manufacturing employment

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pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

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The story is a very different one in the 1970–90 period, when the process of economic restructuring and technological transformation which took place during these two decades led to a reduction of manufacturing employment in all countries (see tables 4.1–4.14 in Appendix A). However, while this trend was general, the shrinkage of manufacturing employment was uneven, clearly indicating the fundamental variety of social structures according to differences in economic policies and in firms’ strategies. Thus, while the United Kingdom, the United States, and Italy experienced rapid de-industrialization (reducing the share of their manufacturing employment in 1970–90 from 38.7 to 22.5 percent; from 25.9 to 17.5 percent; from 27.3 to 21.8 percent, respectively), Japan and Germany reduced their share of manufacturing labor force moderately: from 26.0 to 23.6 percent in the case of Japan, and from 38.6 percent to a still rather high level of 32.2 percent in 1987 in the case of Germany.

I have chosen to elaborate on the basis of the 1987 projection because, while being equally reliable, it is more detailed in its breakdown by industries and reaches out to 2005.17 The most significant feature of these projections is the slow decline of manufacturing employment in Japan in spite of the acceleration of the transformation of Japan into an informational society. In the 1987 statistical projection, manufacturing employment stood at 25.9 percent in 1985 and was projected to remain at 23.9 percent of total employment in 2005. As a reminder, in the US projection, manufacturing employment was expected to decline from 17.5 percent in 1990 to 14 percent in 2005, a much sharper decline from a substantially lower base. Japan achieves this relative stability of manufacturing jobs by compensating declines in the traditional sectors with actual increases in the newest sectors.

The major analytical distinction between the two periods stems from the fact that during the first period the societies under consideration became post-agricultural, while in the second period they became post-industrial. I understand obviously by such terms the massive decline of agricultural employment in the first case and the rapid decline of manufacturing employment in the second period. Indeed, all G-7 countries maintained or increased (in some cases substantially) the percentage of their employment in transformative activities and in manufacturing between 1920 and 1970. Thus, if we exclude construction and utilities in order to have a sharper view of the manufacturing labor force, England and Wales decreased only slightly the level of their manufacturing labor force from 36.8 percent in 1921 to 34.9 percent in 1971; the United States increased manufacturing employment from 24.5 percent in 1930 to 25.9 percent in 1970; Canada from 17.0 percent in 1921 to 22.0 percent in 1971; Japan saw a dramatic increase in manufacturing from 16.6 percent in 1920 to 26.0 percent in 1970; Germany (although with a different national territory) increased its manufacturing labor force from 33 to 40.2 percent; France, from 26.4 to 28.1 percent; and Italy, from 19.9 to 27.4 percent.


pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

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Protecting existing manufacturing jobs, bringing back lost ones, and creating new ones is a perennial aim of the left. Is this a viable strategy? No, it isn’t. As figure 4.22 shows, since the 1970s, manufacturing employment has been shrinking steadily in all rich nations. As in agriculture, this employment decline is due partly to automation. It owes also to the availability of low-cost production in poorer nations. Neither is likely to abate. Two decades from now, manufacturing jobs will have shrunk to less than 10 percent of employment in most affluent countries. Here in the United States, they may well be less than 5 percent. FIGURE 4.22 Manufacturing employment Manufacturing employment as a share of total employment. The lines are loess curves. Data source: OECD, stats.oecd.org. Revitalize Unions? Labor unions ensure that employers pass some of their profits on to workers in the form of pay raises.

Some people from poor homes are further hampered by a lack of English language skills. Another disadvantage for the lower-income population is that in the 1970s and 1980s, the United States began incarcerating more young men, many for minor offenses. Having a criminal record makes it more difficult to get a stable job with decent pay.51 A number of developments, including technological advances, globalization, a loss of manufacturing employment, and the decline of unions, have reduced the number of jobs that require limited skills but pay a middle-class wage—the kind of jobs that once lifted poorer Americans into the middle class.52 Finally, changes in partner selection have widened the opportunity gap. Not only do those from better-off families tend to end up with more schooling and higher-paying jobs. They also increasingly marry (or cohabit with) others like themselves.53 Do we have conclusive evidence of rising inequality of opportunity in earnings and income?

“Decoupling of Wage Growth and Productivity Growth: Myth and Reality.” Commission on Living Standards. London: Resolution Foundation. Pew Research Center. 2011a. “The Generation Gap and the 2012 Election.” Washington, DC. Pew Research Center. 2011b. “Public Wants Changes in Entitlements, Not Changes in Benefits.” Washington, DC. Pierce, Justin R. and Peter K. Schott. 2012. “The Surprisingly Swift Decline of U.S. Manufacturing Employment.” Working Paper 18655. Cambridge, MA: National Bureau of Economic Research. Pierson, Paul. 1994. Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment. Cambridge, UK: Cambridge University Press. Piore, Michael J. and Charles F. Sabel. 1984. The Second Industrial Divide. New York: Basic Books. Polanyi, Karl. (1944) 1957. The Great Transformation. Boston: Beacon Press.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

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Michael Spence, in his brilliant book The Next Convergence, explains how the integration of global markets is leading to enormous dislocations, especially in labor markets.27 The factor price equalization story yields a testable prediction: American manufacturers would be expected to shift production overseas, where costs are lower. And indeed manufacturing employment in the United States has fallen over the past twenty years; economists David Autor, David Dorn, and Gordon Hanson estimate that competition from China can explain about a quarter of the decline in U.S. manufacturing employment.28 However, when one looks more closely at the data, the globalization story becomes much less compelling. Since 1996, manufacturing employment in China itself has actually fallen as well, coincidentally by an estimated 25 percent.29 That’s over thirty million fewer Chinese workers in that sector, even while output soared by 70 percent. It’s not that American workers are being replaced by Chinese workers.

(BEA) business: burdens and mandates on computer use in; see also information technology (IT) Moore’s Law in process changes in regulation of robot use in; see also automation see also manufacturing business cycles Busque, Leah Byrne, Donald California, University of, at Berkeley call centers Canada, immigrant entrepreneurship in Capek, Karel capital: bargaining power associated with intangible labor’s replacement by nonhuman capital, human see also superstars capital, organizational capitalism Card, David Carlsberg breweries Carnegie Mellon University Case, Steve Cato Institute Cavallo, Alberto Center for American Progress Chesky, Brian chess Chetty, Raj Chile, immigrant entrepreneurship in China: automation in capitalism in manufacturing employment in Chinn, Menzie choice modeling Christmas Carol, A (Dickens) Chunara, Rumi Churchill, Winston circuits, integrated Cisco Systems cities, plunder and conquest of Clark, John Bates Clarke, Arthur C. Cleveland Clinic Clifton, Jim Clinton, Bill cochlear implants Cohen, Jared Cohen, Peter Collegiate Learning Assessment (CLA) Columbus, Christopher Coming Apart (Murray) Coming Jobs War, The (Clifton) Commerce Department, U.S.

Topalov, Veselin TopCoder traffic congestion translation services, online transportation Trebek, Alex tribbles TripAdvisor Tufano, Peter TurboTax tweets Twitter United Airlines United Kingdom, immigrant entrepreneurship in United Nations United States: average workweek in college students in Earned Income Tax Credit in education in financial hardship in GDP growth in Great Recession’s effects on immigration reform in income distribution in income guarantee plans in infrastructure in intellectual property regime in life expectancy in living standard in manufacturing employment in mid-1990s productivity increase in patenting in political inequality in post-1970 productivity decline in post-2000 productivity growth in productivity improvement in social mobility in tax rates in tax system in traffic congestion in unemployment in workforce in Urban Dictionary uShip value-added tax (VAT) Varian, Hal Velodyne Venkatraman, Venkat Victorians, educational system of Vinge, Vernor visas, H1–B vision, computer-aided Voltaire Wadhwa, Vivek wages: decoupling of productivity from globalization and immigration’s effect on in manufacturing Power Law distributions in relative performance determinants of spread in; see also “winner-take-all” markets see also income Wagner, Kyle Waldfogel, Joel Wales, Jimmy Wall Street Journal Walmart Walton, Sam Watson Watson, Thomas, Sr.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

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According to this school of thought, advanced countries cannot live by services alone, not least because services have less export potential than manufactures. So a shrinking manufacturing base must be equated with national decline, as must the growing financialisation of the economy. No surprise, then, that the decline in manufacturing employment in the UK, from 31 per cent of the workforce in 1975 to 25 per cent in 1983 to 8 per cent today, causes much angst, as does the almost-as-severe percentage fall in the US, where manufacturing employment is down to 9 per cent. Unfavourable comparisons are made with Germany and Japan, where manufacturing constitutes a much bigger part of the economy and contributes consistently to large trade surpluses. This belief in the intrinsic merits of manufacturing is perhaps understandable, given that manufacturing was – and still is, in the developing world – responsible for raising the great mass of people out of poverty.

This belief in the intrinsic merits of manufacturing is perhaps understandable, given that manufacturing was – and still is, in the developing world – responsible for raising the great mass of people out of poverty. It is an overwhelmingly powerful truth that manufacturing secured the triumph of capitalism. Yet, as I will show, it is arguable that manufacturing employment ought to fall in a mature economy; and one of the safest predictions for the twenty-first century is that in the developed world it will continue to do so without causing a collapse in living standards. To make this case is admittedly quite a challenge, because the prejudice about the superiority of manufacturing over services has deep historical roots. Adam Smith, still hugely influential across the centuries, showed a bias in The Wealth of Nations against services, suggesting that while the labour of a manufacturer added value, the labour of a menial servant did not: There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect.

Without it, companies worldwide making everything from smartphones to oven controls would have to rethink their production methods. Yet despite its strong position, dealing with hundreds of companies in a global market, it employs all of seven people. Nor, incidentally, is the reduced capacity of manufacturing to generate jobs purely an advanced-country characteristic. Even in China, where the manufacturing sector contributes 33 per cent of GDP, manufacturing employment is now below its level in the late 1990s. Perhaps the biggest impetus behind the decline of manufacturing in the advanced economies is globalisation. In effect, developed countries have been outsourcing their manufacturing to China and other emerging markets that are now going through the rapid urbanisation and industrialisation that characterises the early stages of capitalist development, in which very low labour costs create comparative advantage.


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

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If previous periods of industrialisation at least had the benefit of providing enough factory jobs for the new proletariat, premature deindustrialisation threatens to eliminate this traditional pathway entirely. Technological and economic developments now enable countries to virtually leapfrog the industrialisation phase, which means that developing economies are now deindustrialising at much lower rates of per capita income and with much lower shares of manufacturing employment.106 China is a good example of this, with manufacturing employment in decline,107 labour struggles becoming more confident,108 real wages surging109 and demographic limits leading to a focus on ‘technological upgrading [and] productivity enhancements’ in order to maintain growth.110 The automation of factories is at the leading edge of this deindustrialisation trend, with China already the biggest purchaser of industrial robots, and expected to soon have more industrial robots in operation than either Europe or North America.111 The factory of the world is going robotic.

Technological and economic developments now enable countries to virtually leapfrog the industrialisation phase, which means that developing economies are now deindustrialising at much lower rates of per capita income and with much lower shares of manufacturing employment.106 China is a good example of this, with manufacturing employment in decline,107 labour struggles becoming more confident,108 real wages surging109 and demographic limits leading to a focus on ‘technological upgrading [and] productivity enhancements’ in order to maintain growth.110 The automation of factories is at the leading edge of this deindustrialisation trend, with China already the biggest purchaser of industrial robots, and expected to soon have more industrial robots in operation than either Europe or North America.111 The factory of the world is going robotic. Deindustrialisation can also be seen in ‘reshoring’, where manufacturing returns to developed economies in jobless, automated forms.112 These deindustrialisation trends are taking hold across the developing economies of Latin America, sub-Saharan Africa and most of Asia.113 Even in countries where manufacturing employment has increased in absolute terms, there have been significant decreases in the labour-intensity of the process.114 The result of all of this is not only an incomplete transition to a significant working class, but also the stymying of the expected employment path for the workforce. Premature deindustrialisation is leaving most of the world’s urban proletariat dispossessed of its agricultural livelihood and without the opportunity to be hired for manufacturing jobs.

