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01 / 05
Trump Is Wrong: America Makes Tons of Stuff

Blog Post | Science & Technology

Trump Is Wrong: America Makes Tons of Stuff

Does the Donald want America to build things, or does he want us digging with spoons?

Americans “don’t make anything anymore,” said Donald Trump on Fox on Sunday with Chris Wallace, lamenting what he sees as the death of U.S. manufacturing. “I just ordered 4,000 television sets. You know where they come from? South Korea … I don’t think anybody makes television sets in the United States anymore.” Actually, America still makes televisions. More importantly, Trump’s insinuation that trade has destroyed U.S. manufacturing is fundamentally mistaken.

The truth is that U.S. manufacturing is thriving, although the industry employs fewer people, mainly because of automation—not trade. Would Trump undo technological progress and massive savings to bring back manufacturing jobs?

The rumors of American manufacturing’s death have been greatly exaggeratedSales revenues and output are rising. In 2014, value-added by the industry set a new record. While it’s true that manufacturing is a smaller share of the U.S. economy than it once was, that’s not because it isn’t growing—other sectors of the economy are simply growing faster.

The reason that so many goods found in a U.S. convenience store say, “Made in China,” is because U.S. manufacturing has shifted towards high value-added products like aerospace equipment, not because the U.S. has stopped “making things.”

Despite growing revenues and output, manufacturing employs fewer Americans than it once did. Technological advancement has led to gains in efficiency, and it is primarily automation, not trade, that has reduced demand for workers in manufacturing.

In fact, the U.S. manufacturing industry added jobs in the years immediately after the North American Free Trade Agreement was passed. Trade restrictions sometimes even inflict harm on domestic manufacturing. Tariffs on manufacturing inputs (e.g., hot-rolled steel) may protect U.S. workers making that specific product, but harm all the U.S. manufacturers who need those inputs to create other products (e.g., airplane parts) further down the production line. On the whole, trade enriches us.

While manufacturing employs fewer Americans than it did in Donald Trump’s youth, total U.S. employment has risen, as more Americans find work in other sectors of the economy. If Trump would give up gains in efficiency solely to boost employment in manufacturing, then he may want to consider this famous piece of advice attributed to Milton Friedman:

Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

Does the Donald want America to build things, or does he want us digging with spoons?

Blog Post | Workforce Hours

The Long Thread of Lessening Labor

We have more time to do as we wish and fewer needs that force us to do as we must.

Summary: This article challenges the common perception that human progress has made us work harder and deprived us of leisure. It shows how both market and domestic labor have declined over time, thanks to technological innovations and economic changes. It traces the history of labor alleviation from the Viking era to the present day, and celebrates the benefits of having more time and freedom to pursue our interests.


People often complain that we are all working too hard and that human progress is pointless if we have to labor and strain to achieve our current lifestyles. They say we would be better off curtailing our desires and returning to some Edenic life with more time for ourselves. The problem is that Edenic life never existed. In fact, over the past millennium, humanity has been working less and less. And a thousand years is probably long enough to make the claim that working less is a trend, not a blip.

To understand working hours, it is important to recognize two points. First, households (some societies define households as containing only parents and children, while others extend the definition to cousins and nephews and so on) are the central economic units that should be discussed. Second, labor comes in two flavors: domestic work and market work. Domestic work includes food preparation, childcare, cleaning, or any other labor within the household. Market work generates money or goods to trade for any goods and services that the household does not produce. The “labor burden” on the household is the combined number of hours spent doing those two types of work.

Market and domestic labor can substitute one another. Children can go to kindergarten, and food can be bought as take-out. Likewise, clothes can be purchased from a factory, or they can be stitched at home. People tend to use the option that gets them the desired good or service with the least amount of work. As I will show below, the net effect of changes in those two forms of labor determines the total household labor supply. Or, to put it less formally, it determines how long people have to work to gain what they want. Once those two kinds of labor are added up, a declining trend in the total number of hours worked becomes apparent. Consider this report from the Federal Reserve Bank of Boston:

Specifically, we document that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours). 

And that was just for the period between 1965 and 2003. A closer look at the 20th century suggests that market working hours fell for men and rose for women. The rise in female market working hours was precipitated by technological innovation and a concomitant decline in the number of domestic working hours. Domestic working hours fell greatly for women and, less dramatically, for men. The net effect of the four processes was that leisure hours rose, and total working hours fell, for both men and women.

