De-Industrialization

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1. A straightforward long-term decline in the output of manufactured goods or in employment in the manufacturing sector. 2. A shift from manufacturing to the service sectors, so that manufacturing has a lower share of total employment. Such a shift may occur even if manufacturing employment is growing in absolute terms 3. That manufactured goods comprise a declining share of external trade, so that there is a progressive failure to achieve a sufficient surplus of exports over imports to maintain an economy in external balance 4. A continuing state of balance of trade deficit (as described in the third definition above) that accumulates to the extent that a country or region is unable to pay for necessary imports to sustain further production of goods, thus initiating a further downward spiral of economic decline. Explanations Theories that predict or explain deindustrialization have a long intellectual lineage. Rowthorn [3] argues that Marx's theory of declining (industrial) profit may be regarded as one of the earliest. This theory argues that technological innovation enables more efficient means of production, resulting in increased physical productivity, i.e., a greater output of use value per unit of capital invested. In parallel, however, technological innovations replace people with machinery, and the organic composition of capital increases. Assuming only labor can produce new additional value, this greater physical output embodies a smaller value and surplus value. The average rate of industrial profit therefore declines in the longer term. Rowthorn and Wells distinguish between deindustrialization explanations that see it as a positive process of, for example, maturity of the economy, and those that associate deindustrialization with negative factors like bad economic performance. They suggest deindustrialization may be both an effect and a cause of poor economic performance. Pitelis and Antonakis suggest that, to the extent that manufacturing is characterized by higher productivity, this leads, all other things being equal, to a reduction in relative cost of manufacturing products, thus a reduction in the relative share of manufacturing (provided manufacturing and services are characterized by relatively inelastic demand). Moreover, to the extent that manufacturing firms downsize through, e.g., outsourcing, contracting out, etc., this reduces manufacturing share without negatively influencing the economy. Indeed, it potentially has positive effects, provided such actions increase firm productivity and performance. George Reisman identified inflation as a contributor to deindustrialization. In his analysis, the process of fiat money inflation distorts the economic calculations necessary to operate capital-intensive manufacturing enterprises, and makes the investments necessary for sustaining the operations of such enterprises unprofitable. Page 16 of 112
Institutional arrangements have also contributed to deindustrialization such as economic restructuring. With breakthroughs in transportation, communication and information technology, a globalized economy that encouraged foreign direct investment, capital mobility and labor migration, and new economic theory's emphasis on specialized factor endowments, manufacturing moved to lower-cost sites and in its place service sector and financial agglomerations concentrated in urban areas. The term de-industrialization crisis has been used to describe the decline of laborintensive industry in a number of countries and the flight of jobs away from cities. One example is labor-intensive manufacturing. After free-trade agreements were instituted with less developed nations in the 1980s and 1990s, labor-intensive manufacturers relocated production facilities to third world countries with much lower wages and lower standards. In addition, technological inventions that required less manual labor, such as industrial robots, eliminated many manufacturing jobs. <strong>De</strong>industrialization–Its Causes and Implications International Monetary Fund, September 1997 Robert Rowthorn | Ramana Ramaswamy During the past 25 years, employment in manufacturing as a share of total employment has fallen dramatically in the world’s most advanced economies, a phenomenon widely Page 17 of 112
Page 1 and 2: The e-Advocate Monthly …a Compila
Page 3 and 4: The Advocacy Foundation, Inc. Helpi
Page 5 and 6: Dedication ______ Every publication
Page 7 and 8: The Transformative Justice Project
Page 9 and 10: The Advocacy Foundation, Inc. Helpi
Page 11 and 12: Biblical Authority ______ Proverbs
Page 13 and 14: Table of Contents …a compilation
Page 15: I. Introduction De-Industrializatio
Page 19 and 20: General Explanation During deindust
Page 21 and 22: enormously. In the European Union,
Page 23 and 24: this too reflects the changing patt
Page 25 and 26: and the standardized nature of the
Page 27 and 28: II. The American Rust Belt The Rust
Page 29 and 30: Railroad in 1834, and the consolida
Page 31 and 32: the grip of such industrial unions
Page 33 and 34: evitalization. Among the successful
Page 35 and 36: III. Post-Industrial Society In soc
Page 37 and 38: The increasing importance of knowle
Page 39 and 40: emnants from its industrial history
Page 41 and 42: IV. Urban Decay Urban Decay (also k
Page 43 and 44: Historically in the United States,
Page 45 and 46: suburbs of Paris and areas like Vau
Page 47 and 48: V. Dutch Disease In economics, the
Page 49 and 50: sector. Because that economy had sm
Page 51 and 52: manufacturing sector from the early
Page 53 and 54: VI. The Resource Curse The Resource
Page 55 and 56: influenced the domestic economics o
Page 57 and 58: elatively high-wage employment in t
Page 59 and 60: Arabia, Iraq, Libya, Algeria. (Data
Page 61 and 62: Corrupt members of national governm
Page 63 and 64: Foreign Aid There is an argument in
Page 65 and 66: VII. Balance of Trade The Balance o
Page 67 and 68:
more raw materials than they produc
Page 69 and 70:
one another, this [absurd] doctrine
Page 71 and 72:
imported into France, and was found
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imports are greater than exports, i
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VIII. Shrinking Cities in The U.S.
Page 77 and 78:
IX. Re-Industrialization Reindustri
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X. References 1. https://en.wikiped
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Notes _____________________________
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Attachment A Deindustrialization an
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MONTHLY LABOR REVIEW June 1986 Dein
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MONTHLY LABOR REVIEW June 1986 Dein
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MONTHLY LABOR REVIEW June 1986 * De
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MONTHLY LABOR REVIEW June 1986 9 De
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MONTHLY LABOR REVIEW June 1986 a De
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JARGONALERT Balance of Trade BY JES
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Attachment C The Re-Industrializati
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10 Journal of Public and Internatio
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Advocacy Foundation Publishers The
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XVI for Drug-Free Communities Landm
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Vol. VIII 2022 ComeUnity ReEngineer
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Vol. XV 2029 Inner-Cities Revitaliz
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The e-Advocate Monthly Review 2018
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The e-Advocate Quarterly Special Ed
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Legal Missions International Page 1
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Vol. V 2019 XVII Russia Q-1 2019 XV
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The e-Advocate Newsletter Genesis o
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Extras The Nonprofit Advisors Group
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About The Author John C (Jack) John
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De-Industrialization

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