Skilled workers became increasingly necessary in overseeing the new machines, carrying out expanding service work, and managing the increasingly large firms that were emerging.14 The need for skilled labour was further amplified in the early twentieth century by the rise of office technologies – typewriters, photocopiers, and so on – that required relatively well-educated operators. In other words, technology is not uniformly deskilling, and the increased demand for skilled labour over the past century testifies to that.15 Over this period, manufacturing employment continued to decline, due to its susceptibility to productivity-enhancing technology.16 The automation of mass-production manufacturing in the early twentieth century was eventually extended, with the automation of small-batch manufacturing.17 While the industrial sector employed 1,000 robots in 1970, today it uses over 1.6 million robots.18 In terms of employment, manufacturing has reached a global saturation point.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

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The picture is the same in higher-valued services, where technology is devised and refined, translating innovation into goods and services yielding productivity gains.28 The erosion is also reflected in manufacturing employment, which peaked at 19,426,000 in 1979 on the eve of President Reagan’s election. There was a 41 percent decline in manufacturing jobs thereafter, to fewer than 11,500,000 by early 2010, before turning up a bit with the recovery. Manufacturing employment was actually lower in 2009 than in 1941 prior to Pearl Harbor, or in any year in between. The thinning out of manufacturing employment was intense. Writing about the middle years (1984–1986) of the Reagan administration, Peter Peterson noted: “Over the past three years America’s import deluge has resulted in pink slips for one to two million domestic manufacturing workers each year.

That ended decades of uncertainty about prospective American taxes on imports from China for American firms eager to offshore high-wage jobs there. The impact of PNTR on offshoring was dramatic. Indeed, one study in December 2012 by Justin R. Pierce of the Federal Reserve System and Yale management professor Peter K. Schott attribute the loss of as many as 4 million US manufacturing jobs between 2000 and 2007 to the new certainty provided by PNTR. Utilizing census data, they concluded: “Absent the shift in US policy, US manufacturing employment would have risen nearly 10 percent between 2001 and 2007, versus an actual decline of more than 15 percent.”9 The second example is the North American Free Trade Agreement (NAFTA), enacted earlier in the Clinton administration (1993). A key provision forced Mexico to guarantee that foreign investors for the first time could actually own a majority controlling interest in domestic factories.

More than a third of them remain indefinitely out of work; more than half of the rest have taken pay cuts of 30 to 50 percent in new jobs that cannot make use of their experience.”29 In that same year, Paul Kennedy prophetically wrote: “In terms of commercial expertise, levels of training and education, efficiency of production, standards of income … the ‘number-one’ power of 1900 seemed to be losing its position, with dire implications for the country’s long-term strategic position.”30 Employment in manufacturing is cyclical, but each upturn in the macroeconomy during the Reagan decline has featured disproportionate job loss in the manufacturing sector. During the recent recession, manufacturing employment fell nearly 29 percent through October 2009, over five-fold faster than the pace of job loss across all sectors.31 Once such jobs are gone, as economist Nancy Folbre explained earlier, firms have mostly proven loathe to recreate high-value manufacturing jobs at home, and thus the losses become permanent. Any new jobs are low-wage ones in today’s two-tier manufacturing pay structure. Higher wages in China are encouraging some reshoring now, with Boston Consulting touting a survey a year or so ago that larger multinationals are reexamining domestic US manufacturing.


pages: 823 words: 206,070

The Making of Global Capitalism by Leo Panitch, Sam Gindin

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Franco, “Global Competition in the 1990s: American Renewal, Japanese Resilience, European Cross-Currents,” Business Horizons, May–June 2002, p. 25. 119 Ibid., Tables 1, 2. 120 Economic Report of the President 2002, Tables B-2 and B-51. 121 This data was supplied on request by the US Bureau of Labor Statistics. 122 The peak of US manufacturing employment had occurred in 1979; by 1999 the number of workers in US manufacturing was 2.5 million lower than in 1979, and below where it had been in 1966, even though overall US employment had doubled since then. Economic Report, Tables B-46 and B-51. The decline in manufacturing jobs affected virtually every advanced capitalist country. See André Bernard, “Trends in Manufacturing Employment’, Perspectives, February 2009, Statistics Canada. Available at statcan.gc.ca. 123 US Bureau of Labor Statistics. Available at ftp.bls.gov. 124 Science and Engineering Indicators 2010, Table 6-3. 125 Paul Langley, The Everyday Life of Global Finance: Saving and Borrowing in Anglo-America, Oxford: OUP, 2008, p. 164. 126 John Grahl, “Globalized Finance: The Challenge to the Euro,” New Left Review II/8 (March–April 2001), p. 44. 8.

The second transformation—the one most associated with the thesis of US decline—occurred in the core industries that had fueled American economic dynamism in the postwar era. The old labor-intensive sectors like shoes, textiles, food, and beverage had seen a sharp contraction well before the 1980s, but it was rising imports and the corresponding loss of jobs in steel, auto, and machinery that occasioned alarm about the state of American manufacturing. Employment in the automobile sector fell by a quarter of a million jobs between 1979 and 1983, and by the end of the 1980s foreign-based producers had captured almost half of the US car market (up from less than 20 percent before the first energy crisis, in 1973). Steel employment had also been falling through the 1970s, but between 1980 and 1984, amid bankruptcies, closures, and layoffs that often devastated entire communities, it was cut in half (a decrease of some 200,000 jobs), and continued to fall thereafter.

Japan and Germany ranked second and third, with shares of 21 percent and 6 percent respectively; the EU as a whole had a share of 24 percent, and China accounted for 3 percent.117 This also helps explain why “large American companies maintained or increased their world market shares in 12 of the 18 most important global industries” right through the 1990s.118 By the end of the century, of the top dozen global firms by sector, the US accounted for 77 percent of the world’s aerospace sales, 75 percent of all sales of computers and office equipment, 91 percent of computer software sales, and 62 percent of pharmaceuticals.119 Shored up by its high-tech sectors, during 1983–99 US manufacturing output grew faster (4.2 percent annually) than overall GDP (3.7 percent).120 The restructuring led to manufacturing productivity actually growing faster in these years (3.3 percent annually) than it had in the “golden” 1950s and 1960s (when it had averaged 2.4 percent).121 This enormous productivity growth was reflected in an increase in overall manufacturing volume of 90 percent over the same period, while manufacturing employment showed virtually no increase at all (of the 34.4 million private sector jobs created in the US in these years, 99.2 percent were outside manufacturing).122 The trajectory of the computer and peripheral equipment sector captures this well: it achieved an astonishing annual increase in real output of 29 percent throughout the 1990s; but with productivity growing at the even more extraordinary rate of 31 percent, there was no net job growth.123 The fourth structural transformation in the economy involved the growth of a diverse range of “professional and business services” that ranged across consulting, law, accounting, market research, engineering, computer software, and systems analysis.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

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3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, debt deflation, deskilling, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, knowledge worker, labor-force participation, labour mobility, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, Plutocrats, plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Richard Feynman, Rodney Brooks, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce

Within the Parkdale plant, “only infrequently does a person interrupt the automation, mainly because certain tasks are still cheaper if performed by hand—like moving half-finished yarn between machines on forklifts.”6 Completed yarn is conveyed automatically toward packing and shipping machines along pathways attached to the ceiling. Nonetheless, those 140 factory jobs represent at least a partial reversal of a decades-long decline in manufacturing employment. The US textile industry was decimated in the 1990s as production moved to low-wage countries, especially China, India, and Mexico. About 1.2 million jobs—more than three-quarters of domestic employment in the textile sector—vanished between 1990 and 2012. The last few years, however, have seen a dramatic rebound in production. Between 2009 and 2012, US textile and apparel exports rose by 37 percent to a total of nearly $23 billion.7 The turnaround is being driven by automation technology so efficient that it is competitive with even the lowest-wage offshore workers.

The total value of imports from China amounted to less than 3 percent of US consumer spending.50 It is undoubtedly true that, as Figure 2.8 shows, the fraction of American workers employed in manufacturing has fallen dramatically since the early 1950s. This trend began decades before enactment of the North American Free Trade Agreement (NAFTA) in the 1990s and the rise of China in the 2000s. In fact, the decline seems to have halted at the end of the Great Recession as manufacturing employment has actually outperformed the job market as a whole. Figure 2.8. Percentage of US Workers in Manufacturing SOURCE: US Bureau of Labor Statistics and Federal Reserve Bank of St. Louis (FRED).51 A potent force has been very consistently eliminating jobs in the manufacturing sector. That force is advancing technology. Even as the number of manufacturing jobs has been steadily declining as a percentage of total employment, the inflation-adjusted value of the goods manufactured in the United States has dramatically increased over time.

It’s often remarked that China faces the danger of growing old before it grows rich, but what I think is less generally acknowledged is that China is in a race not just with demographics but also with technology. As we saw in Chapter 1, Chinese factories are already moving aggressively to introduce robots and automation. Some factories are reshoring to advanced countries or moving to even lower-wage countries like Vietnam. A look back at Figure 2.8 in Chapter 2 shows clearly that advancing technology resulted in a relentless sixty-year collapse in American manufacturing employment. It’s inevitable that China must ultimately follow essentially the same path, and it’s quite possible that the decline in factory employment may turn out to be even more rapid than in the United States. While automation in American factories progressed only as fast as the new technology could be invented, China’s manufacturing sector can, in many cases, simply import leading-edge technology from abroad.


pages: 238 words: 73,824

Makers by Chris Anderson

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3D printing, Airbnb, Any sufficiently advanced technology is indistinguishable from magic, Apple II, autonomous vehicles, barriers to entry, Buckminster Fuller, Build a better mousetrap, business process, commoditize, Computer Numeric Control, crowdsourcing, dark matter, David Ricardo: comparative advantage, death of newspapers, dematerialisation, Elon Musk, factory automation, Firefox, future of work, global supply chain, global village, industrial robot, interchangeable parts, Internet of things, inventory management, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, Kickstarter, Lean Startup, manufacturing employment, Mark Zuckerberg, means of production, Menlo Park, Network effects, profit maximization, QR code, race to the bottom, Richard Feynman, Richard Feynman, Ronald Coase, Rubik’s Cube, self-driving car, side project, Silicon Valley, Silicon Valley startup, Skype, slashdot, South of Market, San Francisco, spinning jenny, Startup school, stem cell, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, supply-chain management, The Nature of the Firm, The Wealth of Nations by Adam Smith, transaction costs, trickle-down economics, Whole Earth Catalog, X Prize, Y Combinator

Our commercial lives reside mostly in the real world of bricks and mortar, of food and clothes, of cars and houses, and, until some sci-fi future arrives where we’re just disembodied brains in vats, that will continue to be the case. Bits are thrilling, but when it comes to the overall economy, it’s all about atoms. Yet the cost of labor has made it harder and harder to keep manufacturing industries going in the rich countries of the West. Driven by the exodus of factory jobs due largely to Asian cost advantages, manufacturing employment in the United States is at a century-long low, both in absolute numbers and as a percentage of total working population. What’s worse, those factories that are bucking the trend are having trouble finding qualified workers, as a generation has turned away from manufacturing as a career option. The industry that created the middle class in America is now seen to be in terminal decline (as we’ll see later, this isn’t the case, but without a reset, appearances risk becoming reality).

Add to that the increasing cost of transportation across the seas, the political risk of trade wars and tariffs and the hidden costs of delays and disruption in shipping along with the excess inventory needed to buffer that, and you can see why the Eastward migration of manufacturing may have peaked.38 Can Makers make jobs? But one thing we have not been making more of in recent years is manufacturing jobs. Even as output doubled over the past four decades, manufacturing employment fell by about 30 percent over that period. The increased output was a result of improved production efficiency (mostly automation) leading to greater productivity per employee, not more workers. Meanwhile, the biggest creators of jobs in the American economy are small and medium-sized business—exactly what manufacturing moved away from over the previous decades as companies searched for economies of scale to compete with low-cost labor overseas.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

banking crisis, big-box store, blue-collar work, car-free, carbon footprint, collapse of Lehman Brothers, congestion charging, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial innovation, Ford paid five dollars a day, high net worth, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, labour mobility, low skilled workers, manufacturing employment, McMansion, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, Robert Shiller, secular stagnation, Silicon Valley, Silicon Valley startup, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

During the First Reset, as the last chapter has shown, major industries such as railroads, petroleum, and steel were consolidated, new industries and new systems innovations took shape, and the way was paved for a period of remarkable industrial growth. By the turn of the twentieth century, the economic landscape was also transformed.3 Between 1870 and 1900, the populations of urban areas exploded. New York City’s population more than tripled, rising from 942,000 to 3.4 million people. Philadelphia expanded from 550,000 to 1.3 million people, and Chicago swelled from 300,000 to 1.3 million. Manufacturing employment in these three cities grew by 245 percent over the same period.4 The period also saw the rise of a new set of massive industrial cities. Pittsburgh grew from 86,000 people in 1870 to more than 320,000 in 1900; Detroit from 79,000 to 285,000; Cleveland from 92,000 to 382,000. Across the nation, the number of Americans living in urban areas surged by more than 20 million, as the share of the population counted as urban rose from 25 to 40 percent.

