Andrew Liveris’ new book, Make It in America (Wiley,2011) is certainly timely. The author, CEO of Dow Chemical, calls for a national strategy to revive manufacturing, a plea repeated by President Obama in his State of 
the Union talk last night. Liveris wants the government to draw a plan to encourage more manufacturing, to cut taxes, and to make regulations uniform, as in Europe and Asia.
No economy as large as the US can sustain itself without manufacturing, he writes. “Accepting such a future (as a nation of great innovations, and not as a manufacturing society), means accepting a level of joblessness that would make recent years look like a warmup”. This is a good point. If we look at a Top 10 of big time innovators (say Amazon, Apple, Dell, Facebook, GE, Google, HP, IBM, Intel, and Microsoft), we see they only employ an average of 61,000 workers. Since there are 29 people working at Wal-Mart and 2 at Disney for every one at a big time innovator, it becomes clear that we cannot count on innovators for job creation.
Being passive, as we have been for 4 decades, is not a growth strategy, Liveris adds. China has a strategy to be more than the world’s low-cost toy manufacturer. Brazil is moving beyond its role as an agricultural leader. Some Americans imagine we can thrive by dreaming up new Kindles and iPods, while the Chinese make them. But when we move our capacity to make high-tech products overseas, we lose skill for whole sets of products.
Liveris gives the example of the Kindle. Amazon invented it, but couldn’t find the screen-making expertise and capacity to produce it in the US, so it went to Taiwan. He closes by writing: “Manufacturing is America’s future. Not just its past. Manufacturing is the foundation upon which our economic prosperity, our growth and wealth and jobs depends.”
Manufacturing brings us many things besides jobs, from innovations to improved balance of payments. However, faculty may want to use Liveris’ book as a starting point to discuss several related points: What to measure, creative destruction, and productivity.
1) What to measure: Where would we be if we measured agriculture by the number of people employed rather than output? Do we really want as many people working on farms as we had one hundred years ago? Or if we measured phone service by the number of switchboard operators?
2) Creative destruction: Reference Schumpeter’s’ creative destruction and the advantages of a dynamic free society. We got rid of the inefficient steel mills. We got rid of expensive inefficient vacuum tubes and unreliable resistors. All were replaced by better technology (and fewer people.)
3) Production and productivity: How have we done on production and productivity? We produce cars, and glass, and paper with a fraction of the people we did 50 years ago. And with about as many people in manufacturing as 1941 (or 1953, depending on which figures one uses) America remains as the largest manufacturing country in the world. China will soon surpass USA, but with over 4 times the population one would expect so. Only Germany is in the same league as America in manufacturing productivity (but trailing in total manufacturing output).