In his 1930 essay Economic Possibilities for our Grandchildren, the British economist John Maynard Keynes predicted that the next century would usher in an age of prosperity. He also forecasted that people would work less and spend more time at leisure. Keynes turned out to be right. But many modern readers, who come across Keynes’ prediction of a 15-hour workweek, wonder why they are still putting in 40 at the office. The answer is that the work we killed was the domestic labor done largely by women. 

One author estimates that it took 60 hours a week of physical labor to keep a 1930 household working. Today, it takes perhaps 15 hours. Those numbers are not exact, but when you consider the washing machine, the gas oven, the vacuum cleaner, prepared food, and steam irons, the amount of household work eliminated is immense. One of Hans Rosling’s TED talks recounts how the washing machine brought him books. According to the Swedish physician, once the washing machine liberated his mother from laundry, she had more time to read to him. The South Korean economist Ha Joon Chang claims that the washing machine – by which he really means all domestic labor-saving technologies – changed the world more than the internet.

But labor alleviation did not begin in the 20th century. In her new book (The Fabric Of Civilisation came out in November 2020), the American writer Virginia Postrel estimates that it took 365 full days of work to spin enough thread to make a Viking sail. Days and days of work to create enough thread to weave a bandana and weeks to make a pair of jeans. The Vikings used the drop spindle to make thread – a basic technology that humans used for millennia. The spinning wheel, which partly mechanized the process, arrived in Europe sometime in the 11th or the 12th century A.D. 

Then came the Industrial Revolution, first with the Spinning Jenny, which was followed by Crompton’s Mule and endless other derivatives. These machines progressively automated what was a horrendously time-consuming and nearly exclusively female domestic task for centuries. The economic historian Brad Delong has remarked that when women of any class are depicted in older literature, there is always reference to their spinning. By the time of Jane Austen’s novels in the late 18th and early 19th century A.D., spinning is never mentioned – it was all done in the factories by then.

We all have more leisure now than our forebears did. We have more time to do as we wish and fewer needs that force us to do as we must. But this wonderful outcome of human progress is obscured by the fact that, in large part, it is the household labor that has been automated away. Sure, the Roomba might not be a great leap forward, but it is just the latest iteration of a process that began a thousand years ago. And there is no sign of it ending.

Blog Post | Adoption of Technology

Don't Count on a “Tech-Driven” Employment Apocalypse

New technology creates more, better jobs than it costs. If anything, automation may lead to labor shortages.

Media reports often paint a dire picture of technological change and automation which they fear will spawn a future rife with massive job loss and less employment. And yet, a labour shortage— not a glut due to mass unemployment— looms in Canada thanks to retiring baby boomers and our aging population.

Furthermore, history suggests that when technological change alters the employment mix, the economy grows, creating new jobs and more opportunity. For example, a Deloitte study of census results for the United Kingdom since 1871 notes that, despite fears of job destruction, technological change spurs job creation. Over the long run, the UK has experienced increases in both employment and the labour force. While there were declines in some occupations such as agricultural labourers, washers, launderers, telephonists, and telegraph operators, other occupations such as accountants, bar staff, hairdressers, service workers, etc. experienced employment growth.

The situation is the same in Canada. Between 1851 and 2017—an era marked by rapid technological change— our population grew from 2.4 million to 35.2 million, a 15-fold increase, while the Canadian labour force grew from an estimated 762,000 people to 19.7 million people, a 26-fold increase. And according to employment data, from 1891 to 2017, the number of employed people in Canada grew from 1.6 million to 18.4 million, a 12-fold increase, while the labour force (which includes employed people, unemployed people seeking work, and employers) grew—from 1.7 million people to 19.7 million people, also a 12-fold increase.

While employment and the labour force grew alongside technological progress and development, the composition of employment also changed. For example, in 1921 agriculture still accounted for nearly one-third of all employment in Canada (down from 50 percent in 1871) compared to two percent by the early 21st century. Overall, the last 150 years in Canada has seen a shift from goods production (manufacturing, for example) to services (health, for example) as the dominant source of employment. Even as demand for many traditional jobs has declined, entirely new occupations have arisen that did not exist mere decades ago—think of today’s social media strategists, solar panel installers, and genetic counsellors.

