I often reiterate my view that successful economies don’t need to be based on manufacturing. This seeming love of things you can drop on your foot is the current incarnation of the backward-looking views of most people when looking at the economy. Consider how most of the nation used to be engaged in agriculture. The reduced number of farmers led to neither national decline nor reduced farm productivity. This shift is us getting wealthier, not poorer.
There’s a narrative that countries have to make things to be successful,” Obama said to his economic advisers. “What’s the evidence?”
His economists, top academics from schools like Harvard and MIT, replied that there wasn’t much evidence. In fact, they argued, manufacturing represented relatively few jobs in the nation’s economy. And governments had terrible records of investing in specific industries, anyway.
Even if we were to boost manufacturing, productivity gains mean that we wouldn’t be creating manufacturing jobs just as pro-agricultural policies don’t create more farmers but simply go to agribusinesses. Factories simply don’t employ many people these days – and that’s a good thing because productivity is what makes societies wealthier.