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Manufacturing fetish

rubber-soul-production-lineOver the past week or so we have heard from politicians from the extremes of left and right, John Mcdonnell and Donald Trump,  waxing lyrical about “manufacturing”. They almost appear to cling to the incoherent belief that manufacturing is somehow far more worthy than other forms of adding value

I am going to post a more thorough piece on this shortly but for now I will quote the first class economist John Kay, who it should be noted, is seemingly centrist in his political belief

Manufacturing fetishism – the idea that manufacturing is the central economic activity and everything else is somehow subordinate – is deeply ingrained in human thinking. The perception that only tangible objects represent real wealth and only physical labour real work was probably formed in the days when economic activity was the constant search for food, fuel and shelter.

A particularly silly expression of manufacturing fetishism can be heard from the many business people who equate wealth creation with private sector production. They applaud the activities of making the pills you pop and processing the popcorn you eat in the interval. The doctors who prescribe the pills, the scientists who establish that the pills work, the actors who draw you to the performance and the writers whose works they bring to life; these are all somehow parasitic on the pill grinders and corn poppers.

When you look at the value chain of manufactured goods we consume today, you quickly appreciate how small a proportion of the value of output is represented by the processes of manufacturing and assembly. Most of what you pay reflects the style of the suit, the design of the iPhone, the precision of the assembly of the aircraft engine, the painstaking pharmaceutical research, the quality assurance that tells you products really are what they claim to be.

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