[OPE-L] manufacturing jobs in the 'information economy'

From: glevy@PRATT.EDU
Date: Sun Nov 27 2005 - 16:42:50 EST

I am forwarding a section of a post to the "karl marx" group (a
mostly inactive yahoo group) from the 'Nationalist economics
bulletin' (published by the British National Party), week of
November 21, 2005 (now why would 'nationalists' post on a Marx
group?  Shouldn't it be obvious that Marx was and Marxists should
be internationalists?).  The bulletin concerns the UK economy but
the section below has wider relevance.  Do you agree with the listing
of "opportunities" and "drawbacks"?

In solidarity, Jerry

7. One big reason Germany has less inequality than we do, is that
Germany has a more solid industrial economy, and thus a better-paid
working class. One of the biggest myths holding the British economy
back is that we can  even must  forget about manufacturing, and
stake our future prosperity on service industries. But the empirical
evidence from other nations is fairly clear that not only is
manufacturing not a dying part of the economy in the developed
world, it is in fact one of the best economic sectors for a nation
to have a strong presence in, because of its ability to produce
sustainable well-paid jobs for ordinary workers, in which it
significantly surpasses the service economy.

This isn't true for all manufacturing. It's true for advanced, that
is high-tech, manufacturing. Most of what you've heard about the
obsolescence of manufacturing is indeed true, if you're talking
about primitive forms of it. If you're talking about the stamping
out of plastic toys and similar items, it is indeed true that this
is, today, an intrinsically low-paying industry, because it can be
performed by illiterate peasants in Shanghai, and therefore anyone
else performing it is in competition with such low-paid workers.
But it is an entirely different story for the manufacture of things
like computer chips, aeroplane parts, and medical devices. Companies
can't do this with illiterate peasant labour. This is why it tends
to get done, even today, with highly-skilled and well-paid labour,
in places likes Bavaria, California, and Kyushu (Japan).

Below is a partial list of advanced manufacturing industries, to
make clear how vast the opportunities are:

1. Flat-panel displays for laptops, TVs and other devices.

2. Steel-alloy pipes for transporting oil, which sound primitive but
are in fact very sophisticated due to the subtle corrosion-resistant
alloys involved and the difficulty of making them in the large sizes
that require the least final assembly.

3. Synthetic fibers. Although sewing clothes is low-tech, turning a
barrel of crude oil into convincing synthetic silk is not.

4. Photolithographic steppers, the machines used to turn the designs
of silicon chips into actual chips.

5. Bearings, ball and otherwise, are a classic seemingly old and
dull product that has quietly adapted with the times to become
frequently very high-tech.

6. Electric power generators, which are unseen but expensive and

7. Capacitors, and other obscure but important electronic

8. Textile-making machinery like ultra-fast modern looms.

9. Laser diodes, which make CD players work.

10. Nickel hydride batteries, the tiny high-quality ones that are
vital for cell phones, camcorders, etc.

11. Robotics, an industry that is not only valuable in itself, but
buttresses other manufacturing industries by making readily
available the know-how to automate production of other things.

12. Cameras, both conventional and digital, still and motion.

13. Machine tools, which are, of course, the ultimate key to making
other manufactured goods.

14. Avionics and aeroplane parts.

15. Watch movements.

16. Ship engines. How do you think all those imports get here?

17. Photocopiers, especially their key electro-optical components.

18. Carbon fiber, an emerging material that is replacing metals in
key applications.

19. Construction equipment, which is often a lot more sophisticated
than it looks.

21. Medical devices.

22. Equipment for nuclear power plants.

23. High-tech weaponry, including counter-terrorist equipment like
bomb sniffers.

24. Green power devices, like fuel cells and the generators, control
units, towers and blades of windmills.

25. Pollution control equipment, like sulfur dioxide scrubbers, and
pollution detection devices.

Note that much advanced manufacturing involves products  fibers,
pipes, bulldozers  that one would not think of as advanced, but are
in fact more subtly made than one imagines. Advanced manufacturing
often centers on the key components of products rather than the
products themselves. Many consumer products, for example, consist of
technically-advanced components surrounded by a commonplace plastic
package that is easy to make. The outside of a fax machine, for
example, will say `made in China', simply because final assembly was
done there, with unskilled labour. But the bit that really matters 
and accounts for most of the cost, and wages paid  is the electro-
optical read-write head. This is a sophisticated piece of equipment,
made by highly-trained and well-paid labour in some developed
country, like Japan.

Enthusiasts of the post-industrial economy are simply not honest
about its drawbacks:

1. Jobs in computer software, finance, management consulting, and
similar fields may be highly paid, but it usually takes a college
degree to get one. Most of the British work force lacks a college
degree; a large percentage of college-age Britons are not ever going
to get one. Without alternatives to the information economy, many of
these people are doomed to a low standard of living for their entire
lives. By comparison, advanced manufacturing reliably creates a wide
spectrum of jobs at all skill levels, and is particularly rich in
the crucial category of the skilled blue-collar jobs that ordinary
working-class people have a plausible chance of holding.

2. The information economy is intrinsically limited in terms of how
many good jobs it can create, because it is limited in how large a
portion of our economy it can be, for the simple reason that
information is only a limited part of the value chain that makes up
any product. The value of a programmer who creates a website to sell
DVD players is necessarily limited to some fraction of the value-
added of retailing the product, which is only a small part of its
overall value. This value is made up of researching, designing,
manufacturing, distributing, marketing, wholesaling, retailing and
servicing it. If we cede the manufacturing link of the value chain
to foreigners, this means ceding a large piece of potential economic
activity and the jobs and wealth that flow to whomever performs that
activity. And Britain is limited in what share of the world market
for internationally-traded services we can win.

3. Jobs in the information economy are more vulnerable to foreign
competition than people realize. For example, the current strength
of the City of London is vulnerable to the growth in sophistication
of the financial sectors of other nations. It is also vulnerable,
even if the top jobs stay in London, to `hollowing out' as the `back
office' jobs get relocated to India and other places where clerical
workers are cheaper.

<rest of message snipped, JL>

(The list of industries above is derived from Eamonn Fingleton's In
Praise of Hard Industries, an outstanding, and very readable, book
on this topic).


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