., David Gordon’s classic “Capitalist Development and the History of American Cities,” in Marxism and the Metropolis: New Perspectives on Urban Political Economy, William K. Tabb and Larry Sawers, eds. (New York: Oxford University Press, 1984), 21–53. 4. Population data for American cities are from Campbell Gibson, “Population of the 100 Largest Cities and Other Urban Places in the United States: 1790 to 1990,” U.S. Census, June 1998, retrieved from www.census.gov/population/www/documentation/twps0027/twps0027.html. Data on manufacturing employment are from Gordon, “Capitalist Development and the History of American Cities.” 5. Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities (New Haven, Conn.: Yale University Press, 1984). 6. Statistics on immigration and immigrants during the First Reset are from Campbell J. Gibson and Emily Lennon, “Historical Census Statistics on the Foreign-born Population of the United States: 1850–1990,” U.S.


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

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3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, creative destruction, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, full employment, George Akerlof, germ theory of disease, glass ceiling, high net worth, housing crisis, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, mass immigration, mass incarceration, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, pink-collar, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yellow journalism, yield management

In contrast, there was an 80 percent increase during 2011–13 in the compensation of Caterpillar’s CEO, whose quoted mantra is “we can never make enough money … we can never make enough profit.”23 Foreign companies such as Volkswagen continue to open plants in the nonunion right-to-work states. By lowering wages compared to wages in union-dominated northern states, these foreign transplant factories help keep overall U.S. manufacturing employment from declining further. But any progress in arresting the decades-long decline in manufacturing employment appears to be contingent on maintaining worker wages at about half the level that the automobile union had achieved for its workers before the bankruptcy of General Motors and Chrysler. In the 2009–2013 recovery, manufacturing regained only 600,000 of the 6 million jobs that had been lost since 2001, and most of those were contingent on hiring workers at wage rates that were substantially lower than were common in manufacturing as recently as 2001.24 INCREASED INEQUALITY AT THE TOP Table 18–2 focused on the gap between the growth rate of average real income since 1975 as contrasted either with income growth at the median (i.e., fiftieth percentile) of that distribution.

GDP increased from 5.4 percent in 1970 to 16.5 percent in 2014. Labor embodied in imports is a substitute for domestic labor. For this reason, the increase in the import share of GDP has contributed to the decline in the relative wages of unskilled and middle-skilled workers. In one particularly striking analysis, David Autor and co-authors calculated that imports from China between 1990 and 2007 accounted for about a quarter of the decline in manufacturing employment during that period and that they also lowered wages, reduced the labor force participation rate, and raised publicly financed transfer payments.10 The inroads of imports go beyond final goods, because both firms and countries increasingly specialize in different stages of production. For instance, increases of automobile parts more than doubled between 2001 and 2014, from $63 billion to $138 billion, and caused many U.S. parts manufacturers to close their domestic factories and in some cases to “offshore” parts production to foreign countries, particularly Mexico.11 Taken together, increased import penetration and outsourcing represent the combined effects of globalization on the levels of both employment and wages in the domestic economy.

The previous literature has noted the fact that among high school dropouts, wages of domestic and foreign-born workers were almost identical up to 1980, but by 2004, foreign-born workers earned 15–20 percent less.15 Downward pressure on wages in the bottom 90 percent would have occurred even if there had been no erosion of unionization nor a growth of imports or immigration. The steady pace of automation—the replacement of jobs by machines—would have contributed to a decline of the relative incomes of those in the bottom 90 percent. Relatively high-paying manufacturing jobs have eroded, as the share of manufacturing employment in the United States declined from 30 percent in 1953 to less than 10 percent currently. The automation effect overlaps with “skill-biased technical change” that results in the destruction of routine jobs that are close substitutes to software-driven computers, and these job losses have occurred not just in the assembly lines of manufacturing plants, but also in such routine office occupations as typist, bookkeeper, clerk, receptionist, and others.


pages: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith

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Affordable Care Act / Obamacare, Airbus A320, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, full employment, global supply chain, Gordon Gekko, guest worker program, hiring and firing, housing crisis, Howard Zinn, income inequality, index fund, industrial cluster, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Steve Jobs, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

Both GM’s CEO, Dan Akerson, and the United Auto Workers union scrapped their “us vs. them” rhetoric. The union agreed to keep wages steady. GM and Ford pledged to reopen plants in the United States and not to shift production to Mexico as they had planned. By early 2012, the Big Three carmakers planned to invest several billion dollars to retool multiple plants in the United States. More broadly, manufacturing employment edged up in both 2010 and 2011, adding more than three hundred thousand jobs, and U.S. manufacturing exports began to rise. And by 2012, the once irresistible cost advantages of China were looking less attractive to some U.S. employers. With labor unrest and wage inflation in China and stagnant or falling wages in America, a few companies such as General Electric, Otis Elevator, and Master Lock of Milwaukee have begun to bring jobs back from China to the United States—and smart government policies could foster that trend.

Grove’s answer, revealing for an American CEO, is that offshoring U.S. jobs is far too important an issue for our nation to be left to our multinational companies and their CEOs. Grove argues that it will take a new national strategy and a broad commitment in U.S. industry to regenerate America’s muscle in manufacturing. A few glimmers have begun to appear—a handful of plants coming back from China, a modest uptick in manufacturing employment, and business leaders such as Grove speaking out. But much more needs to be done, as you will see in the final section of this book. CHAPTER 16 HOLLOWING OUT HIGH-END JOBS IBM: SHIFTING THE KNOWLEDGE ECONOMY TO INDIA Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gain. —THOMAS JEFFERSON, letter, 1814 What we are trying to do is outline an entire strategy of becoming a Chinese company.

“Without an industrial base, an increase in consumer spending, which pulled the country out of past recessions, will not put Americans back to work,” McCormack argues. “Without an industrial base, the nation’s trade deficit will continue to grow…. Without an industrial base, the United States will be increasingly dependent on foreign manufacturers even for its key military technology.” Immelt, too, insists that technology-based manufacturing must be central to reviving the U.S. economy. His goal is to see manufacturing employment double, from 9 to 20 percent of the nation’s workforce—a target endorsed by the Horizon Project, a task force of former CEOs led by Leo Hindery, Jr., who used to run AT&T Broadband. “You cannot survive as a nation of such size and complexity with such a small manufacturing workforce as we have,” Hindery asserts. “If you have only 9 percent making things, the only way you can grow is to have credit bubbles.”


pages: 537 words: 200,923

City: Urbanism and Its End by Douglas W. Rae

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agricultural Revolution, barriers to entry, business climate, City Beautiful movement, complexity theory, creative destruction, desegregation, edge city, ghettoisation, Gunnar Myrdal, income per capita, informal economy, interchangeable parts, invisible hand, James Watt: steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, manufacturing employment, New Economic Geography, new economy, New Urbanism, Plutocrats, plutocrats, Saturday Night Live, the built environment, The Death and Life of Great American Cities, the market place, urban planning, urban renewal, War on Poverty, white flight, Works Progress Administration

Westville. 87 U R B A N I S M households has an industrial worker as its head, and that such a head—directly or by delegation to another family member—spends 20 percent of the family’s income on food, and suppose, for simplicity, that he or she spends it all at one store. If each customer spends $10 (20 percent of $50) per month, the gross receipt per store is perhaps $650. With a 20 percent gross profit margin, that makes $130 per month per store. This perhaps translates to something like $60 per month in net profits—enough to make the grocery business stand up against most forms of manufacturing employment so long as business remains this good. If the store is family-operated—most were—it is quite possible that this income stream is combined with another job, perhaps a factory job. Of the 628, 97 were run under women’s names, and the number actually operated by women was probably higher. The labor of children and adolescents would be folded into such an operation on a daily basis, appearing nowhere in the formal accounts of the operation.

Established in 1870 at its permanent site just north and west of the Yale campus, this was a worldwide brand name with large markets in military and sporting weaponry. In 1916 it occupied 81 outdoor acres for production and another 23 acres for shipping and storage. Its steam boilers produced 7,650 horsepower, and its steam turbines added 11,175 more. It consumed 75,000 tons of coal, 3.4 billion cubic feet of combustible gas, 10,000 tons of steel, and 13,500 tons of lead, and occupied 3.25 million feet of interior plant floor.52 It was the largest manufacturing employer in New Haven and one of the largest in the world, reaching 12,000 workers by 1916 under the impetus of World War I. New Haven Clock Company, founded in the 1850s, built on the stamped-brass 108 F A B R I C O F E N T E R P R I S E technology of Chauncey Jerome’s clockworks to become a low-cost producer on a world scale. The plant occupied two city blocks along the rail spur that also served Sargent Hardware, Cowles, and National Paper Box.

But the largest plant of all, Winchester Repeating Arms, was desperately searching for customers and was now merely part of a corporate network within which Alton, Illinois, was every bit as important as New Haven. Manufacturing firms were not considering central New Haven as a site for new facilities. A sophisticated 1945 economic analysis commissioned by the New Haven Chamber of Commerce had shown that the 295 E N D O F U R B A N I S M rate of change in New Haven’s manufacturing employment base had slipped markedly below national rates during 1943 and 1944.18 It had even slipped behind many comparable cities, including Buffalo, Trenton, and nearby Bridgeport. The report, written by Roy Wenzleck of St. Louis, made unflattering comparisons between New Haven’s economy and those of boomtowns like San Diego, Fort Worth, and Houston. Population growth in the city had been far below the national average for fifteen years, and scarcely two thousand new citizens had appeared since 1930 (which itself ended a decade of slowing growth).


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

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banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

Of course some decline in manufacturing was always inevitable while the process of de-industrialisation and the expansion of the service sector is in many ways a desirable hallmark of economic maturity. 94 Some industries in which Britain once had a comparative advantage such as steel, textiles and coalmining were in historic decline unable to compete with newly industrialising countries with cheaper labour. It is generally desirable for economies to adapt to changing global patterns by shifting low value production to areas which can produce the same goods more cheaply, replacing them with higher value production. Indeed, all industrial nations have experienced a fall in the role played by manufacturing. Between 1974 and 2001, manufacturing employment fell by a third across the nations which make up the Organisation for Economic Co-operation and Development. What is significant is that the falls in the UK and the US have been much steeper. 95 In Mrs Thatcher’s first term alone, as the number of bankruptcies exploded, manufacturing output fell by a third. It is no coincidence that in both these countries finance became an increasingly dominant force as the process of de-industrialisation accelerated.

William Benedetto, head of corporate finance for Dean Witter Reynolds—one of America’s largest stock brokerage and securities’ firms—called Ronald Reagan’s eight-year Presidency ‘an investment banker’s dream world.’96 But while Wall Street flourished, key industrial sectors from timber and steel to chemicals and high-technology, sweated. Between 1970 and 1990, American employment in manufacturing shrank from 27 to 17 per cent of the workforce. This was mostly the product of finance initiated industrial restructuring, including the shift of production centres abroad by American corporations.97 The fall in manufacturing employment continued after 1990, with the mild recession of 2000-2003 accelerating the long term trend.98 In the UK, globalisation, the abolition of international control over exchange rates and the pursuit of a strong pound all hastened the decline of manufacturing. For the City, the end of exchange controls (the rules that had restricted movements of money between nations since the Second World War), high real interest rates and the appreciating pound from 1979 produced what one commentator described in 1981 as ‘dream conditions for London’s financial apparatus.’ 99 Hot money flowed into London and bankers enjoyed, for the first time since 1939, complete freedom over where to invest these increased inflows.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

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affirmative action, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, George Gilder, Gini coefficient, global reserve currency, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, Mexican peso crisis / tequila crisis, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the built environment, The Chicago School, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, Winter of Discontent

The former would have ‘two to fifty shareholders’ while the latter would have ‘more than fifty shareholders and could offer public issues’. A year later a far more extensive programme of corporatization was announced: all but the most important of the SOEs were to be converted into ‘share-based co-operatives’ in which all employees had the nominal right to purchase shares. Further waves of privatization/conversion of the SOEs occurred in the late 1990s so that, by 2002, SOEs accounted for only 14 per cent of total manufacturing employment relative to the 40 per cent share they had held in 1990. The most recent step has been to open both the TVEs and the SOEs to full foreign ownership.13 Foreign direct investment, for its part, met with very mixed results in the 1980s. It was initially channelled into four special economic zones in southern coastal regions. These zones ‘had the initial objective of producing goods for export to earn foreign exchange.

