Ha-Joon Chang
The decline of US manufacturing since World War II, when America had an absolutely dominant position in the world, is quite striking. In 1950, the United States accounted for 60 percent of the manufacturing output in the world. Now it’s only 16 percent. Naturally America is concerned. But I think it’s too late to turn this around in any major way.
In direct response to your question, there are countries that have managed to reindustrialize. There are two types of deindustrialization. One is deindustrialization that happens because manufacturing productivity has grown, and manufacturing goods have become cheap in relative terms.
Twenty years ago, with the money that you can buy a small efficient smartphone with today, what kind of computer could you have bought? One that was very basic. Twenty years ago, you would have had to pay, I don’t know, $2,000 to buy a decent laptop computer. These days you can get quite good ones for $300. So we are actually producing and consuming more and more manufacturing outputs, even in the advanced countries. But manufactured goods have become so much cheaper because that sector has enjoyed very significant growth in productivity.
You think that the Swiss are dealing in black money from Third World dictators and selling cow bells and cuckoo clocks to American and Japanese tourists. But actually, it is literally the most industrialized country in the world, if you count in terms of manufacturing output per person.
That’s what you could call positive deindustrialization. Countries like Sweden and Finland in the 1990s and 2000 have experienced a shrinkage in manufacturing as a share of GDP. But if you recalculate using the old prices, you find that the manufacturing output has increased quite a lot.
There are also negative types of industrialization, which is what countries like Britain first and then…
Auteur: Ha-Joon Chang
