by Patrick Appel

Avent tweeted last week that "something about the word ‘manufacturing’ makes people lose their analytical senses." He expands on that thought:

There is a sense that people seem to have that the making of things is an activity crucial to a modern economy. It’s crucial because a country that can’t make things is vulnerable to trade collapse. It’s crucial because a country that can’t make things is likely to lose its economic edge. It’s crucial because without manufacturing you can’t export. And it’s crucial because manufacturing jobs, everyone knows, are high-paying jobs that provide a good living to people with limited education.

I don’t think too much of this. Economic activity isn’t about satisfying the demand for objects, it’s about satisfying demand, period, and people demand many things that have little to do with assembly lines and smokestacks hair-cuts, mixed drinks, financial advice, dentistry, and so on. These activities are important. If they weren’t important, people wouldn’t be willing to pay lots of money for them.

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