They tried Made in the USA – it was too expensive for their customers

This has come up at the expense of their own consumption however, and a reliance on exports instead. Thankfully China has been focusing on diversifying their export markets along with increasing internal consumption in the last decade.

Factorio is just a programming game with a manufacturing texture pack.

What we want is wood shop and machine shop classes.

Congressmen should be required to complete the Factorio tutorial before taking office

In Factorio you throw iron ore in an electric furnace and it turns into iron plates. In reality you need coal or coke or charcoal to reduce iron to its metal form. Steelmaking is one of the largest single source of CO2 for a reason.

This is just one example among many. The truth is every single facet of industrial production is incredibly complex and there does not exist a single video game that captures all the nuance. Period. Factorio abstracted away all the boring details of industrial production and that is why it is good entertainment. But it’s still just entertainment. To think someone would become knowledge about industrial production because he played Factorio is like thinking someone is a good driver because he played Mario Kart.

Thats the most dangerous thing to turn kids into. They want them dumb and barely powered drill capable.

That's a bit less true than it used to be. Shenzhen supposedly used to work that way. When some small factory ran out of capacitors in board assembly, they'd send a runner to Huaqiangbei for another reel. But now ordering has mostly moved online. There's less of a role for all those tiny stalls stocking components.

That just cuts out a layer in the distribution chain. The part you want is probably manufactured not too far away.

The US used to have manufacturing cities where you could get everything you needed in specific industries. There was the New York City garment district for clothes. Mary Quant, inventor of the miniskirt, writes in her autobiography, "Quant by Quant", about her first visit to New York with a native guide. She was getting things set up for manufacturing in days instead of the months it took in the UK.

Detroit had cars, of course. Most of the auto parts suppliers were nearby. Now, the US auto industry is very spread out. "Trenton Makes, the World Takes" is still on a huge sign in Trenton, NJ., but it's more nostalgia then reality. Waterbury, Connecticut had watch manufacturers and other mechanical precision devices.

Those centers of industry are mostly gone. Even Hollywood is in troublel

I live in Philadelphia. We had a lot of manufacturing here, but most of that vacated the city center in the 1970s and 1980s. I recently was doing some research into urban renewal around my neighborhood, and found a paper about the city's efforts to address a concentrated population of perpetually drunk homeless men, mostly centered in my neighborhood, mostly squatting in abandoned buildings or living in flophouses. The city's approach was effectively to remove them and spread them out - and bulldoze the neighborhood to make way for a federally funded highway, now I-95. A lot of manufacturing businesses just called it quits - the owners had made their money on the backs of cheap labor and hadn't really set up any kind of succession plan, but could retire comfortably. Others moved, mostly out of the city, and by the 90s, that labor was moving overseas.

And that's why I don't really foresee that kind of manufacturing coming back here. In order to survive the race-to-the-bottom pricing that the majority of Americans crave, you need a large labor force that will accept some form of sub-par living conditions. But if you can't earn a living wage, you can't afford to participate in the economy in a way that supports the manufacturing, and then you're back to those mid-century slums.

I'm dramatically oversimplifying things, my main point here is, I didn't really put together how much of early 20th century American manufacturing relied on chronically drunk homeless men.

Some of it is China’s willingness to make big capital investments. My wife was shocked at the low price of beech mushrooms at Ren’s Market and I found out these are grown in a huge factory in China where they are very proud that they only have to handle the mushrooms with a forklift. Contrast that to those white button Agricus mushrooms each of which is cut out from the mycelium individually with a knife.

The good news is that they’re building one here

https://finc-sh.com/tag/new/

When you look at solar panels and lithium batteries their biggest advantage is that they invest in large scale heavily automated factories. For really labor intensive and low value things like those dog beds Chinese labor is already too expensive and production is going to places like Bangladesh.

Perhaps the answer is a combination of a significant UBI (paid for by general federal spending, I could think of many worse reasons to accrue national debt) coupled with a much lower minimum wage? Incentivize companies not to treat labor as a cost sink, while still ensuring that people have enough capital to cover their cost of living. I'd wager productivity would also go up (and mental depression would go down) if things weren't quite as dire as they currently are.

Calling health insurance, retirement and paid leave "bloat" sounds like a satire of a 19th century factory/mine/sweatshop owner. Wow.

Your job is not artificially expensive.

In China it is naturally cheap, they have humongous super advanced vertical and horizontal supply chains at their doorstep.

Need plentiful, cheap three phase electricity? - check. Need some obscure part at scale and immediately?- check. Need advanced engineering? - check. etc. etc.

