The Claims of the Curious Capitalist Have Us Scratching Our Heads

Posted by jeckert on 12/14/2010

Does the U.S. need factories in order to be an economic power?

The answer to this question may seem like an obvious "Of course-- doesn't every country?" But Michael Schuman's blog on The Curious Capitalist says that "A nation today doesn't need to have its own factories to be an economic power, even a manufacturing power."


His argument for the aforementioned statement is as follows,

Manufacturing has become somewhat of a commodity – lots of factories around the world can make a perfectly good mobile phone or PC. But not everyone can design an iPad or develop the applications for it. That innovative process at the heart of manufacturing hasn't been commoditized, and can't be. That's where a high-cost but creative economy like the U.S. can maintain its advantage over the rising manufacturing powers of the emerging world.
Schuman goes on to say that he is not implying the U.S. should immediately shut down all of its factories, but only that advanced economies place way too much emphasis on factories.
And what is his prime example of American success, sans domestic manufacturing? Apple.
We wonder, however, who will be there to buy the Apple products, if no Americans are employed in said "unimportant" factories, subsequently weakening the middle class?...  Not everyone is going to have the drive, intellect, and resources to innovate, innovate, innovate...and then outsource production to the rest of the world.  What, then, of the middle class?
Schuman needs to address these issues before make such rash claims about the role of factories in an advanced economy, especially ours.

1 comment


Who will be there to buy factory goods besides Americans? You're kidding, right?

China, Nepal, Indonesia, Iraq, Syria, India, Russia, South America....

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