[Glen]

http://dissentmagazine.org/online.php?id=214

Those who know arithmetic can quickly detect the absurdity of this assertion. The implication of course is that the United States will import nearly all of its manufactured goods. The problem is that unless we can find some country that will give us manufactured goods for free forever, we have to find some mechanism to pay for our imports.

The story becomes even more fantastic on a closer examination of the services that we export. The largest single item is travel, meaning the money that foreign tourists spend in the United States. This item alone accounts for almost 20 percent of our service exports.

There is nothing wrong with tourism as an industry. However, the idea that U.S. workers are somehow too educated to be doing for manufacturing work, but instead will be making the beds, bussing the tables, and cleaning hotel toilets for foreign tourists is a bit laughable. Of course, with the right institutional structure (e.g. strong unions) these jobs can be well-paying jobs, but it is certainly not apparent that they require more skills than manufacturing.

More important, it is implausible to believe that the United States will be able to dominate this area in the decades ahead. The United States certainly has a head start in sophisticated computer technologies and in some management practices, but it is questionable how long this advantage can be maintained. There are already many world-class computer service companies in India and elsewhere in the developing world, and this number is increasing rapidly.

The computer and software engineers in these countries are every bit as qualified as their U.S. counterparts and are often prepared to work for less than one-tenth of U.S. wages. Furthermore, unlike cars and steel, which are very expensive to transport over long distances, it is costless to ship software anywhere in the world. Given the basic economics, it seems a safe bet that the United States will lose its share in this sector of the world economy. In twenty years it is quite likely that the United States will be a net importer of this category of service, unless of course wages in the United States adjust to world levels.

In short, the idea that the United States can survive without manufacturing is implausible: It implies an absurdly rapid rate of growth of service exports for which there is no historical precedent. Many economists and economic pundits asserted that house prices could keep rising forever in spite of the blatant absurdity of this position. The claim that the U.S. economy can be sustained without a sizable manufacturing sector is an equally absurd proposition.

 

[ponyboy]

Richard Florida has done some good in terms of providing an accessible story, however incorrect, that politicians have embraced in forwarding the causes of downtowns, especially the gentrified nabes where wasps and old victorians reside. Some potential money and investment may flow form it.

However, the professors at U of T who study urban issues largely consider his work to be second rate. It is riddled with problematic assumptions and definitions and lack of methodological clarity. It is really weak for not speaking to the motives and preferences of immigrant populations.

I have been told that it was his ties to the Dean, and not the broad recommendation of faculty, that landed him his position and his swanky digs at the MARS centre. He is affiliated with the business school only; other departments wouldn't cross-appoint him. I respect him for his energy and potential for popularizing some important values of cities, but the evidence that allegedly supports his claims has been broadly criticized by other academics. Worse, he has not engaged other scholars in addressing those criticisms in my opinion. I hope that I am wrong about R. Florida, but thus far he has provided more media razzle dazzle than lasting insight.R