if the Government Monopoly only lightly burdened it, by providing only those services that only a central government can provide (Defense, Justice, Foreign Relations).

    • J K Brown

      We have an immigration, trade and unemployment problem because technology and demographics have outstripped the mid-20th century “government-guided” enterprise model. One could say it is now the state-strangled enterprise.

      An observation from 1950 that when the intervening 66 years are applied we see that it is the “government-guided” that causes the problem.

      Is the big and successful corporation its own master, then? Not quite.

      To begin with, it is severely circumscribed by the government. as Professor Sumner H. Slichter has said, one of the basic changes which have taken place in America during the last fifty years [1900-1950] is “the transformation of the economy form one of free enterprise to one of government guided enterprise….The new economy,” says Dr. Slichter, “operates on the principle that fundamental decisions on who has what incomes, what is produced, and at what prices it s sold are determined by public policies.” The government interferes with the course of prices by putting a floor under some, a ceiling over others; it regulates in numerous ways how goods may be advertised and sold, what businesses a corporation may be allowed to buy into, and how employees may be paid; in some states with Fair Employment laws it even has a say about who may be hired. “When a piece of business comes up,’ writes Ed Tyng, “the first question is not likely to be ‘Should we do it?’ but ‘Can we do it, under existing rules and regulations?’ “He is writing about banking, but what he says hold good for many another business. Furthermore, in the collection of corporate income taxes, withholding taxes, social security taxes, and other levies the government imposes upon the corporation an intricate series of bookkeeping tasks which in some cases may be as onerous as those it must undertake on its own behalf. Thus the choices of enterprise are both hedged in and complicated by government.
      —‘The Big Change: America Transforms Itself 1900-1950’ (1952), Frederick Allen Lewis

      The fact of the matter is, we and the rest of the world economy shall suffer until it is accepted that the “New Deal” has become a burden that cannot be born. The New Deal being the stand in for stifling combinations (unions), socialistic ponzi schemes based on the anomaly of the 20th century change in demographic controls and the move toward frequent and detailed interventionism (“the system of private property regulated, controlled, and guided by isolated authoritarian decrees”)

  • FriendlyGoat

    At opening of final paragraph, we need to ask whether only some of the good jobs of the remainder of 21st century are as-yet “undefined”, or whether that first sentence should be understood as telling us that the conditions for creating them are even-more-mysteriously “undefined”.

  • Rick Johnson

    Politicians do NOT need to think all that creatively about how to create the conditions for good twenty-first century jobs, they only need to follow the advice of the French businessmen to the French Finance Minister in the 1860s – GET OUT OF THE WAY!
    The greatest block to econmoic growth is big government. If governments got out of the way, the rest of us will get along fine.

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