Forecasts suggest that in coming years, employment and the labour force in Canada will continue growing, but at a diminished rate with employment growing slightly faster than the labour force. The result? Low unemployment rates. Again, this is due largely to our aging population and the expected decline in labour force participation rates. Overall labour force participation in Canada has declined over the last decade but interestingly has grown among people aged 55 and over, reflecting the progress of the demographic bulge known as the Baby Boom.

In 2016, people aged 55 and over accounted for 36 percent of Canada’s working-age population—the highest percentage since 1976, the first year of comparable data—with this proportion expected to reach 40 percent by 2026. Yet this demographic will eventually retire, opening up large areas of employment to the smaller age cohorts behind. Demand for workers is expected to be high in health care, computer system design and related services, support services for mining, oil, and gas extraction, social assistance, legal, accounting, and other professional services, arts and entertainment, and food services, such as chefs and servers.

Clearly, contrary to popular belief, history teaches that technological change has been marked by increases in total long-term employment, notwithstanding shortterm job loss for individuals. That’s good news. Canada’s labour market will likely experience continued employment growth (though at lower rates than in the previous half-century) due to demographic changes and changes in labour force participation rates. Our aging labour force, the retirement of baby boomers, and the creation of new jobs spurred by technology, will combine to create a period of chronic labour scarcity, which means the demand for workers will be high.

This originally appeared in The Fraser Institute’s Fall 2019 Quarterly publication.

Blog Post | Labor & Employment

How Work Got Good: Safer, More Interesting, More Intense

Overall, jobs have become safer, more interesting, and more intense.

Steve Jobs recruited Pepsi’s John Sculley to Apple by asking him if he wanted to spend his life selling sugared water or if he wanted “a chance to change the world.” Sculley took the chance. In all his enterprises, Jobs offered his employees the same. They were on an intense mission, where much was asked of them. The work was hard, and they were expected to care about it and devote themselves to it. But they could grow and be justly rewarded for their contributions. They were expected to question their boss, who would sometimes change his mind based on the questioning.

Some of the rewards were intangible—the “flow” of losing oneself in an important and challenging but doable activity. Other rewards were tangible. When the first Macs were shipped, Jobs took the Mac team to the parking lot, called each by name, and handed him or her a Mac with the signatures of the 46 main team members engraved inside.

Many of the higher needs that move us in pursuit of a good life are the same higher needs that move us in pursuit of a good job. The psychologist Abraham Maslow famously observed that after we satisfy physiological needs such as food, clothing, and shelter, we seek to satisfy higher needs, such as fulfillment, meaning, control, and creativity, through the choice and pursuit of challenging, meaningful projects. Too often a life of leisure does not allow sufficient satisfaction of the higher needs. It is telling that Europeans have much more leisure than Americans, but Europeans report being much less happy.

Having a challenging job where you are in control of your time is not only important for satisfying the higher needs; it also is important for satisfying the basic need for good health. One cause of constant long-term stress is boredom, which has been shown to adversely affect hormone levels and heart rates. For men, another cause of constant long-term job stress is lack of control over what projects to pursue or tasks to prioritize. According to a 2011 study published in the journal Health Psychology, men who lacked control in their work had a greater risk of death.

At first glance, it is surprising that among retirees with $1 million to $5 million in assets, 33 percent retire from one job only to then transition to working in a new one. Even among retirees with more than $5 million in assets, 29 percent continue to work. At second glance, these findings are not so surprising in a labor environment where a growing percentage of jobs are good jobs: creative, challenging, satisfying.

A skeptic might object that these findings only apply to the rich. But jobs in construction and trucking are increasingly hard to fill, suggesting that poorer workers who otherwise might build and drive also are finding better alternatives: safer, less physically exhausting, less routine.

Farm to Factory

Innovative dynamism, sometimes less aptly called creative destruction or entrepreneurial capitalism, has a long history of creating new, better jobs and also of nudging old jobs toward the challenging, meaningful peak of the hierarchy of needs. In much of human history, the powerful have been tempted to force slaves to do the most dangerous, exhausting, and boring work. But then inventors created machines that could do these tasks, reducing the temptation to enslave and hugely bettering the work lives of some of the worst off.

An early specific example of innovative dynamism improving jobs happened when kerosene replaced whale sperm oil for high-quality lighting. Collection of sperm oil required the collectors to spend days scraping spermaceti from the brain cavity of the decomposing carcass of a huge whale. Work in oil fields was far from perfect, but it was better than work in decomposing brain cavities.

