Without doing any research, I ask this question as the blizzard rolls in - to actually save or injure the wheat here - don’t know which yet.
What does the U.S. actually produce at levels enough to really matter? At the moment, I don’t give a damn about services, IT, medicine, law, or any other smart stuff. What do we actually make, mine, drill or grow? I know about wheat and beef, but, hell, we’re a net food importer.
Must be the snow, but this is beginning to bother me. I see us as a country which no longer creates real wealth.
“I don’t give a damn about services, IT, medicine, law, or any other smart stuff.”
In other words, any of the stuff that will be the core of the world’s economy in the next few decades.
Well that is the problem, a service industry cannot exist by itself, it has to have underlying production of something tangible. You don’t have IT until you have a company to do IT for that is producing something (be it software, or coal, or widgets)
The USA is probably biased too far into services and not enough actual production today, and signs of that should be ALL TO OBVIOUS right now yet we are bailing out the services, failed ones (AIG), and potentially letting the actual producers die
in short, no, medicine, law, and IT cannot be the core of the worlds economy. If it was we would starve, be homeless, and unable to travel.
The core of any economy is energy, food, raw materials. On top that you produce homes, products, information
On top of THAT you can produce mutual funds and helpdesks and doctors.
Bill Gates created a software company that could create software for pennies a unit that he can sell for hundreds of dollars a unit - that created a whole lot of wealth for a whole lot of people!
In other words, any of the stuff that will be the core of the world’s economy in the next few decades.
Outside of “Medicine” which is an industry that has it’s service based on the ability of it’s product to “Self propagating”, everything else exist for the soul reason to support “Stuff”.
Without making “Stuff” we have no need for IT, we have no need for “Smart stuff” and even a good deal of the “Law” is based around “Stuff”. It has been my contention for years that as goes the “Making stuff” so goes all the other industries.
I’m not saying these other industries aren’t necessary and in fact they “Enhance” the “Stuff” making. What I am saying is that the country that supplies the “Stuff” will eventually also supply the “Smart stuff” that supports the “Stuff” making.
Who is better at fixing a car, the person that designed and manufactured, or someone else? The people with the inner workings of the production will always have a leg up on everyone else. If this country ceases to make stuff, we will eventually be run out of the business of supporting stuff.
Bill Gates created a software company that could create software for pennies a unit that he can sell for hundreds of dollars a unit - that created a whole lot of wealth for a whole lot of people!
What is the majority of Bill Gates’s software used to do? Yep, support making stuff. If the US made nothing and China made everything Bill Gates would not have made it nearly as big in the US as there would have not been as big of a demand for his product.
Believe it or not we are still one of if not the worlds largest “Manufacturer”, It’s just that we are stagnant or on the downhill while other countries are skyrocketing.
We make plenty but many major sectors are becoming less and less competitive. Automotive, Aerospace, heavy equipment. Medical appears to be ok right now but that’s mostly due to the amazing glut in that industry right now which we all know is not going to continue or can’t continue.
Outside of the above, things we make almost nothing of which we used to make almost entirely, is probably a significant and ever growing list. Some of those are very significant including the very machines we use to make pretty much everything else.
What is more disconcerting to me is that we are slowly losing the actual knowledge base to actually make these things. Despite the amazing leaps in manufacturing technology in some areas, again in the machine tool area, we actually can’t manufacture some products as well now as we could 20-30 years ago.
In the state where I live we make cars, trucks, car parts, military equiptment, construction equiptment, industrial machinery and tooling of all types used to make a wide range of industrial and consumer goods, turbine engines, building supplies of all sorts, chemicals, steel, glass, and furniture of all things. We also grow a host of crops and animals to eat; process food, produce and refine oil, a little bit of mining, and lumber production. Alot of this stuff is exported to other states and around the world but the local economy is big enough that a decent amount of this stuff gets sold right here. Then, the folks around here take their money and buy houses, food and clothes so other folks make “wealth” by satifying those demands by building houses and comercial property and others run retail businesses selling stuff to the populous.
There is a host of other local “smart” technology, medical and IT stuff too but I left that out.