Korean electronics corporations now have substantial operations in China. In September 2003, for example, Samsung Electronics announced it was moving its entire PC-making business to China, having previously invested $2.5 billion there, ‘creating 10 sales subsidiaries and 26 production companies, employing a total of 42,000 people’.35 Japanese outsourcing of production to China contributed to the decline in Japanese manufacturing employment from 15.7 million in 1992 to 13.1 million in 2001. Japanese companies also began to withdraw from Malaysia, Thailand, and elsewhere in order to relocate in China. They are now so heavily invested in China that ‘more than half of China–Japan trade is conducted among Japanese companies’.36 As happened in the US, corporations can do very well while their home countries suffer. China has displaced more manufacturing jobs from Japan, South Korea, Mexico, and elsewhere than it has from the US.


pages: 281 words: 86,657

The Great Inversion and the Future of the American City by Alan Ehrenhalt

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anti-communist, big-box store, British Empire, crack epidemic, David Brooks, deindustrialization, Edward Glaeser, Frank Gehry, haute cuisine, Honoré de Balzac, housing crisis, illegal immigration, Jane Jacobs, manufacturing employment, mass immigration, McMansion, New Urbanism, Norman Mailer, postindustrial economy, Richard Florida, The Chicago School, The Death and Life of Great American Cities, too big to fail, transit-oriented development, upwardly mobile, urban decay, urban planning, urban renewal, walkable city, white flight, working poor, young professional

When the mayor spoke those words, the city had suffered through nearly a generation of economic and demographic decline and social disorder, to which no clear end was in sight. In fact, however, by 1989 many of Chicago’s problems were already beginning to ease up. The loss of factory jobs was indeed horrendous: four hundred thousand of them between 1969 and 1983 alone, or 32 percent of the city’s total manufacturing employment base. This was roughly comparable to what was happening in other Midwestern industrial cities, except in one respect: Virtually all the other cities—Detroit, Cleveland, St. Louis—were unable to come up with new kinds of jobs to replace them. Chicago did. In Chicago, the downtown Loop and lakefront corridor running north from it gradually became a magnet for service and professional work: banking, brokerage, insurance, architecture, and various forms of temporary office employment.

Even Pittsburgh, which suffered through the collapse of the steel industry, its economic lifeline, has close to an equal number. Philadelphia has a population of 1.4 million and a little more than six hundred thousand jobs. And the greatest effect of that imbalance has been felt in the old row-house neighborhoods that spread north and west from Center City. Philadelphia’s neighborhoods were not merely places to live; they were all-purpose communities wound tightly around manufacturing employment. They were lunch-pail neighborhoods. The breadwinners in those small homes walked to their factory jobs in the morning, carried their sustenance with them, and walked back home again later in the afternoon to open a beer and glance at the evening paper. The factories closed up in a period of just a few decades: In 1950, 45 percent of the city’s jobs were in manufacturing; by 1980, according to Pew’s Philadelphia Research Initiative, that figure was down to 20 percent.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

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Asian financial crisis, capital controls, clean water, correlation does not imply causation, creative destruction, Deng Xiaoping, Edward Glaeser, Gini coefficient, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, informal economy, Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, liberal capitalism, manufacturing employment, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, profit motive, race to the bottom, rising living standards, school vouchers, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, union organizing, zero-sum game

Whereas at the beginning of the 1970s the developing countries accounted for only 7 percent of global exports of manufactured goods, today they provide more than a quarter. The developing countries export more manufactured goods 0 5 10 15 20 25 30 1970 1981 1983 1985 1987 1989 1991 1993 1995 1999 Developing countries' share of world exports of manufactured goods, percentages Years Source: Ajit K. Ghose, Trade Liberalization and Manufacturing Employment. Employment Paper 2000/3 (Geneva: International Labour Office, 2000), and Overseas Development Institute, Developing Countries in the WTO. Briefing Paper 3 (London: Overseas Development Institute, 1995). Mexico is a case in point. Long regarded as dependent on rudimentary exports to the United States, Mexico’s position has changed rapidly, parallel to its conversion to a policy of free trade.

So the leaderless collective, allegedly staggering about and tripping over its own feet, has been more than five times cleverer than the governments and development aid establishments of the affluent countries at channeling capital to the developing countries. Progressively larger share of investments goes to the developing countries 0 5 10 15 20 25 30 35 40 1970 1977 1981 1985 1991 1995 1997 Percentage of total foreign direct investments going to developing countries Years Source: Ajit K. Ghose, Trade Liberalization and Manufacturing Employment. Employment Paper 2000/3 (Geneva: International Labour Office, 2000). 245 The developing countries get increasingly more capital –25 –5 15 35 55 75 95 115 135 155 175 1973–78 1979–82 1983–88 1989–92 1993–96 Annual net inflow of foreign direct investments to developing countries, US billion Years (spans) Source: Barry Eichengreen, Michael Mussa, et al., Capital Account Liberalization: Theoretical and Practical Aspects (Washington: IMF, 1998).


pages: 350 words: 103,988

Reinventing the Bazaar: A Natural History of Markets by John McMillan

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accounting loophole / creative accounting, Albert Einstein, Alvin Roth, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, corporate raider, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, information asymmetry, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, Kenneth Arrow, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, ought to be enough for anybody, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management

“The free enterprise system is too important to this country to be left in the hands of private individuals,” a Mississippi congressman allegedly once remarked. Oxymoron as this may be, it contains an element of truth. For markets to work well enough to discipline firms, some state action is needed. Large firms are much more prevalent in affluent countries than in developing countries. In the United States, plants with fifty or more employees account for over 80 percent of total manufacturing employment. In Thailand they account for 30 percent of manufacturing employment, and in Indonesia and Ghana, 15 percent. In the United States, plants with less than ten employees account for a mere 4 percent of jobs, whereas in Thailand such tiny plants account for 60 percent, and in Indonesia and Ghana, about 80 percent.10 Richer countries have larger firms. Why does small-scale production go together with low national income? Where labor is cheap and capital is scarce, firms use simple equipment for which a small scale of production is economical.


pages: 112 words: 30,160

The Gated City (Kindle Single) by Ryan Avent

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big-box store, carbon footprint, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, Silicon Valley, Thorstein Veblen, transit-oriented development, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

New York City became a logical location for the manufacturing of the raw goods that came into the harbor. Cotton, for instance, came into the port, made its way through New York factories, and exited the port as textiles destined for markets around the world. It was these manufacturing industries, and their near-limitless appetite for labor, that drove most of the city's phenomenal population growth (not least because manufacturing employment opportunities allowed the city to retain much of the immigrant population entering the city). As New York’s industrial economy grew, it supported the development of complementary sectors. Finance and insurance developed in tandem with shipping. Design grew hand-in-hand with textile production. Publishing sprouted alongside printing. In the 20th century, falling shipping costs made it profitable for factories to pack up and move to cheaper areas.


pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

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3D printing, additive manufacturing, Albert Einstein, barriers to entry, borderless world, carbon footprint, centre right, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, distributed generation, en.wikipedia.org, energy security, energy transition, global supply chain, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, Ronald Reagan, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

Unlike many northern, industrial cities that have been declining since the auto age peaked in the 1980s, Bexar County, which encompasses the larger San Antonio metropolitan region, has significantly outpaced the US economy between 1980 and 2008, with a 58 percent faster growth rate.11 This is in part because of the strong financial and insurance sectors, which make up 20 percent of the employment.12 The only declining sector in Bexar County is manufacturing. While US manufacturing employment grew by 25 percent, San Antonio experienced a net loss of 40,000 manufacturing jobs.13 The city was banking on the prospect that the creation of a five-pillar Third Industrial Revolution infrastructure over the next twenty years would put thousands of people back to work—especially in the manufacturing sector and building trades—and provide new vocational opportunities for a fast-growing younger population.

In the period between 1982 and 2002, US steel production grew from 75 million tons to 102 million tons, while the number of steel workers declined from 289,000 to 74,000.7 This kind of dramatic productivity gain is reverberating across the manufacturing sector as intelligent technology replaces mass human labor on the factory floor. Even in the poorest countries, the cheapest workers are not as cheap or as efficient as the intelligent technology replacing them. If the current trend continues—and it’s likely only to accelerate with even more efficient technology displacement—global manufacturing employment is estimated to decrease from 163 million workers to just a few million workers by 2040, eliminating most factory jobs around the world.8 White-collar and service industries are experiencing similar dramatic gains in productivity and shedding record numbers of workers in the process. Secretaries, file clerks, bookkeepers, telephone operators, and bank tellers are among the scores of traditional white-collar jobs that have become virtually extinct with the introduction of intelligent technology.


pages: 477 words: 135,607

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson

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air freight, anti-communist, barriers to entry, Bay Area Rapid Transit, British Empire, call centre, collective bargaining, conceptual framework, David Ricardo: comparative advantage, deindustrialization, deskilling, Edward Glaeser, Erik Brynjolfsson, full employment, global supply chain, intermodal, Isaac Newton, job automation, knowledge economy, Malcom McLean invented shipping containers, manufacturing employment, Network effects, New Economic Geography, new economy, oil shock, Panamax, Port of Oakland, post-Panamax, Productivity paradox, refrigerator car, South China Sea, trade route, Works Progress Administration, Yom Kippur War, zero-sum game

There can be no definitive answer, as containerization was only one of many forces affecting manufacturers during the late 1960s and the first half of the 1970s. This period saw the completion of expressways that opened up suburban acreage to industrial development. New York’s high electricity costs pushed out some factories. The general shift of population to the South and West accelerated, leaving New York factories poorly situated to serve expanding markets. The economic downturn of the early 1970s contributed to a fall in manufacturing employment nationwide, and New York’s outmoded factories, often housed in antiquated buildings with little land on which to expand or rebuild, bore the brunt of this shrinkage. There can be no doubt, however, that containerization eliminated one of the key reasons for operating a factory in New York City: ease of shipment. A New York City location had long offered trans port-cost advantages for factories serving foreign or distant domes tic markets, as local plants could get their goods loaded on ships with much less handling than could factories inland.

The majority of the metal boxes moving around the world hold not televisions and dresses, but industrial products such as synthetic resins, engine parts, wastepaper, screws, and, yes, Barbie’s hair.6 In international production-sharing arrangements of this sort, the manufacturer or retailer at the top of the chain will find the most economical place for each part of the process. This used to be impossible: high transportation costs acted as a trade barrier, very similar in effect to high tariffs on imports, sheltering the jobs of production workers from foreign competition but imposing higher prices on consumers. As the container made international transportation cheaper and more dependable, it lowered that barrier, decimating manufacturing employment in North America, Western Europe, and Japan, by making it much easier for manufacturers to go overseas in search of low-cost inputs. The labor-intensive assembly will be done in a low-wage country—but there are many low-wage countries. The various components and raw materials will come from whichever location can supply them most cheaply—but costs in different locations often are quite similar.


pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

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affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Corn Laws, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, industrial cluster, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

Exchequer Bond”). ICI adopted a version of Alfred Sloan’s multidivisional structure (see chapter 6), employed an army of professional managers, developed close links with the country’s universities, and began to take the battle to Du Pont. By 1935, it had around fifty thousand workers, the same number as Guest Keen & Nettlefold, an emerging metals and engineering giant. Yet, Britain’s biggest manufacturing employer, with sixty thousand workers, was Unilever. Lever Brothers remained firmly under the thumb of William Lever until his death in 1925. Lever’s road to greatness allegedly began in the 1880s, when he heard a customer ask whether the shop had any more of his “stinking soap”: Sunlight soap built the firm, not to mention Port Sunlight. Lever decimated his domestic rivals by doing such ungentlemanly things as advertising his products.


pages: 172 words: 54,066

The End of Loser Liberalism: Making Markets Progressive by Dean Baker

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Asian financial crisis, banking crisis, Bernie Sanders, collateralized debt obligation, collective bargaining, corporate governance, currency manipulation / currency intervention, Doha Development Round, financial innovation, full employment, Home mortgage interest deduction, income inequality, inflation targeting, invisible hand, manufacturing employment, market clearing, market fundamentalism, medical residency, patent troll, pets.com, pirate software, price stability, quantitative easing, regulatory arbitrage, rent-seeking, Robert Shiller, Robert Shiller, Silicon Valley, too big to fail, transaction costs

Polls generally show that the public opposes NAFTA-type trade deals and sees them as a threat to jobs.[73] These campaigns have had some success in slowing the Clinton-Bush-Obama trade agenda. Most of the bilateral trade deals have been delayed for years, and the Doha round of the World Trade Organization has now been delayed for more than a decade. To make trade deals more palatable to the U.S. public, negotiators have sought to include labor rights and other provisions that might reduce the negative impact that the deals would have on manufacturing employment in the United States and improve conditions for workers in our trading partners. However, labor rights and worker protection provisions would have at best a marginal effect on reversing the extent to which trade policy redistributes income upward. As a result of current trade policy, U.S. manufacturers already have access to a vast pool of relatively low-paid workers in China, India, and elsewhere in the developing world.