Some have suggested that some of the early machines of the Industrial Revolution mainly hurt workers by replacing skilled artisans with unskilled factory workers. But most of those who worked in the factories had earlier worked on farms, not as skilled artisans. Victorian-era economist Nassau William Senior observed that the Industrial Revolution’s factory system had improved the conditions of these former farm workers. He described their new conditions as “the comparatively light labor which is exerted in the warm and airy halls of a well-regulated factory.” Charles Dickens, famous for defending the poor in his bestselling novels of the mid-1800s, praised the clean, comfortable working conditions of former farm girls in a Boston textile factory. Before they had the option of mill work, their labor on the farm would have been dirty, physically exhausting, and often dangerous and lonely.

Around 1858 in England, one 8-year-old girl did farm work 14 hours a day; she later testified that “it was like heaven to me when I was taken to the town of Leeds and put to work in a cotton factory.” By today’s standards, the conditions of the early factories were awful, but they were still better than the even more awful conditions that had prevailed in the countryside. The factory was progress, a stepping stone but not a stopping point. In the 1800s a great many people of all ages and genders voted with their feet for the factory over the farm.

Innovative dynamism also eventually greatly improved the conditions of work for those who remained on the land. Railroads opened up the possibilities for farming at a greater distance from the cities. On the fertile and less rocky fields of the Midwest, farmers could now grow more with less effort. Their work, pain, and danger were also reduced by farm innovations such as the McCormick reaper.

Today, many farmers have drones for monitoring crops, computers for calculating yields, air-conditioned tractors for comfortable plowing, and the internet for information and entertainment.

Office to Home

Over the last six decades, more and more workers have been employed in jobs emphasizing expert thinking or complex communications tasks, while fewer have been employed in jobs emphasizing routine or manual tasks.

Nobel Prize winner Edmund Phelps noted that innovative dynamism “has so far been an extraordinary engine for generating creative workplaces” where workers can discover and explore in the pursuit of challenging projects. Walt Disney Productions was once such a place while its founder was in charge, but it declined after cancer took him. Decades later, officials at the Walt Disney Company offered John Lasseter significantly higher pay to work for them. He declined, choosing to stay at then-independent Pixar, which, though strapped for funding, had become a new exemplar of a creative workplace. Computer-enabled innovations gave Lasseter a job at the challenging, meaningful peak of the hierarchy of needs, where he had the freedom to create a new kind of film, starting with Toy Story.

In the past, home workers were paid significantly less than in-office workers because it was harder for firms to measure and manage home workers’ productivity. The internet made this much easier, and the at-home wage penalty substantially fell between 1980 and 2000.

Another example of gains from technology is Amazon Mechanical Turk. The original Mechanical Turk in 1770 was a chess-winning “robot” eventually revealed to cleverly conceal a human chess master within the box allegedly holding the robotic mechanism. Amazon’s version is an internet platform that allows firms to hire participating workers from around the world to perform various online tasks. The surprising punchline is that Amazon Mechanical Turk was rated by its workers as treating them slightly more honestly and fairly than in-person employers in the workers’ home countries.

Almost everyone would like work that is satisfying and doable but challenging; that is in the upper meaningful peak of the hierarchy of needs. Besides that, some people want a difficult project that they can throw themselves into with intensity—what strategy gurus Jim Collins and Jerry Porras call “big, hairy, audacious goals.”

Big, intense projects appeal to our desire for exhilaration and total engagement. They are especially appealing to those who feel that their lives will be worthwhile only if they “make a ding in the universe.” Many breakthrough innovations are more dangerous at their early stages. But some workers enjoy the adventure of risky jobs, take pride in their ability to get those jobs done, or feel satisfaction at being a part of an important project.

When Joe Wilson committed his little Haloid Photographic Company to develop xerography, it was a big, intense project. Horace Becker led the team tasked to produce the first commercial Xerox machine: the model 914. His account captures something of what it feels like to be part of such a project. By the time they tried setting up their first 914 assembly line, he says, everyone was fully immersed in the project, forgetting grievances and performance ratings. All workers, from engineers to assemblers, were indistinguishable in pulling toward the common goal. They would even sneak in on Sundays to make adjustments or to admire the progress.

Big, risky dreams do not appeal to everyone. But an advantage of innovative dynamism is that it allows everyone to be intense without forcing intensity on anyone. And even though many of us will prefer a more relaxed life, we often benefit from the fruits that the intense create.

This first appeared in Reason.