It's at the point where for many industries the risk/reward just do not make any sense at all (it'll just be loss making no matter how you spin it, government supports etc).

USA's workers directly fund our safety net (such as it is) and public health.

Who pays for all that stuff in China?

gosh, if only someone would think of the small business owners.

I agree with most of that.

But companies have been incentivized to offshore production for decades. In many cases policy decisions have immensely rewarded them for doing so.

The end result is those countries (mainly China) have grown into infinite scaling machines. It probably won't unwind any time soon.

And in China retail/consumption is not nearly as consolidated/monopolistic as it is in the US.

Agree, especially with the BS of "Made in the USA". Consumers really don't care; they just want the most bang for their buck. Period.

Use of coal in Chinese energy production is not growing, peaked in 2013 according to their stats. They are also building massive solar and nuclear capacity.

But anyway, half of all global coal production is consumed in China. I hope they will manage to get rid of coal in the next 20 years.

You would think it would be that black and white, and under normal circumstances I would tend to agree, however pay is well above average for the location and skill especially when you factor in the benefit package.

I really think it comes down to the fact that people have no interest in working in low skill manufacturing. The business loses people to Walmart etc. where they get lower pay and no benefits all the time. There is more variety of work and potential for advancement at a company like Walmart. Even at a larger scale low skill manufacturing plant advancement is sparse.

No, by paying high salary you are not going to retain smart people on dumb physically challenging job.

And they say they can get employees, as pay is decent for low skilled job.

So you see the problem. Americans wont work these types of jobs at wages that allow businesses to compete with China. Businesses are in a competition. When they raise wages they need to raise prices and they cant do that when competition is knocking at the door.

Fascinating article.

They have toyed around with automation but the capital required to retrofit for such a small business would be intensive but is coming down.

Interestingly the automation pieces that they have been testing (multi-axis robot arms) have only became cost effective since the Chinese robots entered the market. The Chinese have completely dropped the floor on automation tooling.

>If an employee is doing an unpleasant, dead-end job with no prospect of advancement, they have to make a value judgment. If there's no prospect of advancement or any kind of wage growth (they're "low skill", so they'll be replaced if someone cheaper comes along), let alone security, then why stick around?

Exactly my point, and that's what they are doing.

There is no prospect of advancement possible. It's a small operation with 15 or so total employees. Under normal circumstances I would agree on a much larger scale.

The majority of people are not suitable for management, and do not advance in "careers". Most people just work the same job over and over, until the retire or die.

But the cost of everything has got out of hand. Why bother going to work if you're going to be basically homeless anyway? Housing+food+health care has detached significantly from wages and the costs of other goods.

There will be versions of the machine that automate more of the process. But they will cost money and require maintenance too look after and adjust.

I used to work a similar job[1] at a plastics factory. We had about 12 machines in the area I worked. Some machines automated remove stuff from the mold, some removing the excess, some putting though the leak tester. Each stage of automation was an additional thing that had to be configured and adjusted.

Often we'd only make an item for a shift or two. At one point the company bought a new machine (the size of a 2 car garage) that automated some more bits. The machine took 18 months of adjusting before it worked reliably.

[1] Blowmold, ranging from 750ml bottles, 5-20 litre jerry cans, sections of culvert pipe.

Then tell me where these poorly qualified, undereducated Americans who can fill these low skill jobs are?

The business's biggest success with finding employees was getting in the good graces of the local probation officers who refer ex-cons to us, and that comes with its own set of problems.

Other than paying a premium for temps at a temp agency that's been the only way as of the last 5-10 years to get employees in the door. Normal applications are crickets.

At some point Americans became convinced that the process of organizing hundreds of billions of dollars in infrastructure and millions of people on the task of manufacturing products was “easy.”

50 years on, and fthe generation that knew how to manufacture is gone - their children never built up the same skills at the same scale. Their children’s children didn't bother to learn the STEM and Craft skills required to work at scale.

Restoring manufacture will be a generation away outside of “dark factories”

Great post - I recommend reading "Apple in China" to get a great insight into the how the Chinese manufacturing industry (and economy) has developed over the last 30 years.

Another advantage a Chinese factory may have is https://en.wikipedia.org/wiki/996_working_hour_system

> China literally half a century of heavy investment on the part of it's government in that infrastructure and in it's citizens, and we can't even make bike paths here anymore

This is the part that the vast majority of people don't realize. China's manufacturing advantage did not just happen spontaneously and organically.

> Boomers screaming and shitting themselves to death about socialism.

At some point this stops becoming an actual thing, and just becomes an internet boogeyman.