Profit Over People: Neoliberalism and Global Order by Noam Chomsky

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Bernie Sanders, Bretton Woods, declining real wages, deindustrialization, full employment, invisible hand, joint-stock company, land reform, liberal capitalism, manufacturing employment, means of production, Monroe Doctrine, Ronald Reagan, strikebreaker, structural adjustment programs, Telecommunications Act of 1996, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, Washington Consensus

So it is, along with repression of labor, lax enforcement of environmental restrictions, and the general orientation of social policy to the desires of the privileged minority. Such policies are naturally welcomed by the manufacturing and financial institutions that are extending their control over the global economy, with the assistance of mislabeled “free trade” agreements. NAFTA is expected to drive large numbers of farm workers off the land, contributing to rural misery and surplus labor. Manufacturing employment, which declined under the reforms, is expected to fall more sharply. A study by Mexico’s leading business journal, El Financiero, predicted that Mexico would lose almost a quarter of its manufacturing industry and 14 percent of its jobs in the first two years. “Economists predict that several million Mexicans will probably lose their jobs in the first five years after the accord takes effect,” Tim Golden reported in the New York Times.


pages: 204 words: 67,922

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

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3D printing, assortative mating, call centre, clean water, commoditize, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, mass immigration, McMansion, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, Post-materialism, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War

Robinson, and Melissa A. Milkie, Changing Rhythms of American Family Life (New York: Russell Sage Foundation, 2007). See also, Anne H. Gauthier, Timothy M. Smeeding, and Frank F. Fursten berg, Jr., “Are Parents Investing Less Time in Children? Trends in Selected Industrialized Countries,” Population and Development Review 30, no. 4 (December 2004): 647-71. 2. David Brauer, “What Accounts for the Decline in Manufacturing Employment?” figure 3. U.S. Congressional Budget Office, February 2004. See also, U.S. Department of State’s Bureau of International Information Programs, “A Service Economy,” U.S.A. Economy in Brief at http://usinfo.state.gov/products/pubs/economy-in-brief/pag e3.html. 3. “Income Inequality Measures,” in Luxembourg Income Study, May 27, 2003, at http://www.lisproject.org/keyfigures/ineqtable.htm. 4.


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

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accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, Y2K, zero-sum game

In the 1980s, the Reagan administration talked free trade and yet persuaded Japan to impose "voluntary" export restraints on cars and computer chips. And in 2002, the Bush administration imposed heavy duties on imports of foreign steel. The US. has too much sovereignty for the rest of the world's good. None of this is intended to deny that plant relocations to Mexico and outsourcing contracts in China have put a sharp squeeze on U.S. manufacturing employment and earnings, or that the threat of those things has gready reduced the bargaining power of U.S. workers. But how much has this contributed to downward mobihty and increasing stress? The econo-metricians say that trade explains, at most, about 20-25% of the decHne in the U.S. real hourly wage during the 1970s and 1980s.While not insignificant, that still leaves 75—80% to be explained, and the main culprits there are mainly of domestic origin.


pages: 291 words: 81,703

Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen

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Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, computerized trading, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, income inequality, industrial robot, informal economy, Isaac Newton, John Markoff, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Myron Scholes, Narrative Science, Netflix Prize, Nicholas Carr, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra

That doesn’t prove a causal connection, but it would be surprising if those were two completely unrelated numbers. More systematically, a recent study by David H. Autor, David Dorn, and Gordon H. Hanson supports the notion that outsourcing has had a negative impact on US wages. From 1991 to 2007, US imports from China rose from $26 billion to about $330 billion. They find that greater exposure of a region to Chinese imports predicts weak performance in manufacturing employment, weak wage performance, and, in those same regions, a growing demand for transfer payments (“handouts”) from the government. Another recent study, by Runjuan Liu and Daniel Trefler, finds further evidence of job market problems from outsourcing. They found that “downward occupational switching,” meaning people took lower-paid jobs in less lucrative sectors, went up by 17 percent among affected groups, transitions to unemployment increased by 0.9 percentage points, and the earnings of affected “occupational stayers” fell by 2.3 percent.


pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

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active measures, affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, labour market flexibility, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor, zero-sum game

As Americans start to read the market signals and retrain to enter new exciting areas of the economy, they will regain a competitive advantage over Chinese or Indian workers. We heard this view from Thomas Friedman in our earlier discussion, given a belief that there are no limits to the number of idea-generating jobs that could be created to compensate for those lost to Asia, even if there are limits to the expansion of manufacturing employment. But where are these new jobs? They depend on an article of faith rather than hard evidence. It was difficult to find much support for a significant, let alone exponential, increase in demand for high-skill workers in new innovative fields even when the American economy was booming. Although the Bureau of Labor Statistics’ estimate that most of the jobs with the fastest growth rate will require a bachelor’s degree, most people will continue to work in occupations that require low levels of education and training.


pages: 219 words: 61,720

American Made: Why Making Things Will Return Us to Greatness by Dan Dimicco

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, Affordable Care Act / Obamacare, American energy revolution, American Society of Civil Engineers: Report Card, Bakken shale, barriers to entry, Bernie Madoff, carbon footprint, clean water, crony capitalism, currency manipulation / currency intervention, David Ricardo: comparative advantage, decarbonisation, fear of failure, full employment, Google Glasses, hydraulic fracturing, invisible hand, job automation, knowledge economy, laissez-faire capitalism, Loma Prieta earthquake, manufacturing employment, oil shale / tar sands, Ponzi scheme, profit motive, Report Card for America’s Infrastructure, Ronald Reagan, Silicon Valley, smart grid, smart meter, sovereign wealth fund, The Wealth of Nations by Adam Smith, too big to fail, uranium enrichment, Washington Consensus, Works Progress Administration

None of those jobs require a college degree, but the bigger problem is that very few of them pay well. We really shouldn’t be aching for more service-sector work. In practice, it means a North Carolina textile worker who a few years ago made $15 an hour sewing blankets at a mill is now making $10 an hour as a cook at a county jail. We see stories like that all the time. I mention textiles in particular because as recently as a decade ago it was one of the largest manufacturing employers in the state. But North Carolina apparel makers have been destroyed by cheap foreign imports. The United States has lost nearly a million textile jobs since 1999. Why do we put up with this? Construction and manufacturing are the sectors where the economy is bleeding jobs and where we have the greatest need. Problem Solving 101 says if we want to turn this crisis around, we need to figure out what is preventing those sectors from growing and then address those factors.


pages: 309 words: 91,581

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

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assortative mating, autonomous vehicles, blue-collar work, Bonfire of the Vanities, Branko Milanovic, call centre, collective bargaining, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, Erik Brynjolfsson, feminist movement, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, Gunnar Myrdal, income inequality, industrial robot, invisible hand, job automation, Joseph Schumpeter, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, Powell Memorandum, purchasing power parity, refrigerator car, rent control, Richard Feynman, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Paradoxically, though, economists experienced initial difficulty applying Stolper-Samuelson to the Great Divergence. Adrian Wood, a British economist, argued a decade and a half after the Great Divergence began that trade with low-wage countries was lowering wages for unskilled workers in developed countries. “There is a clear inverse association,” Wood wrote in a 1995 paper. “Countries with larger increases in import penetration experienced larger falls in manufacturing employment.” But in the United States, Wood had to concede, imports of manufactured goods from low-wage countries still totaled less than 3 percent of gross domestic product. By itself, that wasn’t enough to displace many workers. Wood answered by arguing that the effects were subtle and indirect. For example, he wrote that imports from low-wage countries required more labor than other goods, and therefore displaced more U.S. workers than did imports from high-wage countries.6 Most leading economists in the United States didn’t buy it.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

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Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

These outsourced services are still the same activities. But they are now counted as part of service output, rather than of manufacturing output. In addition, seeing the share of manufacturing in their output falling, some manufacturing firms have applied to be reclassified as service firms, even though they still conduct some manufacturing. A UK government report estimates that up to 10 per cent of the fall in manufacturing employment between 1998 and 2006 in the UK may be due to this ‘reclassification effect’.7 Making things still matters The view that the world has now entered a new era of the ‘knowledge economy’, in which making things does not confer much value, is based upon a fundamental misreading of history. We have always lived in a knowledge economy. It has always been the quality of knowledge involved, rather than the physical nature of the things produced (that is, whether they are physical goods or intangible services), that has made the more industrialized countries richer.


pages: 385 words: 101,761

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire by Bruce Nussbaum

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3D printing, Airbnb, Albert Einstein, Berlin Wall, Black Swan, Chuck Templeton: OpenTable, clean water, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Danny Hillis, declining real wages, demographic dividend, Elon Musk, en.wikipedia.org, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, follow your passion, game design, housing crisis, Hyman Minsky, industrial robot, invisible hand, James Dyson, Jane Jacobs, Jeff Bezos, jimmy wales, John Gruber, John Markoff, Joseph Schumpeter, Kickstarter, lone genius, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, new economy, Paul Graham, Peter Thiel, QR code, race to the bottom, reshoring, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, Tesla Model S, The Chicago School, The Design of Experiments, the High Line, The Myth of the Rational Market, thinkpad, Tim Cook: Apple, too big to fail, tulip mania, We are the 99%, Y Combinator, young professional, Zipcar

There’s been little innovation in transportation and we haven’t seen any new breakthroughs in energy, with alternatives to hydrocarbons making up just a fraction of all energy production. We have all been feeling the ripple effects of the innovation shortfall. In 1999, the Bureau of Labor Statistics forecast that 2.8 million new jobs would be created over the next decade in “leading edge” industries such as IT, aerospace, telecom, pharmaceuticals, and semiconductor and electronic component manufacturing. Employment in this space would grow at 3.4 percent, twice as fast as the rest of the private economy. It never happened. In fact, leading edge industries lost 68,000 jobs over that decade. Even those of us who have jobs have not seen significant enough wage increases. As a consequence of the failure of innovation, Thiel points to the fact that real median wages have, at best, risen by 10 percent since 1973 according to government data.


pages: 320 words: 96,006

The End of Men: And the Rise of Women by Hanna Rosin

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affirmative action, call centre, cognitive dissonance, David Brooks, delayed gratification, edge city, facts on the ground, financial independence, hiring and firing, housing crisis, income inequality, informal economy, job satisfaction, low skilled workers, manufacturing employment, meta analysis, meta-analysis, new economy, New Urbanism, Norman Mailer, Northern Rock, postindustrial economy, purchasing power parity, Results Only Work Environment, Silicon Valley, Steven Pinker, union organizing, upwardly mobile, white picket fence, women in the workforce, young professional

., “Effect of Marriage on Duration of Chest Pain Associated with Acute Myocardial Infarction before Seeking Care,” Canadian Medical Association Journal 183, no. 13 (2011): 1482–1491. Statisticians Bernard Cohen and I-Sing Lee: Bernard Cohen and I-Sing Lee, “A Catalog of Risks,” Health Physics 36, no. 6 (1979): 707–722. THE NEW AMERICAN MATRIARCHY THE MIDDLE CLASS GETS A SEX CHANGE Since 2000, the manufacturing economy: Total manufacturing employment in the United States was 17.3 million in January 2000, and hit a low of fewer than 11.5 million in January 2010, according to the Bureau of Labor Statistics. In 2011, the number of manufacturing jobs grew by 1.2 percent, the industry’s first increase since 1997. The housing bubble masked this new reality: Lawrence Katz, “Long-Term Unemployment in the Great Recession,” Testimony for the Joint Economic Committee, US Congress, April 29, 2010. http://www.employmentpolicy.org/topic/10/research/long-term-unemployment-great-recession-0.


pages: 355 words: 63

The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

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Andrei Shleifer, business climate, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, creative destruction, endogenous growth, financial repression, Gini coefficient, Gunnar Myrdal, Hernando de Soto, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, large denomination, manufacturing employment, Network effects, New Urbanism, open economy, Productivity paradox, purchasing power parity, rent-seeking, Ronald Reagan, selection bias, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

The authors say ”jobless growth”happenswhenever the rate of employment growth is not as high as the rate of output growth, which leads to ”very low incomes” for millions of workers. The 1993 Human Development Report expressed the same concern about this ”problem” of jobless growth, which wasespecially severe in developing countries between 1960 and 1973: ”GDP growth rates were fairly high, but employment growth rates were less than half this.”ll Similarly, a study of Vietnam in 2000 lamented the slow growth of manufacturing employment relative to manufacturing output.12 The authors of all these reports forgot that having GDP rise faster than employment is called growth of income per worker, which happens to be the only way that workers’ “very low incomes” can increase.13 Transitions Increases in machinery per worker could not be asource of long-run growth, but they could be a source of growth in the transition to the long-run path.


pages: 376 words: 109,092

Paper Promises by Philip Coggan

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accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, balance sheet recession, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, Bretton Woods, British Empire, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, John Meriwether, joint-stock company, Kenneth Rogoff, labour market flexibility, light touch regulation, Long Term Capital Management, manufacturing employment, market bubble, market clearing, Martin Wolf, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Myron Scholes, negative equity, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, Plutocrats, plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce, zero-sum game

For a decade, there has been much debate about who was responsible for this imbalance. Was it profligate Americans, spending more than they earn? Or was it sinister Chinese, manipulating their currency? Chinese labour costs were so low that, once the country joined the global trading system, it quickly grabbed market share in low-cost manufactured goods. Americans routinely complain that everything they buy seems to be made in China. Manufacturing employment in China surged. The result was one of the biggest migrations in history as rural workers moved to the big cities. Much of the rest of the world may have abandoned the Bretton Woods approach but China did not. The Chinese Communist party had no intention of letting their interest or exchange rates be controlled by the markets; they opted for capital controls and a managed currency, pegged to the dollar.

