“Production has been seriously neglected in the mainstream of economics, which is dominated by the Neoclassical school. For most economists, economics ends at the factory gate (or increasingly the entrance of an office block), so to speak. The production process is treated as a predictable process, pre-determined by a ‘production function’, clearly specifying the amounts of capital and labour that need to be combined in order to produce a particular product. Insofar as there is interest in production, it is at the most aggregate level – that of the growth in the size of the economy. The most famous refrain along this line, coming from the debate on US competitiveness in the 1980s, is that it does not matter whether a country produces potato chips or micro-chips. There is little recognition that different types of economic activity may bring different outcomes – not just in terms of how much they produce but more importantly in terms of how they affect the development of the country’s ability to produce, or productive capabilities. And in terms of the latter effect, the importance of the manufacturing sector cannot be over-emphasized, as it has been the main source of new technological and organizational capabilities over the last two centuries.” -Chang, Ha-Joon. Economics: The User’s Guide (Kindle Locations 3067-3076). BLOOMSBURY PUBLISHING. Kindle Edition.
Here again, we return to the problem with the Neo-Liberal/Republican/Libertarian agenda: this erroneous notion that an expanding economy will solve all problems. Or as their John F Kennedy, Reagan, put it:
“A rising tide raises all boats.”
This is why they put, above the interests of ALL parties involved, the interests of the rich. And this is why they seem completely oblivious to the very real effects of their policies on very real people. They focus on quantifiable matters such as the GDP without so much as a consideration of how individuals are actually doing: the quality of their lives. Take, for instance, a point made by Robert Reich. If you suddenly lose a union job in manufacturing that was paying 20$/hr. and had to maintain your quality of life with 10$/hr., that would mean that you would have to work 16 hours a day. But as if that wasn’t bad enough (and to add insult to injury), you would find yourself having to pay for things you didn’t have to before. Instead of cooking your own meals, you would to buy them from restaurants. Instead of mowing your own lawn, you would have to hire a lawn service. In other words, you would be increasing the GDP while significantly decreasing the quality of your life.
Furthermore, what Chang is getting at here is that manufacturing (despite all claims to it being a “post-industrial society” (is still more important than the neo-liberals would have you believe. And as much as I agree with him, this is where I would depart with Chang in that he didn’t include it. If you think about it, a thriving economy depends on people like you and me being able to walk into a store or shop and being able to exchange money for goods or services. In fact, I have to wonder if a service isn’t secondary to goods –somehow dependent on the production of goods. Yet the Neo-Liberals act as if we can somehow carry on under an economy that no longer seems anchored (a kind of Simulacrum if you will (in the manufacturing of goods –that is given that about 40% of our economy is based on finance.