Walmart will just raise prices and their customers will eat the increased prices through reduced purchasing power or going without, while complaining but doing nothing else (because they have no leverage to do otherwise).

https://www.businessinsider.com/walmart-price-increases-item... | https://archive.today/4Kcqf

I was going to manufacture a line of useful products here in the USA, but decided against it. I'd release the product, then a month later counterfeits would be on Amazon for 10% of the price.

As a small operation, there are 0 affordable resources at my disposal to fight IP theft.

The US textile industry was built on ignoring UK patents though :)

> What immediately sprung out to me is that Amazon isn't held accountable for selling goods that directly violate patent laws, which should protect small business and reward innovation.

(IANAL) This may fall under a DCMA-like concept where sites are not responsible for 'user content'. The 'user' in question is the vendor and their 'profile' of sellable items is the content. Similar to how eBay is not (?) responsible for the items put up for sale.

(Not saying this is (morally) right, just describing the situation. I would really like to see some accountability as well.)

Which is funny because he could drive a stake through Bezos' heart with some sweet FTC rule making.

As far as I can tell, consumers have never benefited from patents, and they seem blatantly anti-competitive. Perhaps if only "small business" (whatever that actually denotes) were allowed to hold them it might make sense, but we all know that's not even remotely how patents are wielded today.

Personally I strongly prefer knockoffs. Same quality, but cheaper.

I thought it was a good video, but similarly I had an issue with how he discussed the loss of the skilled trades and professions in the US. He did a good job highlighting that these jobs are rare, don't pay well and are important, but he made it seem like we all just accidentally stopped investing in local manufacturing, or that we just let those skills erode. Leaders at these manufacturing companies moved things over seas, laid off the skilled workers, busted up unions, and overall sold off this skill set in order to sell cheaper products and make more money for themselves.

> Why buy from China when we can support the good people of Alabama? Their elected senator just called me a rat. Why should I support Alabama over China?

He just happens to be in Alabama, but the principle applies to someone in Massachusetts or Hawaii as well.

The interview he does on the Odd Lots podcast is a lot more in-depth, and I found it a great listen:

https://open.spotify.com/episode/5gJazFZZaZ0OGKf516XpeO

Corporate R&D is a tax write off per section 174.

One of the main issues they raise is that the bristles on common brushes can be left behind and are difficult to pick out of food, so the wet rag probably exceeds expectations in that way.

Or scrunched up tin foil at ~$2 / 100 ft.

Look, I love Destin, watch all his stuff recommend it all the time.

But I'm never going to buy this product, it's just too expensive for what it does compared to the alternatives.

And I know he knows that. He's clearly at least 'not stupid'.

So something isn't squaring with this.

And helped spread microsplastics to every corner of the Earth

Well into the 1990s, we made shirts and canned soup in Oregon, a place that had very few immigrants at the time. My wife's dad's family came here before the American revolution and he worked at a Heinz soup plant until NAFTA.

That fire was in 1911.

But now both adults need to work to afford a detached house, and the labour participation rate of middle aged men is at an all time low. So, the answer is probably no. I'm sure lots of people would pay and extra $2k for clothing if housing, food, health care, and cars were at similar ratio to wages from the 1980s.

I'm amazed how much of the internet economy has turned out to be advertising. People complain about ads when they watch TV, but they'll go out of their way to spend hours watching ads on social media. And lots of kids dream about being an influencer, basically an advertiser, for their work.

> the desire of the customers, as pushed by social media, to follow a fashion changing almost every month

A lot of it is top down, pushed onto customers by the industry. It's very hard to find timeless classics these days, we are given trendy bits that change every year to speed up obsolescence so they purposely look kitschy.

The desire of costumers is to go well beyond psychotic measures in order to save the tiniest amount of money on a purchase, rather than purchase domestic or locally produced for a bit more expensive. And that applies almost worldwide, not only to Americans.

This is not evidence for what you are saying. Handing down stuff, including clothes doesn't equate to poverty, sometimes the opposite. Better clothes also last longer. Check out the Sam Vimes theory of socioeconomic unfairness. To take this a little literally, for much of my young adulthood, I wore my dad's old snow boots, not because I was poor, but because they were too well made, even at an old age, not to use.

Choosing to buy more, cheaper, clothes is as much an example of consumerism, as anything else.

https://en.wikipedia.org/wiki/Boots_theory

That's not impoverished; it's just not wasteful. Half my kids' clothes are from Once Upon A Child, and most of my younger one's are hand-me-downs from the older one. For that matter, I'm wearing 20 year old gym shorts right now.

Could this be due to how low quality many clothes are nowadays and they are simply not lasting long enough to become hand-me-downs?