The Power Surge: Energy, Opportunity, and the Battle for America's Future by Michael Levi

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American energy revolution, Berlin Wall, British Empire, Carmen Reinhart, crony capitalism, deglobalization, energy security, Exxon Valdez, fixed income, full employment, global supply chain, hiring and firing, hydraulic fracturing, Induced demand, Intergovernmental Panel on Climate Change (IPCC), Kenneth Rogoff, manufacturing employment, oil shale / tar sands, oil shock, peak oil, RAND corporation, Ronald Reagan, Silicon Valley, South China Sea

Moreover, as the cost of clean energy falls, including as a result of government support, the possibility grows that the benefits of shifting toward it will outweigh the associated costs. Making the case that clean energy delivers benefits in excess of its costs, though, requires a careful look at the benefits that clean energy can deliver. Exhibit A, for many enthusiasts, has been jobs. m m m Manufacturing employment has been in a free fall for decades. Brackenridge, Pennsylvania, just outside of Pittsburgh, is no exception. During the first ten years of the twenty-first century, nearly a third of all manufacturing jobs in the area vanished, tracking the trend in the country at large.52 When FLABEG, a large German maker of automotive mirrors (look for their stamp on your rearview mirror the next time you drive), announced in November 2011 that it would be closing its Brackenridge plant, the news wasn’t surprising.53 Ten miles down the road in Clinton, though, the same company is writing a different story.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

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3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, BRICs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, Jacquard loom, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Future of Employment, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, very high income, working-age population

It seems to have also, as a side effect, accelerated deindustrialization. Readers in rich economies will be well aware of the phenomenon – the loss of manufacturing work to other locations – that hollowed out once-great cities like Detroit. Britain, the first industrializer, was the first to face this particular ill, quite early in the twentieth century. Over time, the bug affected more industries in more corners of the rich world: in America, for instance, manufacturing employment peaked as a share of total employment in the early 1940s and declined at a remarkably steady rate thereafter; but there have been particularly nasty spells of employment loss along the way – in the early 1980s, for instance (when Reagan and Thatcher earned the ire of many blue-collar workers) and then in the 2000s. Remarkably, manufacturing now accounts for less than 10 per cent of American employment.


pages: 353 words: 91,211

The Shock of the Old: Technology and Global History Since 1900 by David Edgerton

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agricultural Revolution, anti-communist, British Empire, Computer Numeric Control, conceptual framework, creative destruction, deglobalization, dematerialisation, desegregation, deskilling, endogenous growth, global village, Haber-Bosch Process, interchangeable parts, knowledge economy, Mahatma Gandhi, manufacturing employment, means of production, megacity, microcredit, new economy, post-industrial society, Productivity paradox, Ronald Reagan, Silicon Valley, spinning jenny, Upton Sinclair, urban planning, V2 rocket

Massive economies of scale are exploited as never before on a global level to produce cheap mass-produced goods of great complexity. Think of cheap PCs, mobile phones and IKEA furniture. Mass production is now so common it is invisible. At the beginning of the twenty-first century Wal-Mart is the largest corporation in the world, by annual sales ($300bn in 2005/6) and by employee numbers. With nearly 2 million workers it is vastly larger not only than the biggest firms of 1900, but also than the very largest manufacturing employers of the 1960s. But it is a retailer, not a manufacturer. Indeed it indirectly employs many more millions, largely in China, mass producing all sorts of stuff for the American consumer. IKEA, again principally a retailer and designer, controls the mass manufacture of furniture, indirectly employing an estimated 1 million workers. Indeed IKEA provides a wonderful example of the arguments of this book.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, intangible asset, invisible hand, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, obamacare, offshore financial centre, oil shock, Plutocrats, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Ronald Reagan, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

New York Times, April 29. Philippon, Thomas, and Ariell Reshef. 2012. “Wages and Human Capital in the U.S. Finance Industry: 1909–2006.” Quarterly Journal of Economics 127 (November): 1551–1609. Phillips-Fein, Kim. 2009. Invisible Hands: The Businessmen’s Crusade Against the New Deal. New York: Norton. Pierce, Justin R., and Peter K. Schott. 2016. “The Surprisingly Swift Decline of US Manufacturing Employment.” American Economic Review 106 (7) (July): 1632–1662. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press. Pinto, Nick. 2015. “The Bail Trap.” New York Times, August 13. Piore, Michael J., and Sean Stafford. 2006. “Changing Regimes of Workplace Governance, Shifting Axes of Social Mobilization and the Challenge to Industrial Relations Theory.”


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Bretton Woods, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, Plutocrats, plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, Thomas Malthus, Thorstein Veblen, too big to fail, Uber and Lyft, Uber for X, Y Combinator, zero-sum game, Zipcar

China plans to raise the retirement age in stages from 2017, which will add millions to the world’s labour force. Meanwhile, in India, hundreds of millions of people will move from its backward rural economy and informal urban economy into the global wage-labour market. There is little prospect of a global labour shortage pushing up wages in rich countries for many years to come. China’s industrialisation surge has accompanied a sharp decline in manufacturing employment in industrialised countries, particularly since the financial crash. Between 2008 and 2015, the USA lost over 6 million manufacturing jobs. But now over half of China’s output is attributable to services, including financial services. It and Southeast Asian countries such as Malaysia and Singapore have become rentier economies, with the means to invest in rich countries and buy up companies and other assets.


Gaming the Vote: Why Elections Aren't Fair (And What We Can Do About It) by William Poundstone

affirmative action, Albert Einstein, Debian, desegregation, Donald Trump, en.wikipedia.org, Everything should be made as simple as possible, global village, guest worker program, hiring and firing, illegal immigration, invisible hand, jimmy wales, John Nash: game theory, John von Neumann, Kenneth Arrow, manufacturing employment, Nash equilibrium, Paul Samuelson, Pierre-Simon Laplace, prisoner's dilemma, Ralph Nader, RAND corporation, Ronald Reagan, Silicon Valley, slashdot, the map is not the territory, Thomas Bayes, transcontinental railway, Unsafe at Any Speed, Y2K

I say, '[O]kay, that's fine, do what you want to do.' Then he calls me at night and says, 'Let me read this to you.' I say, 'Buddy, I don't give a shit.' He says, 'No, I want to get it right.' So he reads the whole fucking thing. And then he says he may want to change a few phrases.") As David Duke became a national celebrity, the questions got tougher. On Meet the Press, Tim Russert asked, "Me. Duke, can you name the top three manufacturing employers in Louisiana?" Duke couldn't. After an uncomfortable silence, he said, "We have a number of employers in our state. I couldn't give you the names right off." The next question was how many people in Louisiana lived below the poverty line. Duke didn't know that, either. "I don't carry around an almanac with me." In a televised debate for Louisiana Public Television, Edwards held up a map that had appeared in the newsletter of Duke's National Association for the Advancement of White People.


pages: 323 words: 95,492

The Rise of the Outsiders: How Mainstream Politics Lost Its Way by Steve Richards

Affordable Care Act / Obamacare, Airbnb, banking crisis, battle of ideas, Bernie Sanders, call centre, centre right, collapse of Lehman Brothers, David Brooks, Donald Trump, Etonian, eurozone crisis, falling living standards, full employment, housing crisis, low skilled workers, manufacturing employment, Martin Wolf, mass immigration, Neil Kinnock, obamacare, Occupy movement, Ronald Reagan, Silicon Valley

In Spain, youth unemployment peaked at more than 50 per cent. In Greece, unemployment was the highest in the European Union and rose at some low points to more than 30 per cent of the adult population. In much of the democratic world there has been an accelerating increase in service-sector employment, both in low-skilled customer-service work and in high-skilled knowledge occupations, and a corresponding drop in manufacturing employment. This has contributed to a polarization of the workforce in many countries, with more high-skilled and low-skilled jobs, but fewer requiring mid-level skills. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time permanent contracts has shrunk. Labour markets have been fundamentally transformed as digital technology has destroyed a wide range of routine jobs, while creating new employment opportunities for highly skilled workers.


pages: 481 words: 121,300

Why geography matters: three challenges facing America : climate change, the rise of China, and global terrorism by Harm J. De Blij

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agricultural Revolution, airport security, Anton Chekhov, Ayatollah Khomeini, Berlin Wall, British Empire, colonial exploitation, complexity theory, computer age, crony capitalism, demographic transition, Deng Xiaoping, Eratosthenes, European colonialism, F. W. de Klerk, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global village, illegal immigration, Internet Archive, John Snow's cholera map, Khyber Pass, manufacturing employment, megacity, Mercator projection, out of africa, RAND corporation, risk tolerance, Ronald Reagan, South China Sea, special economic zone, Thomas Malthus, trade route, transatlantic slave trade, UNCLOS, UNCLOS

I have colleagues whose work focuses on Amazonian deforestation. West African desertification, Asian economic integration, Indonesian transmigration. Others take a more specific look at such American phenomena as professional football and the sources and team destinations of players, the changing patterns of church membership and evangelism, the rise of the wine industry in this period of global warming, and the impact of NAFTA on manufacturing employment in the Midwest. I'm always fascinated to read in our professional journals what they're discovering, and as I used to tell my students, the Age of Discovery may be over, but the era of geographic discovery never will be. THE SPATIAL SPECIALIZERS The stirring story of geography's early emergence, its Greek and Roman expansion, its European diversification, and its global dissemination is a saga of pioneering observation, heroic exploration, inventive mapmaking, and ever-improving interpretation, discussed in fascinating detail by the discipline's leading historian (Martin, 2005).


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

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activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

In the debate about the causes of growing income inequality, American economists have tended to opt for technology as the driving force. But, drawing on detailed data from local labor markets in the United States, the authors of “The China Syndrome” argue that globalization, and in particular trade with the mighty Middle Kingdom, are today also having a huge impact on American blue-collar workers: “Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment.” The deleterious effects go beyond those workers who lose their jobs. In communities hit by the China Syndrome, wages fall—particularly, it turns out, outside the manufacturing sector—and some people stop looking for work. The result is “a steep drop in the average earnings of households.” Uncle Sam gets hit, too, especially in the form of increased disability payments. Messrs. Autor, Dorn, and Hanson are no protectionists.


pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

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1960s counterculture, affirmative action, airline deregulation, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, Gunnar Myrdal, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, liberal capitalism, Long Term Capital Management, manufacturing employment, market bubble, Martin Wolf, new economy, oil shale / tar sands, oil shock, open economy, Paul Samuelson, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Ronald Reagan, Simon Kuznets, strikebreaker, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

The War on Poverty targeted youth and offered training to those whose culture or skills made them unemployable despite the buoyant economy. Especially after the urban riots, money went disproportionately to blacks in cities that had experienced riots. The original intellectual framework persisted. The programs targeted young people, not adults, and offered cultural training, not jobs. The formulation ignored the structural changes that reduced manufacturing employment in the cities. The Labor Department’s Moynihan report of 1965 concluded that jobs were needed, but this point was overwhelmed by the controversy over the report’s unproven contention that the black family structure was pathological. Whatever the theory, the Democratic Party sponsored programs that increased resources—food, health, education—for African Americans. The War on Poverty and the Model Cities program, mostly centered in black areas, encouraged black businesses and fostered black employment.


pages: 459 words: 123,220

Our Kids: The American Dream in Crisis by Robert D. Putnam

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assortative mating, correlation does not imply causation, deindustrialization, demographic transition, desegregation, ending welfare as we know it, epigenetics, full employment, George Akerlof, helicopter parent, impulse control, income inequality, index card, jobless men, low skilled workers, manufacturing employment, mass incarceration, meta analysis, meta-analysis, mortgage tax deduction, new economy, Occupy movement, Ralph Waldo Emerson, randomized controlled trial, school choice, selection bias, Socratic dialogue, The Bell Curve by Richard Herrnstein and Charles Murray, the built environment, upwardly mobile, Walter Mischel, white flight, working poor

