From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: Clinton's plan our best and only hope for the future
Date: Fri, 06 Nov 92 14:43:40 EST
Organization: IFS Project, University of Michigan
Distribution: usa
Reply-To: jwh@citi.umich.edu

In article <1992Nov6.142436.27938@mksol.dseg.ti.com>, mccall@mksol.dseg.ti.com (fred j mccall 575-3539) writes:
|> In <Tc==33#@engin.umich.edu> jwh@citi.umich.edu (Jim Howe) writes:
|> 
|> [...]
|> 
|> >|> 
|> >|> >level of manufacturing has increased.  
|> >|> 
|> >|> Level, perhaps, although I would like to see some figures on this.
|> 
|> >From 1980 to 1990, manufacturing as a % of GNP rose from 20% to
|> >22.5%.  From 1947-1990, the % of GNP has pretty much ranged from
|> >20% to 22.6%.
|> 
|> How much of that 'manufacturing' is things like foodstuffs?
|> 

What point would you be trying to make?  The labor department (or whoever
publishes these statistics) has made classifications about 'goods'
and 'services'.  I'm simply reporting their results.  I don't
believe their classifications have dramatically changed so year to
year comparisons are at least somewhat valid.

|> >|> I'd also like to see it massaged into manufacturing on a per capita
|> >|> basis and a mention of how many people are involved in manufacturing
|> >|> now (and that number is down by millions -- what are all those people
|> >|> doing now?).
|> 
|> >Employment in the 'goods' sector is down in percentage terms.  Some of
|> >this is due to the fact that many jobs which were formerly performed
|> >by a 'goods' company are now being contracted out.  
|> 
|> But they would still be producing those goods SOMEWHERE in the
|> economy, unless they contract it out to a foreign firm.
|> 

But the workers doing that work would no longer be consider to be
working in the 'goods' sector.  'Goods' sector employment would
drop and 'service' sector employment would increase.  Statistically
you could claim a loss of 'goods' jobs.

|> >Same work, maybe
|> >even the same workers, but a different sector classification.  
|> 
|> This statement just doesn't seem to track.  If a company is
|> manufacturing something, whether under contract or not, that is
|> manufacturing.  Those workers don't all of a sudden magically become
|> 'service sector' workers.
|> 

A manufacturing company does more than simply produce goods.  They
will typically have an accounting department, a billing department,
an EDP department, etc.  If all of these activities are being performed
'in house' all of these workers are considered to be 'manufacturing'
workers.  If the EDP department is spun off into its own company and
contracts with the former company, those workers are now 'service'
sector workers.

|> >Also,
|> >the fact that we can produce more goods with fewer people is an
|> >indication of our increased productivity.  If we wanted to keep 
|> >everyone employed in manufacturing industries we could simply require
|> >companies to eliminate all machines and require that work be done
|> >by hand.  Of course this would also dramatically raise costs, and
|> >substantially lower the standard of living for everyone.
|> 
|> Disingenous and specious.
|> 

How so?

|> >|> 
|> >|> >Our technology still leads the
|> >|> >world in many areas.  
|> >|> 
|> >|> In some areas, indeed, but we're working real hard to piss those away,
|> >|> too.  We INVENTED most of the technology that other countries turn
|> >|> into products and beat our brains out with.  Why do you think that is?
|> 
|> >Perhaps we have better things to do with our time and effort.  If
|> >you were a productive janitor as well as a productive electronic
|> >engineer, would it be a productive use of your time to clean your
|> >office, or would you hire someone else to do it?
|> 
|> Disingenous and specious, not to mention evading the question.
|> 'Better things to do with our time'?  You assume that ALL of us are
|> that 'engineer'; SOMEBODY still needs to be that 'janitor', whether I
|> do it or not.  Just how economically profitable is it to do the R&D
|> and then let someone else do the production?  It's NOT; that's why we
|> have things like intellectual property laws.
|> 

Non-sequiter.  R&D may create an intellectual property.  Profit can
be realized simply by selling the idea.  The person who comes up with
the invention doesn't have to produce it to make money.

|> >|> Obviously, there are great opportunities in those areas, and yet
|> >|> countries with less of the 'market freedom' you vaunt clobber us in
|> >|> your free markets.  How does that come about, do you think?
|> >|> 
|> 
|> >Perhaps you could provide a better description of what you are talking
|> >about.
|> 
|> Germany.  Japan.

That's not an explanation.  Germany and Japan happen to be going through
larger economic problems than we are.  We are more productive than the
Japanese and Germans.  Japan has tried for years to match our computer
expertise to no avail.  Personally I wouldn't trade our economy for
theirs.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         
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