What? It’s the 80s not the 50s. Hand me downs might have been a cultural thing, but “average” people weren’t wearing them out of necessity.

I think you’re conflating a culture that did not see everything as disposable with a lack of wealth.

The hard stats since I looked them up:

Median income increases by 1/3 in inflation adjusted (“real”) dollars from late 80s until 2020. The country is definitely more wealthy.

https://fred.stlouisfed.org/series/mepainusa672n

Hand-me-downs are great. My youngest has some hand-me-downs he got from his older brother who got them from my neighbor’s son. Your kids don’t need new clothes.

I think not only has manufacturing gone away, as well as the supply chain, but also choice. The moment you want something slightly different than what is sold in the typical big box stores, it's either non-existent, or costs a fortune.

I have. Definitely one of the better options out there. I recently got a mygreenmattress which are latex and made in Chicago. Still would like a wool one.

Everyone already knows this but the mattress industry is absurdly opaque and most reviews are fake

Robots that can fold towels are an active research area

https://www.npr.org/2022/10/22/1130552239/robot-folding-laun...

> Of course maybe this will change.

It's possibly already changing? 3D-knitting (of shoe uppers is what I have noticed) can make some sewing redundant. How far that can be taken remains to be seen.

ah there are already sweaters made using this technology it seems: https://www.oliver-charles.com/pages/3d-knitting

While true, that know-how is misleading. There is a lot of know-how in the US - the US makes more than every before, which means the know-how is still here! It is just focused on the things we already make and do well on, so often you can't get at it.

And slave labour. Nobody cares that their cheap products are the fruit of slave labour.

This is because they are the largest thieves of intellectual property on the planet. They steal everything because they cannot do it themselves.

I've always understood China's currency manipulation to play an initial role in making it an attractive source of commodity products.

What we see is exactly what Uber and Lyft effectively did. China subsidized manufacturing at the cost of their citizens, but in doing so destroyed much of the competition, giving them a monopoly like position in industrial manufacturing cemented by a mastery of economies of scale, which can now be used to exert global power.

Any country which did not abuse their citizens or subsidize their businesses became noncompetitive.

And why would you use old school taxis when uber/lyft were offering $5 rides in a 7x7mile area, and how could old taxi companies compete when they are forced to compete with people not bound by market forces?

Right, that's the difference between a centralised economy and a free market. These thin-vieled calls for a centralised, planned economy (people of my generation had another word for it) are getting more common and in more places.

Custom PCBs can be gotten from Aisler, based in the Netherlands

And on the third hand, those are things that you cannot buy off the shelf machines to automate. Sewing is an active area of research, but it still needs as much labor as in 1930. Beverage packing is automated but a lot of it is custom machines so you need a lot of up front money. (though it appears their limits were containers - al is made in the US so I'm surprised they cannot order the alloy they need).

I'm just saying, every single example is a consumer discretionary item. Maybe they could pick some examples from other sectors. We already know consumer discretionary spending is a weak sector and will get weaker with tariffs.

Yes but they are bullshit products. Dog beds? A dog is happy with an old blanket. "Stress-reducing carbonated beverages" no comment. A $65 paper day planner?

These are things that nobody needs. They are the poster children for mindless consumerism, feasible only because they are made in overseas sweatshops.

Cost disease isn't driven by a shared currency, but by a common labor market.

When hyper-productive sectors, say, tech in the Bay Area, start paying top dollar, everyone else in the same talent pool eventually needs to follow suit.

Even industries with stagnant labour productivity, like K-12 education, have to hike their wages to attract and retain staff. They can't offset these higher costs with efficiency gains, and that's where the "disease" kicks in.

If you think this is caused by a common currency, consider labour costs in developing countries which use the US dollar. Do those costs go up when labour productivity in the Bay Area goes up?

Not everybody has the capabilities that are necessary for the tech industry. So do your industrial production somewhere else in the USA where additionally the cost of living is low.

Reposted because

1)you might have been too young to have read it (1992)

2)outsourcing and trade balance was in the full quote

>When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y'know what? There's only four things we do better than anyone else:

music

movies

microcode (software)

high-speed pizza delivery

--Snow Crash,1992

Fortunately, there are still plenty: financial services / capital markets, tech, biotech / pharma, media / entertainment, e-commerce, higher ed.

Obviously, there are lots of players in those categories, but the U.S. is at or near top of the pack there. We just happen to be optimizing for the wrong thing right now.

I heard a columnist say, incredulously, “China wants our financial services industry, and we want their manufacturing industry”

Music, movies, microcode and high speed pizza delivery.