The big Standard Products factory at the east end of town had provided nearly 1,000 steady, well-paying blue-collar jobs in the 1950s, but in the 1970s the payroll was trimmed to less than half that, and after more than two decades of layoffs and givebacks, the plant gates on Maple Street finally closed in 1993. Twenty years later, only the hulking ruins of the plant remain, with EPA signs on the barbed wire fence warning of environmental hazard. But the closing of the Standard Products factory, the Army base, and the gypsum mines were merely the most visible symbols of the town’s pervasive economic collapse. Manufacturing employment in Ottawa County, of which Port Clinton is by far the largest town, plummeted from 55 percent of all jobs in 1965 to 25 percent in 1995 and kept falling.14 Unemployment rose and fell with the national economic tides, but the local booms were never as good as the national booms, and the local hard times were much worse. As late as the 1970s, real wages locally were slightly above the national average, but during the next four decades they fell further and further behind, bottoming out at 25 percent below the national average.


pages: 434 words: 150,773

When the Iron Lady Ruled Britain by Robert Chesshyre

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Berlin Wall, Big bang: deregulation of the City of London, British Empire, corporate raider, deskilling, Etonian, Fall of the Berlin Wall, financial deregulation, full employment, housing crisis, manufacturing employment, mass immigration, means of production, Neil Kinnock, North Sea oil, oil rush, Plutocrats, plutocrats, Right to Buy, Ronald Reagan, school choice, Silicon Valley, the market place, trickle-down economics, union organizing, wealth creators, young professional

The four leaders I met were anxious to convince me that Skem’s reputation for bolshy workers was a slander on the town. They handed me a report – ‘Skem: The Broken Promise’ – to which David Sheppard, the Bishop of Liverpool, had written a sombre introduction: Once claiming to offer its people a new and better way of life, [Skelmersdale] now embodies the human results of the collapse of manufacturing employment, the regional and local concentration of economic decline, and the wholesale redundancy of manual and unskilled workers … Skelmersdale is special in being in the travel-to-work area with the highest unemployment rate in the north-west and in having its own story of promises broken and hopes dashed. The report refuted a national press claim in the seventies that ‘the town’s troubles were the result of militant trade unionism … and the mud of that campaign has apparently stuck’.


pages: 565 words: 151,129

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism by Jeremy Rifkin

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3D printing, active measures, additive manufacturing, Airbnb, autonomous vehicles, back-to-the-land, big-box store, bioinformatics, bitcoin, business process, Chris Urmson, clean water, cleantech, cloud computing, collaborative consumption, collaborative economy, Community Supported Agriculture, Computer Numeric Control, computer vision, crowdsourcing, demographic transition, distributed generation, en.wikipedia.org, Frederick Winslow Taylor, global supply chain, global village, Hacker Ethic, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Julian Assange, Kickstarter, knowledge worker, labour mobility, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, market design, mass immigration, means of production, meta analysis, meta-analysis, natural language processing, new economy, New Urbanism, nuclear winter, Occupy movement, off grid, oil shale / tar sands, pattern recognition, peer-to-peer, peer-to-peer lending, personalized medicine, phenotype, planetary scale, price discrimination, profit motive, QR code, RAND corporation, randomized controlled trial, Ray Kurzweil, RFID, Richard Stallman, risk/return, Ronald Coase, search inside the book, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, smart grid, smart meter, social web, software as a service, spectrum auction, Steve Jobs, Stewart Brand, the built environment, The Nature of the Firm, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transaction costs, urban planning, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog, Whole Earth Review, WikiLeaks, working poor, zero-sum game, Zipcar

“Global Employment Trends 2013,” International Labor Organization, 2013, 10, http://www .ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_20 2326.pdf (accessed July 7, 2013). 5. “Difference Engine: Luddite Legacy,” Economist, November 4, 2011, http://www.economist .com/blogs/babbage/2011/11/artificial-intelligence (accessed July 9, 2013). 6. Ibid. 7. Michaela D. Platzer and Glennon J. Harrison, “The U.S. Automotive Industry: National and State Trends in Manufacturing Employment,” Cornell University ILR School, August 2009, 8, http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1671&context=key_work place (accessed July 7, 2013). 8. James Sherk,”Technology Explains Drop in Manufacturing Jobs,” Heritage Foundation, October 12, 2010, http://www.heritage.org/research/reports/2010/10/technology-explains-drop-in -manufacturing-jobs (accessed August 10, 2013). 9.

Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs, Arthur A. Ekirch, Jr.

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Alistair Cooke, clean water, collective bargaining, creative destruction, credit crunch, declining real wages, endowment effect, fiat currency, fixed income, full employment, hiring and firing, income per capita, Joseph Schumpeter, laissez-faire capitalism, manufacturing employment, means of production, minimum wage unemployment, Plutocrats, plutocrats, post-industrial society, price discrimination, profit motive, rent control, rent-seeking, Richard Thaler, road to serfdom, Ronald Reagan, Simon Kuznets, strikebreaker, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, transcontinental railway, union organizing, Upton Sinclair, War on Poverty, Works Progress Administration

In 1870 just 26 percent of Americans lived in incorporated places with populations of more than 2,500; by 1890, 80 History 35 percent did. During the interval the number of cities with populations exceeding 100,000 increased from fourteen to twenty-eight. The labor force shifted among sectors. While agricultural employment grew slowly, employment in construction, trade, and transportation surged ahead. Manufacturing employment held at 19 percent of the labor force, but rapid productivity gains raised manufacturing output from 33 percent of all commodity output in 1869 to 53 percent in 1894. 6 The urban-industrial transformation of the socioeconomic structure left few people unaffected. Under these dynamic conditions, to adopt new ways of life and new kinds of production was the road to wealth-or, for the less fortunate, at least an avenue of survival.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

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1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

To the contrary, in 2015 IBM began to license server and software technology to the Beijing-based Teamsun, a company bent on using IBM’s innovations to build indigenous equivalents. Soon Western companies will seek to be part of Chinese supply chains rather than the reverse. China has enough land, labor, capital, technology, and knowledge to make almost anything and everything. Despite rising wages and growing competition, its manufacturing employment and output continue to grow, while the import share of the components going into its exports is rapidly declining. In other words, it is becoming a more self-reliant manufacturer of higher-value goods. The only way to retain competitive advantage is to make complex products nobody else can (yet). Germany, Switzerland, Finland, Japan, and Singapore rank atop the economic complexity index.


pages: 399 words: 116,828

When Work Disappears: The World of the New Urban Poor by William Julius Wilson

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affirmative action, citizen journalism, collective bargaining, conceptual framework, declining real wages, deindustrialization, deliberate practice, desegregation, Donald Trump, edge city, ending welfare as we know it, fixed income, full employment, George Gilder, ghettoisation, glass ceiling, Gunnar Myrdal, income inequality, informal economy, jobless men, labor-force participation, labour market flexibility, low skilled workers, low-wage service sector, manufacturing employment, mass immigration, new economy, New Urbanism, pink-collar, race to the bottom, RAND corporation, school choice, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, upwardly mobile, urban decay, urban renewal, War on Poverty, working poor, working-age population, Works Progress Administration

Fifty-seven percent of Chicago’s employed inner-city black fathers (aged 15 and over and without undergraduate degrees) who were born between 1950 and 1955 worked in manufacturing and construction industries in 1974. By 1987, industrial employment in this group had fallen to 31 percent. Of those born between 1956 and 1960, 52 percent worked in these industries as late as 1978. But again, by 1987 industrial employment in this group fell to 28 percent. No other male ethnic group in the inner city experienced such an overall precipitous drop in manufacturing employment (see Appendix C). These employment changes have accompanied the loss of traditional manufacturing and other blue-collar jobs in Chicago. As a result, young black males have turned increasingly to the low-wage service sector and unskilled laboring jobs for employment, or have gone jobless. The strongly held U.S. cultural and economic belief that the son will do at least as well as the father in the labor market does not apply to many young inner-city males.

Making Globalization Work by Joseph E. Stiglitz

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affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Gini coefficient, global reserve currency, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Kenneth Arrow, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus, zero-sum game

Growth NOTES TO PAGE 65 3o1 in per capita real income fluctuated between 3.5 percent of the 1960s, 3.2 percent of the 1970s, and 2.7 percent of the 1950s. 6. From Instituto Nacional Estachstica Geografia e Informatica, cited in William C. Gruben, "Was Nafta Behind Mexico's High Maquiladora Growth?," Economic and Financial Review (Third Quarter, 2001), pp. 11-21. 7. Overall, employment in the domestic manufacturing sector declined in the decade after NAFTA. Export manufacturing employment increased slightly, but these gains were largely overset by losses of jobs in agriculture, and it was not clear how permanent the jobs created would be: by the end of the first decade, 30 percent of the jobs created in the maquiladora in the early 1990s had disappeared. See Sandra Polaski, "Mexican Employment, Productivity, and Income a Decade after NAFTA," Carnegie Endowment for International Piece, brief submitted to the Canadia..1 Standing Senate Committee on Foreign Affairs, February 25, 2004. 8.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

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bank run, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bretton Woods, capital controls, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, labour mobility, light touch regulation, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

And similarly for many other so-called structural reforms.14 REFORMS THAT WOULD HAVE MATTERED In each of the crisis countries, there are reforms that might have led to a stronger economy, both in the short run and the long. INDUSTRIAL POLICIES Most advanced countries are in need of a structural transformation of their economy, from the sectors (mostly manufacturing) that were dominant in the past to those that will define the 21st century. Because the pace of productivity increase in manufacturing is greater than that of demand, global manufacturing employment will be decreasing, and because of globalization, the share of this global employment that will be captured by the advanced countries, including those in Europe, will be diminishing. A few countries, like Germany, may be able to maintain a niche, at least for a while, especially if they can manage to have an undervalued currency. Germany has benefited from being wedded to the “weaker” countries of the eurozone, for the net effect is that the euro, the currency today, is weaker than say the German mark would have been.


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

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3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, knowledge economy, labor-force participation, labour mobility, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game

The batteries come from a GE plant in Schenectady, New York—a Rust Belt city that was once seen as a relic of an earlier industrial age but that now houses a new GE factory on the site of a former turbine plan, which churns out the batteries twenty-four hours a day. Schenectady, the home of GE’s first research facility in 1900, is once again a growing R&D hub for the company. This has huge implications for the local economy of Schenectady as well as for other such communities around the country. The official figure for US manufacturing employment, 9 percent, belies the true importance of the sector. Manufacturing represents a whopping 69 percent of private-sector R&D spending as well as 30 percent of the country’s productivity growth.49 And, according to US government figures, every $1 of manufacturing activity returns $1.37 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and coauthor of Producing Prosperity: Why America Needs a Manufacturing Renaissance.


pages: 525 words: 153,356

The People: The Rise and Fall of the Working Class, 1910-2010 by Selina Todd

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call centre, collective bargaining, conceptual framework, credit crunch, deindustrialization, deskilling, Downton Abbey, financial independence, full employment, income inequality, manufacturing employment, Neil Kinnock, New Urbanism, Red Clydeside, rent control, Right to Buy, rising living standards, sexual politics, strikebreaker, The Spirit Level, unemployed young men, union organizing, upwardly mobile, urban renewal, Winter of Discontent, women in the workforce, young professional

‘There was nothing then … my mother was desperately poor, and in those days, it was usual to do as you were told.’30 Although the number of domestic servants actually increased between 1921 and 1931, men and women in the towns and cities were increasingly able to find factory work. After a slow post-war start, manufacturing began to expand. Older industries like steel had relied on smaller numbers of skilled workers, but the new manufacturing employers chose to concentrate on consumer goods – tinned foods, fashionable clothes and electrical appliances – produced cheaply and uniformly by using as much mechanization as possible. They didn’t need workers who had served a lengthy apprenticeship, but they did need large numbers of employees to staff their production lines, and young wage-earners, who were cheaper to employ than adults, were suddenly in demand.


pages: 456 words: 123,534

The Dawn of Innovation: The First American Industrial Revolution by Charles R. Morris

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air freight, British Empire, business process, California gold rush, clean water, colonial exploitation, computer age, Dava Sobel, en.wikipedia.org, glass ceiling, hiring and firing, if you build it, they will come, interchangeable parts, Isaac Newton, Jacquard loom, Jacquard loom, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, lone genius, manufacturing employment, new economy, New Urbanism, old age dependency ratio, On the Economy of Machinery and Manufactures, purchasing power parity, QWERTY keyboard, refrigerator car, Robert Gordon, spinning jenny, Stephen Hawking, The Wealth of Nations by Adam Smith, trade route, transcontinental railway, traveling salesman