Blog Post | Adoption of Technology

What Ma and Keynes Get Wrong About Progress

Desire for greater material well-being is not a moral failing. Yearning for a better life has driven progress over the past 250 years.

British economist John Maynard Keynes once said that “[p}ractical men who believe themselves quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” It’s unclear whether Chinese tech billionaire Jack Ma is a Keynes discipline, or considers himself immune to economists’ musings. But in forecasting that technology and automation might deliver a 12-hour working week, Ma certainly echoes Keynesian thinking about economic progress.

Sharing a stage with U.S. entrepreneur Elon Musk in Shanghai, Alibaba founder Ma this week predicted that artificial intelligence and automation will deliver unheard of gains to productivity. Offering an upbeat story of its effects, he suggested that producing more with fewer workers will reduce the desirable working time to just “three days a week, four hours a day.” Instead, we will be able to spend extra time enjoying “being human beings” and going to “karaoke in the evening.”

In a 1930 essay entitled “Economic Possibilities for our Grandchildren,” Keynes made a similar prediction. Within a century, he believed we’d be four to eight times as rich. Such would be the technological advances in production driving more output with less labor input, our economic needs could be fulfilled by just working “three-hour shifts or a fifteen-hour week.” Even working that long would be reflective of our natural human desire to stay occupied, rather than out of necessity. Keynes even mused that people would have more time to sing too!

As we contemplate the long hours we’ll spend at our desks this next week, it’s easy, in retrospect, to dismiss Keynes’ musing as a flight of fancy. But in fact, a lot of what he wrote was prescient. What he got wrong should make us think skeptically about Ma’s musings of what it means to be human.

Keynes’ forecast of our prosperity boom was unnervingly accurate. With a decade to go, the U.S. is already six times as rich in real GDP per capita terms as on the eve of 1930.

Improvements in the technology of domestic appliances has meant that traditional “household work” — the basics of laundry, cooking, and cleaning — have fallen time-wise from being a near full-time occupation (38 hours) in 1930 to just 15 hours in 2015. If Keynes’ prediction had been about chores, he hit the bullseye.

What he got wrong was what technology and innovation would mean for paid working hours. Yes, full-time production workers’ average hours have fallen from 48 hours to 40 hours since 1930. Productivity improvements, in other words, delivered a whole extra day off, as we saw the birth of the modern weekend. As a result of more part-time and flexible work, an average employed person’s working hours have fallen from 38 hours per week in 1950 to 34 hours per week in 2014 too. Yet we are clearly nowhere near the 15-hour work week he projected.

Keynes severely underestimated that, when free to choose, most of us seek further material advancement and betterment, and value the inherent dignity that comes from productive labor in the service of others. As progress raises wages, the opportunity cost of leisure rises. Faced with this trade-off, we still maintain substantial hours of employment.

This search for greater material well-being is not some moral failing, as Keynes implied. In fact, it’s precisely this yearning for a better life that has driven progress in the past 250 years. Most people are not content with modestly rising living standards driven by technological improvements producing slightly more with fewer and fewer workers, allowing us to “have fun.” They want to enjoy the best goods, services and experiences possible for their families. They want to feel the dignity of their services being needed. They want to see their living standards propelled.

If predictions about automation are correct, then the next 30 years could well see rapid improvements in technology, as Ma implies. Service sector employment could be revolutionized, with lots of tasks currently undertaken by lawyers or doctors ripe for automation or being replaced with artificial intelligence or robotics. This will make us rich, and disrupt established occupations and work patterns. From a policy perspective, that will bring demands for jobs to be protected and innovations restrained. Predictions of “mass worklessness” will feed calls for huge social programs too, whether universal basic income us or government project jobs to give people meaningful purpose.

But the past century shows we shouldn’t fear technological change, nor presume its labor market effects will have vast destructive social consequences or change who we are. As the opportunity for leisure time and greater comfort has risen, we’ve maintained our desire for betterment and meaningful labor. That shows there’s no discrepancy between employment and “being human beings.” Striving and toiling is part of who we are.

Contra Ma and Keynes, then, I doubt increased productivity will result in mass karaoke singing. We will enjoy more comfort and the option of more family and leisure time, yes. But the recent past suggests that workers will shift into jobs delivering new entrepreneurial pursuits, into meaningful vocational activities, and new jobs where human contact and effort are highly prized by further enriched customers.

This first appeared in Medium.