> What are our strengths/specializations in your opinion?

Not static. The parent post reminds us that "Made in USA" meant low quality. But so did "Made in China". These things change, but if the national-level policy is "let the market figure it out" (the polar opposite of China's approach), they don't change for the better.

>is that by continuing down a path of fewer and fewer specializations we get pinched off completely. you exist on americas economic downslope, sadly. an ever declining standard of living in a post manufacturing economy. china and everyone after can just copy your progress and basically be America in its boom days

Let’s see.. higher ed, which Trump is trying to eliminate.

All over the map. There were a lot of high quality brands that in the 1980s reduced quality trying to compete on price, and those earned a bad reputation over time. There are a lot of brands that remain the same high quality (or more likely better) that they had all along that are still going strong - however those brands do not try to compete on price and now are very expensive.

Another thing foreign makers did was be more flexible to needs. Some great brands refused to reduce quality, but they were so focused on quality at low prices that they were not responsible to needs. They started making things in batches which reduced costs but if you want a different model you had to wait for that batch. If you have to order something a year in advance while Taiwan can get it to you in a couple months (including shipping via boat!) for some that mattered.

Foreign manufactures often did innovate more as well. Sometimes features on the foreign product were enough better (for some definition of better) as to be important for your needs.

Note that for every example above you can find a company in the US that has been doing exactly that "bad thing" and they have survived against foreign competition. Every product is different, with different needs. The real failure is always not recognizing correctly what is the correct path for you. Often there is more than one "correct path" mixed in with the bad, but you can only choose one. Sometimes a competitor choosing one path fills the niche of that path and if you choose the same both of you will fail.

The biggest push of “Made in the USA” that I remember was from Walmart back in the 80s. They were fighting the stigma of selling Chinese goods. So the cheap/poorly made products with that label was fitting. Eventually, even Wallyworld gave up on it and just leaned into the Chinese made products while they offered lower prices because they knew in the end customers only cared about price. The “Made in USA” became a meme back then with people joke the “Made in USA” labels were made in China.

The point is, people say they don’t like Chinese made goods with one side of their mouth while the other side is saying they don’t really care at all as they continue shopping and purchasing these Chinese goods. Walmart and Amazon really laid the groundwork to the point that the SHEIN and Temus of the world happened. Consumers just don’t care about any other than price

You’re not wrong on most of your points - and I’m not denying the value of hard work. And I’m also well aware of the drudgery of office work.

That said, have you worked in the kind of factory that will come back? I did a summer stint at my dad’s steel mill as a 19 year old. I’m proud of that summer but that work took a lot of me. When other friends were out doing things, I was too exhausted to hang out. The money wasn’t great either. And that’s a microcosm of most of those older worker’s lives. Many drank heavily. I’m not bemoaning them at all or their work.

I’m just saying that the early 2000s wasn’t the 1850s either.

I don’t deny there’s a better life than office work but let’s not gloss over the kind of hard - as in, really hard - labor that industrialization requires.

Totally agree but is more environmentally friendly and more humane part of the current political rhetoric?

And absolutely outsourcing to somewhere else hurts somewhere else. But let’s be realistic: the kind of drastic change that would require no one getting hurt is not in the American discourse.

I looked up the EPA report for the brownsite. It listed arsenic, barium, multiple chromium compounds, 2,4-dimethylphenol ethylbenzen lead, 4-methyl-2-pentanone, methlyene chloride, naphthalene, toluene, and xylene at hazardous levels. It also mentions steel, zinc, and nickel dust and fumes.

I do know that I drove by the old site a few years ago, and you can see the outlines of not just the buildings but the machinery because the dirt is a different color, and there's either no or very little grass or just stubborn weeds growing in those areas.

A lot of steel is coated with grease or oil to avoid rusting. Just by nature of working with it you also need solvents to remove it. The degreasers of the past were magically powerful and environmentally catastrophic. Never mind all the oil/grease used.

Steel is alloyed with a lot of things, some of them toxic (lead comes to mind). If any of that spills.

I think some additives to the steel can be really poisonous? Chrome?

I guess you get a lot of heavy metal slag?

> had a much higher living standard and much more money than service or office workers

I don't see how you could say this with a straight face. We know at this point that factory jobs inflict physical damage to the body, a priceless artifact that no wage could replenish. I find it difficult to address your last paragraph as it's just not based in reality. Anecdotally, many people I know who take an hourly wage at factories never shift elsewhere. There is no waiting, and often they will start their families younger than their salarymen equivalent, 30 years ago or now. Perhaps they failed by your standards?