Less Manufacturing is Good for You

Thought-provoking piece by Marc Cenedella here on the merits of commoditization, more white-collar jobs, and less manufacturing.

Farm productivity has exploded, increasing 1.9% per year over the last half of the century. At that rate, every 100 years, the same inputs on a farm produce 6.5 times as much foodstuffs. The percentage of the population engaged in farming dropped from 40% to under 2%, and yet we became a great exporting power in agricultural products.

Similarly, manufacturing productivity rose 1.3%, on average, over the course of the second half of the 20th century. A brief list of 20th century mechanical engineering achievements is instructive. From better distribution (automotive), to better storage (air conditioning), to better production (glass, paper, metal), to better power generation (energy), the list of advances in making "stuff" has meant that we produce more and better stuff each year, with fewer costs and materials per unit.

Consider your TV, car, refrigerator, stove, and calculator in the 1970s compared to what you have today. They are better, faster, safer, and more effective.

The end result of our being able to make things more readily is that we’ve found we need fewer and fewer people to actually make stuff.

This is the process of commoditization, and it is a good thing for our economy.

If you think about it, all human endeavors become commoditized. Newton and Liebniz, in the 17th century, were the only guys in the entire world who were smart enough to figure out the calculus. Today, it’s something bright high schoolers master before going to college.

Read the whole thing.