Santorum’s Manufacturing Fetish

In Rick Santorum’s movie trailer ad for his new group, Patriot Voices (like the Sixth Sense?) he narrates that the purpose of the group, among other things, is to:

“Make America an economic and manufacturing super power again.”

As Reihan Salam has pointed out at National Review and other places, why the fetish with manufacturing? It makes no sense.

Of course, I get why the nostalgia aspect of it is popular, but it often leads to people telling/believing outright lies about the state of U.S. manufacturing, which is far from dead. In 2007, for example, U.S. manufacturing output was equal to that of Brazil, Russia, India and China combined. If separated from the U.S. economy, using 2011 data from the Bureau of Economic Analysis, our manufacturing sector would be the world’s tenth largest economy.

People falsely claim “we don’t make anything anymore” because employment in manufacturing has declined. This is easy to debunk because, thanks to technology, productivity per unit of labor has risen considerably. Just like you can have more toll booths and fewer toll booth operators thanks to an innovation called EZ-Pass.

George Mason Professor Don Boudreaux notes that:

The average American manufacturing worker today produces annually 660 percent more than did the average American manufacturing worker in 1947.

Unless you’re a luddite who wants to ban technological marvels like shovels and Caterpillar machines merely to create jobs, you should focus on output — not employment — when talking about the health of an industry. Manufacturing in the U.S. is not dead. Far from it, in fact.

In the late 1950’s, did people say they wanted to return the U.S. to an agricultural power house because we have such smaller amounts of people working in agriculture? Did I miss that part of American history?

Walter Williams explains, sarcastically:

In 1790, 90 percent of Americans did agricultural work. Agriculture is now in “shambles” because only 2 percent of Americans have farm jobs.

Has the economy gotten worse in the last few years? Sure. Will there come a time when other people make more than us? Probably. Is that necessarily bad? No.

What’s so wrong with comparative advantage? Do we have to make knick knacks, museum snow globes and baseball hats? Should it be our economy policy to focus our scarce resources on those trinkets instead of better things to produce, like airplanes? Or designing iPads?

Point is, Santorum’s focus on restoring us to a manufacturing “super power” is misguided. First, we already are a manufacturing super power. Second, it’s not the appropriate role of government to guide the economy into producing certain things over others.

Santorum should shift his focus to the first part of his message, making America the most competitive nation economically. Contrary to what he suggests, we’re still an economic superpower. We should let the market choose what to use its capital and labor on, not give that power to Rick Santorum. Leave the government out of it, and please, please, drop the manufacturing fetish, Rick.

President Obama has a manufacturing fetish, too, if you hadn’t noticed. I don’t point that out as a compliment.

Proposing different tax rates for manufacturing over other sectors of the economy, which Santorum’s goal invariably would require, is just plain bad economics. Jade West from the National Association of Wholesaler-Distributors put it this way to the New York Times:

“My guys are totally freaked out by manufacturing getting a different tax rate than we do. They’re not more important in the economy than retail or distribution or anything else.”

And she’s right. People who manufacture something are no more important to the economy than the wholesalers, the trucking companies, the retailers, or the designers of the widget.

Last time I checked, having government policies that direct the economy is something fashionable in state managed economies, like Soviet & present day Russia.

I thought conservatives believe they’re the bad guys for reasons like that. I do, at least. Santorum, if he really is an economic conservative that doesn’t believe in picking winners and losers, should change his tune. 

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