The analyses by Charles Fishman and James Fallows seem to be predicated on the odd assumption that the only two places where manufacturing occurs are China and the U.S. While it’s true that rising labor costs are making Chinese manufacturing cost-prohibitive, fortunately for U.S. businesses and consumers, the authors’ assumption is wrong. American companies are opening factories rapidly in Mexico, a nation of 114 million with relatively low labor costs, directly adjacent to the U.S. The continent of Africa, with more than 1 billion mostly poor and unemployed people, will become a practically unlimited source of low-cost manufacturing in the coming decades, as Chinese companies seem to have realized already. America’s time as a world-beater in manufacturing is long since past. The sooner academics, politicians, and, yes, journalists admit the truth, the better.
Charles Fishman and James Fallows rightly point out the economic advantage of close proximity for design and manufacturing teams. It is also true that rising wages in China decrease that country’s competitive advantage. These factors tend to encourage our companies to manufacture in the U.S. However, if China is allowed to maintain a huge trade surplus with the U.S. by relentlessly manipulating our currency exchange rate, the U.S. manufacturing renaissance will be stillborn. In 2011, our trade deficit with China was $295 billion, which is the equivalent of about 7 million U.S. manufacturing jobs. China has caught up technologically. Its design and manufacturing teams are also in close proximity, producing Chinese goods that, with an artificially cheap currency, will continue to drive American companies out of business.
Thomas M. Tharp
West Lafayette, Ind.
Once upon a time, in the halcyon 1950s and 1960s, a man could have a blue-collar factory job and make enough money to support a whole family. Those days are over now, but they echo still in the dreams of manufacturing returning to the U.S. The idea is that were that to happen, good jobs would magically be created. Where the reality is that manufacturing jobs are not good jobs any more: you’re better off working in retail, whether you’re in the U.S. or in China. And you don’t need to spend unpaid years in college learning technical skills to get a retail job …
I do get worried when The Atlantic splashes the word “COMEBACK” all over its cover: that makes this phenomenon seem much happier than in truth it is.
Excerpt from a Reuters blog post
Mr. Fishman’s article was very interesting and optimistic, but he totally ignored the major reason for manufacturing’s outsourcing boom over the past 25 years: the elimination of import duties and quotas in this country. Prior to the near-elimination of tariffs, manufacturing in this country was protected from competition from low-wage-labor countries. As soon as tariffs were lowered and quotas eliminated, outsourcing became financially attractive. It’s interesting to note that conservatives’ resistance to cooperation at the UN is supposedly based on the perception that the U.S. would be ceding sovereignty, but they have no objection to allowing the World Trade Organization to determine U.S. trade policy.
Raymond M. Bodie
I was surprised that government subsidies and tax incentives weren’t mentioned. GE pays little U.S. tax despite its significant profits. I understand that tax incentives and subsidies for the local manufacture of energy-efficient appliances—which do not always work as well as earlier, less-energy-efficient models—play a role in this. This may be taxpayer money well spent. But these measures are not part of a fair and rational manufacturing policy. As is the case with agricultural subsidies, the benefits are designed to go disproportionately to large companies, which have a seat at the table when policies and legislation are developed. Our life is made difficult enough by the pricing policies of the cartels controlling many of our raw materials without global companies getting the benefit of preferential tax treatment and government subsidies.
Robert T. Bateman
In the January/February issue, Joshua Lang studied the terrifying problem of anesthesia awareness—when patients wake up during surgery (“Awakening”). He showed how efforts to eradicate the phenomenon have prompted deep questions about consciousness.
While intraoperative awareness under general anesthesia is extremely rare, one case is too many. Over the past 20 years, anesthesiologists have been committed to minimizing the risk of awareness. The Foundation for Anesthesia Education and Research recently issued $500,000 in grants to help fund research to clarify the role of brain monitors in the prevention of awareness. Although past research has shown deficiencies in recognizing awareness with monitors, researchers are currently applying new approaches and techniques to study consciousness, including those of Dr. Giulio Tononi, whom Joshua Lang profiled.