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Thursday, November 15, 2012

'Manufacturing Fetishism'

John Kay:

Fetish for making things ignores real work, by John Kay, Commentary, Financial Times: ...The ... iPhone ... sells, in the absence of carrier subsidy, for about $700. Purchased components ... may account for as much as $200 of this. ... “Assembled in China” costs about $20. The balance represents the return to “designed in California”, which is why Apple is such a profitable company.
Manufacturing fetishism – the idea that manufacturing is the central economic activity and everything else is somehow subordinate – is deeply ingrained in human thinking..., probably formed in the days when economic activity was the constant search for food, fuel and shelter. ...
Most of what you pay reflects the style of the suit, the design of the iPhone,... the painstaking pharmaceutical research... Physical labor incorporated in manufactured goods is a cheap commodity in a globalised world. ... 
Manufacturing was once a principal source of low-skilled employment but this can no longer be true in advanced economies. Most unskilled jobs in developed countries are necessarily in personal services. Workers in China can assemble your iPhone but they cannot serve you lunch, collect your refuse or bathe your grandmother. Anyone who thinks these are not “real jobs” does not understand the labor they involve. ...
Where will exports come from, they ask? From exporting “designed in California” or “tailored in Savile Row.” Ask Apple, or your tailor, how they derive their earnings.

    Posted by on Thursday, November 15, 2012 at 12:24 AM in Economics, International Trade | Permalink  Comments (132)


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