Friday, January 7, 2011

Trivia of the Day

. Friday, January 7, 2011

This, from KPC, is well-known to me and I reiterate it to my students every semester. But it's worth a reminder:

China ... USA

1. Which country has the largest amount of manufacturing, by value, in the world?
2. Which country lost the most manufacturing jobs, gross, between 1990 and 2005?

The answers surprise people who know nothing about economics. The answer to 1 is "USA," by a lot.

The answer to 2 is China, again by a lot.




Munger's claim that China has lost the most manufacturing jobs is a bit misleading. The key word is "gross". They've also created quite a lot of manufacturing jobs, and on net the number is positive. In the U.S. the net number (in manufacturing) is negative. But he's right that there's been a lot creative destruction going on, and most Americans only see one side of the story. It also true that the U.S. produces a lot more than we used to, with a lot less labor. That's a good thing, although it may contribute to the rise of structural inequality I discussed below.

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