Here is a great video from SmarterEveryDay covering domestic manufacturing and the hurdles involved in the process of developing and building product in the USA.
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I’ll need to go watch that when I have time - he’s great. And I can imagine what it will cover - from supply chain to labor participation to regulatory hurdles, taxation and government interference, etc. People love to say, “Buy American Made!” but… if you’ve ever tried to actually MAKE something in America, you quickly find out how difficult that is!
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People say buy American, but then they want the least expensive thing you can get. His grill scrubber sells for $75 and I imagine to prove a point, he has virtually zero profit in it. Hard to compete with $3 scrubber from Wal-Mart or Amazon, no matter the difference in quality. His is a work of art, but the average consumer doesn’t care. One thing he says in the video that is just myopic is that companies should “make less profit.” That sounds great, but you can flow that all the way down to people should accept lower wages (i.e. “less profit for your time”). This is an age old discussion, first it was Japan, then Taiwan, then Mexico, Indonesia and China. Vietnam, India and parts of Africa will be next.
When Japan started building after WWII, their products were junk. But they were cheap, they made money and invested and improved. That’s the same arc that China has followed, but their costs are increasing and production will move again.
Consumer behavior will never allow for massive production anywhere but the lowest cost production. It’s really simple economics and supply and demand.
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There is a whole dynamic of social development that underlies this. In agrarian societies anybody and everybody farms, growing food for their families and hopefully a bit more to sell on the market. Families grew crops as well as raising livestock. Enter specialization: some people/places produced crops/livestock better than others. Then comes industrialization: adding power increased output and efficiency and further favored specialization. Enter cheap transportation: raw materials can be sourced from low cost suppliers and finished good can be shipped to wide markets.
As this development is taking place many jobs in agriculture are lost, but they are replaced by industrial jobs. The next stage of development is industrial jobs moving to low cost nations, eliminating many jobs that are then replaced with service jobs as the cost for efficiently produced goods goes down.
We are now at the stage where people who have made their money in industrial farming and in mass production manufacturing spend their money in the service sector.
As these shifts take place, less developed nations develop and production moves to less developed nations as yesterdays developing nations transition to manufacturing and then to services.
There is no going back.
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Excellent post!
What comes after services and what happens when all nations have moved to services? 
Directionally, I agree that is how it tends to go. However I don’t think isn’t as simple as that and at some point (perhaps way in the future) there has to be some level of cycle or re-integration due to things like national sovernty / security issues, integrity of supply chain / product availability, etc. I would think that staying in the services only state would eventually lead to compromised sovernty or simply ceasing to exist when the money inevitably runs dry, perhaps spurred by interruptions in that chain.
I think this is similar to trickle down economics which is a tool used to trick the working class into working harder for the leadership class. If you look at the profit being amassed by the upper echelon of our country it is clear to me that we can pay workers more and make less profit. As an example, a lot of the “inflation” that happened during covid was companies just charging more money without anything changing.
Counter point to the argument that there is this natural progression from farming to service is a lot of European countries. They invest in education, fair trade agreements, and labor while supplementing their material pools with foreign goods. When the employees make good money then they can afford good products even when they are acting like a consumer. There are many European countries that are well known for their family of products while their citizens are otherwise being consumers.
If we paid our citizens a usable wage then they would buy a decent pair of shoes instead of a shit pair from Walmart. I’ve seen this within my own family. Point here is that consumerism and super cheap products don’t necessarily go hand in hand, that is just our adaptation of it.
That said, I loved this video.
I found it curious and funny how he mentioned a few times that he was looking for “American made” knobs and ended up with Costa Rican made knobs. I hate to be that guy, but Costa Rica is in America.
Consider AI and automation… They can’t do everything yet but they are becoming more capable every day. As I see it there is good reason to not give up all of the ability to do the earlier parts of the progression even if we’re not good at it or aren’t the most efficient provider. But if you’re looking to maximize profit for a particular cog in the machine you won’t.
Re-integration— Like we should produce essential drugs here rather than buy them from oversea suppliers? Good idea. The drugs will cost more but when push comes to shove we won’t be beholden to other’s interests. Just don’t let domestic production atrophy. So yes, I’ll agree it is more complicated. When the cheapest source for raw materials is one “other country” and the cheapest labor is another country, and the cheapest way to move materials and product is on ships from (you guessed it) yet another country “efficiency” (low cost) is proportional to dependency (globalization). As long as all those linked suppliers in the supply chain play for our benefit we think we’re doing great ($$$) while in (hidden behind the curtain) fact we are dependent. It doesn’t help when our politicians harp on “America First” and want to make us (or U.S. if you prefer) out to be “the greatest”.
Now I’ll get a cup of coffee and snack on a chocolate bar…
Ironically, I hate to be that guy too. However, assuming you mean America as in the USA and not the Americas (North, Central, South), I think you are confusing Costa Rica with somewhere else. It’s a separate country.
I’m not thinking of Puerto Rico. Costa Rica is in Central America.
“American” referring to these 50 states and territories is something unique to folks from the states. In my travels saying something (or myself) is American often only narrows the conversation to a couple of continents.
I worry I detailed this conversation. I think it is a worthwhile conversation to have. Personally, I often spend extra money to buy products made in the USA or made overseas by companies based here and I would love to see more of it.