For inscribing cuts like the one shown, up to a dozen cutters might be driven off a single pattern guide. By 1860, the Midwest was a major manufacturing center in its own right, mostly centered around the big Ohio River cities like Cincinnati and Louisville. Chicago was gaining rapidly in population—110,000 to Cincinnati’s 161,000—but Cincinnati still had a nearly six-to-one edge in manufacturing employment. Food processing and its by-products were the largest single industry, but the Midwest was developing a large transport sector: steam engines, steam boats, and, increasingly, rails and rail cars. In the first few decades of the Midwest’s rise as a manufacturing power, the east-west transportation barrier acted like a protective tariff. Trade between the eastern states and the Midwest was dominated by easy-to-transport goods: the West sold packed meat and lard products and bought shoes, clocks, and textiles.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, income inequality, income per capita, indoor plumbing, informal economy, intermodal, invisible hand, Kenneth Rogoff, knowledge economy, late capitalism, linear programming, lump of labour, manufacturing employment, new economy, Nixon shock, North Sea oil, oil shock, Paul Samuelson, pension reform, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

As one of its most zealous advocates, Madsen Pirie, the head of a free-market think tank, declaimed in 1988, “The privatization programme in Britain probably marked the largest transfer of power and property since the dissolution of the monasteries under Henry VIII.” Some 650,000 workers were forcibly moved from state employment into the private economy as the role of state-owned enterprises faded away. The industrial sector, deprived of taxpayer subsidies, shrank quickly as marquee names closed unprofitable operations. Manufacturing employment, 30 percent of the workforce in 1979, fell to 22 percent under Thatcher as the United Kingdom shifted decisively to a service economy. Well beyond the mineworkers, the trades union movement lost power, weakened not only by changes in labor law, but also by the rapid erosion of the industries that had formed its base for more than a century. In 1979, 54 percent of British workers were union members.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

Airbnb, Albert Einstein, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

Its economy remains unbalanced; China’s consumption as a percentage of GDP has increased somewhat over the past decade but growth still reflects high levels of investments in the economy and the careless efforts to support investment through sudden and unpredictable stop–go monetary and fiscal operations. China needs to rebalance its economy through increased consumption, but expansion of domestic consumption in China cannot make up for the drop in economic growth that will follow from continued reductions in investment growth.7 The sums simply do not add up. Productivity growth has decelerated for several years. Manufacturing employment has reached levels where it is difficult to grow by adding more labor to the economy, and the service economy remains ossified. The dependency ratio between the retired and the working population has climbed after decades of a one-child policy that skewed the country’s demographics. The rural–urban labor transfer is largely an exhausted force for rapid growth. And, importantly, there is strong resistance from vested interests to the root-and-branch reforms essential for China’s growth to remain at decent levels.


India's Long Road by Vijay Joshi

Affordable Care Act / Obamacare, barriers to entry, Basel III, basic income, blue-collar work, Bretton Woods, business climate, capital controls, central bank independence, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, congestion charging, corporate governance, creative destruction, crony capitalism, decarbonisation, deindustrialization, demographic dividend, demographic transition, Doha Development Round, eurozone crisis, facts on the ground, failed state, financial intermediation, financial repression, first-past-the-post, floating exchange rates, full employment, germ theory of disease, Gini coefficient, global supply chain, global value chain, hiring and firing, income inequality, Indoor air pollution, Induced demand, inflation targeting, invisible hand, land reform, Mahatma Gandhi, manufacturing employment, Martin Wolf, means of production, microcredit, moral hazard, obamacare, Pareto efficiency, price mechanism, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, race to the bottom, randomized controlled trial, rent-seeking, reserve currency, rising living standards, school choice, school vouchers, secular stagnation, Silicon Valley, smart cities, South China Sea, special drawing rights, The Future of Employment, The Market for Lemons, too big to fail, total factor productivity, trade liberalization, transaction costs, universal basic income, urban sprawl, working-age population

The small firms (49 or fewer workers) employed 84 per cent of all workers in manufacturing; only 5.5 per cent were employed in medium-​sized firms (50–​199 workers), and only 10.5 per cent in large firms (200+ workers).16 This extraordinary size-​ distribution of firms with a ‘missing middle’ is very different from what is found in East Asia (see Table 5.3), where the distribution is much more evenly spread (or increases with firm-​size as in China).17 The same story is repeated in services. In 2005, there were somewhat more than 100 million workers in services, employed in 16.5 million firms, of which 99.96 per cent were small (49 or fewer workers). The concentration of employment in small firms was even greater than in manufacturing: 96 per cent of workers were employed in small enterprises. Table 5.3 SHARES OF MANUFACTURING EMPLOYMENT BY FIRM-​S IZE IN INDIA AND SELECTED EAST ASIAN ECONOMIES, 2005 (PER CENT) Micro + Small Medium Large (1–​49 workers) (50–​199 workers) (200+ workers) India 84.0 5.5 10.5 South Korea 46.5 23.9 29.6 Taiwan 38.9 21.3 39.8 Malaysia 27.5 19.7 52.8 China 24.8 23.3 51.8 Source: Asian Development Bank (2009). G r o w t h a n d t h e Em p l oy m e n t P r o b l e m  [ 71 ] 72 The ultra-​skewed distribution of firm size is significant because there is a close positive relation between firm size, labour productivity, and wages.


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The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bretton Woods, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial innovation, financial intermediation, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Hyman Minsky, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, liquidity trap, Long Term Capital Management, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

He later wrote, ‘What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalisation of Western liberal democracy as the final form of human government.’ (Fukuyama, 1992). 17 US Bureau of Labor Statistics website: Workforce Statistics on manufacturing employment; Eurostat website: employment and unemployment database, tables on employment by sex, age and economic activity. 18 World Trade Organisation website: Statistics Database. 19 The policy was relaxed at the end of 2013, and became a two-child policy in October 2015. 20 Bernanke (2005). 21 The fundamental drivers of high saving and weak investment that led to falling real interest rates are a matter for continuing research – see Rachel and Smith (2015). 22 Since the 1980s, it has been possible to measure real interest rates quite accurately by looking at how much governments have to pay to borrow in the form of securities (bonds) on which the returns are indexed to inflation.


pages: 518 words: 170,126

City for Sale: The Transformation of San Francisco by Chester W. Hartman, Sarah Carnochan

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affirmative action, Albert Einstein, Bay Area Rapid Transit, big-box store, business climate, Golden Gate Park, Haight Ashbury, housing crisis, illegal immigration, John Markoff, Loma Prieta earthquake, manufacturing employment, new economy, New Urbanism, profit motive, Ralph Nader, rent control, Ronald Reagan, Silicon Valley, South of Market, San Francisco, strikebreaker, union organizing, urban planning, urban renewal, very high income, young professional

Albert Schlesinger of the Convention & Visitors Bureau, along with Herman and one of the Swigs, talked with each of the supervisors individually. According to Schlesinger, the plan went through the board “like shooting fish.” Some opposition voices made themselves heard during the hearings. Labor representatives, as noted above, were upset over the lack of industrial reuse in the area and the loss of blue-collar jobs. Official data would later show that between 1960 and 1970 manufacturing employment in San Francisco decreased by 19 percent.6 Herman promised at least 25 percent of the land in the YBC area would be devoted to industry.7 Social workers, ministers, and representatives of the City’s Human Rights Commission appeared, carrying petitions with several hundred names, to register protest over the lack of relocation housing. The agency conveniently sidestepped the controversial issue of how to relocate four thousand low-income persons.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

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Alvin Roth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, Kenneth Arrow, Kenneth Rogoff, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

GDP 4.2 Index of world equity prices, Great Depression and current crisis 4.3 Index volume of world trade, Great Depression and current crisis 4.4 Google Trends search term: “toxic assets” 4.5 Fed projection misses the mark 4.6 American bank mergers, 1995–2009 4.7 The “Flash Crash” of May 6, 2010 5.1 Proportions of U.S. mortgages originated by various financial entities, 1953–2007 6.1 European ETS prices, 2011 6.2 European public and private debt, 2000 and 2010 6.3 U.S. public and private debt, 1920–2011 6.4 Total Over-the-Counter Outstanding Derivatives 6.5 Google Trends for search term “financial innovation” 1 One More Red Nightmare: The Crisis That Didn’t Change Much of Anything Conjure, if you will, a primal sequence encountered in B-grade horror films, where the celluloid protagonist suffers a terrifying encounter with doom, yet on the cusp of disaster abruptly wakes to a different world, which initially seems normal, but eventually is revealed to be a second nightmare more ghastly than the first.1 Something like that has become manifest in real life since the onset of the crisis which started in 2007. From the crash onward, it was bad enough to endure house prices sinking under water, dangling defaults and foreclosures, the collapse of what remained of manufacturing employment, the reduction of whole neighborhoods to bombed-out shells, the evaporation of pensions and savings accounts, the dismay of witnessing the hope of a better life for our children shrivel up, neighbors stocking up on firearms and people confusing bankruptcy with the Rapture. It was an unnerving interlude, with Nietzschean Eternal Return reduced to an Excel graph with statistics from the Great Depression of the 1930s.


pages: 585 words: 165,304

Trust: The Social Virtue and the Creation of Prosperity by Francis Fukuyama

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barriers to entry, Berlin Wall, blue-collar work, business climate, capital controls, collective bargaining, corporate governance, corporate raider, creative destruction, deindustrialization, Deng Xiaoping, deskilling, double entry bookkeeping, equal pay for equal work, European colonialism, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global village, Gunnar Myrdal, hiring and firing, industrial robot, Jane Jacobs, job satisfaction, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, labour market flexibility, labour mobility, land reform, liberal capitalism, liberation theology, low skilled workers, manufacturing employment, mittelstand, price mechanism, profit maximization, RAND corporation, rent-seeking, Ronald Coase, Silicon Valley, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, transfer pricing, traveling salesman, union organizing

Many people believed that these small, traditional firms would disappear with progressing industrialization, as they did in India. But by and large, they did not. Traditional independent weavers, for example, expanded market share more rapidly than large textile firms in the 1930s.6 Between 1954 and 1971, the number of manufacturing firms in Japan doubled, while increasing by only twenty-two percent over the same period in the United States.7 In 1967, sixteen percent of manufacturing employment in Japan was in firms with fewer than ten workers, whereas the corresponding figure for the United States was only three percent.8 David Friedman has gone so far as to argue that dynamic small businesses, and not the well-known giant corporations, are the essence of the Japanese “miracle.”9 In this respect, Japanese industrial structure would appear to bear many similarities to those of Chinese societies, with their myriad small family businesses.


pages: 828 words: 232,188

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

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Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamonds, British Empire, centre right, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, crony capitalism, deindustrialization, Deng Xiaoping, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Hernando de Soto, Home mortgage interest deduction, income inequality, information asymmetry, invention of the printing press, iterative process, knowledge worker, land reform, land tenure, life extension, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, Post-materialism, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, World Values Survey, zero-sum game

Rather than starting a business, a young entrepreneur is much more likely to enrich himself by entering politics, organizing a militia, or otherwise scheming to grab a share of the country’s resource wealth. As we have seen, this agrarian equilibrium was dramatically upset with the onset of industrialization in the nineteenth century. Continuous high levels of economic growth driven by technologically induced increases in productivity reordered societies in dramatic ways. Peasants who had been politically inert over the preceding centuries moved to cities or other centers of manufacturing employment, where they were transformed into an industrial working class. Residents of cities acquired higher levels of education and emerged as a new middle class. As Adam Smith explained, improved transportation and communications technology centered around waterways began to expand the size of markets dramatically in the seventeenth and eighteenth centuries. This facilitated a massive change in the division of labor, which was the main driver of social change in Britain, Belgium, Germany, and France, a process that began to unfold in East Asia in the late twentieth century and is still ongoing in China in the early twenty-first.

The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

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air freight, airline deregulation, Albert Einstein, asset-backed security, bank run, Berlin Wall, Bretton Woods, business process, call centre, capital controls, central bank independence, collateralized debt obligation, collective bargaining, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Hernando de Soto, income inequality, income per capita, invisible hand, Joseph Schumpeter, labor-force participation, labour market flexibility, laissez-faire capitalism, land reform, Long Term Capital Management, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, new economy, North Sea oil, oil shock, open economy, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, reserve currency, Right to Buy, risk tolerance, Ronald Reagan, shareholder value, short selling, Silicon Valley, special economic zone, the payments system, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, working-age population, Y2K, zero-sum game

Most dominant by far has been China, where labor force data, to the extent they can be relied upon, suggest a slow, but gradually accelerating, government-controlled shift of the workforce of the rural provinces to the dynamic market-dominated regions of the Pearl River delta and other export-oriented areas. Vast numbers of Chinese workers left agriculture-related pursuits for manufacturing and service jobs in urban areas. Privately controlled businesses rose to claim a significant share of China's near 800-million-person workforce. By 2006, agriculture was down to little more than two-fifths of total employment. Chinese manufacturing employment has held steady in recent years despite massive workforce reductions in state-owned enterprises. The largest gains in employment over the last decade have been in services. Importantly, it is the pace, the rate of change, of movement from centrally planned employment to competitive markets that determines the degree of disinflationary pressure on developed nations' wage costs and hence prices.