“I don’t give a damn about services, IT, medicine, law, or any other smart stuff.”
In other words, any of the stuff that will be the core of the world’s economy in the next few decades.
If that is true then we are seriously screwed.
Medicine is a necessary evil (ie the less of it you need, the better), law is even worse, and IT growth is only useful if there is an underlying base of industry to support it.
The engine of prosperity is technological efficiency and innovation related to things that are truly useful. If we keep losing that, then we will become a poor country.
““The engine of prosperity is technological efficiency and innovation related to things that are truly useful. If we keep losing that, then we will become a poor country.””
…and truly useful things are being manufactured, grown, drilled, mined, forged and harvested less and less in the U.S.
Yes were are a net importer, but we still make far more than I think any other country. Even when looking at actual “Product manufacturing” and eliminating all the “Support” GDP.
The fact that we “Spend more” (Import) than we “Produce” (Export) is an entirely different problem.
We do indeed make lots of stuff, but as a percentage, especially if adjusted for growth, I’d bet dollars to donuts we “Make” less now than we did in 1970.
IOW the percentage of “Service/Support”, Financial and “Medical” all of which either exist because of “Making stuff” or are a “Zero sum gain” (Medical) is a much larger percentage of our GDP than in 1970. If adjusted for growth we probably made more stuff in 1970 than today.
Looking at an economy like China that is clearly not the case nor was it the case in the US from 1940-1970/5 or so.
…and truly useful things are being manufactured, grown, drilled, mined, forged and harvested less and less in the U.S.
If they are cheaper places to get drilled and mined stuff, then we are better off importing it. These are finite resources, and we might as well save them for later when they are more scarse.
We harvest quite a lot in this country, and we probably do it more efficiently and cheaply than anywhere in the world. That is a mixed bag when it comes to huge livestock factories, but the changes I’ve seen in grain farming since I was a kid are pretty impressive. It is all about using new tech to do the job with less work and expense.
The thing we are losing that is truly important is the high-tech cutting edge. We can not have increases in prosperity unless we produce things more efficiently and also develop new things that enhance our lives and others. It isn’t necessarily a problem to offshore low-tech manufacturing to poorer countries, but if we lose ground on the high-tech then we are screwed.
The changes in grain farming are not only unsustainable, but also destructive to the farm unit (the private family farm). Impressive, yes, but not such a great deal in my mind.
Genetic manipulation has allowed us to do amazing things with herbicides and grow more per acre than we “should” be able to. This requires petro based fertilizer and water beyond the capability of the aquifer beneath us. The machines we use would boggle your mind with their capital costs, maintenance and fuel use.
I know of no farm family which does not need income from a second, off-farm-source. This was not true twenty years ago, and certainly not the case 50-60 years ago when self-sufficient family farms were the norm. You can see their skeletons on every section from here to Iowa.
It isn’t necessarily a problem to offshore low-tech manufacturing to poorer countries, but if we lose ground on the high-tech then we are screwed.
I whole heartedly disagree with this. My contention is that you can’t remain competitive in the high tech unless you’re remain comeptitive in the low tech.
There is a two fold problem. First the natural progression is from low to high. 10 years ago China COULDN’T produce some products from a couple of my customers because they were too complex. Today they produce 90% of these products and have run the America companies out of business. Granted this is not microprocessor technology but it is higher end manufacturing products and techniques. It doesn’t take long to steel someones process and make it your own. They are then your competition.
Second problem is that this “High tech” should be implemented into the low tech making the low tech more productive which should keep the low tech competitive. Since that low tech essential supports the high tech by keeping low tech competitive you also keep the high tech competitive.
Simple example, how many Socket head cap screws do you thing their are in an entire CPU production facility? Let’s say a whole bunch. If China can make them cheaper than we can then they can also supply them to “High tech companies” of their choosing at a lower price. They control the cost of the high tech at that point in that area.
In a completely free global market the above is not a concern, but we aren’t in a free global market.
Even in a “Free market” you have some “Price reduction” do to the simple issue of proximity. I can supply my neighbor screws cheaper than the guy in China can if we produce them at the same price. If the high and low tech reciprocate in an area both should be cheaper.